the double-edged sword of the EU’s revolving door

The election of two former employees of tech giant Meta to the European Parliament in June has revived the issue of the “revolving door” – the flow of workers from the public to the private sector and from the private to the public in a related field. The European Commission is also due to issue an opinion on the issue this week.

“On the one hand, lobbying is beneficial to industry and the public sector because it enables informed political decision-making. On the other hand, it can pose a threat to the democratic fabric of society because lobbying can undermine the integrity of decision-makers and lead to favouritism if not properly regulated,” wrote EPRS, a think tank for the European Parliament.

Crossing the Metaverse

Newly elected MEP Aura Salla (Finland/EPP) has experience in transitioning from the private to the public sector, having spent almost six years in the Commission, first in the cabinet of Jyrki Katainen, the Finnish Commissioner for Jobs and Growth, and then in the EU’s internal executive think tank.

In 2020, she joined Meta as EU Affairs Chief and became Facebook’s face in Brussels, representing Meta’s interests during the negotiations on the Digital Markets and Services Acts (DMA and DSA) platform rules. Salla then returned to the public sector when she was elected as a member of the Finnish Parliament in April 2023.

Following her victory in the European Parliament elections in June, she joined the Economic and Monetary Affairs Committee (ECON) and is currently also a substitute in the Internal Market Committee (IMCO). IMCO was the committee responsible for the most important digital legislation of the previous term (AI Act, DSA and DMA).

“It is completely normal and people should be encouraged to work in the private and public sectors,” Salla told Euronews, adding that public officials familiar with the private sector could improve the quality of lawmaking.

IMCO was also the European Parliament committee chosen by another former Meta employee, Dóra Dávid (Hungary/EPP). The Hungarian was elected from the Tisza list, a party ally of Viktor Orbán and now rival of Péter Magyar.

She began her career as a competition lawyer before working for NGOs and the Hungarian Mission to the UN in New York. She went through the revolving door a second time when she joined Ebay in 2020 as general counsel. Three years later, she took on a similar role at Meta.

“Until a few months ago, I had never even dreamed of going into politics,” Dora told Euronews, explaining that applying – through an open competition – to become a candidate for the European Parliament “appealed to my desire to use my skills and experience in the pursuit of the public interest.”

“I decided to represent my fellow countrymen, the Hungarians – not a specific company – in the pursuit of change; a more democratic, fair, prosperous and less corrupt Hungary,” she said, rejecting the notion of a “revolving door” to describe her journey.

High-ranking EU officials go private

Revolving doors are not a new phenomenon. Among the high-profile politicians who have become lobbyists is Neelie Kroes, the former Dutch Commissioner for Competition and Digital Affairs, who — shortly after ending her term in 2014 — lobbied her former colleagues and the Dutch government on behalf of Uber, according to leaked documents known as the “Uber Files.”

The revolving door between the private and public sectors could have a “damaging effect” on public trust, fuelling Euroscepticism and undermining EU interests, EU Ombudsman Emily O’Reilly wrote on 22 May in response to another move by a senior European Commission antitrust official to a private law firm.

The letter comes after law firm Paul, Weiss announced the hiring of Henrik Morcha, a former director of the European Commission’s antitrust division for 30 years.

The New York law firm cited Morch’s “extensive experience” in handling mergers as a benefit to its clients. “It’s clear that the Commission has allowed one of its senior officials to work for a non-EU company that stands to benefit greatly from that inside knowledge,” said O’Reilly, who investigates allegations of maladministration in EU institutions. The European Commission had until the end of June 2024 to respond to O’Reilly but was unable to do so in time and was granted an extension until this week.

O’Reilly had previously called on the Commission to reform its practices in an investigation that ended in 2022 and which specifically found that officials from the Directorate-General for Competition, DG COMP, should be temporarily banned from working for private firms dealing with similar issues if their activities could not be properly monitored.

The Ombudsman’s 2022 investigation looked into a number of controversial hires, including the move of Carles Esteva Mosso, deputy director general at DG COMP, to become an antitrust partner at Latham & Watkins, and Adam Farkas, executive director of the EU banking agency, to the lobbying group Association for Financial Markets in Europe. Two other antitrust officials, Nicholas Banasevic and Cecilio Madero Villarejo, also left the commission at the time to work in law firms, while Madero later joined a consulting firm.

