PO3680: Comparative Perspective of Lobbying Regulation in the EU

1. PO3680: Comparative Perspective of Lobbying Regulation in the EU • Dr. Raj Chari • Some of the findings in this lecture are taken from the Chari, Murphy and Hogan article in Political Quarterly (2007; available in the ‘publication’ section of Chari’s webpage) and Regulating Lobbyists: A Global Analysis (Manchester University Press, 2010) by the same authors.

2. Introduction and Objective • Political science has failed to offer in-depth, detailed, comparative analysis of worldwide lobbying regulations, which seeks to promote transparency in the policy making process • Objective: To Analyze and Explain Developments in Lobbying Regulation in 9 Political Systems in North America, Europe, Asia, as well as Australia

3. Lobbying • Lobbying activity - act of individuals/groups, with varying and specific interest, attempting to influence decisions at the political level • Influencing by: • Direct communications with governmental officials, • Offering presentations, • Draft reports, • Telephone conversations etc.

4. Lobbying Regulation • ‘Regulation of lobbyists’ – the idea that political systems have established ‘rules’ which lobby groups must follow when trying to influence government officials. • Not a matter of voluntarily complying • Regulations - codified, formal rules passed by government and written in law that is enforced and must be respected. • Non-compliance results in penalization, fines or jail.

5. Examples of such rules: • Register with the state before contact can be made with public officials, • Indicate which public actors the lobbyist intends to influence, • Provide state with individual/employer spending reports • Have a publicly available list with lobbyists details available for citizens to scrutinize, • Former legislators cannot immediately become lobbyists once they have left public office (‘cooling off’ period). • Theoretical justification is based on ensuring transparency and accountability - So, which countries have rules in place?

8. To see legislation in each of these jurisdictions, please go to Regulating Lobbying interactive map on: www.regulatelobbying.com

9. Findings: Countries with Lobbying Legislation • Liberal democracies with lobbying regs relatively rare • Norm - no lobbying rules. • Australia, Canada, EU, Germany, Hungary, Lithuania, Poland, Taiwan and US. • US (1946), Germany (1951), Canada (1989), EP (996). • US regs in all states, Canada in five provinces. • Hungary, Poland, and Lithuania, and Taiwan enacted lobbying laws post 2000. • Australia introduced lobbying regs 1983, abandoned 1996, reintroduced 2008.

10. In EU-27 there are at present 5 states with regs • 3 former communist countries • More established EU states (except Germany) have not enacted lobbying regs • Large democracies - Japan and India - no lobbying laws. • Taiwan only democracy in Asia with lobbying rules • No lobbying regs in Africa or South American   • Georgia passed the lobbying law (1998) – however ranked by the Freedom House as only a ‘partly free

11. History of EP legislation • The rationale behind the idea of having a registry was based on perceptions of less than transparent practises having occurred in the EP throughout the 1980s and 1990s. • As a consequence, in the early 1990s calls were made towards establishing ‘minimalist standards’ in order to clean up the situation, something which was spearheaded by Marc Galle. • However, little progress was made at the time given the upcoming EP election in 1994 and given the EP’s inability to clearly agree to key terms such as ‘lobbying and lobbyist’.

12. History of EP legislation • Nevertheless, in 1996 led by Glyn Ford, proposal that permanent passes be issued to those entering Parliament frequently to supply info to MEPs. • In its rules, the EP offers the following definition for lobbyists: ‘Lobbyists can be private, public or non-governmental bodies. They can provide parliament with knowledge and specific expertise in numerous economic, social, environmental and scientific areas.’ • Does EP definition portrays lobbying activity as an utterly ‘altruistic,’ if not ‘good-hearted,’ act? What about idea of ‘attempting to influence’ to gain desired outcomes that are in their interest?

13. What are the main points of rules? • Three main points w.r.t. EP rules: • A) Passes granted for one year for those lobbying inside (not outside) institution – very important. What about meeting up in Joe’s Pizza? • B) A subsequent register of all who lobby will be available to the public on the EP website (but info of lobbyists is limited) • C) In order to get a pass, a lobbyist must respect the code for conduct and sign the register. But how effective is this?

