Kim Bizzarri and Will Dinan, 24 March 2009

Corporate interests and big money are now circling Brussels with the same enthusiasm they have encircled Washington. What can be done?

With the looming Euro-election this June it is timely to consider what the Scottish public might actually be voting for in the next few months. Most electors would struggle to name their MEP, and fewer still have any idea what they get up to when they depart for Brussels, and instantaneously disappear from our political consciousness. While the real power in the European system resides in the European Commission, appointed by national governments, the Parliament is nevertheless an important institution. Perversely, as Europe attracts more and more political powers, it attracts less and less media attention. EU summits appear on our television screens every few months, but the day-to-day business of politics in Brussels is rarely, and often poorly, reported. This is a very worrying development, as is the arrival of the professional influence industry en masse in the heart of the European polity.

Corporate lobbying has rapidly become an integral element in the decision-making process in Europe. It costs a lot of money to hire specialist staff (often ex-officials), rent offices, and maintain a presence at the centre of EU governance. This is an important structural advantage for those with the deepest pockets to invest in shaping policy and legislation. One of the greatest myths about Brussels is that it is a vast bureaucracy churning out endless and pointless directives. There are in fact fewer public servants in Brussels than there are in Edinburgh. However, this is not cause for cheer. Given their extensive portfolios and powers EU officials need some outside help; information subsidies if you like. The Commission in particular has developed a rather unhealthy dependency on lobbyists for accessing useful and timely information. By helping out in this way lobbyists have been granted a privileged position in the decision-making process, where information is traded for influence. Over the last two decades corporations, industry lobby groups and PR firms have sprung up all around the European institutions, with the purpose of moulding European legislation from its very inception. Almost every industry imaginable has its own sectoral lobby group in Brussels, from the tiny European Bottled Watercooler Association, to the gargantuan European Chemical Industry Council (CEFIC) which has more lobbyists on staff than all the environmental NGOs combined.

With over 15,000 full-time lobbyists currently roaming the corridors of the EU institutions, Brussels has become a worthy rival to Washington, with lobbying expenditures estimated to approximate one billion Euros a year. It is estimated that 70 per cent of all lobbyists represent the interests of big business, whilst national and regional offices, as well as civil society organisation, make up just 20 per cent and 10 per cent of the total respectively. The Brussels corporate lobbying scene alone numbers over 1,000 lobby groups, hundreds of public relations and public affairs firms, numerous law firms offering lobbying services, dozens of corporate funded think tanks, as well as hundreds of EU affairs offices run by individual corporations. It is easy to understand why the Society of European Public Affairs Professionals (SEAP) complained to the European Parliament in 2004 about the lack of physical space available for lobbyists in the building, many of which would be “forced to stand during committee meetings”.

The overwhelming presence of corporate lobbyists in Brussels and the dependency of EU officials on their input to shape European legislation, raises serious concerns on the democratic nature of European governance. Cases of privileged access and of revolving doors (the traffic of personnel from jobs regulating industry to jobs in that very industry lobbying the regulators), as well as the corporate funding of front groups, have all become standard practice in the Brussels’ way of doing politics. The revolving door between EU institutions and business has allowed corporations to exploit former officials’ personal contacts within the institutions to gain privileged access and influence decision-makers. Jean-Paul Mingasson for example, former Director-General at the Commission for Enterprise and Industry, left his post in 2004 to work as an adviser to BusinessEurope, the powerful confederations of European industrialists (the EU umbrella group of the UK’s CBI). While employed at the Commission, Mr Mingasson was personally involved in the EU’s revised legislation for the regulation of chemicals in Europe (REACH), against which he promptly begun lobbying as an advisor for BusinessEurope.

The strong ties that bind the EU institutions to business have arguably caused too much of the decision-making process in the EU to become captured by corporate interests. The current Commissioner for the internal market, Charlie McCreevy, recently opined that there had been capture of financial regulation by the industry. Despite this realisation, he still appointed a group of former bankers to advise him on how to best manage the current financial crisis – although none of the alleged experts has been known to be a supporter of strong regulation. This over-representation of industry within bodies responsible for advising EU institutions is not uncommon to Brussels. In the Biofuels Research Advisory Council (Biofrac) for instance – responsible for advising the European Commission on innovation policy for biofuels – the industry was represented with four oil companies, four biofuel companies, one member from the food industry, one from a forestry company, one from an energy company and one from EuropaBio (Europe’s large lobby association for biotech companies). There were also eight academics, some with links to the oil and biotech industry, but not a single representative from the environmental movement. It should come by no surprise therefore that the recommendations Biofrac put forward had a strong corporate bias. However, with approximately 1,350 expert groups similar to Biofrac advising the European Commission on all kinds of policy matters, there are serious democratic deficits around impartiality and transparency in EU decision-making.

