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EU: EU lobbyists face tougher regulation

by Andrew Bounds and Marine FormentiniFinancial Times
August 16th, 2007

Europe seems set for US-style controls on lobbying after the biggest public affairs companies in Brussels ruled out voluntary regulation because they would have to divulge their clients and fees.

The European Public Affairs Consultancies Association (Epaca), which represents 38 businesses, told the FT that its members would boycott an interests register being established by the European Commission, terming it "discriminatory and unworkable".

Many law firms have also said they would not join the register, to be set up next year under plans by Siim Kallas, the anti-fraud commissioner, to illuminate decision-making in Brussels.

Epaca, which includes multinationals such as Burson-Marsteller and Fleishman-Hillard along with smaller firms, said disclosing client information would breach competition law.

The Commission has made it clear that if voluntary controls did not work it would introduce a US-style mandatory system with penalties for non-disclosure.

In an e-mail, Epaca also said the Commission's definition of lobbying was "far too general" and by relying on signatories to self-declare funding, the register was open to abuse. It also set public affairs companies higher filing standards than non-governmental organisations.

Anna Rouillard, of Epaca, said consultancies "are expected to provide a detailed breakdown of lobbying-related turnover", which could be used to discover their clients and fees.

She added: "The voluntary nature of the register is likely to lead to a distortion of the market: consultancies not able to register may become stigmatised and therefore lose clients."

She proposed instead a mandatory register with a common definition of lobbying, and an exemption from revealing commercially sensitive information.

That sets the industry on a collision course with Mr Kallas. His aim was to illuminate the influence exercised by Brussels's estimated 15,000 lobbyists without an onerous compliance regime. It would be the first comprehensive official regulation of lobbying in Brussels.

While lobbyists must sign an ethics code to gain access to MEPs, they need not give client details.

Epaca and the Society of European Affairs Practitioners have a code of conduct. But Mr Kallas has pointed out that no one has ever been found in breach of it.

He also refuses to compromise on financial disclosure. "If spending money on lobbying gives no influence, I wonder what the lobby professionals say to their clients when they bill them?" he recently asked the European parliament. The proposed regulation is "very light" by international standards, he says.

Failure to comply would lead to US-style regulation of all lobbying activity, such as entertaining officials at receptions, he adds.

But many legal experts doubt whether the Commission can enforce such a measure even for its own staff, let alone Brussels-wide. Many decisions are taken jointly by the Commission, the parliament and member state governments grouped in the European council.



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