The end of summer 2021 was marked by several court cases or scandals related to public integrity and transparency. Reviews called for the reform of lobbying regulations in the United Kingdom and ethical standards in Malta, while enquiries by ethics committees were launched against members of the US Congress.
Within European institutions, on 16 September the Parliament voted on a resolution to strengthen transparency and integrity through the creation of an independent European body responsible for ethical issues, while a president of the chamber of the European Court of Auditors was accused of embezzling public funds. The Commission, for its part, asked the Czech Republic to amend the conflict-of-interest framework for allocating European funding.
Finally, lobbying was scrutinised both by NGOs, which showed in a study the digital sector’s influence on decision-makers in Brussels, and by the governments themselves, as was the case for example in Tunisia.
EUROPEAN UNION (EU)
On 16 September, the European Parliament voted on a resolution in which it considers that a single independent European body responsible for ethical issues would better ensure the consistent and full implementation of ethical standards in all EU institutions. In addition, it calls on the European Commission to draw up a proposal in this regard. This independent body would have the power to make recommendations on ethics, including conflicts of interest. It would also be able to investigate on its own initiative the movement of European Commissioners, MEPs, and staff members of the EU and participating institutions between public and private sectors, before, during and after their terms of office or functions. It would also have a preventive role in raising awareness and giving advice. This proposed body will now be the subject of negotiations with the European Commission and the Council. (Mediapart, 16 September 2021, EUobserver, 23 September 2021)
According to a study conducted by the NGOs LobbyControl and Corporate Europe Observatory, the digital giants invest more than €97 million each year to make their voice heard in the European Parliament. Data from the EU Transparency Register shows that the digital sector spends the most on lobbying in the EU, ahead of the pharmaceutical, fossil fuels, finance or chemical products industries. Almost a third of this spending centres around 10 large companies, including, at the top, Google, Facebook and Microsoft. According to the study, in addition to the direct employment of lobbyists, these companies use networks of lobby groups and consultancy and law firms, and finance numerous think tanks and groups. (Le Temps, 1 September 2021, Reuters, 31 August 2021)
The Court of Justice of the European Union (CJEU) gave a decision in plenary session sanctioning the former president of chamber III of the European Court of Auditors for embezzling public funds. Karel Pinxten, a Belgian national, was accused of misappropriating more than €470,000 during his two terms (March 2006-April 2018), according to the EU Anti-Fraud Office (OLAF). The CJEU ruled against Karel Pinxten, who will lose two-thirds of his pension. (Libération, 30 September 2021, The Guardian, 30 September 2021)
The European Ombudsman, the 27 Member States and the European Commission signed an initiative on transparency on 23 September. This initiative aims to take the necessary measures (without detailing them) to make the EU’s decision-making process more open and to use the Conference on the Future of Europe to improve transparency in order to increase people’s trust in the EU. (Contexte, 27 September 2021)
IMF Managing Director Kristalina Georgieva has refuted accusations against her about pressure she allegedly exerted while at the helm of the World Bank. She is accused of having tried to influence a report in China’s favour. An investigation carried out at the request of the World Bank’s ethics committee concluded that there were irregularities in the drafting of the 2018 and 2020 editions of the « Doing Business » report, which scrutinises countries’ regulatory frameworks to find out which ones are most favourable for establishing businesses. Kristalina Georgieva is said to have pressured staff to change the report methodology. The World Bank’s management at the time was particularly criticised for its lack of integrity by its former chief economist, the Nobel Prize winner in Economic Sciences Paul Romer. (Ouest France, 25 September 2021, Aljazeera, 24 September 2021)
FIFA has suspended the former president of the African Football Confederation (CAF) from all football-related activities for one year. In September 2016, Issa Hayatou signed a contract contrary to competition principles with Lagardère Sports. This guaranteed the French company the management of television and marketing rights for competitions organised by CAF until 2028. The matter was referred to the investigatory chamber of the FIFA Ethics Committee in March 2017 by a competitor of Lagardère, Presentation Sport. (L’Equipe, 3 August 2021)
German MPs will be subject to more financial transparency. These developments follow a wave of financial scandals involving German Members of Parliament in managing the pandemic. The source of income received by MPs should thus be made more transparent. However, NGOs fear that despite stricter rules, procedures will continue to be carried out internally within the Bundestag, without the public being informed. During the tenure of the current President of the Bundestag, there has only been one fine for misconduct. (Euronews, 17 September 2021)
At the end of August, the former leader of the Austrian far right was given a suspended 15-month prison sentence in connection with the corruption case linked to Ibizagate. Heinz-Christian Strache was suspected of helping a friend in exchange for donations to his party and an all-expenses paid holiday. The former leader of the Freedom Party was notably filmed on a hidden camera in Ibiza offering public contracts to a woman posing as a Russian oligarch’s niece, in exchange for electoral support. He had resigned from his duties of Vice-Chancellor of Austria and President of the party when these facts were revealed. He has since been the subject of new charges of embezzlement from his own party. (France 24, 27 August 2021, Euronews, 27 August 2021)
Malta’s Commissioner for Standards in Public Life has launched an initiative to improve transparency and public integrity. Supported by the European Commission’s Directorate-General for Structural Reform, the initiative will call on the expertise of the Organisation for Economic Co-operation and Development (OECD). The project aims to restore and expand standards of integrity for those holding public office, members of government and parliamentarians included. Commissioner George Hyzler’s proposal to revise the code of ethics for MPs is currently blocked in Parliament. (Times of Malta, 27 September 2021)
