Monday

18th Jun 2018

Ombudsman blasts Commission over Barroso case

  • 'It was entirely predictable that a former commission president taking up a post with Goldman Sachs was likely to raise these serious public concerns," but Juncker (l) took no decision, Ombudsman O'Reilly said (Photo: European Commission)

The European Commission should "reassess" its former chief's move to Goldman Sachs and say clearly whether he can lobby the institution, the EU Ombudsman has said.

"Putting the matter to the ethics committee once more would demonstrate that the Commission has taken very seriously public concern over this affair and the damage done to the image of the EU institutions," said Emily O'Reilly.

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  • 'The exact nature' of commissioner Katainen's meeting with Barroso 'is not clear' (Photo: European Commission)

In a scathing report published on Thursday (15 March), she said she had "some specific concerns about how the commission dealt" with the appointment of Jose Manuel Barroso to the US business bank in July 2016.

"It was entirely predictable that a former commission president taking up a post with Goldman Sachs was likely to raise these serious public concerns," but "the commission took no decision on his case," and failed to "set out, in any formal document, precisely how [it] should deal with approaches" from Barroso, she said.

O'Reilly insisted that the commission's "maladministration" was "not without consequences."

Some nine minutes after the 10am publication of the ombudsman's report, Barroso tweeted simply: "I have not and will not lobby EU officials".

Earlier this year, commissioner Jyrki Katainen admitted that he met with Barroso last October.

 The meeting, which took place in a hotel bar and where no notes were taken, was registered only as a meeting with 'The Goldman Sachs Group, Inc. (GS)'. Katainen later told EUobserver that it was a private "chat" between two friends."

"The accuracy of vice‐president's later statement cannot now be confirmed," the Ombudsman noted, referring to the interview published on this website.

For the EU accountability watchdog, "the exact nature of the meeting is not clear."

She insisted that "there are understandable concerns about this incident, specifically that the former commission president is using his previous status and his contacts with former colleagues, to open doors, to influence, and to obtain information."

For O'Reilly, the "chat" between the two politicians looked pretty much like a lobbying meeting, and not only because it was recorded as Goldman Sachs meeting.

First, because "the matters discussed in that meeting, trade and defence policy, may be of interest to an investment bank such as Goldman Sachs."

Second, "one of key objectives of a lobbyist is to meet with public officials and to obtain from them information which may be useful to the company they represent."

Thirdly, Katainen's portfolio - jobs, growth, investment and competitiveness - is "certainly of interest to an investment bank such as Goldman Sachs."

In a press conference last month, the commission's president Jean-Claude Juncker said that the case was "nothing".

He argued that the Barroso-Katainen meeting "was respecting in full the rules the commission has adopted."

He added that Barroso - who he said was "not a gangster" and was still his "friend" - was "on the list of lobbyists."

Commission 'should have been alerted'

For O'Reilly, however, the commission's defence is based on weak arguments.

The EU executive let Barroso keep his job at the US business bank after an ad-hoc ethics committee appeared to say he had not breached the rules imposed on former commissioners.

"In fact, there were aspects of the opinion of the ethics committee which should have alerted the commission to the need to consider that opinion very carefully," the Ombudsman noted in her report.



She pointed out that the committee "did not express the positive conclusion" that Barroso's new job respected ethics rules, but that it only stated that there were "not sufficient grounds to establish a violation" of Barroso's duties.

"This was not an endorsement of the position of the former commission president," she insisted.

She also noted that the ethics committee did not state that Barroso was violating the rules only because he had pledged in a letter to Juncker that he had "not been engaged to lobby on behalf of Goldman Sachs," and that he did "not intend to do so."

O'Reilly "infers from this that the ethics committee was of the view that should the former commission president lobby the commission on behalf of Goldman Sachs, this would be a breach of his duty to act with integrity and discretion."

No direct talk with Barroso

But the commission, when handed the ethics committee's report, "did not incorporate into a formal decision the former commission president's commitment not to lobby on behalf of Goldman Sachs."

In addition to the commission's lack of action after the report, the Ombudsman considers that the ethics committee itself failed to investigate properly on Barroso's job at Goldman Sachs.

She noted that there is "no evidence" that it spoke "directly or written" with Barroso and that it based its assessment only on Barroso's letter to Juncker.

She argued it was "unrealistic" to reach a proper conclusion "in the absence of clear information as to what that job will or may entail."

In its report, the ethics committee noted that the notion of integrity was "unclear" but did not try to define it.

If the committee really did not think that its role was to define what integrity is, O'Reilly said, this "would appear significantly to undermine its role as commonly understood."

'Good sense and judgment'

The Ombudsman also pointed out that several members of the ad hoc committee are special advisors to the commission, and that "there is a risk of conflicts of interest" when they have to assess the behaviour of commissioners with whom they have "close working relationships".

O'Reilly has therefore asked the commission to refer Barroso's case back to the ethics committee, and this time to "assess, and take a formal decision" on whether "it is appropriate to require its former president to abstain from lobbying the commission and/or its services for a certain further number of years.

The commission has until 6 June to say what it will do.

In her report, O'Reilly gave a clear hint of what she expects from the institution that is the guardian of the treaties.

She noted that "certain activities undertaken by former commissioners can give rise to serious and legitimate public concerns," even after the 18-month so-called "cooling-off period" during which they have to notify the commission about the jobs they want to take.

"Former commissioners should thus use good sense and judgement when accepting job offers, even after the notification period expires," O'Reilly said.

Interview

Katainen explains: My friend Barroso did not lobby me

Vice-president of the European Commission Jyrki Katainen tells EUobserver that he did most of the talking during a beer with the former commission chief, who now works for Goldman Sachs.

Ombudsman asks for more details on Barroso case

Emily O'Reilly has asked the EU Commission to say what former commissioners should be allowed to do after they leave office and explain why it took no decision over its former president's controversial new job.

Magazine

Barrosogate and the revolt of public opinion

Just days after Britain's vote to leave the EU, the bloc was rocked by the news that commission ex-president, Jose Manuel Barroso, had landed a top job with Goldman Sachs.

Commission rejects ombudsman criticism over Barroso case

The European Commission repeated that it followed the rules when its former head joined Goldman Sachs - and suggested it will not follow the EU Ombudsman's demand to refer the case back to the ethics committee.

Commission sticks to its line on Barroso case

In a letter to a coalition of transparency NGOs, the EU executive has repeated that a meeting between its former boss - now working for Goldman Sachs - and the current vice president was "fully in line" with the rules.

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