Why is crossing the floor from private to public sector, and vice versa, subject of polemic? What are the rules in place to prevent conflicts of interest and ensure good regulation? Euronews looks at the tech sector to answer those questions.
The election of two former employees of tech giant Meta to the European Parliament in June revived the issue of revolving doors – movement of workers from the public to the private sector and private to public in a related field, a matter the European Commission is also set to opine on this week.
“On the one hand, lobbying is beneficial to industry and to the public sector as it allows informed policy-making. On the other, it can pose a risk to the democratic tissue of society, as lobbying can undermine decision-makers’ integrity and lead to favouritism if not appropriately regulated,” wrote the EPRS, the think tank of the European Parliament.
Crossing the Metaverse
Newly elect MEP Aura Salla (Finland/EPP) has experience moving from the private to public frontier. She spent almost six years at the Commission, first in the cabinet of Jyrki Katainen, Finnish Commissioner for jobs and growth before working in the EU executive’s in-house think tank.
In 2020 she joined Meta as the head of EU affairs and became the face of Facebook in Brussels – she represented Meta’s interests while the Digital Markets and Services Acts (DMA & DSA) platform rules were being negotiated. Salla then revolved again into the public sector when elected in April 2023 as member of the Finnish Parliament.
After her June victory at the EU Elections, she joined the committee on Economic and Monetary Affairs (ECON) and is now a substitute on the Internal Market (IMCO) committee too. IMCO was the committee responsible for the most important digital legislation of the previous mandate (AI Act, DSA and DMA).
“It is completely normal and should be encouraged for people to work in private sector and public sector,” Salla told Euronews, adding that civil servants with knowledge of the private sector can enhance the quality of law making.
IMCO was also the European Parliament committee of choice for another former Meta employee, Dóra Dávid (Hungary/EPP). The Hungarian was elected on the list of Tisza, the party of Viktor Orbán ally-turned-rival Péter Magyar.
She started her career as a competition lawyer before working for NGOs and the Hungarian Representation to the UN in New York. She went through the revolving door a second time when she joined Ebay in 2020 as legal counsellor. Three years later she took a similar position at Meta.
“Until a few months ago, I hadn’t even dreamt of going into politics,” Dora told Euronews, explaining that applying – through an open competition – for an MEP candidate role “tapped into my desire to apply my skills and experience in pursuit of the public interest”.
“I’ve decided to represent my fellow Hungarians – and not a particular company – in pursuit of change; a more democratic, fair, prosperous and less corrupt Hungary,” she said, eschewing the notion that the ‘revolving door’ described her journey.
Senior EU officials going private
The revolving door is no new phenomenon, famous politicians-turned lobbyists include Neelie Kroes, the former Dutch Competition and Digital Commissioner, who – soon after her mandate ended in 2014 – lobbied former colleagues and the Dutch government on behalf of the hailing company Uber, according to the leaked cache of documents known as the “Uber Files”.
Revolving doors between the private and public sector can have a “corrosive effect” on public trust, fueling euroscepticism and undermining EU interests, EU Ombudsman Emily O’Reilly wrote on 22 May in response to another move of a senior European Commission antitrust official to a private law firm.
The letter followed law firm Paul, Weiss announcing the hire of Henrik Morch, a former director in the Commission’s antitrust arm with a 30-year career.
The New York-based law firm had cited Morch’s “extensive experience” in handling merger cases as a benefit to the law firm’s clients. “The clear impression is that the Commission has allowed one of its senior officials to work for a non-EU company that anticipates major benefits from that inside knowledge,” said O’Reilly, who investigates suspected maladministration in EU institutions. The European Commission had until the end of June 2024 to reply to O’Reilly but couldn’t in time, and was granted an extension until this week.
O’Reilly had earlier called for the Commission to reform its practices in a probe which closed in 2022 – and which specifically concluded that officials from the competition directorate-general, DG COMP, should be temporary banned from moving to work at private firms that work in related issues if their activities couldn’t be properly monitored.
ADVERTISEMENTThe Ombudsman’s 2022 probe followed a number of controversial hires, including the move of Carles Esteva Mosso, a deputy director-general at DG COMP, to become an antitrust partner at Latham & Watkins, and that of Adam Farkas, executive director of the EU’s banking agency, to lobby group the Association for Financial Markets in Europe. Two other antitrust officials, Nicholas Banasevic and Cecilio Madero Villarejo also quit the commission around that time to work for law firms, with Madero later moving to a consultancy.
