POLICY REPORT
From: eLabEurope
HEC-NYU Regulatory Policy Clinic
Re:
The EU Transparency Register in 2014 and beyond
________________________________________________________________________
Table of content
Lobbying in the EU........................................................................................................................... 2
New provisions of the 2014 Interinstitutional Agreement ............................................................. 3
Possible amendments to the Interinstitutional Agreement for a de facto mandatory registry ..... 7
Improving the current scheme without waiting for treaty change : the case for a legislationbased regime of lobbying regulation............................................................................................... 8
Comparison with the U.S. System of Legislation-Based Regulation of Lobbying .......................... 13
Recommendations for Future Action ............................................................................................ 16
Lobbying in the EU
Since the years immediately after the entry into force of the Treaty establishing the
European Community, Brussels has played host to lobbyists. During these years, the lobbyists
primarily targeted Member State governments due to the EC institutions' lack of political
mandate. However, in the aftermath of the 1987 entry into force of the Single European Act,
these lobbying efforts began to target the European Commission. Moreover, as the
competences of other EU institutions increased, the drive to influence policymaking in these
other institutions saw a corresponding increase. It is noteworthy that the target of the lobbyists
who met with EU officials varied, from time to time, as a reflection of the different
interinstitutional regimes established by the treaties. For instance, the change in the voting
system from unanimity to qualified majority dramatically increased lobbying activities.
As a result of such changes, during 1990s Brussels became one of the largest centers of
lobbying activity in the world. In parallel to this, as a consequence of the increased competences
and broader functions of the EU institutions, the institutional need for interest group
participation also increased. This need has driven the EU institutions to welcome interest
groups, represented by lobbyists, into the halls of their institutions. This allowed the interest
groups to influence policy formulation from the initiation of discussions to final adoption or
ratification. Such lobbyist activities included agenda setting for the MEPs, formulation of the
forums led by the European Commission, reformulation of the policies at the European
Parliament committees, and monitoring of the harmonization and implementation of legislation
at the national level.
To be more precise, until 1992, open structured dialogue took place between the
Commission and the interest groups. In 1996, the Parliament launched its own register for the
interest groups, followed by consecutive amendments in the Parliament's code of conduct for
interest representatives in 1996 and 1997. As the sheer number of lobbyists operating in
Brussels increased, a more concrete regulation governing the conduct of the lobbyists targeting
the Commission and the Parliament became highly desireable. In November of 2005, the
Commission launched an internal report proposing a European Transparency Initiative. After 2-3
years of internal consultation within the Commission, the working paper on the code of conduct
for relations with interest groups was made available for public consultation. All citizens and
interest groups were invited to participate in this consultation, and it was ultimately announced
that the content of the draft Code was as follows:
“In the basis of the communication on the Follow-up to the Green Paper on the 'European
Transparency Initiative', the Commission has committed itself to draft a Code of Conduct, which
will accompany the public register for interest representatives to be launched in Spring 2008.
The Code contains a limited number of clear and concrete rules, indicating how interest
representatives are expected to behave when representing their interests. This is deliberately
done in order to avoid the use of any abstract or general expressions which could subsequently
lead to subjective appreciations or unending debates linked to alleged violations of the rules.
When registering, registrants would automatically be asked to declare that they would abide by
this code, or that they already abide by a similar professional code.”
A number of years passed after this initial effort until finally, in 2008, the Commission
launched its register. In the same year, the Parliament adopted another resolution calling for a
common register for the Council of Ministers, the Parliament and the Commission. In 2010, the
Parliament established a working group to define the framework of the common register, and in
2011 the Joint Transparency Register between the Commission and the Parliament was
launched. The Interinstitutional Agreement between the European Commission and the
Parliament on the establishment of a transparency register for organizations and self-employed
individuals engaged in EU policy-making and policy implementation, which continues to govern
the Transparency Register to this day, thereby entered into force.
Since it was a mere interinstitutional agreement rather than legislation imposing legal
obligations on lobbyists, the Agreement did not meet public expectations for the transparency
within the EU. Still, progress was made, as there were 5.150 registrants on the first anniversary
of the Agreement.
It is estimated that between 25.000 and 30.000 professional lobbyists, generally
representing business interests, are currently targeting EU institutions. As such, efforts to enable
the register to better regulate the massive lobbying efforts taking place in Brussels have, in
recent years, continued in both the Commission and the Parliament.
In 2013, a group of MEPs and Commissioner Maroš Šefčovič undertook a review of the
Transparency Register. On 13 December 2013, a list of measures and elements to take was
published by the Commission. However, it has been widely reported that the Commission's
report did not reflect all of the measures agreed to by the working group and obscured the fact
that the Commission and Parliament were at odds on a number of important matters.
The Parliament itself has expressed its intention to use these proposed amendments as a
short term solution that will provide some improvement while they work toward their long term
goal: a legislation-based mandatory lobby registry, in its resolution of 8 May 2008 on the
development of the framework for the activities of interest representatives (lobbyists) in the
European institutions and in its decision of 11 May 2011 on conclusion of an interinstitutional
agreement between the European Parliament and the Commission on a common Transparency
Register, both documents being explicitly quoted in the final revised interstitutional
agreement adopted by the Commission on 9 April 2014, and approved by the European
Parliament at its plenary on 15 April 2014.
