Kroes-ing through the revolving door
Neelie Kroes, European Commissioner under President José Manuel Barroso for ten years – firstly for Competition and then for the Digital agenda until 31 October 2014 – was already a controversial figure, even before her revolving door move to Uber in 2016. But yesterday’s revelations in The Guardian, the International Consortium of Investigative Journalists, Le Monde, and others, illuminate the laissez-faire approach of the Commission to revolving doors, conflicts of interest, privileged access, and lobby transparency. And major questions remain as to whether, several years on, anything has really changed.
This article was updated on 13 July in the light of new revelations in Le Monde and on 14 July to reflect our urgent letter to Commission President Von der Leyen.
The first that the public heard about Kroes’ move to Uber was when the controversial ride-hailing app announced that she had joined its new public policy board.
This was a brazen revolving door move. For 18 months after leaving the Commission Kroes was required to seek authorisation for all new proposed roles and to not lobby on topics for which she had been formerly responsible. In May 2016, literally only days after the end of her notification period, she jumped to Uber. But once the notification period has expired ex-Commissioners are not free of all ethical duties. In fact all former Commissioners are required by the EU treaty to behave with “integrity and discretion”, and this duty has no statute of limitations.
What’s more, in her role as Digital Commissioner Kroes had been fulsome in her support for Uber, including in its dispute with local authorities. In an April 2014 Commission blog Kroes wrote: “I am outraged at the decision today by a Brussels court to ban Uber, the taxi-service app.” She went on: “I’ve met the founders and investors in Uber. My staff have used the service around the world to stay safe and save taxpayers money. Uber is 100% welcome in Brussels and everywhere else as far as I am concerned.” She even announced via Twitter that she wanted to “start a new # tag... #UberIsWelcome in Brussels and everywhere.”
As part of our 2016 investigations into Kroes’ move to Uber we asked the Commission for all paperwork relating to the authorisation of her move to Uber; we were told that no application was made and the role fell outside of the notification period. We also asked for all emails, correspondence, meeting and telephone call notes between Kroes, her office and her Cabinet with Uber from January 2012 to October 2014. The Commission could only produce one document, namely the minutes of a meeting with her Cabinet in March 2014.
Recent media coverage has now made clear that this is far from the whole story.
Internal Uber emails reveal that “We are getting Neelie Kroes to join our advisory board (mega confi[dential]).” This was written in September 2014 when Kroes was still Digital Commissioner. Negotiating new jobs while in office is not (explicitly) against the rules, although arguably is not compatible with commissioners’ wider treaty obligations.
Le Monde has reported that an internal exchange at Uber in 2015 clearly mentions "the risk that an NGO, such as the Corporate Europe Observatory" would request documents about the Kroes file from Brussels with the aim of publishing them.
Le Monde reports the existence of numerous meetings and correspondence between Uber's lobbyists and Kroes' Cabinet from November 2013. A "brief" meeting took place with Kroes in July 2014. The meetings took place within an official framework, and using the official email addresses of Kroes' advisers, yet were not released to us as requested.
In 2015, after having left office, Kroes contacted Dutch Government members on several occasions following police raids on Uber as part of a legal investigation. Kroes also contacted the office of PM Rutte to pass messages on. In January 2016 Rutte, Kroes, and the controversial CEO of Uber at the time, Travis Kalanick, had a meeting.
The Guardian quotes ongoing Uber efforts in 2015 to keep its relationship with Kroes secret: “Her name should never figure on a document whether internal or external. We have a specific relationship with Neelie Kroes right now, which is sensitive and highly confidential.”
While Kroes was under a formal ban on lobbying the Commission as part of the 18 month notification period, The Guardian reports that she offered to approach several EU Commissioners including Violeta Bulc (transport) in 2015 and Frans Timmermans (Vice-President) in 2016. Timmermans did not meet with Uber; Bulc did meet with Uber in May 2016 and it is not clear what role, if any, Kroes played in setting this up.
The Uber Files indicate that Kroes was applying to the Commission for permission to work for Uber in August 2015. In November 2015, Kroes received an opinion from the Commission’s Ad-hoc ethical committee that she should not work for Uber before the end of her 18 month notification period. A follow-up approach to the then-Commission President Jean-Claude Juncker by Kroes for permission was also rejected. This was not mentioned by the Commission to us when we asked for all paperwork regarding Kroes’ move to Uber.
“The poster child for the discussions around ‘revolving door/tech’s crony capitalism’”
Membership of Uber’s public policy board is just one of several roles that Kroes took after leaving the Commission at the end of October 2014, some of which were closely related to her Digital portfolio. Even Uber executives were worried that Kroes was becoming ““the poster child for the discussions around ‘revolving door/tech’s crony capitalism’”.
As Kroes’ RevolvingDoorWatch profile makes clear, these additional roles were:
Special adviser to the Bank of America Merrill Lynch;
Special envoy for start-up companies in the Netherlands (unpaid, from January 2015 to June 2016);
Non-executive member of the management board of the Open Data Institute (unpaid);
Member of board of directors of Salesforce.
As with the Uber role, Kroes’ move to the Salesforce board occurred after the end of her notification period of 18 months. The Commission told us that this role did not go through any authorisation process.
