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An Insider in Brussels: Lobbyists Reshape the European Union

by Elke CronenbergSpecial to CorpWatch
September 18th, 2006

Cartoon by Khalil Bendib

A version of this article first appeared in the Swedish magazine VI www.vi-tidningen.se

Morning transforms Brussels' famous Schuman Square from an empty urban landscape into a bustling international center of European Union (EU) governance and commerce. The families that lived there until the 1960s are all gone, pushed out to make space for soulless concrete buildings that sit side-by-side with imaginative glass architecture. Schuman Square now houses the European Commission, the European Council of Ministers, the offices of the regions and with the European Parliament in walking distance.

The square is also is the heart of another business. Its single purpose is to influence the bureaucrats to institute policies and pass regulations that benefit its clients. Its workforce is some 15,000 lobbyists who spend Euro 60-95 million ($76 - $120 million) a year to buy access to the EU's growing power. Some of them are former bureaucrats and officials who have spun through the revolving door to become well-paid lobbyists, sometimes for industries they previously regulated.

They work in what has become the political center of the 25 countries of the European Union. Together these countries have a population of over 461 million people, a geographic area of four million square kilometers and a gross domestic product of $12.43 trillion, which would be the largest in the world if it were one country.

Over the last two decades, corporations, industry lobby groups and public relations firms have been drawn to Brussels like a magnet. The reason, of course, is the greater powers that the European Commission, the European Parliament and other EU institutions have gained as the result of a series of new European Union treaties. The first target for the lobbyists is the European Commission because it is there that legislative proposals originate. The next step is the European Parliament and its committees.

Burson-Marsteller: An Insider in Brussels

Brussels has rapidly developed its own insider culture. "We in Brussels we who work with questions about the European Union, live in an EU-bubble, where the political system surrounds us," says Per Johansson, a 32-year old Swede working in the city's increasingly cosmopolitan environment. Like many lobbyists, he studied law and then continued his education abroad where he gathered the necessary international contacts. Today, he is one of some 40 employees from 24 nations at the lobbying firm Burson-Marsteller.

Burson-Marsteller which describes itself as "a leading global public relations and public affairs firm" has almost 80 offices world wide, 23 of which are in the US and Canada. It is one of Brussel's bigger lobbying firms, with customers in the chemical, pharmaceutical, energy, information technology, and telecom sector; its clients include Coca-Cola, Swiss Pharma Association, and Statoil.

Per Johansson's office at Burson-Marsteller is at the highly desirable business address of 18 Avenue de Cortenbergh, just off Schuman Square. Leaving the morning throngs, he passes through the massive marble walls that surround his company, checks the European Commission's numerous web pages, and meets with persistent journalists.

Part of Burson-Marsteller job, along with image shaping, is the traditional damage control strategies that PR firms employ when a client corporation is caught in a scandal. Another function, common in the US and rapidly spreading around Europe, is influencing government policy and shaping it to benefit the client's corporate needs. Sometimes this job requires positioning hand-picked experts, creating fake "grassroots" group, and arranging apparently objective scientific studies to support the client's interests.

One member of the European Parliament stressed that he does not want general opinions on political questions; he wants lobbyists to give him concrete text amendments that he can submit for voting in committees or plenary sessions of the European Parliament. As a result amendments drafted by industry lobbyists--and occasionally by civil society groups--often end up as EU law. Parliamentarians, critics charge, are in danger of becoming mere intermediaries who simply transfer lobby group demands into the EU’s decision-making machine.

Given this relationship, much of the lobbyists' work goes on behind closed doors. Some time ago, Burson-Marsteller faced bad publicity when it was accused of hiding its relationship to the Bromine Science Environmental Forum (BSFE). The neutral-sounding group describes itself on its website as "Dedicated to furthering the scientific understanding of bromine products."

In fact, BSFE "is a bromine industry front group run by the global PR firm Burson-Marsteller," according to the Watchdog Center for Media and Democracy. It is financed by leading bromine producers and used to influence decision makers in Brussels to apply lighter regulation. Often used as flame retardants in clothing, bromide has been implicated in serious human health problems and implicated in reducing Scandanavia's peregrine falcon population.

