Lax lobbying rules leave standards in public life ‘under severe strain’

Ruth Green, IBA Multimedia JournalistTuesday 27 April 2021

The pandemic has laid bare the increasingly blurred lines between public and private sectors when it comes to securing coveted government contracts. As allegations of Covid-related cronyism continue worldwide, lobbying scandals highlight the urgent need for greater transparency and stricter rules governing the ‘revolving door’ between public and private office.

In March, it emerged that former UK Prime Minister David Cameron personally lobbied the Chancellor of the Exchequer and other Treasury ministers to secure Greensill Capital access to an emergency loan scheme established in the wake of the pandemic. Cameron, who acts as an adviser to the firm, claims he didn’t break any rules since former ministers are only banned from engaging in lobbying for two years after leaving office.

Separately, it has come to light that last year Prime Minister Boris Johnson promised he could ‘fix’ tax issues to enable a high-profile businessman to build ventilators in the United Kingdom. These scandals have only intensified calls to overhaul lobbying laws and raised alarm bells about the misuse of status, power and connections to improperly influence business dealings.

It would be more efficient to more strictly regulate the lobbied because they're the ones who've signed up for public life and are supposed to be acting in the public interest

Professor Elizabeth David-Barrett
Director of the Centre for the Study of Corruption, Sussex University

Robert Barrington, former Executive Director of Transparency International UK, is now Professor of Anti-Corruption Practice at Sussex University. ‘Cronyism – or chumocracy – is a well-known feature of corrupt governments,’ he says. ‘Democracies tend to prevent it tipping over into corruption by having a system of checks and balances. In the past couple of years, democracies have been having a bad time – the US and the UK have been under severe strain in terms of standards in public life.’

Several inquiries have been launched into the Greensill scandal, including one led by the renowned Slaughter and May corporate lawyer Nigel Boardman. However, a motion for a broader inquiry into allegations of improper lobbying practices in Whitehall has been vetoed. Transparency International UK says more than £3.7bn of contracts relating to the government’s Covid-19 response should be independently investigated.

A series of lobbying scandals prompted the last major change in legislation in this area in 2014 when Cameron, then Prime Minister, introduced the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act (‘The Lobbying Act’), which restricts what non-governmental organisations can say in the year before a general election. He pledged to increase transparency around lobbying activities and introduced a statutory lobbying register, but this was criticised for being too open to loopholes and voluntary disclosure.

Professor Elizabeth David-Barrett is Director of the Centre for the Study of Corruption at Sussex University. She says these scandals beg the question of whose behaviour should be regulated – the lobbyists or the lobbied. ‘With the Lobbying Act, we're basically regulating the lobbyists,’ she says. ‘It would be more efficient to more strictly regulate the lobbied because they're the ones who've signed up for public life and public service and who are supposed to be acting in the public interest. It’s there, with those people who have the decision-making power, who should be acting within the rules and making sure that they're not being improperly influenced.’

Reforming the laws on misconduct in public office could be one way to clean up British politics, says David-Barrett. She points to the Law Commission of England and Wales, which in December 2020 called on the government to ‘clarify and modernise the law and target the most serious misconduct’. There doesn’t seem to be much urgency in addressing the Law Commission’s concerns though. A Ministry of Justice spokesperson told Global Insight that an interim response to the recommendations was expected in June ‘at the very earliest’.

The UK isn’t the only country failing to make lobbying practices more transparent. Brazil has been debating the introduction of lobbying laws since 1985. Despite six bills, the proposals didn’t make it over the final hurdle. The last attempt was in 2016 at the height of the Car Wash scandal. As the country continues to grapple with corruption, there’s been little political appetite to push through any legislation.

‘Over the past decades, lobbyist has become a synonym for someone who carries a briefcase full of money and delivers it to a politician – in other words, the term is strongly associated with corruption,’ says Leopoldo Pagotto, a partner at FreitasLeite in São Paulo and Co-Chair of the IBA Anti-Corruption Committee. ‘In view of this context, there is no political climate to regulate it. It does not mean that the regulation is completely ruled out. Yet, from a realistic perspective, it is unlikely to happen.’

Progress is apparent elsewhere, however. In 2015 Ireland passed a Lobbying Act which established an open register for individuals and companies to disclose lobbying activities. In the US, where lobbying forms such a crucial role in funding political campaigns, the government has introduced the Lobbying Disclosure Reform Act of 2020. The US Securities and Exchange Commission is also looking at introducing a rule to require corporations to disclose their political activity.

A 2015 report by Transparency International identified unfair and opaque lobbying practices as one of the key corruption risks facing Europe. It ranked Cyprus among the worst offenders and called on the country’s government to bring in regulation and establish a public register for disclosing lobbying activities.

Six years on and the Cypriot government may finally be getting its act together. The government is poised to pass a package of three bills, which include creating a registry for lobbyists, a national anti-corruption authority and introducing greater protections for whistleblowers.

Nicolas Kyriakides, a partner at Harris Kyriakides in Nicosia, says the legislation will transform policymaking in Cyprus. ‘Lobbying should be regulated in a fair and transparent way so that all companies have access to the same opportunities,’ says Kyriakides, who founded Zenox Public Affairs in December 2020 to take the ‘taboo’ out of lobbying practices in Cyprus.

A vote on the proposals will take place in June after the country’s forthcoming parliamentary elections. ‘Undoubtedly, the trend in the EU, the UK and elsewhere is that lobbying should be more transparent and regulated in a fair way to all key players,’ says Kyriakides. ‘I truly hope that the next Parliament of Cyprus passes the bill regulating lobbying as soon as possible.’

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