Wednesday

5th Oct 2022

EU watchdog seeks details on Barroso's bank job

  • Emily O'Reilly, the EU ombudsman, worried about the outrage caused by Barroso's appointment to Goldman Sachs. (Photo: European Union)

The European Ombudsman, Emily O'Reilly, has asked European Commission president Jean-Claude Juncker for more details on his predecessor Jose Manuel Barroso's new job at Goldman Sachs.

In a public letter dated Monday (5 September), O’Reilly asked the commission chief what measures were taken to verify that the appointment abides by ethics obligations as laid down in the EU treaty.

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Ex-commissioners must have the commission’s approval to take up positions during a “cooling off” period of 18 months after they step down. Barroso joined Goldman Sachs as a non-executive chairman and Brexit adviser in July, 20 months after leaving office.

The ombudsman said that “certain cases will not cease to be problematic simply because 18 months or longer has passed.”

“The appointment, which the commission has argued is in compliance with the code of conduct, raises question marks over the adequacy of the code itself,” the ombudsman said.

Barroso’s appointment to Goldman Sachs caused public outrage.

The US investment bank was involved in selling subprime mortgages - the financial instruments that caused the 2007 financial crisis.

It also helped Greece, for a fee worth hundreds of millions of euros, to conceal its debt figures through special financial operations before the country’s debt crisis became clear, prompting three EU bailouts.

“Mr Barroso’s move has generated concern at a very challenging time for the EU and particularly in relation to citizen trust in its institutions. This is a significant public interest issue and must be openly and comprehensively addressed by the commission,” O’Reilly wrote.

”The ‘right to work’ is not an unqualified one and must be balanced by the public right to an ethical administration”, she said.

The Wall Street trader is one of the US banks that could be hardest hit by Brexit.

O'Reilly asked how the commission planned to handle possible conflicts of interest between the bank's special Brexit adviser, Barroso, and the commission's special Brexit negotiator, Michel Barnier - who was once a member of the Barroso commission.

The EU executive was given until 14 October to reply. The ombudsman's office said that the commission usually respects the deadlines.

When asked by journalists on Tuesday about O'Reilly's letter, commission spokesman Alexander Winterstein said that Barroso's appointment was in line with EU rules, which he called ”the world's strictest".

When asked if the commission planned to change the rules, the spokesman recalled a previous statement by Juncker, where the commission president said that Barroso had followed the rules, but that "one has to choose one's employer well".

Winterstein did not elaborate on what Juncker meant in implying that Goldman Sachs was a poor choice.

He said all contacts between Barroso and Barnier would be recorded in the commission's "unique" transparency register.

More than 117,000 people have now signed a petition initiated by EU staff who were angered by Barroso’s appointment, but also by Juncker’s muted response.

A second petition, organised by NGOs, has gathered 62,000 signatures.

The petitions call for stronger measures against the former head of commission, including scrapping his pension rights. They also want to sharpen the conduct code by way of closing the revolving door between the EU executive and big business.

An EU staff union has also written to Juncker, saying that the appointment “can only provide further ammunition for populist and extremist europhobe propaganda”.

EU commission under fire over Barroso bank job

Barroso did not break any rules and the rules do not need changing, the EU commission said, after its former chief joined the bank that helped to break Greece at a turbulent time in Europe.

EU launches probe into Barroso ethics

Jean-Claude Juncker told EU ombudsman that his predecessor will be treated as just another lobbyist and will be subject to scrutiny by a special ethics committee.

Barroso had deeper ties to Goldman Sachs

The US bank made "confidential" suggestions on changes to EU policy changes during the former Commission chief's time in office, newly released documents reveal.

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