This month, Banasevic was named vice president of competition and regulatory affairs for Microsoft in Europe, the Middle East and Africa.

A European Commission spokesperson told Euronews that Basanevic will be subject to certain restrictions under the staff regulations for an indefinite period.

“For example, former staff are permanently banned from working on legal matters they were involved in during their term of office, including related appeals to European courts. They are also prohibited from disclosing unauthorised information obtained in the course of their service, unless it is already public,” the spokesman said, adding: “They must also continue to demonstrate honesty and discretion, particularly in relation to accepting certain positions or benefits.”

A Microsoft spokesman denied that Banasevic had broken any rules on leaving the European Union.

“The many revolving door cases at DG Competition underline the need for consistency,” Max Bank of NGO LobbyControl told Euronews. The bank believes that stronger enforcement of current rules and greater transparency are needed.

Concerns about potential conflicts of interest

“The cases of Nicholas Banašević, Aura Salla and Dora David illustrate the dangers of a revolving door between the corporate interests of big tech companies, legislators and the executive,” said re-elected MEP Alexandra Geese (D/Greens), who negotiated the DSA.

“When (Salla) joins the European Parliament and decides to sit on the committee responsible for regulating big tech companies, I wonder whether she will be acting in the best interests of European citizens or her former employer,” Geese added.

She argued that the financial opportunities of technology companies are much greater and more attractive than the salaries of MPs and civil servants.

Margarida Silva, a researcher on large technology companies at SOMO, the Netherlands Centre for Research on Multinational Corporations, emphasises that MEPs have an obligation to report any potential conflicts of interest, including financial ones, even if this obligation is not always fully respected.

“My career began long before Meta and this is not the first time I have decided to work in the public interest,” Dávid told Euronews. She said her past does not constitute a conflict of interest, adding: “I no longer work for Meta and I have severed all financial ties with the company.” Indeed, David’s declaration of interests indicates that she has sold her shares in Meta.

What are the rules about revolving doors?

In a 2019 report, the European Court of Auditors highlighted the lack of harmony between the approaches to ethics rules taken by different EU institutions, including the “revolving door” phenomenon.

The code of conduct stipulates that a former Commissioner cannot engage in lobbying for two years – three years for a former President – ​​and must inform the Commission of any new positions they take on. The EU executive then decides, in consultation with the Independent Ethics Committee, whether to grant authorisation.

For MEPs who wish to become committee chairs, rapporteurs, members of delegations, quaestors or vice-chairs, their declarations of interests will be examined by their committees or the Bureau. They are subject to a six-month period after the end of their term before they can lobby. Former legislators are granted lifetime access to Parliament facilities – provided they do not use this access to represent private interests.

Officials working in the European Council are subject only to national rules. The President is an exception, who must wait 18 months before taking up another job.

“In order to ensure that the interests of European citizens are well protected, it is advisable to introduce a serious cooling-off period for positions where the risk of conflict of interest is so high,” says German MEP Geese.

Revolving doors – a new phenomenon?

According to Adam Chalmers, senior lecturer in politics and international relations at the University of Edinburgh, the saying of Jean Monnet, a founding father of the European Union, that “Europe will be built through crises and the sum of their solutions” applies to “revolving door” regulations.

The revolving door has been going round since people started regulating, Chalmers told Euronews, adding: “It’s actually much more common than you think, that we’re going back and forth like that.” He believes that revolving doors are becoming more visible as part of a broader trend in career paths, with people taking on more jobs over the course of their career than they used to. “90% of revolving doors are quite harmless and boring,” he added.

Hence, successive revolving door scandals have led to stronger regulation. The move of former Commission President José Manuel Barroso to US banking giant Goldman Sachs came under scrutiny by the European Ombudsman, Emily O’Reilly. She found no breach of EU law, but the situation led to a reform of the Code of Conduct for Members of the European Commission, and the cooling-off period for former commissioners was extended from 18 months to two years.

Recently, one of the consequences of the Qatargate scandal was the reform of the Code of Parliamentary Conduct, which introduced a six-month cooling-off period for former MEPs.

Depending on the European Commission’s response to the Ombudsman’s letter, due this week, the rules could be tightened further.