New provisions of the 2014 Interinstitutional Agreement
The interinstitutional agreement between the European Parliament and the Commission
agreed upon in April 2014 maintains a voluntary Transparency Registry. While around 6000
organizations are currently registered in the Transparency Registry to lobby in Brussels, many
law firms and other entities participating in lobbying continue to choose not to register. Because
registration is not mandatory, lobbying entities that choose not to register are not subject to any
sanctions.
Who should register?
All organizations and self-employed individuals engaged in EU policy-making are eligible to
sign up to the register whether based in Brussels or abroad. The scope of the register is very
broad and covers “all activities carried out with the objective of directly or indirectly influencing
the formulation or implementation of policy and the decision-making processes of the EU
institutions, irrespective of where they are undertaken and of the channel or medium of
communication used, for example via outsourcing, media, contracts with professional
intermediaries, think tanks, platforms, forums, campaigns and grassroots initiatives.” The
covered activities are generally communication of any form with the Members of the
Institutions, including, inter alia, invitations, proposals and meetings.
The 2014 IIA more clearly defines direct and indirect influence, without nonetheless adding
new fields to the scope. It states now that intermediaries, such as PR firms or communication
agencies, should also register.
Law firms
Additionally, a number of activities are excluded from registration. Most significantly, the
provision of legal advice to clients remains excluded. While this provision should not be
considered controversial in light of the fact that the genuine provision of legal services cannot
be considered lobbying in any real sense, law firms have used this provision to assert that their
lobbying activities, as distinguished from "legal service" activities, are exempt from registration.
In the 2014 IIA, a new field of exclusion has been added for law firms : activities “consisting of
analyses and studies prepared for clients on the potential impact of any legislative or
regulatory changes with regard to their legal position or field of activity”. This new exemption
seems more favorable to law firms, as this monitoring of legal proposals, or legal intelligence,
could have been considered as the first step of a lobbying strategy, thus falling into the scope
of the transparency register.
The line is now explicitly drawn when moving to the next step, i.e. “activities concerning the
provision of legal (…) advice where (it consists in) the provision of tactical or strategic advice,
including the raising of issues the scope of which and the timing of communication of which are
intended to influence the EU institutions”. This creates a more favorable regime for la firms :
according to the report adopted by the European Parliament on April, 15th 2014, these “clearer
definitions describing exceptions to the scope of coverage of activities of law firms (should) help
to encourage further registrations and bring about a better understanding of the meaning of
covered activities of law firms”. This definition could turn out to be problematic in the case of a
mandatory register, because it would exclude part of the lobbying work of law firm from
disclosure requirements.
The activities of social partners in the framework of the social dialogue remain not covered.
It is also noteworthy that political parties and churches are not expected to register, although
some of the networks and offices set up to represent them are expected to do so.
Public entities
While under the first IIA provisions for public entities, only “the representative offices or
legal entities, offices and networks created to represent local, regional or municipal authorities
in their dealings with the EU institutions, as well as their associations” were expected to register,
under the 2014 IIA, regional public authorities and their representative offices are not expected
to register any more, but “can register if they wish to do so”, thus creating an odd category of
entities which may join but are not expected to do so. This exception carved out for regional
public authorities is all the more cumbersome since any association or network created to
represent regions collectively is expected to register and all other sub-national public authorities
such as local and municipal authorities or cities, or their representation offices, associations or
networks, are also expected to register. The 2014 IIA also excludes lobbying to Member States’
permanent representation, which were previously covered, a move possibly made to coax the
Council into signing the IIA.
Incentives to register
One of the main novelty of the 2014 IIA are the incentives for lobbys to register. According
to the text of the agreement, Incentives offered by the European Parliament to registrants may
include: further facilitation of access to its premises, its Members and their assistants, its
officials and other staff; authorisation to organise or co-host events on its premises; facilitated
transmission of information, including specific mailing lists; participation as speakers in
committee hearings; patronage by the European Parliament.
When decided to sign the IIA, the Parliament specified that its incentive would include :
granting patronage only to registered organisations, for any events organised by an organisation
falling within the scope of the Transparency Register, reducing the number of meetings with
non-registered organisations or interest representatives
In its report, the Parliament asked the Commission to consider limitations on the
participation of non-registered organisations in Commission advisory bodies and expert groups,
encourage Commissioners and Commission officials and other staff to refuse invitations to
events organised by non-registered organisations, and to restrict to registered organisations the
possibility of hosting or co-hosting events on Commission premises, while the IIA stated that
incentives offered by the European Commission to registrants may include: measures with
regard to the transmission of information to registrants when launching public consultations;
measures with regard to expert groups and other advisory bodies; specific mailing lists;
patronage by the European Commission.
Sanctions for non compliance
Besides existing complaints, the new IIA sets up an alert mechanism with regard to
factual mistakes concerning the information provided by the registrants, that any person may
lodge online.