Deceptions like Burson-Marsteller's secretive role in the bromide scandal have led to calls for greater openness about the PR industry's growing role in shaping regulations and formulating EU policy.

The Lobbyists

A few blocks away from Schuman Square, at the Renaissance Hotel, Burson-Marsteller invited its local and global employees to an internal conference on the nuts and bolts of lobbying, earlier this year. One panel discussion features a member of the European Parliament, a journalist, and an employee from the European Commission who describe the best techniques for effectively lobbying them. In another session Burson-Marsteller highlights some of its successful campaigns such as its PR effort for the brewers organization explaining how beer and sport make a great fit.

Burson-Marsteller is just one of the 2,700 international and local special interest groups that cluster in Brussels. Around 70 percent are industry lobbyists, 10 percent work for non-governmental organizations such as Greenpeace, while the rest lobby and serve as information liaison for various regions, municipalities and other public institutions.

The huge number of lobbyists concentrated in Brussels reflects the reality that two-thirds of all legislative decisions for the EU are made in that city. And it is here that lobbyists get easy access to the European Parliament, attend committee meetings, and most easily find out which of the 732 members of the European Parliament need a push to a certain direction.

One of the lobbying firms' biggest shoves to parliamentarians came in 2005 when the EU was considering a new law called REACH --Registration, Evaluation and Authorization of Chemicals. This EU-wide legislation, placed the onus on business to show that the chemicals it uses are safe, and encouraged replacing hazardous chemicals with safer ones. The financial implications for the chemical companies were enormous and they deployed small armies of lobbyists to argue against the proposal.

"The lobbying and political pressure the EU executive body faced concerning the REACH proposal was more intense than [during the progress of] any other legislation the current Commission has proposed since taking office in 1999," declared former EU Commissioners Margot Wallström (Environment) and Erkki Liikanen (Enterprise) as quoted by Greenpeace.

After scrutinizing the system, the environmental organization charged that: "The same lobbying practices that trigger huge scandals in the USA appear to be acceptable in Brussels. In the USA, lobbyists are required to file detailed reports to Congress twice a year, listing their clients, fees and issues they follow. In the EU lobbyists operate without restriction."

While the lobbyists were sweet-talking the commissioners, they were using scare tactics on the public.  The chemical industry's trade organization, CEFIC (European Chemical Industry Council), warned that acceptance of the original proposal would throw millions out of work, numbers later showed to be greatly exaggerated.

In the end, the accepted proposal under REACH may even have been weaker than the regulations it replaced. Almost everyone agreed: Responsibility--or blame--lay with the powerful lobbying groups.

Lobbyists who come to Brussels to represent groups promoting a better environment or a more equitable distribution of wealth and power often have only a tiny fraction of the resources of the major corporations. Facing a grossly uneven playing field, groups such as Corporate Europe Observatory (CEO) and Friends of the Earth lobby hard despite small budgets.

Earlier this spring, the lobbying watchdog group CEO discovered that European Services Forum, a coalition of the European service sector, had invited members of the so-called 133 Committee to a private meeting following by a cocktail party.

The 133 Committee consists of EU's trade officials, said to be the real power behind legislation on trade issues. Claiming that such exclusive meetings are inappropriate, CEO and Friends of the Earth staged a protest outside the building that featured its own selection of cocktails, including "Tequila Dealmaker" and "Transparency Sunrise."

Networking the System

"Brussels is networking," says Kjell Peterson, head of West Sweden, one of the regional offices that lobbies for Sweden's interests in Brussels. Some time ago, when he worked in Asia, it took him years and uncountable dinners and golf rounds with the customers to secure an order. The same holds true in Brussels.

Lobbying: A threat or service to democracy?

Editors Note: VI magazine interviewed the following people separately, but posed the same questions to each of them:

Siim Kallas (Estonia), vice-president of the European Commission in charge of Administration, Audit and Anti-fraud

Erik Wesselius (Netherlands) researcher from the lobby watchdog group Corporate Europe Observatory (CEO)

Anders Wijkman (PPE-DE) and Carl Schlyter (Verts/ALE), Swedish members of the European Parliament.

