International Newsletter of HATVP – December 2020-January 2021
The start of the year calls for a review of lobbying in 2020: the United States has seen a sharp increase in this activity which has been intensified by GAFA (Google, Apple, Facebook and Amazon) spending and the provision of legislation in response to the pandemic. The rules on lobbying within European institutions have been reformed without entirely making access to policy makers conditional on registration in the European Union’s Transparency Register.
As candidate for the Presidency, Joe Biden himself outlined a comprehensive reform of lobbying in Washington, and possibly the establishment of a federal ethics agency. On his first day at the White House, the Democratic President signed an executive order for an ethics pledge. This order reaffirms the ban prohibiting members of his administration from accepting gifts from lobbyists. It introduces new bans concerning the redeployment of members of the Biden administration, increasing to two years the ban on working as lobbyists on matters related to their prior employment. Members of the administration may not retrain as foreign agents and may not communicate with federal agencies and senior White House officials following release from their duties.
As at the start of every year, Transparency International’s Corruption Perception Index shows that progress is still insufficient. According to this NGO, the pandemic is fostering corruption within the field of health. Yemen’s quarantine centres are a case in point. And in the United Kingdom, the pandemic has resulted in a relaxation of the rules governing the awarding of public contracts, and concerns over conflicts of interest. Lastly, the Council of Europe is calling on Germany to reinforce its ethical rules.
On 26 and 28 January, MEPs had the opportunity to examine Radan Kanev’s opinion and Daniel Freund’s report on the European ethics body. Discussions showed that several groups continue to support the creation of an ethics body, reiterating that this project represents a commitment from the European Commission and that all the Spitzenkandidat (lead candidates for the Presidency of the Commission in 2019), including conservatives, supported the idea of an ethics body. However, the EPP group (right-wing Christian Democrats), who hold the largest number of seats in the European Parliament, are less enthusiastic regarding the creation of this body. The arguments put forward by the EPP MEPs are concerned with avoiding a proliferation of bodies but also with preserving the European Parliament’s political independence. (Contexte, 29 January 2021)
From now on, lobbyists are required to register with the European Union’s Transparency Register ; this now applies to the Parliament, the Commission and also to the Council. However, the reform’s initial ambitions have been reduced since inclusion in the Register is not to be a sine qua non for meeting with public decision makers. Member States’ ambassadors must publish their meetings with lobbyists six months before their respective countries assume Presidency of the Council, and during the six-month term. Within the European Parliament, the current rules are to be maintained. Rapporteurs, shadow rapporteurs (rapporteurs who represent their political group’s point of view on a topic) and commission presidents — but not MEPs — will be required to publish their meetings. (Le Monde, 31 December 2020, The Parliament, 11 December 2020)
The GAFA’s spending on lobbying in Brussels has reached new levels. In particular, strategies designed to curb future European regulations which would affect them were leaked. Google’s strategy, for example, involved using “academic allies” tasked with raising questions about future ground rules, eroding support within the Commission itself or even maintaining a transatlantic trade dispute by enlisting American officials against European policy. (The New York Times, 14 December 2020, Le Figaro, 15 December 2020)
On 24 January, the European Ombudsman launched an investigation into the transparency of the European Commission with regard to vaccine negotiations. The investigation follows a complaint from Corporate Europe Observatory, which criticizes the Commission for not having complied with several requests for access to its contract with the pharmaceutical company AstraZeneca, and for not having disclosed the names of the European negotiators. (RTBF, 24 January 2021, Corporate Europe Observatory, 22 January 2021)
