'Two steps forward, one step back' for EU lobby transparency is the verdict of transparency campaigners on the quality of the data since the launch of the revised EU lobby transparency register. While some new organisations have signed up and others have improved the quality of their registrations, too many other entries continue to look problematic: confusing, unclear, inconsistent or just down-right dodgy.
Since the end of January, Brussels' lobbyists have been busy updating their EU transparency register entries to meet new disclosure requirements before the 27 April deadline. As a result of this process, now the EU lobby register only contains entries which have been updated in 2015. Using the data in ALTER-EU's January 2015 report “New and improved? Why the EU lobby register still fails to deliver” and the LobbyFacts website (which reflects the state of the official lobby register before the recent round of updates), ALTER-EU set out to discover how new and improved the data in the lobby register really is. Read our full findings here.
Our report “New and improved?” highlighted a series of major corporations, lobby consultancies and law firms which remained outside the register. While there have been some recent joiners (Credit Suisse, PACT European Affairs, Covington & Burling, TESCO and others) many of those we noted as absent in the old register remain so in the new register. These include: the City of London Corporation and Standard & Poors from the finance sector; EUTOP International, Ketchum and Eacon Group lobby consultancies; the law firms Freshfields Bruckhaus Deringer, Hogan Lovells, Clifford Chance, Dentons, Field Fisher Waterhouse and White & Case; as well as major corporations Electrabel, Anglo-American, Ajinomoto, Northrop Grumman, and Maersk.
Some lobbying organisations have updated their entries, quite possibly in response to the oxygen of negative publicity generated by our report.
In January 2015, NGOs complained to the EU lobby register authorities about the (previous) entry of Goldman Sachs which gave a 2013 lobby expenditure figure of less than €50,000. We suggested that Goldman Sachs had substantially under-reported its true lobby spend, especially considering the €450,000 it spent on two EU lobby consultancies between January 2013 and June 2014. Since then, the investment bank has updated its registration to report €700,000-€799,999 lobby spend for 2014, although this is still a far smaller lobby spend than Deutsche Bank (€3,962,000 reported lobby spend in 2014) and Credit Suisse (€1,250,000 - €1,499,999 for 2014). The final outcome of the NGOs' original complaint is not yet known.
Pharmaceuticals multinational Shire which we also criticised in our “New and improved?” report has increased its lobby expenditure disclosure from €200,000 - €250,000 in 2013, to €700,000 in 2014. It also provides a breakdown into different categories including: employees, public affairs consultancy fees, office & administrative expenses etc. The US consumer technology and defence multinational Honeywell has increased its lobby declaration from €250,000 - €300,000 in 2013 to €500,000 - €599,999 for 2014.
Other 'improved' entries include those for Prudential, European Landowners' Organization, Ogilvy Group and Monsanto which now all use recent lobby financial data in their declarations, rather than the seriously out-of-date info as was the case before. However, we have spotted further problems in this area. Association des couples multiethniques de France reports financial lobby data from 2003; Michel Abdelahad reports data from 2005; DIERREPI CONSULTING di Dom Rosario Poidimani reports data from 2007; Lucian Buzea reports data from 2008; and PLATAFORMA DE ONG DE ACCION SOCIAL reports data from 2009! A further 28 organisations report financial lobby data from 2010; 85 from 2011; and 293 organisations from 2012. A full list will be passed to the EU lobby register secretariat, but surely it is possible for it to set up an IT system which picks up on such entries?
We also previously criticised lobby firms and law firms for listing clients using opaque acronyms rather than spelling out their full name; some lobby consultancies have now improved their registration in this aspect.
But others have updated their registration in ways which create more questions than answers.
Bloomberg previously declared €50,000 lobby expenditure for 2013 when it joined the lobby register on 22 January 2015. Now, in its updated registration it provides a figure of €50,000 - €99,999 for 2013 lobby spending. However, lobby firm Sovereign Strategy says that Bloomberg provided it with lobby revenue of €100,000 - €199,999 in 2013. How is it possible to reconcile these two entries?
Gazprom, the Russian energy giant, did not initially meet the 27 April deadline to update its registration and was temporarily removed from the register. It later updated its registration, but reported spending less than €10,000 on EU lobbying, despite having 11 European Parliament pass-holders. This was clearly ridiculous, and after this was exposed by campaigners on Twitter, the registration was updated to €900,000 - €999,999. This is still less than the €1,000,000 - €1,250,000 LobbyFacts reports it previously declaring.
The French gas and electricity company Engie (formerly called GDF Suez) declared a decrease of lobby expenditure from €2,500,000-2,750,000 in 2013 to than less than €9,999 in 2014. Meanwhile, law firm Beiten Burkhardt declared €10,000,000 lobby turnover until January 2015. Yet now Beiten Burkhardt's reported lobby turnover is reported as less than €99,999.
Consultancy NineSigma Europe BVBA's registration also raises questions. For 2013 in its most recent declaration it declares revenue of less than €99,999 yet it had previously declared €2,250,000 - €2,500,000 and 12 lobbyists. It also seems unclear about its own clients. For the year 2013 it says it has “no clients so far as we know” providing lobby revenue below €9,999, which begs the question, how can they not know?. In the category for new clients providing revenue below €9,999, it says: “our clients choose to remain anonymous”. This is against the lobby register rules. All lobby clients should be disclosed and our original “New and improved?” report showed that 150 consultancies and law firms were in breach of the lobby register rules by not disclosing their clients. Our updated research indicates that many we previously featured, especially law firms, still fail to follow this basic rule.