Question: Who is governing in Brussels: our members in the European Parliament who claim to have enough integrity to fight against pressures; or the thousands of lobbyists who move freely through the corridors of power without accounting for the identity of their clients and the sources of their financing?

Siim Kallas, European Commission: Lobbying is definitely necessary. It is unimaginable that decision-makers would not be approached by different interest groups. As a member of the European Parliament, you must have all existing views and be able to analyze them.

Erik Wesselius, Corporate Europe Observatory: Lobbying can make a positive contribution to the decision-making process, but it is a part of the decision making that is completely out of sight of everybody but the lobbyists and the people being lobbied. There is no way to scrutinize it and to correct potential bad practices.

Anders Wijkman (MEP, PPE-DE): Every member of the European Parliament should have the ability to stand against persuasion from corporations. You should not fall for nice words, but you should emerse yourself deeply in every single dossier and formulate your own opinion. If we just speak to the European Commission's different experts, we would only get a very narrow point of view.

Carl Schlyter (MEP, Verts/ALE): I am so tired of all the naive politicians who thinks "but I am a politician, I am not influenced by lobbying."

Question: A new proposal before the European Commission, the Green Book on transparency, is supposed to define grey areas and promote openness. Is the proposal is too weak, as critics claim, and simply show that even the European Commission are puppets of the lobbyists?

(Note: The Green Book about more transparency proposes stronger rules for lobbyists and suggests that they should first of all regulate themselves.)

Erik Wesselius: I would consider [voluntary standards] a failure. If there are no sanctions, there will not be any transparency, because nobody will bother to register. To have external scrutiny by the media, by groups like us, by individual citizens, we need information about everybody who wants to exert influence. Look for example at groups claiming to be voluntary but which instead are run by lobbyists and paid by companies.

Many patients associations in Europe are in fact run by powerful pharmaceutical companies. We therefore would like to see a mandatory registration, in which customers and financing clearly appear.

The current registers do not work at all. There are no members of the European Parliament who have the time to look into them. Besides that, you can only find the name and the company, not which interests they are representing.

Siim Kallas: Even with a mandatory registration, there is always the danger that somebody acts in the shadows.

Question: But should we legalize crimes just because there will always be criminals?

Siim Kallas: Look at the USA; the system is different, but even despite their very strong legislation, their scandals are not small ones.

Question: Should information about how lobbying companies spend their money on their projects be published as in the USA?

Erik Wesselius: Yes, absolutely. If you could see how much money the chemical industry is spending on undermining REACH and how much the environmental movement had at its disposal, people would start asking questions like whether that money is protecting the politic.

Carl Schlyter: Definitively. We have listened to the chemical industry, which claimed that so many million people would loose their jobs, numbers later shown to be false. But nobody has talked to the thousand of dads and moms with allergic children, who do not even know why their kids are sick. And if they knew, they could not afford to come here [to Brussels] and tell me about it. Because of this imbalance in the decision-making forces, we only get selective information and the result is a Europe where only big companies decide. That is not a democracy.

Anders Wijkman: Industry has more money and can put more resources into lobbying. But most of the time this is balanced by the commitment of the environmental organisations. They invest both heart and brain in a different way.

Question: Another phenomenon is the so-called revolving doors between the European institutions and lobbying companies. For example, former employees of the European Commission are hired by lobbying companies and bring along a clear advantage when it comes to how to exert influence.

Erik Wesselius: Look at for example Elmar Brok. He is a member of the Transatlantic Policy Network, a lobbying organisation for European and American companies, senior vice-president in the German media empire Bertelsman, as well as a member of the European Parliament. He is also chairman in the Committee on Foreign Affairs at the European Parliament.

Siim Kallas: This is acceptable because Elmar Brok is completely transparent about his background.

Question: The European Commission's proposal for more transparency suggests that even names of beneficiaries of agricultural funds should be made public.

Erik Wesselius: It was revealed that companies like Nestle received a significant amount of funds. That was only possible because of the lack of external scrutiny. We will see more scandals in the future.

