International Newsletter of the HATVP – October 2021
In October, the European Ombudsman asked the European Commission to clarify how it monitors the career transition of its staff.
Foreign influence in the area of interest representation is a topic that is gaining more and more attention, including from the research services of the European Parliament. In Tunisia, one of the main opposition parties has seen its computer servers confiscated as part of an investigation into a lobbying contract.
Following the recent revelations from the International Consortium of Investigative Journalists, known as the Pandora Papers, the presidents of Chile and Ecuador and the former Dutch finance minister are being investigated for transactions involving tax havens. In the United States, conflicts of interest related to the holding of company shares by senior public officials has led to parliamentary inquiries. In Australia, the plan to create a federal integrity commission has been criticised for its lack of resources, while corruption cases have recently shaken the Australian political class.
EUROPEAN UNION (EU)
The European Federation of Agricultural Trade Unions and Cooperatives (COPA-Cogeca) is reportedly engaged in an intense lobbying campaign against the European “Farm to Fork” strategy, the agricultural component of the Green Pact promoted by the European Commission. Internal documents consulted by journalists from the daily Le Monde detail the lobbying actions carried out by the agricultural federation to obtain the withdrawal of key provisions of the text (relating to the reduction in the use of pesticides, the health risks caused by factory farming or the maximum sugar levels in processed foods). COPA-Cogeca’s courses of action include commissioning academic studies and organising events with European media. (Le Monde, 12 October 2021)
On 19 October, the European Ombudsman, Emily O’Reilly, called a meeting with the Commission to seek clarification on the Commission’s authorisations for staff wishing to move to the private sector. Her department has examined around 100 files on the retraining of Commission staff. In October, Nicholas Banasevic, former chief competition officer, joined a law firm, Gibson, Dunn & Crutcher, and came under criticism. The European Executive said it had assessed these career transition plans and adopted appropriate restrictions to prevent any risk of conflict of interest. The European Ombudsman would also like to ask the Commission about its monitoring of compliance with the conditions attached to decisions authorising transfers to the private sector. In September, the failure of former Agriculture Commissioner Phil Hogan, who has joined the law firm DLA Piper in Brussels, to respect the two-year waiting period caused controversy. (Le Monde, 19 October 2021)
The research services of the European Parliament have published a briefing on overseeing foreign influence and lobbying, as part of the expansion of the European Union transparency register to intermediaries representing the interests of foreign states. According to the OECD, only the United States, Australia and Canada currently have rules governing foreign influence. The American and Australian laws provide for specific foreign influence mechanisms, separate from the registers on the representation of interests. The Canadian system, on the other hand, includes foreign parties directly in its register of interest representatives, although the creation of a separate register is also being considered. The main challenges for such mechanisms reside in their ability to take these new forms of influence into account and to delimit what concerns commercial interests and what concerns state interests defended by certain structures. (European Parliament, 19 October 2021)
GEOGRAHIC AREAS
Austrian conservative Chancellor Sebastian Kurz, suspected of having used government funds in the past to secure favourable media coverage, announced his resignation on 9 October. According to the prosecution, between 2016 and 2019, glowing articles and partially manipulated opinion research were published in exchange for the purchase of advertising space by the then Conservative-led Ministry of Finance. (France 24, 9 October 2021)
NETHERLANDS
Outgoing Dutch Finance Minister Wopke Hoekstra has been named in the so-called “Pandora Papers” revelations for having invested more than €26,000 in a shell company in the British Virgin Islands in 2009. He reportedly resold these shares shortly before entering government in 2017. Wopke Hoekstra, who is responsible for combating tax evasion in his country and is particularly critical of the financial mismanagement of southern European countries, denied any illegal behaviour before the Dutch parliament. To forestall any revelations about other investments, he confessed that he also invested his money in 2015 on the island of Guernsey. (Franceinfo, 6 October 2021)
UNITED KINGDOM
The UK government has been accused by the investigative journalism website openDemocracy of waging a “secret war” against transparency. In a recent report, the collective says that 2020 was the worst year for transparency since the Freedom of Information Act came into force in 2005. The UK government is reportedly using a variety of strategies to prevent information from being released to the public. Only 41% of requests for access to documents were reportedly honoured in 2020, a figure that continues a downward trend over the past decade. The government responded that the attack revealed a lack of understanding of the Freedom of Information Act, that the context of the Covid-19 epidemic had reduced the capacity to respond to these requests for access to documents, and that most of the requests were for documents whose sensitive nature prohibited disclosure. (The Guardian, 25 October 2021)
SLOVAKIA
Peter Kazimir, governor of the Slovak Central Bank, and, as such, member of the Governing Council of the European Central Bank (ECB), has been charged with corruption in his country. The corruption charges are linked to his former role as finance minister in the government of former Prime Minister Robert Fico. Peter Kazimir denies these accusations. (Les Echos, 13 October 2021)
VATICAN
The trial for financial crimes of Cardinal Becciu and his co-defendants, which began at the end of July, has resumed at the Vatican. Removed from office and privileges by the pontiff in September 2020, the cardinal has been implicated in the costly purchase of a prestigious building in London as part of the Holy See’s investment activities. All the defendants are facing charges of fraud, embezzlement, abuse of power, money laundering, corruption and extortion. Half of the sum intended for the purchase of the building was allegedly used for stock market investments, led by an Italian-Swiss businessman Raffaele Mincione, who also reportedly financed his own projects with these funds. (L’Express, 5 octobre 2021)
A report from the police special investigations unit reveals corruption at the Ministry of Health. Public contracts have been signed by the Ministry of Health with the communications company Digital vibes, supposed to set up awareness campaigns as part of the fight against the pandemic. But these 9 million euros were allegedly spent irregularly and made it possible for two people close to the former Minister of Health, Zweli Mkhize, and his son to benefit. Despite his promises to fight corruption at the top of the state, South African President Cyril Ramaphosa has never publicly condemned the behaviour of his former minister. (RFI, 2 October 2021).