Possible sanctions remain suspension from the register of withdrawal of badges, under,
if infringements are repeated, a name and shame approach, which is rather an incentive not to
register in the first place.
“Inappropriate behavior”, which may justify such sanctions, have been detailed in the
European Parliament report of April, 15th 2014 : “interference in the private sphere or personal
life of decision-makers, e.g. by sending gifts to a decision-maker’s home address or approaching
decision-makers at their home address or via their relatives or friends; performance, or any
active promotion, of activities in the field of communication with the EU institutions and their
Members or staff which are liable to impair the functionality of the EU institutions’
communication systems, particularly in cases where such activities are performed anonymously;
failing to declare the interests or clients being represented when contacting a Member of the
European Parliament or officials or other staff of the European Parliament with regard to the
legislative process; employing ‘front groups’, i.e. organisations which hide the interests and
parties they serve, the latter not being registered in the Transparency Register; and employing
the representatives of third countries when engaged in direct and indirect lobbying activities;
offer or grant support, whether financial or in terms of staff or material to Members of the
European Parliament or their assistants”. This definition sets for the first time what are
acceptable and non-acceptable lobbying techniques.
Code of conduct
The new Agreement now requires the registrants to provide “specific” information
about their lobbying activities and lobbying costs on an annual basis. The 2014 IIA requires to
disclose the amount of time spent by each person on lobbying activities It is important to note
that the organizations must also declare any EU funding they receive. In addition to this, the
names of persons having EP accreditation should be made public. A new feature is the
disclosure of membership of “high-level groups, consultative committees, expert groups, other
EU supported structures and platforms, European Parliament intergroups or industry forums,
etc”.
Registrants sign up to a Code of Conduct specified under Annex III of the Agreement
(“Code of Conduct”). The Code of Conduct includes a commitment to provide accurate and upto-date information on all lobbying activities. The 2014 Code of Conduct is almost identical to
the previous one, with a stronger emphasis on the prevention of conflicts of interest, namely
about employment of members of an MEP’s entourage.
Otherwise, the registrants basically undertake not to behave dishonestly and to refrain from
selling copies of documents obtained from the covered EU institutions (the Parliament and the
Commission). Although slightly clearer, all the obligations are still outlined in a broad and
ambiguous manner, for which the register is often criticized. An evidence for that is that the
European Parliament “believes that the Code of Conduct attached to the Agreement of 23 June
2011 and the Code of Conduct for Members of the European Parliament with respect to
financial interests and conflicts of interest should be amended in order to ensure that Members
do not enter into any kind of agreement or contractual relationship with an external body to
either fund or directly employ individuals within a Member’s staff”, as stated in the AFCO
report.
Possible amendments to the Interinstitutional Agreement
for a de facto mandatory registry
eLabEurope believes that while the Draft Report's amendments are small steps in the
right direction, the Transparency Register will remain seriously inadequate until much more
significant reforms are undertaken. While the establishment of a truly mandatory lobby register,
complete with the civil and criminal sanctions necessary to promote compliance to the fullest
possible extent, will be impossible without the use of legislation, significant improvements can
be made under the interinstitutional agreement framework. While an interinstitutional
agreement cannot impose obligations on private parties who are not members of the
institutions that are parties to the agreement, it does allow for the imposition of obligations on
MEPs and Commissioners.
A significant measure, notwithstanding the will of MEPs to interact with all stakeholders,
regardless of their nature, would be that Parliament officials and staff to ask to see a
registration badge before interacting with a representative of an organisation or individuals
undertaking an activity falling within the scope of the Transparency Register and prohibit
Parliament officials and stop from interacting with such individuals when they are unable to
produce a badge.
Such a provision should, moreover, extend beyond the official premises of the
Parliament and Commission, so that lobbyists truly need to register in order to successfully carry
out their jobs. Sanctions could also be imposed on MEPs or their assistants, instead of only
applying to lobbyists. These changes would serve to establish a register that is de facto
mandatory.
Once registration is made de facto mandatory, it will become possible to prevent the
revolving door problem through restrictions on who is eligible for registration. If only the
effective lobbyists are registered lobbyists (because unregistered lobbyists are simply unable to
interact with EU officials), only individuals who are eligible for registration will be employed by
lobbying firms or retained by corporations or interest groups.
If individuals who have worked as MEPs, Commissioners, or members of the administrative staff
supporting these institutions are made ineligible for registration, the revolving door will be
closed. Such individuals would be useless as active lobbyists, so they would cease to see
lobbying as a viable career path.
Improving the current scheme without waiting for treaty
change : the case for a legislation-based regime of lobbying
regulation
Because it seems unlikely that the MEPs and Commissioners will be willing to subject
themselves the strict restrictions needed to foster a de facto mandatory regime, it is our
position that a truly mandatory, legislation-based, regime of lobbyist registration and regulation
should be pursued. Legislation-based systems, like the one in the United States that will be
discussed below, have the advantage of allowing governments to impose legal obligations on
the lobbyists themselves. These legal obligations are, of course, backed by civil and criminal
sanctions that provide the most powerful possible incentive for compliance. Such sanctions also
make it less likely that lobbyists will be willing to take the risk of employing the many evasive
tactics, such as action through intermediaries and falsifying difficult-to-verify information, that
threaten de facto mandatory regimes.
