Global Taxes

Lobbying scandals place renewed scrutiny on disclosure

Ruth GreenWednesday 8 September 2021

Covid-19 exposed how insufficient transparency measures have led to the continued abuse of lobbying activities worldwide. In the UK, allegations of improper lobbying practices linked to Greensill Capital have already sparked multiple inquiries, but the scandal may be just the ‘tip of the iceberg’, according to the head of Transparency International UK.

‘Greensill is a great, big shining example of why the system itself is broken,’ says Daniel Bruce, Chief Executive of the NGO’s UK Chapter. ‘Irrespective of what Mr Cameron as an individual shouldn't have done as a former prime minister – and the judgement calls that he's made – what it shows is that the systems for lobbying transparency and integrity in the UK are fundamentally broken and not fit for purpose,’ he says. ‘It’s one thing to have them, but they've got to be effective. That's where we really fall short compared to some of our like-minded democracies.’

The UK isn’t alone. A recent report by the Organisation for Economic Cooperation and Development (OECD) revealed that out of 41 countries surveyed in 2020 only 23 provided ‘some level of transparency over lobbying activities’ and that the type and extent of disclosure varied considerably.

In the shadows in which lobbying currently exists in the UK, there’s the potential breeding ground for policy capture

Daniel Bruce
Chief Executive, Transparency International UK

The report highlights the growing complexity of the lobbying landscape since the OECD’s ‘Recommendations on Principles for Transparency and Integrity in Lobbying’ were published a decade ago. It also stresses the instrumental role lobbying plays in many sectors and the urgent need for more robust legal and regulatory frameworks to reduce the risk of undue influence worldwide.

‘There’s almost no policy issue today that isn’t connected to lobbying,’ says Julio Bacio Terracino, Acting Head of Division, Public Sector Integrity and lead author of the report. ‘If you’re interested in climate change, if you're interested in inequality or if you're interested in gender issues – the different interests, the way they interact and shape the issues – they are all very connected.’

Some countries are making progress. Bacio Terracino points to Germany, where a series of political scandals prompted the recent creation of a new lobby register – which will take effect from 1 January 2022 – in a bid to increase transparency in the federal decision-making process.

Ireland is one jurisdiction where scandals have already fuelled considerable appetite for change. The country passed a Lobbying Act in 2015 following a litany of allegations of corruption and improper lobbying activities in the 1990s and 2000s, and established a transparency register.

Marie Daly, Special Counsel at Covington & Burling, says the legislation has transformed the face of lobbying in the country. ‘People were fed up with the scandals and fed up with the allegations of corruption,’ she says. ‘The transparency register put a lid on all of that. It introduced rules and it gave structures to lobbyists. It helped to professionalise the business of lobbying. Instead of being perceived to be a type of cloak and dagger activity, it's now out in the open. Lobbyists openly register and are able to market themselves. Now there's a way of mopping up the potential for corruption. That corrals it and gives confidence to people.’

Even in Brazil, where historically lobbying has always been associated with corruption, there are positive indications it is starting to be conducted in a more transparent way. ‘Civil society has started to pay attention to the people that politicians and the authorities meet during their working hours,’ says Leopoldo Pagotto, a partner at FreitasLeite in São Paulo and Co-Chair of the IBA Anti-Corruption Committee. ‘The agendas are now publicly available on the internet and off-schedule meetings are often unveiled and subject to harsh criticism by the press.’

Pagotto says Brazil’s Car Wash corruption scandal has also given rise to a new brand of lobbyist. ‘Rather than selling political influence, they are selling professional advice about the best way to be heard, the best way to present a proposal or the best way to knock at the door of a politician or authority who may be interested in hearing what the client has to say,’ he says.

The pandemic cast greater global scrutiny on lobbying as health became one of the most lobbied issues in 2020. Canada’s Lobbying Act requires lobbyists to provide a monthly report disclosing specific communications with officials with direct influence on government decision-making. Bacio Terracino says this has allowed the country to gain ‘real-time transparency’ over its lobbying activities throughout the Covid-19 crisis. ‘This is important because you can have as strong mechanisms for lobbying as you like,’ he says, ‘but when the time comes to an emergency like this, more regular reporting can make sure that all those that are influencing and interacting with government do it with transparency and with integrity.’

In the UK, Bruce is calling for ‘a suite of solutions’ to clean up lobbying, including giving statutory powers to the lobbying watchdog, strengthening the role of the independent adviser to the prime minister on the Ministerial Code and extending the mandatory two-year cooling-off period for former ministers. ‘Lobbying, when well-regulated and transparent, is a good thing for democracy,’ he says. ‘It allows policy-making to be informed and evidence-based, but we need to know who is doing it and why. In the shadows in which lobbying currently exists in the UK, there’s the potential breeding ground for policy capture.’

Daly agrees that it’s in everyone’s interest for lobbyists coming from the public sector to respect the rules surrounding cooling-off periods. ‘They’re selling their credibility, effectively,’ she says. ‘For David Cameron, if he wants to operate as a lobbyist he can only do so if his credibility is in intact. It works both ways: it's not just about the stick of trying to get somebody to work within these rules, there's a carrot for the individual as well, because they need to have credibility. They need to stick by the code of ethics that is there.’

Image: melitas C /

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