Question: The reactions to publishing the names of agriculture beneficiaries were very different. The Bavarian state governor, for example, claimed that publishing does not serve the purpose of achieving a higher degree of transparency. It would lead to a lot of administrative costs and, as she says, "only promote feelings of envy."

Siim Kallas: Envy, that is ridiculous. And there are not so many costs involved in publishing on the internet; it is just about pushing a button. But the resistance is decreasing. Nowadays, there are 11 member states publishing this information. People realize that we live in a different time.

As long as our rules are fair and defensible, let the information out! Are our rules no longer defensible, we have to change the rules, not hide them. Sooner or later, the information will be collected by the civil society organisations, and then, you can come to a difficult position.

Question: What impact do cultural differences have on how to react on transparency? How does your own background influence your work?

Siim Kallas: It is always easy to blame certain cultural differences. But I have to say, that that is not true any more. In some questions, France and Portugal are more open than the Nordic countries.

As a financial minister in Estonia, the finance ministry was considered as a headsquarter for all conspiracy, and many rumors circulated. Then, we made the information available on the internet. When someone was approaching me with suspicion, I just said: "Use your computer, please, everything is available there." This tremendously reduced all speculations.

Question: But not all information is, in fact, available?

Siim Kallas: We still need a free exchange of views. We secure real working peace by making the majority of the information public and it works very well.

Question: In Sweden, we have the right to request all incoming mail to the government, every single letter from lobbyists, for example.

Siim Kallas: Believe me, you do not get everything. They just give you a part of it.

"If you would like to get your message through, you have to build up confidence," he says. "The European Commission often holds the most delicate information. If you have succeeded in building up confidence, then you will have the chance to access this information. And it is not different when it comes to the members of the European Parliament: You build up confidence, but you also have to supply them with information, something that can help them."

"There are so many questions in widespread areas about which they have to inform themselves. They need help, we provide this help."

Other methods include staging junkets and events such as the annual golf competition that West Sweden arranges with a leading Swedish car manufacturer Volvo. Among the invitees are administrators from the European Commission and European Parliament.

Throughout the year, Brussels provides many such opportunities for lobbyists to make contacts and mingle with the bureaucrats and regulators who make the rules that affect their clients' industries.

"The lobbyist must be an extravert, and must know how to create relations, he can not be a bureaucrat. Also, he can not have any problems with alcohol, due to the many temptations waiting," Peterson says.

Another Swedish regional office, East Sweden, held its 10-year anniversary celebration for some 200 guests including the Swedish Commissioner Margot Wallström and chairmen of the board from Swedish districts. When the Swedish magazine VI, that this author writes for, tried to attend, we were turned away with the argument that its presence would give a wrong picture.

The lobbyists have also seamlessly blended into the informal world of sports after work.

For example Per Johansson does some of his networking in the locker room of the British school in the suburb Tervuren, where he joins friends and business associates for a soccer match. In the first half, he is team goalkeeper for the League of Extraordinary Gentleman: "Easy guys!" he shouts. "Two in the middle! Well played, Francesco!"

Among the players are Catalin, a Rumanian diplomat and Francesco, an external relation manager for the lobbying organization European Social Action Network. Simon from Spain works in a law firm, Titus works at the European Parliament, German Martin comes from the semi-conductor industry. Others work at the European Commission or are journalists.

Independent panels: Independent? Expert?


But sports and parties are not the only games in town. The lobbying companies' backdoor into the European Parliament in Brussels is the various advisory panels and the independent experts who serve on them.

"The European institutions pay lobbyists with the goal of being lobbied back by them," is a commonly heard phrase in Brussels.

One of the institutions that lets itself be lobbied from within is the European Parliament's Committee for Environment, Public Health and Food Safety (ENVI). Among the committee members are the Swedish parliamentarians Anders Wijkman (PPE-DE) and Carl Schlyter (Verts/ALE).

The committee is the gatekeeper for new proposals from the European Commission and its member states. If it agrees with a proposal, it passes it on to the European Parliament for a vote. With such power, it is not surprising that the committee is the target of thousands of lobbyists. The panels of independent experts are supposed to protect the parliamentarians from such massive lobbying by supplying them with unbiased reports on which to base their decisions.

