The Power of Financial Lobbyists Must be Curtailed PDF Print E-mail
Andy Rowell, 20 March 2011

The Sunday-Times’ “cash-for-laws” scandal in today’s paper will catch the headlines because once again politicians have been willing to take cash to influence legislation.

But the revelations are just the tip of the ice-berg. The fact that 3 MEPs were prepared to be paid to place amendments is shocking. But the fact that amendments are extensively and routinely placed by lobbyists is equally damning for our democracy.

Whilst, it could be easy to dismiss the antics of a few rogue MEPs, the greater unseen scandal is the power of big business in crafting laws in Brussels.

Nowhere is this this industry influence greater than on financial reform, where large banks and their lobbyists are trying – and succeeding – in watering down legislation that is meant to protect against another banking crisis and protect consumers.

Our report, published today on Goldman Sachs, entitled “Doing God's Work: How Goldman Sachs Rigs the Game” looks at the antics of just one bank and its lobbyists in London and Brussels.

There is no evidence that Goldman Sachs has paid MEPs for any of its activities. But as the Sunday Times has reported: “There is a smell to lobbying”.

Placing amendments is just one of the lobbying tactics being employed to shoot down legislation the bankers don’t want. But there are a whole lot more.

Our research show just how pervasive the presence of Goldman Sachs is in Brussels, although on the surface it is nowhere.

But scratch that surface and it is everywhere. It can operate through a dozen or so highly active lobbying groups, it sits on the Commission’s expert groups which have a direct influence on policy.

Its lobbyists routinely meet MEPs their assistants and Commission staff. You could argue that they have huge privileged access and undue influence on what happens in Brussels. But all of this influence is hidden from public view.

Take Tory MEPs. Our report shows that there have been extensive meetings between Goldman Sachs and Conservative MEPs including: 9 meetings in six months with a key MEP on the Parliament’s Economics and Monetary Committee; and a total of 36 meetings between just four Tory MEPs and Goldman Sachs, its lobby groups or PR companies acting on their behalf in just a few months.

The reason for all these meetings is to try and influence legislation. The bank’s lobbying campaign to undermine political reform on derivatives and alternative investment funds has included not just MEPs and their assistants but private dinners and unminuted "after office hours” meetings, high-level conferences and targeted campaigns against Commission officials.

The report also exposes how Goldman Sach’s lobbyists tried to undermine amendments in a key report on derivatives, seen as “financial weapons of mass destruction”.  

The report is published as the debate on financial reform at the EU reaches a crucial stage. Brussels is finalising plans for reforming the OTC Derivatives market as well as Credit Default Swaps. Once again the industry lobbyists are all over the legislation.

Hopefully the Sunday Times' revelations will stir a debate on lobbying in Brussels. For people who follow the Brussels bubble they know that the scandal was an accident literally waiting to happen.

The rules that govern the way politicians behave are extremely lax. Over two years ago, whilst investigating conflicts of interests of MEPs, the Liberal MEP Chris Davies told me that: “The European parliamentary rules are 20 years behind those of Westminster. They really are a scandal waiting to happen.”

Last year, SpinWatch and Corporate Europe Observatory published a report that exposed how oil companies such as BP had helped draft climate change legislation that secured a nine billion euro subsidy from taxpayers.

Emails obtained by Spinwatch showed how the industry cosied up to Chris Davies himself, who was responsible for drafting legislation on how to pay for carbon capture and storage (CCS) technology.

Davies justified his actions by using a famous quotation often mis-attributed to Otto von Bismarck: “The public should never be allowed to see two things: How sausages are made and how laws are made.”

If the public did really understand the influence big business has on crafting and changing laws in Brussels, there really would be outrage.
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