quinta-feira, 22 de setembro de 2016
Commission bumps into its own revolving door
Commission bumps into its own revolving door
Neelie Kroes’ failure to disclose Bahamas business role highlights blurry EU ethics rules.
David M. Herszenhorn and
9/23/16, 5:29 AM CET
As a European Commission vice president overseeing the Continent’s digital agenda, Neelie Kroes used her powerful post to become a prominent and outspoken advocate of Uber, the ride-sharing service.
In May, 18 months after Kroes’ term ended, Uber hired her as a senior adviser on regulatory issues — a job that could eventually reward her with a small fortune.
No one has alleged anything illegal about the arrangement. But Kroes’ overlapping interests on Uber, as public servant and private businesswoman, highlight the blurred lines between the political and corporate sectors that are increasingly testing the bounds of EU ethics rules.
Last Friday, Kroes, who also served as commissioner for competition from 2004 to 2009, admitted a clear violation of the rules: failing to disclose her role as director of an offshore shell corporation that had been registered in the Bahamas.
Her admission came as the Commission was already facing a storm of public outrage over its former president, José Manuel Barroso, who in July accepted a senior executive position with Goldman Sachs. The two revelations have left the current president, Jean-Claude Juncker, and his administration scrambling to show critics that they are capable of policing the business dealings of current and former officials.
“We don’t have a secret police service that can be sent out to the Bahamas or elsewhere to track down information we haven’t been given” — Margaritis Schinas, chief European Commission spokesman
On Thursday, faced with a barrage of questions about Kroes, the Commission’s chief spokesman, Margaritis Schinas, said: “We have very strict rules in place.” But he also conceded the EU has limited ability to check up on the numerous officials spinning through the Berlaymont’s revolving doors.
“We assume, we rely on the completeness of declarations made by our commissioners; they are published,” Schinas said. “We don’t have a secret police service that can be sent out to the Bahamas or elsewhere to track down information we haven’t been given. But when it comes to the commitments declared, well these are published on the internet, so there is transparency, and it is possible for us to check that, but obviously that depends on what’s communicated to us.”
Caught off guard
It was a different kind of internet transparency that led to the revelation that Kroes, during her time as a member of the EU executive body, had been a director of Mint Holdings Limited, an offshore company created as part of a plan to purchase assets from Enron, the American energy conglomerate that collapsed after a huge accounting fraud.
The information about Kroes was included in leaked documents published Wednesday by the International Consortium of Investigative Journalists.
To get ahead of that news, Kroes sent an email to Juncker late last week admitting the lapse and blaming it on a clerical error. Officials said that the email was not noticed until Wednesday, after reporters had made repeated inquiries about her position with Mint Holdings.
Neither Kroes, nor her lawyer, Oscar Hammerstein, responded to email and phone messages seeking comment on Thursday.
Under pressure to respond to the criticism, Schinas said Juncker had sent a letter to Kroes seeking further details about the violation. Officials said they would decide whether to pursue disciplinary action based on her response — a process that can only be carried out in court.
One potential sanction in such cases is to revoke a former commissioner’s EU pension. But officials said Thursday that Kroes, 75, is not receiving a pension — revealing a potential gap in the Commission’s accountability system.
Kroes, if sanctioned, might also be forced to pay back to the Commission her 18-month transition allowance, worth up to €13,000 a month, and the €23,000 “resettlement allowance” every commissioner receives upon leaving office. It was not immediately clear how much transition allowance Kroes had received.
Officials said that only after receiving a formal response from Kroes would they decide if additional steps were needed, such as scrutinizing her current business dealings. In addition to Uber, Kroes holds paid advisory positions with Bank of America Merrill Lynch and Salesforce, a San Francisco-based cloud computing company.
Her role with Bank of America began in February 2015, with approval of the Commission’s ethics committee, just three months after she left her position as a Commission vice president.
One senior EU official said the Commission was blindsided by the revelation about Kroes, even as it was still reeling from outrage over Barroso’s job with Goldman Sachs. More than 145,000 people have signed a petition — set up by a group of Commission employees — calling for Barroso’s pension to be revoked.
“We still do not really know what happened and I think the Kroes issue is not the same one as Barroso,” a senior EU official said, speaking on condition of anonymity. “But for sure on Barroso, the Commission did not respond as quickly as it should have. The Commission has to be aware of protecting itself and its reputation. So they should not miss the window to take care of Kroes.”
The senior official said Juncker had miscalculated in thinking he could successfully separate himself from the previous administration and its scandals. “They were not really prepared,” the official said.
Numerous officials said the Kroes and Barroso scandals highlighted a far broader challenge in which there is a constant flow of high-profile figures between government and private industry, creating all sorts of entangled relationships.
“They meddled so much with business interests that now they live outside of any realities. They don’t really care if it backfires against the institution where they used to work” — senior EU official
“It seems they do not care about the institutions and political accountability after they left office,” the EU official said. “They meddled so much with business interests that now they live outside of any realities. They don’t really care if it backfires against the institution where they used to work.”
Barroso has insisted that he did nothing wrong, but his case nonetheless is being investigated by the Commission’s ethics committee after Juncker said he should now be considered a lobbyist. That comment set off a war-of-words between the two men last week.
Responsibility for enforcing the ethics rules falls to the Commission, but also the European Court of Justice and the European Anti-Fraud Office, known as OLAF.
OLAF had no comment Thursday on the Kroes matter.
Before taking office as the commissioner in charge of competition, Kroes had promised never to return to the business world.
“After my period in the Commission, I will not take any responsibility in the business world, even not for example a bed and breakfast activity,” Kroes said in 2004 at her confirmation hearing in the European Parliament. But this June, when the Dutch public broadcaster VRT reminded Kroes about her statement more than a decade ago she walked out of the interview.
Kroes, who is known in the Brussels bubble as “Steelie Neelie” — a sort of Dutch reincarnation of the British Iron Lady Margaret Thatcher — was pushed to make the pledge because lawmakers clearly saw a risk of numerous conflicts of interest. In her disclosure forms, she listed more than 60 former roles in companies and other organizations. Notably, Mint Holdings was not on the list.
That pledge, however, has now appeared to backfire — giving further ammunition to her critics.
Neelie Kroes at a TechCrunch Disrupt Europe/London event
Kroes at a TechCrunch Disrupt Europe/London event | Anthony Harvey/Getty Images for TechCrunch
“Neelie Kroes is an outstanding negative example for corrupting trust in politics,” Green MEP Sven Giegold said in a statement. “Withholding information about her business activities in the Bahamas was an outright breach of her official duties. These revelations are the inglorious crown of a career full of conflicts of interests.”
In an interview with the Guardian, Kroes’ lawyer said she did not feel bound by the pledge after having been appointed to a separate term as a Commission vice president.
Even before this week’s disclosure about her ethical lapse, Kroes had stirred controversy with an opinion article in the Guardian slamming the decision levied against Apple by the current European commissioner for competition, Margrethe Vestager.
Vestager ruled that Ireland gave illegal tax benefits worth up to €13 billion to Apple and must now recoup that money plus interest.
Schinas himself issued a rare personal response to Kroes’ article. “We understand that it may be sometimes challenging to reconcile the role as a former commissioner with the temptation to publicly express the views of those in Silicon Valley or elsewhere who oppose the Commission’s decisions,” Schinas said.
Once again, Kroes’ overlapping roles seemed to blur the lines.