14. What info does the lobbyist have to provide? • The lobbyist must provide in writing general information surrounding the lobbyist’s activities, including the name of the lobbying organisation, the general interests (in terms of policies) of the organisation, the name of the lobbyist and his/her position, home address of lobbyist (plus a copy of his/her passport) and how long they seek to lobby the EP. • Comparing the information needed to lobby the EP to that required to lobby the different jurisdictions in Canada and the United States, one can see that less information is required.

15. What info does the lobbyist have to provide? • Compared to CAN and US, comparatively less info has to be given at EP level. For example, the lobbyist does not have to state: • the name of each committee, department lobbied; • the subject matters including the specific legislative proposal, bill or resolution, regulation, or program; • if there is a contingency fees involved; • communication techniques used. • whether or not lobbyists is a former public office holder, • nor are there rules on individual spending disclosure (i.e. a lobbyist is not required to file a spending report)

16. Is there an effective gatekeeper system in EP? • Short answer is no. • Let’s consider what the Commission has done. In contrast, from the outset, it should be noted that the Commission’s system is voluntary registration, which contrasts to other regulatory systems in the world where registration is voluntary. • As such, some would even say that the Commission really has no effective registration system….

17. History of Commission’s Initiatives • 2,500 lobbyists have offices in the European capital, spending an approximate 60-95 million Euros in their efforts to influence the Commission: the Commission is the hot bed of EU lobbying activity, particularly given its prominent role in the policy process. • Yet, the European Commission does not run a compulsory register of organisations • History: as early as 1992, the Commission stressed the need for an ‘open’ dialogue with interest groups and some 10 years later under the Prodi Commission,‘White Paper’ stressed the need for open and transparency in government

18. History of Commission’s Inititiatives • In response to the White Paper, CONECCS (Consultation, the European Commission and Civil Society) was subsequently developed. • CONECCS is a ‘voluntary database’ where civil society organisation (including, for example, trade unions, business associations and NGOs) could sign up in order to provide ‘better information about (the Commission’s) consultative process.’ • Nevertheless, CONECCS remained somewhat toothless • Very few signed up

19. European Commission: Transparency Initiative • Thereafter, in November 2005 the Commission approved the so-called ‘Transparency Initiative’, which has a broad goal to foster the idea that ‘European leaders, businesses, civil society and citizens… are making policies in an open and inclusive way…’. • Secondly, ‘a Green Paper was published in May 2006 to launch a debate with all the stakeholders on how to improve transparency on the Community Funds, consultation with civil society and the role of the lobbies and NGOs in the European institutions’ decision-making process.’

20. European Commission: Transparency Initiative • In the Green Paper, the Commission considered that a credible system for greater transparency in the EU would consist of a voluntary registration system and tighter self-regulation by lobbyists themselves in terms of their conduct. • Voluntary registration was considered better than a mandatory one because it was felt that a mandatory one would a) take too long to develop and b) have ‘too many loopholes’ • Commission did not seriously consider advantages to mandatory system and how it could actually promote transparency.

21. European Commission: 2008 Registry • In 2008 registry set up • Again, why voluntary? In Its words, • ‘The Commission is ready to trust the profession. The register offers lobbyists legitimacy and recognition as a profession. With self-declaration, the registrant takes responsibility for supplying correct information, and the Commission believes this trust should first be tested, before considering the possibility of more binding regulation.’ (see http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/428&format=HTML&aged=0&language=EN&guiLanguage=en)

22. European Commission: 2008 Registry • There are three main categories of lobbyists that can register: professional consultancies and law firms; corporate ‘in house’ lobbyists and trade associations; and NGOs and think-tanks. • All registrants must disclose: name of the company, who is the head of the organization, contact details in Brussels, goals and remit of the organization, fields of interest of the organization, and information on the organization’s memberships.

23. European Commission: 2008 Registry • Further signatories of the three groups must also disclose: total revenues relating to lobbying EU institutions (for professional consultancies and law firms), an estimate of costs associated with direct EU lobbying (in-house lobbyists), or the organization’s overall budget and their main sources of funding (NGOs and think-tanks). • Although there is no direct pay-off in signing up for the voluntary register, the Commission states that in return for registering, ‘lobbyists will receive alerts from the EU executive giving details of upcoming public consultations on policy areas of interest to them.’ http://www.euractiv.com/en/pa/commission-launches-lobbyists-register/article-17359

24. Voluntary Registry: Effectiveness? • Fall short of ‘one stop shop’ for registry as outlined as some MEPS and organizations such as the ECPA • Considering there are thousands of lobbyists in Brussels, go and see who’s registered and consider how effective it has been: • https://webgate.ec.europa.eu/transparency/regrin/welcome.do

25. Measuring the Strength of Lobbying Legislation: The CPI Index • Opheim’s (1991) rating of stringency of lobbying regulation. • Index of 22 items from three different dimensions of lobbying regulation requirements. • The dimensions were: • statutory definitions of a lobbyist (seven items); • frequency and quality of disclosure (eight items); and • oversight and enforcement of regulations (seven items).

