Lobbying Bonanza as Firms Try to Influence European Union

[Paul Mobbs]

>From the New York Times... oh dear!

P.



http://www.nytimes.com/2013/10/19/world/europe/lobbying-bonanza-as-firms-try-to-influence-european-union.html

Lobbying Bonanza as Firms Try to Influence European Union

New York Times, 18/10/13


It was a show of force in keeping with the ambitions of American law
firms that increasingly see the European Union’s vast apparatus as a
vital lobbying opportunity for themselves and their multinational
corporate clients. 

Gathered at the Brussels office of Covington & Burling, a prominent
Washington-based firm, were some of its lawyers and lobbyists, along
with executives from some of the world’s largest oil companies,
including Chevron and Statoil. Their aim was to help shape the European
Union’s policies on the gas and oil drilling technology known as
hydraulic fracturing, or fracking.

They were meeting with Kurt Vandenberghe, then a top environmental
official for Europe and a prime player in the debate over fracking,
which is even more contentious in Europe than in the United States.

The host that day in June was Jean De Ruyt, a former Belgian diplomat
whose career stretched from central Africa to the inner sanctum of the
European Union and who is now an adviser at Covington. He and others on
the recently expanded lobbying team there have delivered at least four
senior European Union policy makers to the firm’s doorstep in recent
months, including a top energy official, who arrived in September with a
copy of a draft fracking plan that has yet to be made public.

“It’s key to us to be ahead of when the political debate starts,” Mr. De
Ruyt said in an interview later. “Because by then, we can’t have an
impact.”

As the European Union has emerged as a regulatory superpower affecting
28 countries that collectively form the world’s largest economy, its
policies have become ever more important to corporations operating
across borders. In turn, the influence business in Brussels has become
ever larger and more competitive, rivaled only by Washington’s.

No group is proving more aggressive in claiming a share of that business
— and provoking more criticism — than Covington and a dozen other major
international law firms, some of which have imported American practices
to Brussels, the seat of European Union power, while also operating with
fewer constraints than in the United States.

The rules here differ in significant ways — for starters, the European
system is not greased by corporate campaign contributions, which are
banned or strictly limited in many member countries. But the law firms
have managed to win results for clients, which include chemical and
energy companies, drug makers, Silicon Valley firms, Wall Street
businesses and military contractors.

The firms are taking advantage of weak ethics rules in Brussels,
including one that allows some former government officials to begin
exploiting their connections the day they leave office.

A tradition in Washington, hiring insiders was relatively rare at law
firms in Brussels until the American firms stepped up the recruiting of
European politicians — including top officials at the European
Commission, Parliament and Council, the three bodies that make up the
government — with fat paychecks.

The firms are undercutting efforts to bring more transparency to
lobbying in Brussels, citing lawyer-client confidentiality to evade a
government-backed but voluntary disclosure effort. Covington, for
example, refuses to identify its clients or whom it is lobbying, which
it would have to do back home. It can keep secret the sessions with
clients and regulators at its offices, which most American officials
would have been prohibited from attending or at least required to
disclose in the United States.

Critics, including rival lobbying firms and some European officials,
accuse the law firms of operating in the shadows.

“They hide behind confidentiality,” said Robert Mack, an American who is
a top executive at the Brussels office of Burson-Marsteller, a global
lobbying and public relations firm. “It’s unfair; it’s anticompetitive,”
he added. “There are people who want to do things secretly, and what
they do is go to the law firms.”

Isabelle Durant, a vice president of the European Parliament from
Belgium who served on the committee that three years ago helped create
the voluntary disclosure program, also expressed concern. “I am not
against lobbying, but I am against lobbying opacity,” she said. “We have
to know who works for whom and how much money they are being paid.”


Seeking to ‘Harmonize’

Hidden in the leafy confines of Parc Léopold, which once was home to a
zoo and an amusement park in the center of what is modern-day Brussels,
is the Solvay Library, built a century ago by a Belgian industrialist.

On a brisk night in September, with American lawyers as hosts, the
library’s reading room was packed with dozens of executives from
corporations including Boeing, Intel and Samsung, along with senior
staff members of the European Commission.

The guest of honor was James A. Baker III, the former secretary of state
and Treasury and chief of staff to two presidents. He was looking so
fit, at 83, that a lawyer asked him for nutrition tips. Mr. Baker had
come to celebrate the first anniversary of the Brussels office of Baker
Botts, the Houston-based law firm co-founded by his great-grandfather.