In case revolving doors or privileged access do not guarantee corporations sufficient influence in Brussels, they have resorted to funding and setting up think tanks in an attempt to shape debate within the Brussels political circuit. An example of this practice is the Lisbon Council, which describes itself as a "Brussels based citizens-action group, which serves as an intellectual hub for pro-reform civil society throughout Europe”. The group’s website does not provide a list of financial supporters but states that “in a spirit of policy entrepreneurship, the founders invested their own time, capital and other resources to found the association and fund it through the first months. Over time, the work of the Lisbon Council will be sustained by grants and contributions of its members and supporters”. However, with a membership fee topping €100,000 it is difficult to imagine the Lisbon Council as a typical ‘citizens-action group’.

What is clear instead is that, rather than vested interests masquerading as a concerned public, Brussels is missing real citizen action. The European system is seen as remote, distant and is not trusted by many voters across Europe. The rejection of various EU treaties in referenda in France, the Netherlands and Ireland in the past few years is testament to a growing sense that the EU is top-down, autocratic and unaccountable. The political response to this from the Commission has been to offer a modicum of transparency, the logic being that Europe is unloved and misunderstood because people cannot see what happens in Brussels. This is a rather dubious assumption, but has acted as a driver of some reformist measures.

Despite the burgeoning political influence of big business in Brussels, lobbying towards the EU institutions is virtually unregulated and operates in secrecy. In contrast, the US and Canada in the 1990’s developed lobbying disclosure and ethics legislation, obliging lobbyists to register and report on which issues they work on, and how much money they spend on lobbying. This has not resulted in curbing corporate lobbying power which in the US has reached extraordinary levels due to the dependence of politicians on corporate campaign finance donations (even Obama used lobbyists funds, though he has followed up on some of his pledges to reduce the influence of lobbyists and special interests in Washington). However the regulations in place in North America do secure a level of transparency around lobbying that is currently absent in Europe. At least the American public knows it’s being screwed, and by whom.

Following increased pressure from pro-transparency groups, the European Commission launched the European Transparency Initiative (ETI) in March 2005, offering an unprecedented opportunity to shed some light on the lobbying scene in Brussels. Regrettably, due to opposition both within the EU institutions and from commercial and corporate lobbyists, the initiative has failed to deliver much transparency to date. The original plan to introduce a mandatory system of registration and detailed financial disclosure for all lobbyists has ended up turning into a voluntary subscription to a register whose loose reporting mechanisms offer no insight to the lobbying game played in Brussels and the dynamics that power it. The register, which is currently under review, has come under fierce criticism by pro-transparency campaigners and journalists. The Alliance for Lobbying Transparency in the EU (ALTER-EU) has claimed that the current voluntary system is failing, with less than 20 per cent of Brussels-based lobbying organisations registering over a year after its launch in March 2008. Moreover, some of the organisations who joined the register also failed to provide a complete list of clients (12 have been removed from the register for incomplete or inaccurate registrations), whilst others included in the database proved to be ghost organisations altogether.

On 17 February, the EUobserver, a Brussels-based newspaper, revealed that the register had been hijacked by a “mysterious mischief-maker who registered a string of seemingly fake companies” - one of them being a ‘Fares Bank Ltd’ with no real address but which claimed to have spent €250 million on lobbying EU institutions in 2008 alone – which would place it way ahead of Brussels’ long standing lobbying veterans like Hill & Knowlton or Burston Marsteller. Similarly, a few days later, it also emerged that The Cheerleading Federation of Ireland had joined the register reporting €50,000 spent lobbying on cheerleading policy – although a member of the cheerleaders group later admitted that the group mistakenly registered in the hope to access EU funding.

What can be done? Well, we could easily ignore the Brussels scene and use the forthcoming European Parliamentary elections as a chance to register our apathy, or express our displeasure with Brown/Cameron/Salmond in the ballot box. But this won’t change anything. Some campaigning groups in the ALTER EU coalition are hoping to make transparency an election issue across Europe, and to get candidates to pledge to work towards greater openness, accountability and transparency in the next European Parliament. The more pro-transparency candidates returned in these elections increases the chances of meaningful reforms on disclosure, secrecy and lobbying in Europe. The struggle for a radical improvement of the reporting obligations for lobbyists working to influence legislation at all levels of governance must be an urgent priority for progressive movements in Europe, UK and Scotland. Lobbying disclosure legislation will not lead alone to the end of excessive corporate power over decision-making, but it is a necessary step in that direction...

Kim Bizzarri and Will Dinan are members of the Alliance for Lobbying Transparency and Ethics Regulation (ALTER EU) www.alter-eu.org

This article first appeared in the Scottish Left Review