EU tussle grows over spending disclosures

Government lobbying becomes hot-button issue; crisis of 'legitimacy' cited

By GLENN R. SIMPSON
Staff Reporter of THE WALL STREET JOURNAL
November 9, 2005; Page A15

BRUSSELS -- A battle over disclosures of government spending and lobbying is developing here in the European Union capital, fed by sharp cultural differences across the sprawling confederation about what information should be public.

A European Commission member from Estonia, with encouragement from other Northern European countries and a Dutch good-government group, is urging leaders of this city's growing influence industry to voluntarily begin disclosing the names of their clients in a public register and to overhaul their ethics codes. But leaders of the Anglo- dominated lobbying industry have rebuffed him, saying the industry regulates itself adequately.

U.S.-style government lobbying has grown in Brussels as multinational companies and business groups have fought a stream of EU regulations and directives that have had a growing impact on the conduct of global business. But disclosure rules about how money is spent and who influences the rules haven't moved to match U.S. standards of transparency.

Siim Kallas, the EU commissioner charged with fighting corruption, said in a recent speech that changes are needed to address "a crisis of political legitimacy" facing the EU amid growing hostility from European citizens. Today, Mr. Kallas is expected to offer details of a new "transparency initiative" with four "pillars": disclosure of who receives agricultural and other subsidies from the EU; disclosure of the results of EU fraud inquiries; disclosure of lobbying activities; and tighter ethics rules for EU officeholders.

Mr. Kallas finds himself with a highly public fight on his hands. Disclosure of agricultural subsidies is expected to be a nonstarter for France, which benefits most from the outlays. Many Brussels politicians are disdainful of proposing restrictions on moonlighting and other practices that have raised ethical questions.

The attempt to rein in lobbyists, by asking that they voluntarily register and disclose their contacts with government officials, has ignited the most fireworks so far, with an industry association launching a campaign against any new restrictions. The group says any disclosure rules must be part of a formal law, an attempt to up the ante on the chance that Mr. Kallas lacks support from his colleagues.