As attendees nibbled on foie gras lollipops, dipped in a chocolate
fondant, they discussed the potential business bonanza from
trans-Atlantic trade negotiations that recently began between Europe and
the United States. The goal of the negotiations is to “harmonize” the
regulatory systems of the United States and Europe, so that companies
can meet a single standard — worth hundreds of millions of dollars, if
not billions, in savings for businesses, particularly if they can
persuade negotiators to accept less strict rules in the process. 

The deal making could also mean a huge wave of lucrative lobbying and
legal work in Brussels and in Washington for firms, which charge up to
$1,000 an hour. “It ain’t going to be easy — it’s going to be tough,”
Mr. Baker told the assembled crowd. “But it’s really important to get it
done.” 

 Those kinds of opportunities help explain why American firms are
attracted to Brussels, where many locate near the Rue Belliard, a
European version of K Street, the lobbying corridor in Washington.
Several British firms have beefed up lobbying practices, too. But there
is tough competition. Akin Gump, the prominent American law firm, closed
its Brussels office several years ago, with the top executive at the
time calling the outpost a “drain on resources.”

Others, though, are committed. As Brussels “moves up the scale of
importance to these companies, it becomes of increasing importance to
any law firm like ours,” said Raymond S. Calamaro, a partner at Hogan
Lovells, a firm that splits its headquarters between London and
Washington, who oversees its lobbying practice globally. When lawyers at
Hogan Lovells are stymied by the Brussels bureaucracy, they routinely
turn to Hugo Paemen, a soft-spoken, impeccably dressed man who was named
a baron by the Belgian king and worked as the European Union ambassador
to the United States.

“I’m not looking for visibility,” Mr. Paemen said. “The important work
happens on the telephone, or a lunch or coffee get-together.”

At Covington, Wim van Velzen, once vice president of the European
Parliament’s largest political group, the European People’s Party,
serves as the go-to person for assignments that require legislative
action. Mr. De Ruyt focuses on the European Council, where he once was a
top official. “It’s easier for someone who has been there, who
understands how things go,” he said.

Covington also recently hired Paul Adamson, a former staff member at the
European Parliament and a longtime Brussels lobbyist. “I’m a gun for
hire,” he quipped. More conservative firms in Brussels are troubled by
the notion of bringing in advisers like him and the former politicians,
who are not lawyers, Mr. Adamson added. “But Covington has never been
embarrassed about it.”

The results are tangible, the firms say, providing documents to back up
some of their claims. Last year, Hogan Lovells helped an American
semiconductor company secure an exemption in European environmental law
that allowed it to continue using a potentially hazardous substance in
the computer chips it makes. The firm also helped a group of American
chemical companies avoid having to retest products to meet a new
chemical safety law, striking an alliance with animal rights groups that
did not want animals used for the retesting.

Covington helped get an amendment to data privacy legislation that would
ease restrictions on how companies are allowed to use certain personal
data collected from consumers; the proposal is pending. The firm also
recently successfully lobbied to weaken a proposed regulation intended
to curb the ability of European pension funds to invest some of their
money with private equity firms.

Covington declined to disclose the names of its clients, other than
Microsoft. In marketing materials, though, the firm notes that its
Brussels clients have included the Pharmaceutical Research and
Manufacturers of America, and BSA, the Software Alliance, a trade group
whose members include Oracle, Apple and Adobe Systems. Hogan Lovells
also declined to identify most of its clients, but it did say it
represented Philips, the health care and consumer electronics company.

Craig Burchell, the global head of trade and market access for Philips,
said Hogan Lovells’s mix of legal and policy advocacy is exactly what
his company demands. “Sure, we need lawyers who can handle antitrust
work and trade matters,” he said. “But what we really need is upstream
influence on policy here.”


The Value of Secrecy

Claude Turmes, a member of the European Parliament from Luxembourg,
refuses to meet lobbyists who have not registered in a voluntary
disclosure database created in 2011 that includes names of nearly 6,000
businesses, organizations or lobbying firms that seek to influence the
European government. Hundreds more are believed to have opted out, with
some lobbying firms inspired by the example of the American law firms.

A ponytailed member of the Green Party, Mr. Turmes took part in failed
efforts to make the registry mandatory. “Lobbying is a bit like
prostitution — it will always exist, and if you try to forbid it, then
you would get a black market,” he said. “I’m interested in all actors’
views, but we have to do this in a transparent way.”

Some of the opponents of the mandatory registry included members of
Parliament who work at law firms, including Klaus-Heiner Lehne, a
Christian Democrat from Germany who is a partner at the British-based
law firm Taylor Wessing and advises clients on European regulations,
while serving as chairman for Parliament’s committee on legal affairs.