26. Brinig et al.’s, (1993) rating of restrictiveness of state lobbying laws • Consider the frequency with which lobbyists required to register and report, • Scheme emphasises severity of penalties for violations of lobbying laws.

27. CPI Index • Centre for Public Integrity • Analysed lobbying regulations in 51 jurisdictions in US • Measures effectiveness of lobbying legislation in terms of transparency and accountability. • Referred to as ‘Hired Guns’ method, • Results in what we refer to as ‘CPI Scores.’

28. The Eight Key Areas • The Center for Public Integrity created a ranking system that assigns a score to each state (with lobbying legislation) based on a survey containing a series of questions regarding state lobby disclosure. The questions addressed eight key areas of disclosure for state lobbyists and the organizations that put them to work • Definition of Lobbyist • Individual Registration • Individual Spending Disclosure • Employer Spending Disclosure • Electronic Filing • Public Access (to a registry of lobbyists) • Enforcement • Revolving Door Provisions (particular focus on ‘cooling off periods’)

29. Total of 48 questions • Each question assigned a numerical (i.e. point) value. • The more points, the stronger the legislation in terms of promoting full disclosure, public access, and transparency. • The maximum score possible 100 • According to the CPI, a score of 60 points + is a ‘pass’ • The lower the CPI score, the less robust the lobbying regulation. • CPI’s index goes beyond Opheim’s work • Individual lobbyist registration, electronic filing, public access, and revolving door provisions. • In setting out 48 separately scored items v Opheim’s 22, CPI’s framework is a broader, and deeper.

30. Applying the CPI Scoring System to Other Jurisdictions With Lobbying Laws • Given its robustness, CPI’s framework should be applicable outside the US. • CPI scores for US states - from CPI website, (apart from 2007 federal legislation, and 2007 Pennsylvania legislation) • CPI scores from Canada, Europe, Australia and Asia calculated by research team. • For Poland, Hungary, Lithuanian and Taiwan, English language versions of legislation analyzed with assistance of natives speakers to ensure there were no translational errors between the original and English versions of legislation.

32. Over 50 per cent of US observations scored 60 + • US federal legislation (1995) - below most states, US federal (2007) scored - above most • Canadian observations 35 - 50. • Canadian federal legislation (2008) strongest iteration • Central and Eastern European states (except Poland) within 40s range, Taiwan and Australian within 30s range. • Lowest scoring jurisdictions/institutions Germany, EU Parliament, EU Commission and Poland.

33. Three Different Regulatory Systems • Classification scheme as a basis for helping understand trends and differences. • Three categories of lobbying regulatory systems: • lowly regulated systems, CPI scores from 1 - 29 • medium regulated systems, 30 - 59 • highly regulated systems, 60 +

34. Ranges selected for qualitative and quantitative reasons: • Qualitatively – legislation within each point range possessed similar characteristics. • Quantitatively –ranges represent similar distributions on the point scale. • Lowly regulated systems - point range 28 (CPI between 1 and 29). • Medium regulated systems - range 29 (i.e. 30-59). • Highly regulated systems – theoretical range 40 (i.e. 60-100); the highest ranking jurisdiction (Washington state) has 87 points, range effectively 27 points.

35. All legislation represents a point on a continuum. • Canadian and US fed legislation shows where systems may change over time. • We do not wish to imply that ‘high’ is ‘better,’ ‘low’ is the ‘worst’, or ‘medium’ is a ‘safe middle point.’ • We want a classification scheme to help conceptualise the common traits and rigour of different regulatory environments • Ultimately helps us better understand how transparency is promoted in political system.

36. Lowly Regulated Systems • CPI scores 1 – 29, • Germany, the EP, the EU Commission, and Poland. • Characteristics: • Individual registration exists, but little details given • Does not recognize executive branch lobbyists. • No rules on individual and employer spending disclosure. • Weak system for on-line registration • Lobbyists lists are available to the public, but not all details collected/given • Generally, No Cooling-Off period.