The advantages inherent in a truly mandatory, legislation-based lobbyist regulation
regime are appreciated by the European Parliament. The Constitutional Affairs Committee
report adopted on April 15, 2014 “calls on the Commission to submit, by the end of 2016, a
legislative proposal for the establishment of a mandatory register on the basis of Article 352
TFEU; asks the Commission to include, in the context of any forthcoming proposals for a
comprehensive reform of the Treaties, a proposal either for an amendment of Article 298 TFEU
or for an appropriate specific legal basis allowing a mandatory register to be set up in
accordance with the ordinary legislative procedure.” In making these two requests, the
Constitutional Affairs Committee relied on the EP and Commission Legal Services' assessment
that under the current Treaties, Article 352 of the TFEU is the only legal basis for passing
legislation establishing a truly mandatory lobbyist regulation regime. As the Letter from VicePresident Rainer WIELAND to President Martin SCHULZ, 19.12.2013, which reported the findings
of the inter-institutional high-level Working Group with the Commission on the revision of the
Transparency Register explains, "Regarding the establishment of a mandatory Transparency
Register in the future, it has been found, with the legal opinions of both Institutions' Legal
Services, that at present European Union Law does not provide for a solid legal basis for a
mandatory registration of lobbyists. It was ascertained that, as Article 298 (2) TFEU applies only
to the EU administration, it would not cover the Members of the Institutions or the legislative
activities of the Union. On the other hand, Article 352 TFEU provides a legal basis, but the
legislative procedure to follow requires unanimity in the Council and only the consent of
Parliament."
The Parliament has been informed that such a legislation-based system is presently
unfeasible because the only legal basis for a regulation of this type (Article 352 TFEU) entails a
legislative procedure whereby legislation cannot pass without the unanimous support of the
Council. In both Wieland's letter and the AFCO Report, however, mention is made of Article 298
TFEU as a possible, but ultimately insufficient, legal basis for such legislation. The Parliament has
been told that Article 298, is, in its present form, incapable of providing a sufficient legal basis,
and so the AFCO Report calls for Article 298 to be amended. In light of the difficult and time
consuming nature of treaty amendments, such a course of action is far from ideal. It is our belief
that a treaty amendment is also unnecessary, as Article 298 is, in its present form, capable of
providing a sufficient legal basis for the legislative regulation of lobbying activity aimed at the
organs of the EU.
Article 298 of the TFEU provides that "In carrying out their missions, the institutions,
bodies, offices and agencies of the Union shall have the support of an open, efficient and
independent European administration," and that "In compliance with the Staff Regulations and
the Conditions of Employment adopted on the basis of Article 336, the European Parliament and
the Council, acting by means of regulations and in accordance with the ordinary legislative
procedure, shall establish provisions to that end." Because this provision, which first came into
being with the Treaty of Lisbon, has yet to be used as a legal basis for EU legislation, there are
no ECJ opinions or precedents to help one discern 298's exact contours. However, its broad
language provides ample support for regulations establishing a mandatory lobbyist registration
system.
One must first, as a general matter, ask whether legislation establishing a mandatory
lobby register and regulating the actions of lobbyists in a legally binding way constitutes a
"provision" toward the end of ensuring that "the institutions, bodies, offices, and agencies of
the Union...have the support of an open, efficient and independent European administration."
This question gives rise to a number of constituent sub-questions that must be answered before
one can come to the resolution of the larger issue.1 The first question is what is meant by the
term, "European administration." In providing that this "administration" acts in "support" of the
"institutions, bodies, offices, and agencies of the Union," the text seems to identify anyone
carrying out administrative tasks in support of the "institutions, bodies, offices, and agencies of
the Union" as a member of the "European administration." As such, members of the
administrative staffs of the Commission, Parliament, and Council, each of which is an
institution/body of the Union, are classified as members of the "European administration" under
298.
The second question is whether unregulated lobbying activity threatens the openness,
efficiency, and independence of the European administration. The term "open" should be
interpreted in light of Article 15 of the TFEU2, providing that "In order to promote good
governance and ensure the participation of civil society, the Union's institutions, bodies, offices
and agencies shall conduct their work as openly as possible. The European Parliament shall meet
in public, as shall the Council when considering and voting on a draft legislative act... Each
institution, body, office or agency shall ensure that its proceedings are transparent and shall
elaborate in its own Rules of Procedure specific provisions regarding access to its documents."
Undoubtedly, the openness of the European administration's work process would be threatened
if the bodies of the EU and the public were unable to learn which organizations were lobbying
members of the administration. Additionally, it can hardly be contested that it is at least
reasonable to believe that unregulated lobbying threatens the independence of the public
servants who are the targets of lobbying efforts.
1
For a similar analysis that answers many of the same questions but ultimately concludes that Article 298
can only be used for the regulation of lobbying activity directly involving the administration, see Markus
Krajewski, Legal Framework for a Mandatory EU Lobby Register and Regulations, 7-10.