The Group of States Against Corruption (GRECO) is calling for a better lobbying framework, more transparency at federal government level and provisions for governing conflicts of interest in Germany. In its Fifth Evaluation Round report, the GRECO commended the anticorruption directive but called for this framework to be strengthened by a greater promotion of public integrity amongst holders of senior executive positions. Lobbying carried out on behalf of large companies by former members of the government came under particular criticism. The GRECO calls for clear obligations requiring Federal ministers and secretaries of state to declare their conflicts of interest and financial interests on a case-by-case basis. Finally, it recommended an extension to the waiting period to be observed between leaving government and accepting a job in the private sector, and that this should be applied to Chief Executive Officers. (Council of Europe, 15 December 2020, Le Figaro, 15 December 2020)
The NGO Transparency International is drawing up a review of its Integrity Pacts, which have been deployed in Hungary, Greece and Slovakia. These projects involve the NGO, public authorities and contractors in boosting transparency in public procurement. The European Commission has recognised such Integrity Pacts as a means of encouraging citizens to monitor major infrastructure projects, whilst the EU is to invest €1 trillion in the Green Pact over the next ten years. (Transparency International, 11 December 2020)
ESTONIA
A corruption scandal led the Prime Minister, Jüri Ratas, to step down on 13 January. The entire government, formed from a coalition of the Centre Party, conservatives and the far right, followed in his wake. Members of Mr Ratas’ party, the EKE, are the subjects of a criminal investigation for corruption, involving the granting of approval for a real estate project in Tallinn in exchange for a donation to the party of €1 million. The Estonian President, Kersti Kaljulaid, has asked Kaja Kallas, head of the Reform Party and leader of the opposition, to form the next government. (The New York Times, 13 January 2021, Le Figaro, 13 January 2021)
CZECH REPUBLIC
According to the Czech opposition MEP Tomas Zdechovsky, the Czech Republic will have to repay close to 450 million Czech crowns (around €18 million) to the European Union, due to Czech President Andrej Babis’ conflicts of interest. Citing a confidential audit conducted by the European Commission, the MEP and Member of the European Parliament’s Budget Committee referred to President Babis’ conflicts of interest and those of his company Agrofert, which benefitted from European subsidies. (Radio Prague International, 03 December 2020, Politico, 01 December 2020)
ROMANIA
The former strongman of the Romanian Social Democratic Party (PSD) was indicted by the national Anti-Corruption Prosecutor’s Office. Liviu Dragnea is accused of corruption following his participation in American President Donald Trump’s inauguration ceremony in January 2017. According to the Romanian Prosecutor’s Office, he allegedly obtained undue benefits for himself and for his party amounting to 380,000 dollars. (Le Figaro, 14 January 2021, BalkanInsight, 15 January 2021)
The British media have revealed that during the Covid-19 pandemic, contracts worth several million pounds sterling in public money were made in total secrecy with companies with close links to the Conservative Party. Companies with only very limited experience in sanitary equipment and tests won contracts that had not been made public. Under the pretext of urgency, the normal rules governing the awarding of public contracts were temporarily suspended at the start of the health crisis. (Le Monde, 23 December 2020, The New York Times, 17 December 2020)
Following the arrest of the Russian leader of the opposition, Alexeï Navalny, his team intends to continue the activities of his anticorruption foundation. On the day of the opposition leader’s arrest, his team published an article on Vladimir Poutine’s extravagant expenditure, claiming that he owned a palace on the Black Sea. Navalny had been arrested on his return from Germany, where he had been receiving treatment for his attempted murder by Novitchok agent poisoning. Tried for breach of judicial review, he has since been given a three-and-a-half-year prison sentence by the Russian courts. Thousands of preventive arrests were made to stop support reaching Navalny’s team, and his foundation’s senior executives are under house arrest. (Financial Times, 22 January 2021, Le Monde, 17 January 2021)
SWITZERLAND
On 22 January, the Franco-Israeli billionaire Benny Steinmetz received a five-year prison sentence for bribing foreign public officials in a case involving the awarding of mining licences in Guinea Conakry. Following this unprecedented trial in Switzerland, which lasted seven years, the businessman was found guilty of having paid nearly 10 million dollars in bribes to Mamadie Touré, the fourth wife of the former Guinean dictator. (FranceInfo Afrique, 26 January 2021, Libération, 23 January 2021)