37. Medium Regulated Systems • CPI score 30 – 59 • All Canadian jurisdictions, several US states, Lithuania, Hungary, Australia and Taiwan. • Characteristics: • Individual registration more detailed • Recognizes executive branch lobbyists - exception Hungary • Some regs on individual spending disclosures - exception Australia fed. • On-line registration (Ontario very efficient ) • Public access to frequently updated lobbying register • State agency conducts mandatory reviews/audits • Cooling off period before former legislators can register as lobbyists - exception Hungary.

38. Highly Regulated Systems • CPI score 60+ • America federal and states. • Characteristics: • Rigorous rules on individual registration • Recognizes executive branch lobbyists • Strong regs on individual spending disclosure • Strongregs on employer spending disclosure • On-line registration • Public access to frequently updated lobbying register • State agency conducts mandatory reviews/audits – with statutory penalties for late/incomplete filing of registration form. • Cooling off period before former legislators can register as lobbyists

40. Understanding the Regulatory Environments • US • Most US jurisdictions highly/medium regulated, • Many states on coasts and mid-west highly/medium regulated: Wa, CT, NY, MA, CA, MD, VA, ME, and RI (coasts) and WI, OH, KS, MI, and NE (mid-west). • Many states from south/west lower regulations: LA, FL, ID, NV, AL, OK, and ND. • Significant oultiers to this general rule: KY, AK, MS and GA, high CPI scores. Lower scores, IL and OR. • Canada • All Canadian jurisdictions medium regulated. • Upper medium (Canadian federal 2008) • Lower medium (Alberta) • No discernable relationship to the province’s physical location.

41. Europe • European states medium and lowly regulated • Middle medium (Hungary and Lithuania), • Upper part of lowly regulated systems (Poland) and lower part (Germany) • Both EU institutions lowly regulatory • The Rest of the World • Taiwan and Australia (fed) lower end of the medium regulated jurisdictions.

42. Is there a relationship between corruption and lobbying regulation? • Goal of lobbying regs - transparency and accountability in policy-making. • Transparency International (TI) - Corrupt Perceptions Index. • Measures perceived levels of public-sector corruption • Composite index, drawing on different expert and business surveys • Scale from zero (highly corrupt) to ten (completely clean).

43. TI’s Corrupt Perceptions Index (2008) and different regulatory environments found in the different states.   Table 5: Perceptions of Corruption and Types of Regulatory Systems

44. Is there a relationship between corruption and lobbying regulation? • No cogent relationship between perceptions of corruption and regulatory regimes. • Australia, Canada, Germany US, top of TI index – three types of systems. • Maybe robust regs not needed in Aus – little corruption. • Countries in middle of TI index – half-clean – Poland, Lithuania, Hungary and Taiwan - medium and low regulatory systems. • Maybe Hungary and Lithuania set up medium regulatory systems to stamp out perceptions of corruption. • But, why not implement high regulatory schemes? • No discernable relationship between perceptions of corruption and regulatory systems. • Maybe US and Canada established robust regulatory systems to increase awareness of links between policy makers and lobbyists – not simply to prevent corruption.

45. Why does North America have more robust lobbying rules? • Importance of interest groups/civil society organizations, • Long Established • Large role in policy process –environment, anti-tobacco etc. • Welcomed by government for expertise • Robust lobbying regs prevent perception that groups exercise undue influence. • Regs ensure public is aware of links between policy makes and specific interests. • Watchful press, and changing ethics laws, contributed to a professionalised lobbying industry. • Historical importance of the visibility of scandals • Current lobbying regulations were produced in response to Watergate era scandals. • More recent scandals in various state led to ethics reforms in the early 1990s • Honest Leadership and Open Government Act adopted in wake of Abramoff scandal – highly regulated

46. In terms of Europe these two factors are not as significant • In Central and Eastern Europe, and Taiwan, interest groups have only recently gained influence in policy making • In corporatist Germany interest groups outside the main associations have fewer possibilities to access policy-making process. • Have not seen US type scandals. • ‘Europe is not America: we have never seen cases like Ambramoff here; we can have more trust in our lobbyists.’ - EU Official • This means scandalous events have not been uncovered/achieved the same publicity in the European media as in the US.