One of seven experts on the committee's current panel is David Earnshaw, who contributed a report proposing new regulations for advanced therapy products derived from cells, genes and tissues.

There, the story could have finished, if Earnshaw had actually been an independent expert. Instead, he earns part of his income partially from Burson-Marsteller, one of the biggest lobbying firms in Brussels.

Whether or not he is an expert in advanced therapy products, Earnshaw has solid knowledge of how to move in Brussels. Between 1987 and 1993, he was a researcher for the European Parliament's environmental committee. In 1989 he failed in an election bid to the European Parliament for the British Labor Party. Between 1996 and 2001, he worked for the pharmaceutical company SmithKline Beecham, later GlaxoSmithKline. He then moved on to Oxfam, an international organization to develop humanitarian projects. Now he spends one day of the week as a professor at the college of Europe in Bruges and three days working for Burson-Marsteller, where, since 2002, he has been a managing director with clients in the pharmaceutical industry.

Earnshaw's report on advanced therapy products is published on the committee's web page, where the title "Dr." precedes his name. That title is important "Successful completion of a full university course obtaining a degree related to public health." is a standard selection criteria to qualify panel members as external experts.

But Earnshaw has neither an MD nor a Ph.D. Although he told VI magazine that the committee simply made an error, the website is not the only place where the title appears.

For example, it was as Dr. Earnshaw that he participated in connection with Burson-Marsteller at the "Leaderless Europe" conference at the Center for European studies at the Britain's Hull university. The title also appears on the front page of a paper published by his former employer, SmithKline Beecham.

Asked if he had any academic education in the health field, Earnshaw replied: "No...I have...I taught health policy. I have written about health policy. ...I have written a book about the European Parliament. Presumably, when I write a book about the European Parliament and teach about the European institutions, presumably, I am not biased then, am I?"

It's hard to know since neither Earnshaw nor his employer Burson-Marsteller reveals the names of their clients. And it is unclear if there is any external oversight determining what constitutes independence and who has it.

Earnshaw defends the lack of background information on his qualifications revealed in the report as irrelevant.

"This is bizarre! When you Google, how many hits do you get?" he asks and answers,
"A couple of thousand. It is not difficult to find out who David Earnshaw is. ...The committee wants people of integrity. And wants people who have experience of the world. And wants people who understand how the European Parliament and the European institutions work. I am quite good at that, you know."

A high official from the committee's secretariat was willing discuss Earnshaw's consulting if granted anonymity. "The idea with the panel of public health experts was to protect the committee from being too dependent on lobbyists, trade organisations, and industry," he says. "Often we trust the European Commission's legislative proposals, but we also want to create our own opinion. We want to become independent from the European Commission and can tell them when they are wrong."

But, he continues, "How on earth do you define independence? Almost every single person has some kind of background," and emphasizes that all experts are required to sign a statement attesting to their independence.

"To just attack Earnshaw is unfair," the committee's secretariat says. Earnshaw is a well-known name in Brussels, the choice was a conscious one.

Lack of Transparency

But it is the system as a whole, not individual experts who are the problem, according to Anne Hoel, the policy officer at the European Public Health Alliance. EPHA is an umbrella organization for non-governmental and other non-profit organisations working on health issues in Europe.

"The lack of transparency [in how panel members are chose] is unacceptable," she says. "It is unacceptable from a democratic point of view and for the legitimacy of the European Parliament."

"We are not allowed to know how many applicants there were and how the selection process has been made," says Hoel, who notes that some experts have never received replies to their applications. "The committee looked for academic researchers, but when you look at who has been admitted, that is not the case all the time."

EPHA discovered, for example, that Frédéric Daoud, who has been working for the pharmaceutical industry for many years, was accepted on panels as an independent expert. At a minimum, Hoel says, committees must publish qualifications and declare potential conflicts of interest.

The European Parliament is facing some of the same concerns. Its members must decide more and more complicated questions such as the chemical legislative and the directive on services, a new regulation to increase the capacity of the internal market for services. Lacking full understanding of the issues, says Hoel, members rely on expert advice. "But in some cases, the expert is just a consultant, a lobbyist."