Law firms, think-tanks ‘boycotting’ lobby register: Kallas

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Not enough law firms or think-tanks have signed up to the European Commission’s lobby register, Administration and Anti-Fraud Commissioner Siim Kallas said on Tuesday (8 September).

The EU executive is currently reviewing the success of its voluntary lobby registration scheme, launched by Commissioner Kallas in June 2008 as part of his transparency initiative. 

“Coverage is insufficient in certain categories. Some major think-tanks and lobbying law firms are effectively boycotting the register,” Kallas told a European Parliament hearing.

“With regard to think-tanks, I remain convinced that their inclusion in the target group was justified […] I’ve made it clear that the register is for ‘interest representatives’, and that joining […] does not label think-tanks as lobbyists,” he said. 

Justifying his decision, the commissioner explained that the events programmes of many think-tanks are “directly linked to who the corporate funding sources are”. “Some even advertise on their websites that corporate sponsors are ensured privileged access to key decision-makers, including commissioners and EC officials of all ranks,” he said. 

Meanwhile, Kallas echoed his long-held view that by neglecting to join the register, “law firms retain unfair competitive advantages vis-à-vis public affairs consultancies in attracting clients that wish their lobbying to remain secret”. 

A law firm representative responded by explaining that “we are not doing this on some kind of whim in competition with PA firms”. “We are bound to professional secrecy by constitutional and criminal law in the member states, which often forbids such disclosure,” he said. 

Rejecting this argument entirely, Kallas insisted it was possible for law firms to separate lobbying from their other activities. “I’m seeing law firms competing with PA consultancies on the basis that they’re not bound by transparency […] I’m not on a witch-hunt, but if law firms enter the lobby scene, they need to take part [in the register] like the others.” 

Financial disclosure ‘confusion’ 

The EU executive will also revise the scheme’s financial disclosure requirements to address the “ambiguities” of the present system, the commissioner announced. 

Asked what other changes should be expected, Kallas said the focus would be on addressing “confusing” areas like financial disclosure, where the current system of giving consultancies a choice between absolutes and percentage bands had led to “unintended unequal treatment, requiring the smaller firms to reveal more than the larger ones”. 

At present, registrants are required to disclose the value of work carried out on behalf of each of their clients, either in bands of €50,000 or as a percentage of total revenue (brackets of 10%). 

“We need to look at making financial disclosure more precise and reliable. To have both percentages and brackets is confusing, so we need some fine-tuning, but which direction we’ll go remains to be seen. We’re consulting on a better solution, but it’s too early to talk about numbers,” Kallas said. 

He did admit, however, that the percentage option had created “a certain ambiguity,” while the brackets for absolute sums could be made “more illustrative”. 

The former Estonian prime minister also acknowledged “confusion” about whether financial declarations should include only ‘direct’ lobbying – which he described as “face-to-face contact with a representative of an EU institution” – or feature ‘indirect’ lobbying too, meaning that conducted via “think-tanks, trade associations, platforms, forums and campaigns”. 

“We need to clarify this,” he said. 

Kallas refused to rule out moving towards a mandatory scheme in future, but said he was “quite satisfied and ready to develop the present register further at the moment”. 

The commissioner is also aware that there is little chance of the Council agreeing to join the scheme should it ever go mandatory. Indeed, Jonas Högström, an official at the Swedish Permanent Representation to the EU, admitted that “a mandatory register would be legally and constitutionally very problematic for most member states”. 

The Swedish EU Presidency has invited the European Commission to present to the Council its experiences following the first year of its voluntary lobby register on 25 September. 

"I don't think the current state-of-play requires moving towards an American system," said European Commission Vice-President Siim Kallas, responsible for transparency issues, stressing his desire to "[…] continue to strive for a voluntary register that offers additional transparency with reliable and meaningful information". 

"I didn't propose a register for the sake of having a register. The purpose remains to dispel any suspicion that EU decisions are made in anything other than the overall common European interest," Kallas added. 

"It was always clear that the European Parliament thought mandatory was the best way to go, and we will stick with this," said UK Liberal Democrat MEP Diana Wallis, vice-president of the EU assembly responsible for transparency issues. 

UK Labour MEP Richard Howitt said criticism of EU officials "isn't about who you meet: it's about how often and for how long". "It's great that we have a register, but there will always be concerns about the free-riders who won't be a part of it," he added. 

José Lalloum, managing partner of Logos Public Affairs and chairman of the European Public Affairs Consultancies' Association (EPACA), said: "Brussels is a village and reputation is very important. This is why we self-regulate. If you break the rules as a consultancy, you’re dead within two weeks. But there’s a difference between transparency and voyeurism." 

Regarding the future of the Commission's register, Lalloum commented: "We can go as far as we like in terms of regulation, but we need to make sure that this reassures citizens. Business will always find a way. My mother doesn't know about the register. At the moment we're talking between ourselves." 

"The best thing about Brussels is ease of access, and we must not let this distinction between registrants and non-registrants jeopardise this," said Catherine Stewart, founder and chairperson of Interel Cabinet Stewart and a vice-president of SEAP, the Society of European Affairs Professionals

Christina von Westernhagen of Dow Chemicals, vice-chair of AmCham EU's institutional affairs committee, insisted that the current register was working, but said financial disclosure needed to be redefined to reflect differences in the way interest representation is built in Brussels. "Policymaking must not be misrepresented by financial disclosure requirements," she warned. 

"The current system captures budgets, but not the message and where you're pushing that message as a company, for example within trade associations or lobbying MEPs or member states," said David Coen, professor of public policy and political economy at University College London and a member of the advisory board of the European Centre for Public Affairs

"The number of hats people are wearing and the different fora in which representation happens must be captured," he said, calling for databases of EU lobbying to be "disaggregated" to the level of specific issues, Commission directorates-general and Parliament committees. 

Calling for the current Commission register to be given "more teeth", Coen said there needed to be "a clear incentive to participate and a clear punishment for misdemeanors". 

Friends of the Earth Europe's Paul de Clerck, who is also linked to ALTER-EU, a lobby transparency group, said of law firms' reluctance to join the register: "The privacy argument is a smokescreen. We're not talking about protecting citizens here. We're talking about lobbying activities". 

A representative of Transparency International, an NGO, called on Commissioner Kallas to offer signatories more incentives to join the register. "Good lobbyists know about upcoming consultations weeks before you send out your alerts [to registrants]. You should perhaps consider asking people [who wish to meet with EU officials] to come back when they are registered." 

Erik Wesselius of Corporate Europe Observatory and ALTER-EU said: "Lobbyists clearly have no problem with the level of transparency in Washington, so they should be able to do the same in Europe." 

The European Commission launched a voluntary register for lobbyists seeking to influence its policymaking in June 2008 as part of a wider transparency initiative launched in 2005. 

The scheme is designed to help citizens identify the lobbyists who seek to influence EU policymaking. 

Meanwhile in April 2009, the EU executive and the European Parliament agreed common guidelines and a code of conduct for creating a single lobby register for the two institutions. 

While opinions vary as to the actual number of lobbyists active in Brussels, Administration and Anti-Fraud Commissioner Siim Kallas has cited a figure of 15,000 in the past. 

As of this morning (10 September), over 1,800 interest representatives had signed up to the register. 

  • 25 Sept.: Commission to present its lobby registration scheme to the Swedish EU Presidency. 

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