In Brussels, the law firms argue that Belgian bar rules prohibit them
from violating the confidentiality of their clients. In a public filing
to the European Commission last year, the Council of Bars and Law
Societies of Europe outlined a number of objections to expanding
disclosure requirements for lawyer-lobbyists, and called “professional
secrecy” one of the “core values of the legal profession.”

Many clients view secrecy as an asset. “Even if the matter is public,
the client doesn’t want our involvement to be known,” said Lourdes
Catrain, a partner at Hogan Lovells. “A law firm provides very strong
guarantees of confidentiality.”

Olivier Hoedeman, the research coordinator at Corporate Europe
Observatory, a Brussels nonprofit that studies the influence of lobbying
on the European Union, said he did not even know about some of the
legislative favors the law firms had delivered to their clients. 

“There is no realistic way to track what they are doing if you don’t
even know who their clients are,” he said. “The kind of results they are
achieving, outside of public scrutiny, it is undemocratic. But for the
companies involved it can be highly profitable.” 

 Maros Sefcovic, vice president of the European Commission and the
official who oversees the government’s efforts to increase transparency,
said he was considering writing a letter to the law firms that are
ignoring the register, pushing them to comply.

He estimated that the 6,000 companies, lobbying firms and nonprofit
groups that have joined the register — with about 30,000 lobbyists —
represent 75 percent of the universe of people trying to influence the
European government. And the area with the least compliance, he said, is
the law firms.

“The law firms are registered in the United States, but when they come
to Europe suddenly they pretend they don’t know what a lobbying register
is, and what their obligations are,” Mr. Sefcovic said.

Another European Commission official wondered whether the law firm
lobbyists get special treatment, given their deep network of personal
contacts.

“Public authorities, by law, are obliged to offer equal treatment to
every citizen,” the official said, speaking on the condition of
anonymity because he was not authorized to discuss the matter. “But of
course it makes a difference when you get a call, and it is a former
colleague — and they want a bit of your time.”


Moving Toward Openness

Still, scandals in recent years — none involving American firms — have
spurred a movement toward change that many see as inevitable. Last fall,
the European Union’s top health official departed amid a corruption
investigation, and a sting in 2011 by The Sunday Times of Britain
ensnared three members of the European Parliament in a pay-to-play
episode.

At Hogan Lovells’s Brussels outpost, 28 lawyers and lobbyists from
around Europe met recently to discuss their work and opportunities to
pick up new clients. There was a sense, though, that the firm’s ability
to operate largely in secret may not last much longer.

“We are a long ways from the U.S. position, where it is very
transparent,” Paul Dacam, a Hogan Lovells partner from London, told the
gathering. “The culture of the clients, right now, is not toward
openness. But I have no doubt looking ahead, there will be obligatory
registration.”

With that, Mr. Paemen, the former European Union ambassador, headed out
— he was appearing at an event alongside a leading member of Parliament
and a top European trade official.

A similar session took place at Covington’s Brussels offices, where four
lobbyists discussed plans with a partner to try to influence debates on
trade negotiations, data privacy and pharmaceuticals. They mentioned
fracking, too — the firm is organizing an industry group to offer
government officials suggestions in drafting the rules. There have
already been preliminary moves by the Parliament suggesting it will
demand strict oversight of the industry, an effort the lobbyists will
try to derail.

Mr. van Velzen told colleagues about planned meetings with members of
the European Parliament and the European Commission, while Mr. De Ruyt
shared with the team the close ties he has with the new United States
ambassador to the European Union — a relationship sure to come in handy
as new client matters emerge.

“There is a certain excitement of getting what you want through the
system,” Mr. De Ruyt said in an interview, adding that he had learned
the art of influencing decisions, instead of just making them. “I now
know exactly how to do it.” 


-- 

"We are not for names, nor men, nor titles of Government,
nor are we for this party nor against the other but we are
for justice and mercy and truth and peace and true freedom,
that these may be exalted in our nation, and that goodness,
righteousness, meekness, temperance, peace and unity with
God, and with one another, that these things may abound."
(Edward Burrough, 1659 - from 'Quaker Faith and Practice')

Paul Mobbs, Mobbs' Environmental Investigations
3 Grosvenor Road, Banbury OX16 5HN, England
tel./fax (+44/0)1295 261864
email - mobbsey at gn.apc.org
website - http://www.fraw.org.uk/mei/index.shtml
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