In response to the Uber Files revelations Kroes denied she had behaved inappropriately. She told the The Guardian that as part of her unpaid role as special envoy for startups in the Netherlands: “I was required to interact with a wide array of business, government and non-governmental entities, with the aim to promote a business-friendly and welcoming ecosystem in the Netherlands.” She added: “After my term as European commissioner and once my cooling-off period ended, in May 2016 I joined Uber as chair of its global policy advisory board. Consistent with my ethical duties as a former European commissioner, I did not have any formal nor informal role at Uber before that particular date of May 2016.”
Read more about Uber’s lobby profile in Brussels here.
Extensive business ties … and incomplete declarations
Kroes joined the European Commission following a career in domestic politics in the Netherlands where she served as Minister of Transport, Public works and Water management in the 1980s. She then took a number of corporate jobs and sat on the boards of various companies including Nedlloyd, McDonald’s Netherlands, and Volvo. In fact Kroes listed 25 corporate posts that she had held in the previous decade when she joined the Commission in 2004. The Wall Street Journal wrote at the time: “EU officials acknowledge that they have never dealt with a commission candidate with such extensive business ties - and potential conflicts.”
According to the WSJ, DG Competition reviewed Kroes’ outside interests before her confirmation hearing with MEPs. This review was never published but it was said to suggest that if she had been commissioner over the previous five years, she would have had to recuse herself from as many as 35 merger and anti-trust cases as they involved her previous corporate employers.
But it later emerged that Kroes had not disclosed all her previous private sector roles. This included her lobbying (seven years earlier) for arms manufacturer Lockheed Martin which had strong ties to Italian firms being investigated by the office she would later head. Kroes said she did not reveal this work because she considered it “one-off advice for a specific project”.
Furthermore the 2016 BahamasLeaks scandal revealed that Kroes had not declared her long-term (2000-09) directorship of Mint Holdings. The off-shore firm, based in the Bahamas for tax purposes, aimed to buy assets from US energy, commodities, and services company Enron, though it never actually made the purchase. Enron collapsed in 2001, mired in scandal. Kroes admitted she should have declared the Mint Holdings directorship, but that confession came 12 years after she joined the Commission and 2 years after she had left!
The WSJ also reported that in 2004 Kroes had promised to “never engage in business activities once her five-year commission term ends in 2009, when she will be 68.” Kroes’ later career choices make crystal clear that she did not abide by that commitment.
We told you so!
The recent media revelations regarding Neelie Kroes raise serious questions, both for Kroes and the Commission.
Back in 2014, in the run-up to Kroes and the other members of the Barroso II Commission leaving office, the Alliance for Lobby Transparency and Ethics Regulation (ALTER-EU) warned the Commission that the revolving door rules in place were not robust enough and that scandals would emerge unless urgent improvements were made. Our concerns were dismissed. We were so concerned that we wrote to all Commissioners personally to remind them of the existing rules and to urge them to abide by higher ethical standards, including a longer notification period and lobby ban, and to not negotiate new roles while still in office. No responses were received.
When Commissioners left office and started to accept new roles during their 18 month notification periods, we tabled a series of freedom of information requests to obtain further information about the authorisation process and to ascertain what prior lobby contacts commissioners might have had with their new employers. As outlined above, it now seems clear that some of these requests may not have been answered in full.
In October 2015 we published a report into the revolving doors moves of the Barroso II Commission from the previous year. This report received substantial media coverage indicating significant public interest in these issues and the report was presented to a hearing of a European Parliament committee. We highlighted the case for urgent reform of the rules and how a September 2014 research report written for the European Parliament had concluded that:
“Overall, the [Commissioners' Code of Conduct] is characterised by its poor checks and balances, the absence of a coherent implementation system, and opacity surrounding its operation (eg with regard to the Ad hoc Ethical Committee). Whilst other ethics systems contribute to enhance public trust in government, the EC’s system appears tilted towards the Commissioners’ political and career interests”.
But it took another scandal (when the former President of the Commission Barroso took a high-profile job with Goldman Sachs after the end of his notification period) for the Commission to finally tighten Commissioners’ ethics rules. But even then, the new rules are still not good enough. The Von Der Leyen Commission has now committed to a pan-institutional independent ethics body, but its scope and powers remain unclear.
How many more scandals will there be before the Commission finally wises up to the threat of the revolving door and takes conflicts of interest far more seriously?
Read our comment piece on this topic for The Guardian here.
Today, 14 July 2022, Corporate Europe Observatory and the Alliance for Lobbying Transparency and Ethics Regulation have written an urgent letter to President Von der Leyen to demand urgent action following the Uber Files leaks. Among our demands are:
- A full and detailed investigation into Kroes’ activities in the light of the then Code of Conduct and her wider Treaty obligations to behave with “integrity and discretion”.
- Immediate and permanent removal of the Commission access pass of Kroes.
- The application of financial penalties upon Kroes for any and all breaches of the Code and Treaty.
- A full review of Commissioner revolving doors rules.
- A full investigation into freedom of information failings.
- The suspension of Uber from the EU lobby transparency register.
The letter is available here.
Stop press again!
The European Commission has now, belatedly, replied to our urgent letter. The reply is dated 16 November 2022, and can be read here.
The letter confirms that OLAF, the EU's anti-fraud office is now investigating the allegations regarding the #UberFiles and ex-Commissioner Kroes. But the Commission refuses other actions until Olaf's investigation is completed, and also rejects any accusations of wrong-doing on its own part. Corporate Europe Observatory is considering several options for follow up, so watch this space!