Thursday

16th Aug 2018

Opinion

Hill's UBS move confirms EU's 'revolving door' problem

  • Ex-finance commissioner Jonathan Hill has taken a job witih Freshfields, as well as multiple roles at several multinationals, including Iberdrola, Deloitte, and Aviva insurance (Photo: European Commission)

In July 2016 Lord Jonathan Hill left his role as EU finance commissioner as a consequence of the unexpected Brexit referendum result.

Two years on, Hill has now racked up a series of new jobs, almost all of them in the financial industry and focused on the Brexit process.

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The latest is giving advice to Swiss banking giant UBS, raising serious concerns over conflicts of interest.

But Hill is far from an isolated case: the EU institutions have a serious revolving door problem, and President Juncker's meagre reforms will not solve it.

Serial revolving doors offender

After leaving the EU commission Hill returned to the UK, taking back his seat as a member of the House of Lords and participating in a variety of Brexit discussions.

But this was not simply a quiet return to national politics.

Just seven months later, on the day Article 50 was triggered signalling the UK's intention to depart the EU, the European commission announced it had authorised Hill to become an advisor of Freshfields, a law firm known in Brussels for lobbying on behalf of the financial industry.

The commission's ethics committee saw a very clear threat of conflicts of interest in this role, and imposed a set of conditions for 18 months which included prohibiting Hill from advising financial industry clients, not allowing him to give financial policy advice to Freshfield or other clients, nor to lobby the commission on matters that used to be under his purview.

One has to wonder though, with a job like this can the risk really be curbed by imposed limitations that no one monitors? And does that risk disappear after 18 months? We don't think so.

And that wasn't the end of it.

According to his House of Lords declaration of interests, Hill has since taken on multiple roles at several multinationals, including Iberdrola, Deloitte, and Aviva insurance.

The latter, at least, is a clear overlap with the purview of his previous responsibilities as a public official overseeing the finance sector.

To make matter worse, last month UBS announced that it had also hired Hill to provide advice on Brexit and other political issues for its corporate clients.

This was reminiscent of the Barroso scandal, when the former commission president took up a role with Goldman Sachs to advise on Brexit.

UBS and its clients now stand to benefit from Hill's insider know-how, influence, and access to relevant actors in the EU and UK (not forgetting the UK's Conservative government and House of Lords).

These are unique privileges which will now be available to private companies to pursue their own profit-motivated goals.

What about the ethics rules?

As the UBS role was announced a few months after the end of Hill's 18 month notification period, the commission hasn't even assessed this new job.

New rules for commissioners were introduced in February 2018, extending the notification period for ex-commissioners to 24 months, but Hill resigned before they were implemented.

Still, there is a legal framework that Hill must obey: Article 2454 of the Treaty for the Functioning of the EU (TFEU) obliges former commissioners to act with integrity and discretion when taking up new appointments.

As the EU ombudsman has recently pointed out, these duties "are not time limited".

Corporate Europe Observatory urged the commission to learn from its mistakes over Barroso-gate and speedily send Hill's new job to the ethics committee to assess whether it is compliant with the treaties.

Revolving doors and finance industry

Hill is not alone.

A recent report from Yiorgos Vassalos and Corporate Europe Observatory showed the dizzying moves between the commission's financial department and the financial industry.

Just looking at the post-2008 crisis period alone and excluding Hill, the roster of those moving through the revolving doors include former president Barroso who took a job with Goldman Sachs, and former finance commissioner Charles McCreevy, who went on to work for the Bank New York Mellon and financial firms such as Sentenial Ltd, World Spreads, and Celsius Funds plc.

Commissioners taking up these roles are a problem on its own right, creating a host of conflicts of interest, and granting even more political power and privileged access to a financial industry that is already too powerful.

They also set a negative example to EU officials: no surprise, then, that in the last decade at least one third of top staff of DG Fisma have either came from the financial industry or went there after their time at the commission.

European citizens are still struggling from the fallout of the 2008 economic crisis.

How can we expect the independent and sturdy financial policy-making we need when the lines between regulator and regulated are continually blurred like this?

The commission needs to get its house in order.

It can start by listening to the European Ombudsman and other critics, and take a proactive stance in preventing conflicts of interest. In this case, that means Hill's new roles must be assessed.

Margarida Silva is a lobby transparency and ethics campaigner with Corporate Europe Observatory, a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy-making

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