17th Sep 2019

Commission rules out mandatory sign-up to lobby registry

  • The commission has conceded that its financial disclosure rules were not working (Photo: CE)

Enough lobbyists have signed up to the European Commission's lobby registry that the currently voluntary system does not need to be made obligatory, according to the commission's first annual review of the transparency scheme.

The commission's Registry of Interest Representatives, more commonly known as the lobby registry, is intended to track all those who try to influence EU decision-making. It has been widely criticised by transparency campaigners for lacking strict reporting standards and having little oversight.

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But according to the commission's review, due to be published Wednesday (27 October) and seen by EUobserver, the process is a "success," as the number of registrants "has already passed the 2,000 mark."

"The commission has seen a steady influx of registrations during the past 16 months, and the number is still rising," reads the report.

"A very large and steadily growing number of trade associations that are active in lobbying have registered, as well as 'in-house,' corporate lobbyists, and this trend shows no sign of saturation for the time being," it continues, noting that many NGO lobbyists have also listed themselves with the registry.

"The commission considers that the Register has come a long way in both quantitative and qualitative terms in its first 'pilot' year," it concludes. "Overall, the voluntary approach is working and should therefore be maintained."

The voluntary approach has been the focus of criticism by transparency groups from even before the launch of the registry.

In their own review of the registry in June, the Alliance for Lobbying Transparency and Ethics Regulation (Alter-EU) found that of the 2,600 lobbying entities that operate in Brussels according to a 2003 European Parliament estimate, just 22.8 percent had signed up to the registry.

The number of registrants is inflated, Alter-EU argues, as it is cluttered with lobby registry "spam" - meaningless entities from organisations that have little to do with lobbying EU institutions, but who have signed up to the registry believing it will raise their profile or because they think it will help them access European grants or other funds.

Financial disclosure

However, the commission has conceded that the rules on disclosing what has been spent on behalf of whom do indeed need tightening up - one of the key demands of transparency campaigners.

At the moment, registrants have the choice of registering how much is spent either within bandwidths of €50,000 or expressing the same figure as a percentage of turnover. If they choose to list spending in terms of percentages, they can simply do so in terms of 10 percent tranches, which the commission says allows lobbyists to hide what they are really spending on behalf of a client.

"This system means that registrants who choose to use the percentage brackets are not being treated equally," admits the commission in the review.

"Registrants with a very large turnover and many clients, who choose the percentage option, are de facto allowed to be significantly less transparent than registrants with a smaller turnover and only a few clients. They can offer their clients a much higher degree of confidentiality about the size of their contracts than smaller firms can."

Entries for two of the biggest lobbying firms, Burson-Marsteller and Hill and Knowlton, simply list clients as each falling under 10 percent of their turnover. But for these two large firms, 10 percent of their turnover could mean up to €690,000 and €810,000 respectively.

To do away with this problem, the commission intends to abolish the percentage option, and introduce three scales of reporting.

For firms with an annual turnover of less than €500,000 - the so-called boutique public relations outfits - they must report their spending on behalf of clients in €50,000 tranches; for mid-sized firms with turnover between €500,000 and €1 million, they must report in €100,000 tranches; and the largest firms, with turnovers of over a million, must report in tranches of €250,000.

What counts as lobbying?

Campaigners and many lobbyists in the past year have complained that the commission did not provide clear and broad definitions of what constitutes lobbying.

In response, the EU executive says that the scope of what counts as a lobbying activity "needs to be made more specific."

Registrants should from now on "disclose all expenditures covering actions initiated with the aim of influencing European policy formulation or decision-making processes, irrespective of the communication channel or medium it is using."

This includes social events or conferences, the review points out.

Lobbying also includes activities directed at diplomats from EU member states, the review underlines - until now, considered something of a grey area.

"[Lobbying] also includes activities directed at the permanent representations of the member states, including the Council presidency," warns the commission, while making an exception for activities where lobbyist try to influence national capitals or regional or city governments.

Law firms and think-tanks not playing nicely

The commission review also chastises law firms and think-tanks for refusing to sign up, with the latter strongly arguing that they do not engage in any lobbying.

The commission warns that think-tanks should stop trying to play the lily-white innocent and quotes some of their own literature in which they advertise the "unparallelled" lobbying opportunities they offer.

But the EU executive remains steadfast in refusing to demand that registrants list the names of lobbyists, saying that the names of organisations is enough. Campaigners say that without names, the registry is "as useful as a phonebook without numbers."

The review also offers no additional monitoring by civil servants of the registry or more robust enforcement of the rules.

Earlier this year when it was revealed that the Irish Cheerleading Federation had mistakenly signed up to the registry and an Italian businessman had bombarded the registry with a string of seemingly fake organisations, the commission admitted that it does not have the staff to investigate the veracity of every registrant's information.

"We don't check all the entries, obviously," a commission official told EUobserver at the time. "The information comes from the registrant and we put the burden for registering on them. It's their responsibility. The European Commission does not endorse or verify what goes in."

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