2
For a more complete analysis, see Alberto Alemanno, Unpacking the Principle of Openness in EU Law:
Transparency, Participation and Democracy, European Law Review (2014)
Next, one must ask whether "provisions" aimed at ensuring "the support of an open,
efficient and independent European administration" properly include provisions regulating the
conduct of lobbyists. At first glance, it may appear that Article 298 only gives the EU
competence to legislate as to the internal affairs of the European administration. While the
regulation of the European administration and the individuals who comprise it was probably the
primary purpose behind the drafting of 298, the article's broad text allows it to also be used for
the regulation of lobbyists. The text simply specifies that the objective is the maintenance of an
open, efficient and independent European administration and mandates that the Parliament
and Council shall use the ordinary legislative procedure to enact regulations in furtherance of
this objective. In other words, Article 298 authorizes the European Legislator to enact any
regulation that furthers the stated objective. The one textual limitation on this authorization,
that the regulations be "in compliance with the Staff Regulations and the Conditions of
Employment adopted on the basis of Article 336," simply provides that the regulations enacted
must be in compliance with the stated provisions. It does not imply, as some might suppose,
that only regulations pertaining to the staff and their conditions of employment fit under Article
298. Such a reading would represent an unwarranted inference not supported by the text.
Therefore, if regulating the actions of lobbyists and mandating that they register furthers Art
298's stated objectives, as it undoubtedly does, Article 298 authorizes the Parliament and
Council to use the ordinary legislative procedure to regulate the actions of lobbyists and
mandate that they register.
Based on Vice President Wieland's letter, in which he states that "it was ascertained
that, as Article 298 (2) TFEU applies only to the EU administration, it would not cover the
Members of the Institutions or the legislative activities of the Union," it seems that the
Parliament and Commission's Legal Services agree that Article 298 can be used to regulate
lobbyists but nonetheless find it to be an inappropriate basis for legislation because of their
perception that it could only be used to regulate lobbyists who are targeting members of the EU
administration. Since lobbyists are, for the most part, targeting members of the Commission,
Council, and Parliament, who cannot, under the text of 298, be understood as members of the
European administration, this interpretation would render Article 298 incapable of supporting
the legislation Parliament seeks. This argument for the insufficiency of Article 298 essentially
rests on the premise that while lobbying activity aimed at members of the administration does
threaten the openness and independence of the administration, lobbying activity aimed at
members of the Parliament, Commission, and Council does not. As was elucidated above, Article
298 provides the EU with competence to pass any regulation that furthers Art 298's objectives
(the maintenance of an open, efficient, and independent European administration). So can it
really be said that the regulation of lobbying activity aimed at the legislative organs of the EU
does not promote an open, efficient, and independent European administration? Such a
conclusion seems to disregard the obvious impact that legislators who have been influenced by
lobbyists can and undoubtedly do have on the administrative staff of the Parliament,
Commission, and Council. Only by concluding that members of these organs have no influence
on how administrative staff carry out their work, can we plausibly assert that lobbying activity
directed at MEPs, commissioners, and Council members does not threaten the aims of Article
298. Under this theory of influenced MEPs, commissioners, and council members acting as
conduits for the transmission of influence from lobbyist to administrative worker, Article 298
provides a solid legal basis for legislation-based regulation of lobbyists and the establishment of
a truly mandatory register. This would allow such a regulation to pass in accordance with the
ordinary legislative procedure, and would therefore be highly preferable to reliance on Article
352 or a treaty amendment.
This analysis can also be understood in conjunction with the implied powers doctrine.
While the doctrine of implied powers has been subject to a number of formulations, the version
that has been unambiguously supported by the ECJ holds that a competence that has not been
explicitly granted to the EU is necessarily implied by the text of the treaties when such
competence is needed to give effect to a competence that is explicitly provided for in the
treaties.3 For the purposes of the present analysis, the explicitly granted competence would be
the one provided for in Article 298 (regulating to ensure that the European administration is
open, efficient, and independent). The implied power needed to make such regulations effective
would be the power to regulate lobbying activity aimed at MEP's, Commissioners, and Council
members. For example, a mandatory lobby register for lobbyists seeking to influence members
of the European administration would advance the "openness" of how the administration
carries out its work. However, such openness would be largely illusory if there were not also a
mandatory lobby register for lobbyists seeking to influence members of the three legislative
organs. Under the aforementioned conduit theory of influence transmission, if we do not know
who is influencing MEPs, we will truly know who is influencing the administrative employees
who work in support of Parliament. Unregistered lobbyists would remain free to influence
MEPs, Commissioners, and Council members, who would naturally convey such influence to
administrative employees, thereby compromising the openness and independence of the
European administration. Only by shutting down both influence inputs (lobbyists directly
influencing the administration and lobbyists influencing actors who will inevitably influence the
administration) can the purposes of Article 298 be successfully effectuated. Since this would still
be an exercise of the competence provided in Article 298, which explicitly provides for the
ordinary legislative procedure, regulations adopted pursuant to the implied powers granted by
Article 298 would follow the ordinary legislative procedure.
