Commission’s ethics failures came home to roost in 2016

Among all the bad news stories of 2016, the Brussels bubble media has had cause to repeatedly focus on the European Commission's various ethics scandals, which have reared their ugly heads one after the other. 2016 has truly been a year when the Commission's rules and ethics have been tested – and found wanting.

March 2016

Spanish newspapers reported allegations made in court about Climate Commissioner Miguel Arias Cañete that date back to his time as Agriculture Minister. They relate to the irregular awarding of contracts by Acuamed, a public water management company under the responsibility of the Ministry for Agriculture. Later in the year, MEPs quizzed Cañete about this and other issues (see April) in a closed session.

Meanwhile, the Dutch Presidency of the European Council slashed the future entitlement to transitional payments that former commissioners receive after leaving office, from 36 to 24 months. The transitional allowance means ex-commissioners have a continued source of income and, theoretically at least, no incentive to accept jobs that involve lobbying or other conflicts of interest. Many people will find the idea of commissioners being entitled to generous payments when they are no longer in office unpalatable. However this cut could undermine ALTER-EU’s demand for a 36-month cooling off period to avoid ex-commissioners taking on new employment that could create conflicts of interest after leaving office.

April 2016

On 3 April, Commissioner Cañete came into the media spotlight again due to his wife being listed in the #PanamaPapers. Micaela Domecq Solís-Beaumont was empowered by the Panama-based company Rinconada Investments Group (set up in 2005 and active until 2010) to approve financial transactions. Commissioner Cañete did not include this company in any of his declarations of interest, which should date back ten years. However, the Commission responded that there was no conflict of interest as it pre-dated his time as commissioner, and because Cañete and his wife have a prenuptial agreement and separate interests.

30 April was the last day of the 18-month notification period for departing commissioners from the Barroso II Commission and suddenly the revolving door is nearly swinging off its hinges with a flurry of ex-commissioners moving into the private sector. Connie Hedegaard (former Climate Commissioner) had previously withdrawn a request (following a negative view from the Commission’s advisory panel) for authorisation to join the board of Danfoss, a Danish producer of refrigeration and air-conditioning; but nevertheless as the notification period ended on 29 April, she was elected to join its board.

May 2016

As of 1 May, ex-Digital Agenda Commissioner Neelie Kroes joined the board of US tech company Salesforce. But attracting far more attention in the revolving door stakes was Neelie Kroes’ move to the public policy board of controversial tech company Uber, especially after her vocal support for it whilst in office.

Karel De Gucht (the former Trade Commissioner who launched the TTIP negotiations) was also busy once his notification period ended. He immediately joined the board of Arcelor Mittal, the steel and mining giant.

Meanwhile, the European Ombudsman announced that she would launch an investigation into the handling of potential conflicts of interest connected to Commission Special Advisers.

July 2016

Former Commission President José Manuel Barroso greatly increased the furore over the Commission's revolving door scandals by deciding to become Chair of, and advisor to, Goldman Sachs International. The investment bank, whose operations helped contribute to the financial crisis, and whose lobbying in Brussels is focussed on opposing attempts to develop stricter financial regulation, was surely not an appropriate destination for a former president of the Commission?

Swift criticisms soon followed from MEPs, the Ombudsman, civil society, the EU institution staff, the media, French President François Hollande, and pretty much everyone else – except the Commission.

Meanwhile, almost lost in the media melee was a compelling ruling by the Ombudsman on the handling of an historical revolving doors case by Barroso's Commisison. The case involved a Barroso I commissioner, later identified as Benita Ferrero-Waldener, who had failed to seek authorisation for a new paid role with a private company, as required under the rules. The Ombudsman, who only investigated the case after a tip off, found that the Barroso II Commission had failed to adequately deal with this serious breach of the rules.

Finally, the membership of the Commission’s three-person ethics advisory body was changed via a decision of the College of Commissioners. As a result of the appointment of two new special advisers the ethics body's independence, regularly championed by the Commission, has been seriously brought into question. Can these individuals, who have close working relations to members of the College, really be able to provide independent advice on ethics?

August 2016

Despite the August summer break, the #Barrosogate scandal rolled on. ALTER-EU’s petition with WeMove.EU gathered 50,000 signatures in just a few days. Another petition set up by disgruntled staff working at the EU institutions passed the 100,000 signature threshold.

September 2016

It was only after a strongly-worded letter by the Ombudsman urging Juncker to “clarify the Commission’s position on the Barroso-Goldman Sachs case that the Commission appeared to realise that its approach to ignore the Barroso scandal was not working and that it needed to be seen to be doing something.

Fully two months after the scandal first broke, Juncker finally announced that he would send the case to its ethics advisory panel for an opinion. ALTER-EU said that this should be the start of a much longer process involving action against Barroso at the Court of Justice, and an overhaul of the ethics rules for commissioners.

But another wave of trouble was heading towards the Commission.

Neelie Kroes, formerly digital agenda commissioner, now with new roles at Uber, Salesforce, and Bank of America Merrill Lynch, was shown by the #Bahamasleaks investigation to have failed to include her directorship of Mint Holdings (2000-2009) in her Commission declaration of interests. Kroes admitted a mistake and blamed a paperwork mix-up, but learning the lessons from the disastrous handling of the Barroso case, Juncker immediately sent the Kroes case to the ethics panel. However, at the time of writing, we still await a final Commission decision on this case.