This month Banasevic moved on to become Microsoft’s Corporate Vice-President Head of Competition and Regulation for Europe, Middle East, and Africa region.
A European Commission spokesperson told Euronews Basanevic is subject to certain restrictions under the staff regulations for an indefinite period of time.
“For instance, former staff are permanently barred from working on any legal cases they were involved with during their tenure, including related appeals before the European Courts. Additionally, they are prohibited from disclosing unauthorised information received during their service unless it is already public,” the spokesperson said, adding: “They must also continue to demonstrate integrity and discretion, particularly concerning accepting certain positions or benefits.”
ADVERTISEMENTA Microsoft spokesperson denied that Banasevic is breaking any exit rules of the European Commission.
“The many revolving door cases at DG Competition underline the need for consequences,” Max Bank from the NGO LobbyControl told Euronews. Bank believes stronger enforcement of current rules and increased transparency are needed.
Concerns on potential conflicts of interests
“The cases of Nicholas Banasevic, Aura Salla and Dora David illustrate the dangers of revolving doors between corporate interests of big tech companies, legislators and executive power,” according to re-elected MEP Alexandra Geese (Germany/Greens), who negotiated the DSA.
“When [Salla] joins the European Parliament and decides to serve on the Committee competent for big tech regulation, I wonder whether she will serve the best interests of European citizens or those of her former employer,” Geese added.
ADVERTISEMENTShe claimed that the financial capabilities of tech companies are more substantial and attractive than the salaries of Members of the Parliament and civil servants.
Margarida Silva, Big Tech researcher at SOMO, the Dutch Centre for Research on Multinational Corporations, highlights that MEPs are obliged to report any potential conflicts of interest – including financial – even if the obligation is not always fully respected.
“My career started long before Meta and this is not the first time I’ve chosen to work in the public interest,” Dávid told Euronews. She said that her background does not constitute a conflict of interest, adding: “I do not work for Meta anymore and have cut all financial ties with the company.” Indeed David’s declaration of interests flags her having sold her Meta shares.
What are the rules on revolving doors?
In a 2019 report the European Court of Auditors highlighted lack of harmony between approaches of different EU institutions on ethics rules, including the revolving door.
ADVERTISEMENTThe Code of Conduct states that a former Commissioner is not allowed to engage in lobbying activities for two years – three in the case of a former President – and must inform the Commission about any new jobs taken up. The EU executive then decides in consultation with the Independent Ethical Committee decides whether to grant authorisation.
For MEPs seeking to become committee chairs, rapporteurs, members of delegation, questors, or vice-presidents, their declarations of interest will be analysed by their committees or by the Bureau. They are subject to a six-month period after their term of office ends before they are permitted to carry out lobbying activities. Former lawmakers are granted access to the Parliament facilities for life – on the condition that they don’t use this access to represent private interests.
Officials working at the European Council are only impacted by national rules, however, apart from the President, who is subjected to a cooling-off period of 18 months before taking up further work.
“To ensure that the interests of European citizens are well protected, a serious cooling-off period of for jobs where the risk of conflict of interest is so high, would be recommendable,” according to German MEP Geese.
ADVERTISEMENTRevolving doors, a new phenomenon?
EU founding father Jean Monnet’s dictum that “Europe would be built through crises, and that it would be the sum of their solutions” applies to the regulation of revolving doors, according to Adam Chalmers, Senior Lecturer in Politics and International Relations at the University of Edinburgh.
Doors have been revolving for as long as people have been regulating, Chalmers told Euronews, adding: “It’s far more common than you think, actually, to move back and forth like that.” He believes that revolving doors are becoming more visible as part of a wider trend in career paths which sees people taking on more jobs over the course of their careers than they used to. “90% of revolving doors is quite harmless and boring,” he added.
Hence more revolving doors scandals have led to bolster regulation. Former Commission President José Manuel Barroso’s move to US banking behemoth Goldman Sachs came under the scrutiny of European Ombudsman, Emily O’Reilly. She found no breach of EU law, but the situation led to reform of the Code of Conduct for the Members of the European Commission, and the cooling-off period for former Commissioners increased from 18 months to two years as a result.
More recently, one of the consequences of the Qatargate scandal was reform of the Parliamentary Code of Conduct which introduced the six-month cooling-off period for former MEPs.
ADVERTISEMENTDepending on the response of the European Commission to the Ombudsman, due this week, there may be more tightening of the rules ahead.