If the European legislator is willing to rely on broader formulations of the implied
powers doctrine, reliance on the conduit theory of influence transmission is not even necessary.
One such broader formulation, which has since become an undisputed principle of customary
international law, was expressed by the International Court of Justice in its Reparation for
Injuries decision. In this case, the ICJ concluded that the UN possessed the power to bring claims
on behalf of its employees, despite such competence being entirely absent from the text of the
UN Charter, because "under international law, the Organization must be deemed to have those
powers which, though not expressly provided in the Charter, are conferred upon it by necessary
implication, as being essential to the performance of its duties."4 The ICJ held that this rule of
customary international law applied to international organizations generally. It can, therefore,
be applied to the EU. The reasoning underlying this rule stems from the fact that international
organizations derive their powers and responsibilities entirely from the member states that
conferred such powers and responsibilities on them. If the member states assigned the
organization a certain duty, it must be implied that the member states also consented to afford
the organization the power to take the actions necessary for the successful fulfillment of this
3
4
ECJ, Case 8/55, ECR 19XX p. 280.
Reparation for Injuries Suffered in the Service of the United Nations, n1 April 1949, International Court
of Justice, Advisory Opinion, ICJ Reports 1949, p. 183.
duty. Just as the UN needed to be able to bring claims on behalf of its employees so that the
employees would have the protection they needed to assure that they would be willing to carry
out their objectives with uncompromised loyalty to the United Nations, the EU needs to be able
to establish a truly mandatory, legislation based, lobby register so that the undivided loyalty of
MEP's, Commissioners, and Council members to their constituents and the European citizenry
can be promoted.
Initially, this principle of International Law may seem irrelevant in the EU context
because the EU has already codified a similar principle explicitly in the form of Article 352 TFEU,
which reads, "If action by the Union should prove necessary, within the framework of the
policies defined in the Treaties, to attain one of the objectives set out in the Treaties, and the
Treaties have not provided the necessary powers, the Council, acting unanimously on a proposal
from the Commission and after obtaining the consent of the European Parliament, shall adopt
the appropriate measures." This is not, however, the case. In the first place, it must be
acknowledged that reliance on the ICJ's formulation of the implied powers doctrine is preferable
to reliance on Article 352 because legislation enacted pursuant to the former would be subject
to the ordinary legislative procedure. This can be concluded based on the fact that in the wake
of the Treaty of Lisbon, the ordinary legislative procedure is the default procedure that will take
place unless otherwise provided for. Article 352 does provide for a special legislative procedure,
and is, as the Parliament has already recognized, not a feasible option for lobbying regulation at
the present time. Additionally, it cannot be argued that Article 352 supplants the customary
international law principle described by the ICJ in Reparation for Injuries, as they do not occupy
the same "legislative space." While Article 352 refers to actions necessary "to attain one of the
objectives set out in the treaties," the customary law rule refers to powers that are "essential to
the performance of [an international organization's] duties."5 The customary law rule, therefore,
does not rely on a specific objective set out in the treaties, but instead focuses on the
organization's ability to carry out its work. While it has been asserted that the EU is a sui generis
organization that is neither a state nor an international organization, the fact remains that it
derives its power from the consent of its member states. So long as this fact remains true, the
reasoning of the ICJ remains applicable.
A second expansive view of the implied powers doctrine is the Natur der Sache doctrine,
which, if applied to the EU, would hold that the EU is competent to regulate in areas where,
because of the nature of the matter, regulation by the member states would be impossible.
Reliance on the "nature of the matter" basis for competence is appropriate in this case because
the member states are powerless to regulate such exclusively European Union affairs as third
party access to EU organs and the conduct of EU employees. While the ECJ has yet to accept or
reject this basis for competence, Natur der Sache competence is accepted in German
constitutional law doctrine on the regulation of lobbyists' access to the German federal
government. 6 For reasons mentioned above, a regulation in reliance on this competence would
follow the default ordinary legislative procedure.
5
Reparation for Injuries Suffered in the Service of the United Nations, n1 April 1949, International Court
of Justice, Advisory Opinion, ICJ Reports 1949, p. 183.
6
Krajewski, Legal Framework for a Mandatory EU Lobby Register and Regulations, 11
There is, therefore, at least a plausible argument for the notion that through Article 289
TFEU, the implied powers doctrine, or a combination of the two, the EU is empowered to pass
legislation regulating lobbying efforts targeting EU institutions and to establish a truly
mandatory lobby register. As the Parliament seems to have acknowledged, a legislation-based
lobbyist regulation regime would allow for more effective and comprehensive regulation of
lobbying activity than the current system does. For a lobby registry and other regulations of
lobbying activity to be truly mandatory, they must be capable of imposing legal obligations on
lobbyists. Interinstitutional agreements, procedural rules, and other non-legislative means of
regulating lobbying can, if properly designed, create incentives that are so strong as to assure
that lobbyists, for practical purposes, must register if they are to successfully pursue their
careers. However, even under such an idealized scenario, lobbyists who break the rules that
they signed up for when they joined the register can only be penalized through denial of access.