In Tunisia, the computer servers of the Ennahdha movement were seized by an examining magistrate as part of the investigation into contacts between an American lobbying company and the Tunisian political movement. This contract, signed by the Ennahdha Party Diaspora Group with the public relations firm Burson Cohn and Wolf in July 2021, for the sum of 30,000 dollars, aimed to improve the party’s image in Washington. The Ennahdha party is accused of obtaining foreign funding for an electoral campaign and of accepting funds of unknown origin, violating the rules governing electoral campaigns in Tunisia. (La Presse, 26 October)
The head of the US Postal Service, Louis Dejoy, has come under fire for his holdings in companies related to the US Postal Service. However, the Postal Service claims that Mr Dejoy has respected the ethics rules of the postal administration. The former XPO Logistics executive is said to have completed a public financial declaration on his first day of work and was subject to a two-month review by the Postal Service’s ethics department at the start of his employment. Faced with controversy, Louis Dejoy initially decided to refrain from making any decision relating to companies placing him in a situation of conflict of interest. He finally gave up his portfolio of shares in these companies, under pressure from Congress. Under federal regulations, a federal employee may not hold more than an aggregate of $15,000 worth of shares in a company without recusing himself or herself from any decision regarding the company. (NBC News, 21 October 2021)
The Office of Congressional Ethics, the independent body charged with investigating allegations of misconduct by members of Congress, said it had sufficient reason to believe that four members of Congress, Jim Hadegorn, Mike Kelly, Tom Malinowski and Alex Mooney, may have violated ethics rules in the use of public funds, in financing election campaigns, in declaring share holdings or in using confidential information for personal gain. The two-party ethics committee of the House of Representatives is now examining these situations. This 10-member committee has the power to issue an injunction and sanction to members of Congress. (Forbes, 21 October 2021)
Chilean President Sebastian Piñera is the subject of an investigation following the revelations known as the “Pandora Papers”. The Chilean prosecutor’s office is investigating the sale of a mining company by a company owned by Mr Piñera’s children during his first term of office (2010-2014). The latter, back in power since 2018, denied any conflict of interest in the sale of the mining company Dominga to a close friend. According to the revelations of the International Consortium of Investigative Journalists (ICIJ) behind the Pandora Papers, the Chilean president sold the company to businessman Carlos Alberto Délano for $152 million, a transaction that took place in the British Virgin Islands, a tax haven. The payments in three instalments were contingent, among other things, on not establishing an environmental protection zone within the mining company’s area of operation, as called for by NGOs. (L’Obs, 8 October 2021)
ECUADOR
On 18 October, the Ecuadorian prosecutor’s office opened a “preliminary investigation” into suspected tax fraud against President Guillermo Lasso. The latter is implicated in the revelations known as the “Pandora Papers”. The Ecuadorian president controlled 14 offshore companies, most of them located in Panama. Mr. Lasso refused to testify before a parliamentary committee responsible for investigating this affair and asserted that he had separated from these structures in order to be a candidate in the elections of 2021, whereas in 2017 former president Correa had adopted a law prohibiting presidential candidates from owning companies located in tax havens. (21 October 2021, Le Point)
South Australian Deputy Prime Minister Vickie Chapman is under parliamentary inquiry on suspicion of conflict of interest. Vickie Chapman, who is also Minister for Planning and the Attorney General, rejected an estimated $40 million port project off an island where her family owns property. This decision was taken against the advice of her Ministry, which supported the project. (Indaily, 12 October 2021)
The plan to create a federal integrity commission, which is due to be debated in parliament in the coming weeks, is already the subject of criticism from NGOs and parliamentarians because of the weak powers that this commission would have. The Prime Minister promised the creation of an independent agency at the last election but refuses to allow it to have the same powers as the New South Wales anti-corruption agency. The agency’s recent decision to investigate the Prime Minister of this Australian state led to her resignation. The proposed federal commission would therefore not have the power to investigate on its own initiative or to publish its decisions. Only the “most serious” criminal offences would fall within the remit of the commission, excluding conflicts of interest and breaches of ministerial codes of conduct. (Sydney Morning Herald, 6 October 2021)
CHINA
On 2 October, the National Anti-Corruption Committee announced the opening of an investigation against former Justice Minister Fu Zhenghu. This announcement is part of the “clean hands” operation, under which more than one million Party members have already been sanctioned. Among them are potential rivals of President Xi Jinping. Fu Zhenghu himself had carried out such an anti-corruption campaign when he was a minister. He became known in particular, in 2013, during the investigation which resulted in the life sentence for corruption and abuse of power of the former Chinese security chief, Zhou Yongkang. The current campaign, dubbed the “campaign against tigers and flies”, targets acts of corruption by party officials as well as lower-level civil servants. (RFI, 2 October 2021).