The new Agency for Preventing and Combating Corruption, the APLC, is at the centre of a scandal regarding its methods of enquiry in a case of money laundering involving the Nigerian bank, Access Bank. As part of the investigation, two APLC agents seized documents from the bank without either a warrant or a requisition from the Public Prosecutor’s Office; they then demanded bail for the director of the bank, who was remanded in custody and deprived of his passport. There are growing calls for the establishment of a financial prosecution service in the face of the failings of the Agency for Combating Corruption. (CGNT, 19 December 2020)
Libération and Arab Reporters for Investigative Journalism (ARIJ) published a survey by a Yemeni journalist which reveals a system of corruption based around Covid-19 quarantine centres. The country is intensifying its isolation provisions within ill-equipped and crowded premises. Due to the deplorable sanitary conditions at these centres, carers and guards are accepting payments from individuals placed in quarantine in exchange for their escape. (Libération, 12 December 2020, ARIJ, 12 December 2020)
The construction group Odebrecht has once again received a sentence for corruption relating to the construction of a road in Colombia. The fine amounts to 50 million dollars. Odebrecht and its Colombian partners diverted funds from the execution of the contract to pay a government official who had helped them win the contract. The move was part of a global scale corruption scheme organised by Odebrecht (now Novonor) for over a decade, which resulted in the payment of hundreds of millions of dollars in bribes within various countries. (France 24, 28 December 2020)
EQUATOR
Former Ecuadorian Vice President Jorge Glas, already jailed in connection with the massive Odebrecht corruption scandal, has received a new eight-year prison sentence for embezzling public funds in an oil contract. According to the Prosecution, the State suffered damages of some 28 million dollars due to irregularities in the award of an oil field. (RTL, 25 January 2021)
UNITED STATES
President Biden signed an executive order for an ethics pledge, stricter than those of his predecessors, which will apply to the 1,200 positions requiring confirmation from the Senate. Donald Trump revoked his own ethics pledge during the final hours of his mandate, thus allowing members of his administration to immediately become lobbyists. Biden’s order reaffirms the ban prohibiting members of his administration from accepting gifts from lobbyists, and extends to two years the ban prohibiting them from working on matters related to their prior employment. Members of the administration are also banned from proceeding to work as foreign agents and they may not communicate with federal agencies and senior White House officials. Lastly it bans golden parachutes, compensation from private employers paid to those taking on government jobs. (Government Executive, 20 January 2021)
At least 28 Biden Foundation managers have joined the new administration or worked on the transition team. According to George Bush’s former ethics officer, President Joe Biden and his family should cut ties with the Biden Institute and the Beau Biden Foundation, which rely on fundraising. The Foundations’ donors should also be made public. The Clinton Foundation, the American philanthropic giant, previously came under scrutiny when Hillary Clinton ran for President of the United States. However, unlike the Clinton Foundation, the Biden Foundations already refuse to accept foreign donors and donations from the pharmaceutical industry. (Politico, 18 January 2021)
In the United States, lobbying intensified in 2020 during the pandemic. Most of the expenditure on lobbying was related to recovery plan legislation. The 40 biggest American companies spent 619 million dollars on advocacy, an increase of 8% compared to 2019. The three leaders, Facebook, Amazon and Comcast, all increased their spending on lobbying by 7 to 18%. (Bloomberg Government, 26 January 2021)
On 29 January Lai Xiaomin, ex-CEO of an investment fund, was executed for corruption in China. The courts accused him of having obtained €215 million in bribes. China launched a massive anticorruption campaign in 2012, after President Xi Jinping took over as head of the Chinese Communist Party (CCP). Over a million and a half CCP officials have been sanctioned. This operation, popular with the public, also allegedly serves to remove prominent figures who oppose the President’s line. (Le Monde, 29 January 2021, The Guardian, 5 January 2021)
INDONESIA
The Indonesian Minister for Social Affairs was arrested by the police who alleges that he has accepted 1.2 million dollars in bribes linked to food aid distributed to populations affected by the coronavirus. Juliari Batubara is the second minister under President Joko Widodo to be arrested within a few weeks on suspicion of corruption. He allegedly received more than a million dollars from companies chosen to provide food parcels to individuals affected by the pandemic. (Le journal de Montréal, 06 December 2020, The Jakarta Post, 6 December 2020)