Such denial of access can be circumvented through the use of intermediaries, the complicity of
institutional actors, or other means. It is only through legislative means, that true sanctions,
such as fines and imprisonment, can be imposed on lobbying organizations. The ECJ has
recognized that, as a matter of the implied powers doctrine, the EU has the power to adopt
criminal sanctions in an area in which it is competent.7 Such sanctions would, however, need to
be adopted in the form of legislation rather than internal rules that are only capable of binding
EU institutional actors. We have seen that there are a number of possible legal bases for the
legislative regulation of EU lobbying and the imposition of a legally mandatory lobby register. To
see what such legally binding regulation might look like, it is useful to refer to the legislationbased lobbyist regulation regime that has long been in place in the United States.
Comparison with the U.S. System of Legislation-Based
Regulation of Lobbying
Washington, DC is, with Brussels, the main city for lobbying activities. Even if the two
institutional systems are different, and if issues dealt at the federal vs European level are also
not necessarily identical, the US system of legislation-based lobbying regulation is of high value
to draw some comparisons. In connection to this, the US system could also be used as a
(counter) example for political financing or revolving door regulations, but this would exceed the
scope of this report.
The United States federal government employs a mandatory lobbyist registration
regime based on the Lobbying Disclosure Act of 1995 and the Honest Leadership and Open
Government Act of 2007, which amended the prior act.
Registrants
7
ECJ, C-176/03, para. 48
Specifically, lobbying firms and organizations employing in-house lobbyists must register
and lobbying firms are required to file a separate registration for each qualifying client. A client
qualifies for registration if the firm's total income from the client for lobbying activities exceeds
or is expected to exceed $3,000 during a quarterly period.
Organizations employing in-house lobbyists must register if their total expenses for
lobbying activities exceed or are expected to exceed $12,500 during a quarterly period.
Organizations employing in-house lobbyists file a single registration. An individual lobbyist
employed by a lobbying firm or an organization employing in-house lobbyists does not register
(although he or she will be listed in the firm/organization's registration). However if a lobbyist is
self-employed, he/she is treated as a lobbying firm.
In addition to registration, each registrant must file a quarterly report on the first day of
January, April, July, and October of each year. Quarterly reports disclose lobbying income or
expenses and lobbying issues. Quarterly reports also disclose the specific issues on which
individual lobbyists engaged in lobbying activity and the names of new lobbyists employed by
the firm/organization. Registrants and lobbyists must also file a semiannual report by 30 July
and 30 January of each year. The semiannual report includes specific information regarding
certain contributions and payments made by the filer and any political committee established or
controlled by the filer. It also includes a certification that the filer has read and understands the
gift and travel provisions in the Rules of both the House of Representatives and the Senate, and
that the filer has not knowingly violated these rules, incorporated in a code of conduct. In this
way, the legislation turns compliance with the institutional rules of the House and Senate into a
legally-binding obligation that lobbyists must abide by if they are to avoid the significant civil
and criminal penalties specified in the Act.
The Act also contains the following definitions, thereby avoiding the ambiguity that has
negatively impacted the EU Transparency Register:
Lobbyist: Any individual (1) who is either employed or retained by a client for financial or other
compensation (2) whose services include more than one lobbying contact; and (3) whose
lobbying activities constitute 20 percent or more of his or her services' time on behalf of that
client during any three-month period.
Lobbying Firm: A person or entity consisting of one or more individuals who meet the definition
of a lobbyist with respect to a client other than that person or entity. This definition includes a
self-employed lobbyist.
Lobbying Activities: Lobbying contacts and any efforts in support of such contacts, including
preparation or planning activities, research, and other background work that is intended, at the
time of its preparation, for use in contacts, and coordination with the lobbying activities of
others.
Lobbying Contact: Any oral, written, or electronic communication to a covered official that is
made on behalf of a client with regard to the enumerated subjects at Sections 3(8)(A) of the Act
(2 U.S.C. 1602(8)(B)).
Penalties
In contrast to the current situation in Brussels, no incentive for registration is needed
because civil and criminal penalties come with breaking this law. Specifically, whoever
knowingly fails: (1) to correct a defective filing within 60 days after notice of such a defect by the
Secretary of the Senate or the Clerk of the House; or (2) to comply with any other provision of
the Act, may be subject to a civil fine of not more than $200,000, and whoever knowingly and
corruptly fails to comply with any provision of this Act may be imprisoned for not more than 5
years or fined under title 18, United States Code, or both. The act is enforced by the U.S.
Attorney's Office for the District of Columbia, which actively prosecutes violators. While
violators are prosecuted, negotiated undisclosed financial settlements are typically reached and
prison time is thereby avoided. However, it is a matter of public record that in 2013, the U.S.