Law firm Mayer Brown Europe-Brussels joined the lobby register on 20 February. It declares a lobby turnover of less than €99,999, and annual lobby costs of €50,000 - €99,999 for 2014, but only two clients (United States Steel Corporation and PT Djarum) which provides it with revenue of less than €9,999 each. Meanwhile the lobby consultancy g plus reports that in 2014, it received €100,000 - €199,999 lobby revenue from “Mayer Brown Europe-Brussels LLP (Coalition of non-European companies involved in fertilizer production and trade with the EU)”. It is not clear what connection Mayer Brown has to do with the coalition; the coalition is not mentioned in Mayer Brown's own registration.
And then there are the previous registrants who have dropped out of the register entirely.
The law firm Bird & Bird used to be in the register with a lobby turnover of €10,000,000 and up to 30 lobbyists, making it the law firm with the biggest lobbying turnover in the whole register (alongside Beiten Burkhardt) at the time. Yet now Bird & Bird has dropped out of the register. Can it really be true that it is no longer lobbying on behalf of clients, or has it instead decided to follow the vast majority of the lobbying law firms in Brussels which choose to boycott the register?
Any lobby organisation not updating its lobby registration before April 27 was suspended from the public register. At that point Transparency International recorded 1552 organisations to whom this applied. Since then, some of those have re-joined, presumably having forgotten to update on time; and some may no longer be lobbying at the EU level so have actively decided not to re-join. Others, and who knows how many, may have decided that joining the voluntary lobby transparency register is not worth their efforts. Failing to rejoin the register should mean organisations forfeit the opportunity to hold European Parliament access passes and to request lobby meetings with the most senior Commission officials, but those will not be huge barriers for lobbyists wishing to carry on business-as-usual but outside the glare of lobby transparency. If the Commission were to ban all meetings with unregistered lobbyists, that would be far more of an incentive to register – and to stay registered.
We note that a number of organisations which had previously reported substantial recent EU lobby expenditure or turnover have not yet re-joined the register, for reasons unknown. These include: Forum Public Affairs which previously reported an annual lobby turnover of €700,000 - €800,000; MHP Communications which previously reported an annual lobby turnover of €600,000 and five European Parliament pass-holders; and UK think-tank Policy Exchange which previously reported an annual lobby spend of €3,500,000 - €3,750,000.
Additionally, there are still examples of 'dodgy' data in the register, although the bizarre entries we highlighted in the “New and improved?” report have mostly been rectified. But new ones have come to light.
Nederlandse Belangenvereniging Draadloze Audio verbindingen PMSE (a lobby group for the wireless audio sector) joined on 10 April and lists 1435 lobbyists, and 628 full time equivalents. Yet in 2013 its lobby spend was less than €9,999. Triodos Bank registers 1000 lobbyists but 2014 lobby costs of less than €9,999. These would appear to be examples of organisations confusing staff numbers with lobbyist numbers.
And finally, in ALTER-EU's view, too many of Brussels' largest lobby consultancies (including Fleishman-Hillard, Burson-Marsteller, APCO Worldwide, FTI Consulting Belgium, Kreab Gavin Anderson and g plus) are hiding behind ridiculously wide bandwidths (given as 0 – 99,999; 100,000 – 499,999; 500,000 – 1,000,000; or >1,000,000 euros) when declaring their overall lobby turnover, instead of giving a precise figure. This makes it impossible for third parties to verify whether all their clients have been reported and it is additionally confusing when there is a big discrepancy between declared lobby costs and lobby turnover. If the register is to offer registrants the opportunity to record financial data via bandwidths, the categories used should be far, far narrower, especially for higher sums.
An identical system is in place for law firms and similar problems may well be occurring with this sector too, compounded by the fact that many law firms already refuse to list their clients. Of the 88 law firms registered, at least 25 declare a lobby turnover but do not disclose their clients fully. Of this 25, three write that their clients are confidential (one claiming they are natural persons) while 10 give unclear explanations of their clients. Five clearly only list some of their clients (as the numbers do not add up), one uses an unexplained acronym, and seven give a lobby turnover but then complete the field "own activities, no clients" with "none" or a "-", which is contradictory.
So what can we learn from all of this? There are some lessons:
Exposing dodgy-looking entries or lobbying organisations that have not signed up, can help to get registrations updated and missing companies to register.
But even with 'naming and shaming' some, especially lobbying law firms, are particularly resistant to transparency demands. Further, concerted action is required to get them to sign up. And likely it is only the introduction of a fully legally-binding lobby register, as in the US, that will ultimately force recalcitrant lobbyists to sign up.
It took one day or so for one researcher to check these entries and to compile the attached report. The ability to sort and rank the data is key to this (as provided by LobbyFacts), as is the ability to compare old registrations with new ones. The new EU lobby register interface and search engine is improved but it needs far better functionality to aide journalists and transparency watchdogs in the job of monitoring entries.
But ultimately, it is the role of the register secretariat to be vigilant. Is it monitoring changes to registrations overtime? How effective are its processes to identify and challenge dodgy-looking entries? Is it contacting those that have dropped-off from the register to find out why?*
Increased vigilance on the part of the lobby register authorities will require extra capacity and resources. Until that time - and the introduction of far tighter disclosure rules backed by the threat of real sanctions for non-compliance - the EU lobby register will continue to be a very imperfect snapshot of the Brussels lobby bubble.
* ALTER-EU will formally submit its research findings to the lobby register secretariat for follow-up action.
The data in this blog and report was checked in the EU lobby register on 19 May 2015 and again on 26 May 2015. The references to LobbyFacts refer to entries in the EU lobby register dated prior to the recent round of updates, ie. to data available on 26 January 2015.