Finally, the Ombudsman announced the closure of its long-term inquiry into the Commission’s handling of revolving door moves by officials, only to announce that the Ombudsman’s office would start a further inquiry on the topic in 2017.

But not all critique of EU institutional ethics was focussed on the Commission. In the Parliament, Sven Giegold MEP, who had long been working on a report to boost transparency and integrity, including in the Parliament, claimed that his efforts were being scuppered by an unholy alliance of MEPs (who he named as “Christian Democrats, Social Democrats and Liberals”) opposed to tougher rules for themselves. Unfortunately, this left MEPs open to the charge of hypocrisy vis a vis the Commission.

October 2016

ALTER-EU, WeMove.EU, Transparency International and representatives of the EU staff, went to the Berlaymont to hand-in the two petitions on Barrosogate. However, the meeting promised with Commission Secretary-General Alexander Italianer turned out to be a 10 minute encounter, for the cameras, that was hardly worthy of the 200,000+ signatures the groups had collected.

At the end of the month, the Commission’s Advisory Committee potentially let Juncker off the hook in having to sanction his “friend” Barroso. The committee finally published its opinion saying there was insufficient evidence that the move to Goldman Sachs represents a breach of the treaty requirement to act with “integrity and discretion” after leaving office. But the opinion revealed the weakness of the Commission’s approach to ethics decision-making. ALTER-EU responded by calling for a change of culture so that the revolving door should no longer be seen as a normal part of ‘business as usual’; the abolition of ‘self-regulation’ whereby commissioners make decisions about their own ethics rules; and the end of ethics advisers who are hand-picked former EU-insiders. ALTER-EU made a formal complaint to the Commission on these and related matters. At the time of writing, we still await a response.

Before the month was out, Commissioner Oettinger, current Digital Agenda Commissioner and Juncker’s candidate to become commissioner responsible for the EU budget and human resources, embroils himself and the Commission in a further wave of controversy when offensive comments about a delegation of Chinese officials and about gay marriage are caught on film. Oettinger later called his remarks “sloppy” and belatedly apologises; while the Commission, once again, became the subject of media ridicule due to Juncker’s unwillingness to take action.

November 2016

The #Oettingair scandal blew-up in November when it became public, via a parliamentary question, that in May Oettinger had used a private plane owned by his friend, a German businessman with strong ties to the Kremlin, to attend a conference in Hungary. Key ethics questions were raised by this trip: should the trip be considered as a gift or hospitality under commissioners’ ethics rules? Should the private plane trip have been declared as a lobby meeting?

The Commission’s reaction raised more questions than it answered: a spokesperson declared that it wasn’t a gift and it wasn’t a meeting covered by the transparency rules, bizarrely arguing that the encounter did not need declaring because it did not relate to Oettinger's portfolio. Yet the rules make no such exception. As a Green MEP commented, “It is deeply concerning that an EU Commissioner sees no problem in travelling in the private jet of a lobbyist with close ties to the Kremlin, who is actively opposing EU sanctions against Russia”. There are further allegations that Oettinger’s trip to Hungary provided an opportunity to discuss the possible infringement of EU rules for the expansion of the controversial Paks II nuclear plant, which is under investigation by the Commission. If ultimately approved by the Commission, a Russian state-owned company, Rosatom, would profit immensely from the project.

Meanwhile, once again on the theme of revolving doors, Die Zeit newspaper reported that ex-Commissioner De Gucht was still receiving a transitional allowance despite his highly questionable new roles, including with Arcelor Mittal. Juncker then announced in Le Soir his intention to reform the code of conduct following the Barroso scandal; the proposal that emerged was to add six months to the notification period to ex-commissioners (making it two years in total) and to make the period for presidents three years. This notification period is not an outright cooling-off period or ban, just a requirement to seek authorisation for new roles, and in practice very few job moves are actually blocked. This damp squib of a proposal does nothing to address the deep-seated Brussels culture that approves of commissioners and others going through the revolving door. In the Parliament, MEPs ask the Ombudsman to start a strategic inquiry into #Barrosogate.

December 2016

As #Oettingair rumbled on into December, speculation focussed on whether Juncker would really still promote Oettinger to budget commissioner (a role that also involves regulation of the revolving door, and other personnel matters in the Commission) especially after his previous offensive remarks, and whether MEPs will get the chance to properly quiz him before he takes office.

Meanwhile, the Juncker proposal for reform of ethics rules for commissioners was to be sent to the Parliament for an opinion. However, the legislature’s failure to set tough ethical standards for itself, via both the Giegold report and the Corbett report on the Parliament’s rules of procedures, including a failure to vote for a tough ban on MEPs holding problematic second jobs, unfortunately gave it very little moral high-ground to demand more from the Commission in terms of its own conduct.

2017?

Will 2017 look any different? The big transparency and ethics issues in the new year - aside from the ongoing fallout from #Barrosogate, the #Bahamasleaks and #Oettingair - will be the reform of the lobby transparency register. But the Commission’s attempt to water-down the definition of lobbying in the register threatens to lead to less, rather than more, lobby transparency in Brussels. The Commission – and the Parliament will need swift action – to stop 2017 heading in the same direction as 2016.