Attorney's Office secured a judgment of $200,000 against a consulting firm for violations of the
Lobbying Disclosure Act of 1995 (LDA), as amended.8
Law firms’ compliance
Importantly, although the American judicial system recognizes a very extensive
doctrine of attorney-client confidentiality, the U.S. federal government faces none of the
problems with law-firm non-compliance that the EU currently faces. Once a legally binding,
legislation-based, system is in place, law firms are forced to abandon all attempts to use
attorney-client confidentiality as an excuse for gaining a competitive advantage in the lobbying
industry. As such, in the United States, law firms that meet the definition of a lobbying firm or
the definition of an organization employing in-house lobbyists must register under the same
rules that are applicable to all other persons/organizations. No special treatment is given to law
firms, and they are subject to the same penalties mentioned above.
Revolving door
The U.S. Lobbying Disclosure Act also addresses the "revolving door" problem in a
meaningful way, as it prohibits Senators from gaining undue lobbying access by increasing the
“cooling off” period for Senators from one to two years before they can lobby Congress,
prohibits Cabinet Secretaries and other very senior executive personnel from lobbying the
department or agency in which they worked for two years after they leave their position,
prohibits senior Senate staff and Senate officers from lobbying contacts with the entire Senate
for one year, instead of just their former employing office, prohibits senior House staff from
lobbying their former office or Committee for one year after they leave House employment, and
requires that executive and legislative branch employees who leave government positions and
seek to lobby on behalf of Indian tribes face the same revolving door provisions as others.
Detailed transparency issues
8
For a copy of the judgement, see
http://www.hklaw.com/files/Uploads/Documents/Alerts/Political%20Law/BiassiDefaultJudgment.pdf
Several of the other perceived inadequacies of the EU Transparency Register are also
effectively addressed by the U.S. legislation. The most important of these are detailed below:
Improved Financial Disclosure- In quarterly reports, lobbying firms must report the amount of
income received from each individual client. If the amount is less than $5,000 they merely check
off a box indicating that it is less than $5,000 and do not provide further specificity. If the
income from a client is greater than $5,000, a lobbying firm must provide a good faith estimate
of the actual dollar amount rounded to the nearest $10,000. The same rules apply to
organizations employing in-house lobbyists in regard to their reporting of lobbying expenses in
quarterly reports.
Improved Lobby Issue Disclosure- Disclosure of lobbying issues is one of the central purposes of
the quarterly report requirement. For each client, the registrant must disclose the general
lobbying issue area, identify the specific issues on which the lobbyist(s) engaged in lobbying
activities, identify the Houses of Congress and federal agencies contacted, disclose the names of
the lobbyists who had any activity in the general issue area, and describe the interest of a
foreign entity if applicable. Listing the House or Senate bill numbers of the legislation the
lobbying pertained to is necessary but not sufficient, since many bills are lengthy and complex
and may contain various provisions that are not always directly related to the main subject or
title of the bill.
Improved Staff Disclosure- Disclosure of the names of lobbyists is made by their employers
(lobbying firms or organizations employing in-house lobbyists) in their registration statements.
Moreover, new lobbyists must be disclosed in quarterly reports for the reporting period in
which the individual first meets the definition of a lobbyist. Additionally, individual lobbyists
working for lobbying firms or for organizations employing in-house lobbyists must, themselves,
file semiannual reports.
Improved up-to-date Information on Fixed Dates- In semiannual reports, specific dates are
required for the information on contributions and payments made by the filer to federal
candidates or officeholders, executive branch officials, legislative branch officials, political
parties, etc.
Proactive Transparency- The Secretary of the Senate and the Clerk of the House of
Representatives must make all registrations and reports available for public inspection over the
Internet as soon as technically practicable after the report is filed.
Recommendations for Future Action
Many of the U.S. provisions outlined above impose obligations on private individuals
and organizations. While the European Parliament and Commission can and should impose
specific and extensive rules and definitions like those outlined above through amendments to
the interinstitutional agreement, it seems unlikely that substantial compliance with such
extensive and difficult-to-verify rules and definitions can be achieved in the absence of legal
sanctions. It is only through use of legislation that the EU can avail itself of the deterrence that
comes with the threat of substantial fines and prison time.
We therefore recommend that the Parliament and Commission do what they can to
make the current interinstitutional agreement-based regime as close to de facto mandatory as
possible.
The two parties to the interinstitutional agreement should also do what they can to
convince the Council to join the Agreement. In the absence of the Council's participation,
lobbyists will continue to have a means of influencing the EU legislative process from behind the
shadows. At the same time, however, we recommend that the Commission propose a regulation
creating a mandatory registration and regulatory regime for lobbyists targeting EU institutions.
We believe that sufficient legal bases, in the form of Article 289 TFEU and the implied powers
doctrine, exist to support such legislation. At the very least, it would be a difficult case for the
ECJ when lobbying interests inevitably challenge such legislation. We believe that the ECJ would
uphold such legislation, but the risk that it would find it outside the bounds of the EU's
competence does not justify failure to attempt such an important alteration to the status quo. If
it proves impossible to institute a legislation-based system under the current treaties, an
amendment process can be initiated.
Since lobbying regulation is very popular with the European citizenry, there is reason to
believe that that member states would ratify an amendment that makes legislation-based
regulation of lobbyists possible.