The European Commission has refused to grant the Czech Republic any additional time to revise its policy on combatting conflicts of interest in the context of awarding European grants. In August, the EU Executive threatened to suspend the payment of European funds to certain companies, due to conflicts of interest surrounding the Agrofert conglomerate, founded by Czech Prime Minister Andrej Babiš. A Commission audit concluded that he had a direct influence on the company, while involved in taking decisions on the distribution of European funding. (Radio Prague International, 21 September 2021)
British housing secretary Michael Gove is facing calls to return £100,000 in donations he received from a property developer. Parliamentary records show two donations from the German property developer Zak Gertler. Gove is now in charge of planning in England and faces a decision on whether to scrap his predecessor’s policy which was set to give developers more freedom over where and what to build, in order to increase building. Gove’s predecessor had himself been embroiled in a conflict of interest involving property developers. (The Guardian, 16 September 2021)
A government review has been launched into the Greensill scandal in response to lobbying attempts by former Prime Minister David Cameron on behalf of a company seeking emergency financing linked to the pandemic. The review calls for a new code of conduct and greater transparency on who is funding government lobbying. One of the avenues included in this review for improving the transparency of lobbying would be to require lobbyists to disclose their clients or the people who ultimately benefit from their activity. The categories of lobbyists who are required to register in the UK should also be extended, including former senior civil servants or ministers, as well as lobbyists directly employed by companies, which is not currently the case. Virtual communications (texts and calls), and no longer just physical communications, should also be disclosed. Finally, the rules on conflicts of interest, in particular concerning the post-employment of former public officials, should be strengthened. (The Guardian, 16 September 2021)
Russian opposition leader and anti-corruption activist Alexeï Navalny has written an article from his prison in Russia calling for corruption to be placed at the heart of international summits. Mr Navalny proposes five steps to tackle the greed of autocratic leaders: 1) definition of countries that encourage corruption and adoption of uniform sanctions against these countries by the West; 2) full transparency on all contracts linking Western companies to countries encouraging corruption; 3) adoption of individual sanctions against managers of public or private companies supporting corruption; 4) use of existing tools against foreign corruption (such as the Foreign Corrupt Practices Act in the United States); and 5) the creation of an international commission to monitor the post-employment of former officials and contracts linking Western politicians, whether serving or retired, to corrupt authoritarian countries. (Le Monde, 21 August 2021, The Guardian, 19 August 2021)
Two officials from the US Federal Reserve have announced their early departure after investing in financial markets in 2020. Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren had their financial disclosure reports revealed in the press. In particular, one of them held shares in property investment companies while having taken a public position on the economic risks faced by the American property market. Fed President Jerome Powell has announced a full ethics review. (Le Monde, 28 September 2021, NPR, 27 September 2021)
The US Congress Ethics Committee has opened four enquiries into representatives – Democrat (Tom Malinowski) and Republicans (Mike Kelly, Jim Hagedorn and Alex Mooney). The Office of Congressional Ethics, which, unlike the Ethics Committee, does not have the powers to sanction representatives, had concluded that there were sufficient grounds to suspect violations of ethics rules. One of the representatives allegedly spent several thousands of dollars in campaign funds on subsistence costs and family holidays and failed to report expenses. The wife of another representative is said to have bought shares in steel as her husband actively supported the launch of an enquiry into steel imports under the Trump administration. (Roll Call, 7 September 2021)
The referendum on prosecuting former presidents for corruption did not attract voters. Only 7% of the 93 million voters turned out to vote. The initiative was to represent one of the highlights of the campaign against corruption of centre-left reformist President Andres Manuel Lopez Obrador. This referendum was however criticised from all sides for being orchestrated for political ends. The director of the Americas division of the NGO Human Rights Watch criticised the relevance of this referendum: as former presidents are not protected by any immunity, the prosecutor’s office is in fact free to initiate investigations at any time. (Le Monde, 2 August 2021, Bloomberg, 1 August 2021)
South African President Cyril Ramaphosa has acknowledged endemic corruption under the presidency of his predecessor Jacob Zuma. Testifying before the parliamentary committee investigating the embezzlement of public funds under the Zuma presidency (2009-2018), he explained his own conduct at the time within Zuma’s government. He said he sought to avoid conflict with Zuma so as not to be sacked, which would have severely limited his ability to reform the country. (Le Monde, 12 August 2021, Africanews, 11 August 2021)
On 15 September, the Afghan Central Bank announced that it had found $12.3 million at the homes and offices of former government members, at a time when the country, controlled since the end of August by the Taliban, faces a liquidity shortage. The Taliban is said to have transferred all the funds to the State in the name of transparency, denouncing the former regime for corruption. (La Presse, 15 September 2021, Reuters, 15 September 2021)
Iraq announced that it would hold an international conference dedicated to recovering funds stolen over the past two decades. Iraqi President Barham Salih said in May that $150 billion had been illegally transferred abroad since 2003 through corruption. The Secretary-General of the Arab League, ministers of justice, heads of judicial councils and supervisory bodies in the region were to attend this conference, organised by the Iraqi Public Integrity Commission. (Anadolu Agency, 14 September 2021, Asharq Al-Awsat, 15 September 2021)
The Tunisian authorities have looked into a lobbying contract signed by the Ennahdha party with the communications agency Burson Cohn & Wolfe. The purpose of this contract is to help the Ennahdha party access key players in the United States and advise it on its strategic communication and media relations. This contract was published as part of an obligation for US lobbyists to detail their activities overseas. Ennahdha, the main Tunisian parliamentary party, is currently ousted from power following President Kaïs Saïed’s decision to suspend the Tunisian Assembly. (Mediapart, 6 August 2021)