Explaining Lobbying Regulatory E

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Explaining Lobbying Regulatory E Powered By Docstoc
					        PO3680: Comparative Perspective of
          Lobbying Regulation in the EU

                           Dr. Raj Chari

Some of the findings in this lecture are taken from the Chari, Murphy
   and Hogan article in Political Quarterly (2007; available in the
  ‘publication’ section of Chari’s webpage) and a forthcoming book
    entitled Regulating Lobbyists: A Global Analysis (Manchester
              University Press, 2010) by the same authors.
               Introduction and Objective

• Political science has failed to offer in-depth, detailed,
  comparative analysis of worldwide lobbying
  regulations, which seeks to promote transparency in
  the policy making process
• Objective: To Analyze and Explain Developments in
  Lobbying Regulation in 9 Political Systems in North
  America, Europe, Asia, as well as Australia

• Lobbying activity - act of individuals/groups, with varying
  and specific interest, attempting to influence decisions at
  the political level
• Influencing by:
   o Direct communications with governmental officials,
   o Offering presentations,
   o Draft reports,
   o Telephone conversations etc.
                 Lobbying Regulation
• ‘Regulation of lobbyists’ – the idea that political
  systems have established ‘rules’ which lobby groups
  must follow when trying to influence government
• Not a matter of voluntarily complying
• Regulations - codified, formal rules passed by
  government and written in law that is enforced and
  must be respected.
• Non-compliance results in penalization, fines or jail.
                  Examples of such rules:
• Register with the state before contact can be made with
  public officials,
• Indicate which public actors the lobbyist intends to influence,
• Provide state with individual/employer spending reports
• Have a publicly available list with lobbyists details available
  for citizens to scrutinize,
• Former legislators cannot immediately become lobbyists
  once they have left public office (‘cooling off’ period).

Theoretical justification is based on ensuring transparency
  and accountability - So, which countries have rules in
Country         Rules Governing Lobbyists as of 2008
Australia     As of 1 July 2008 there are national rules in place and a register. Originally formulated
              and implemented in the 1980s, lobbying rules were then abandoned in 1996.
Austria       No statutory rules
Belgium       No statutory rules
Bosnia    and No statutory rules
Canada        Federal Level: Rules and Register since the Lobbyists Registration Act of 1989, amended
              in 1995, 2003 and 2008. Provincial Level: Lobbying regulations exist in 5 provinces

Croatia         No statutory rules
Denmark         No statutory rules
Estonia         No statutory rules
EU: European    Regulated by Rule 9(2) of the Rules of Procedure, 1996.
EU:             Before 2008, ‘self-regulation’ was the model adopted by the Commission. However, as
Commission      of 23 June, 2008, the Commission opened a voluntary register of interest representations.
EU: Council     No statutory rules

France          No statutory rules
Germany         Regulation and registration through rules of procedure of the Bundestag in 1951; later
                amended in 1975 and 1980.
Hungary       Regulation of Lobbying Activity since 2006.
Iceland       No statutory rules
Japan         No statutory rules
Latvia        Regulation since 2001.
Lithuania     No statutory rules
Luxembourg    No statutory rules
India         No statutory rules
Ireland       No statutory rules
Italy         No statutory rules at national level. Nevertheless, regional schemes have been
              introduced in the Consiglio regionale della Toscana in 2002 and Regione in 2004.

Japan         No statutory rules
Malta         No statutory rules
Netherland    No statutory rules
New Zealand   No statutory rules
Norway        No statutory rules
Poland        Regulations since 2005.
Portugal      No statutory rules
Rep Korea     No statutory rules
Romania       No statutory rules
Serbia          No statutory rules
Slovakia        No statutory rules
Slovenia        No statutory rules
Spain           No statutory rules
Sweden          No statutory rules
Taiwan          Lobbying Act passed on 8/8/2007, came into force on 8/8/2008.
Turkey          No statutory rules
United          No statutory rules in either Commons or House of Lords.
United States Federal Level: The Lobbying Act 1946, amended in 1995 and 2007.
                State Level: All states have lobbying regulations.
  Findings: Countries with Lobbying Legislation
• Liberal democracies with lobbying regs relatively rare
• Norm - no lobbying rules.
• Australia, Canada, EU, Germany, Hungary, Lithuania,
  Poland, Taiwan and US.
• US (1946), Germany (1951), Canada (1989), EP (996).
• US regs in all states, Canada in five provinces.
• Hungary, Poland, and Lithuania, and Taiwan enacted
  lobbying laws post 2000.
• Australia introduced lobbying regs 1983, abandoned 1996,
  reintroduced 2008.
• In EU-27 there are 4 states with regs
• 3 former communist countries
• More established EU states (except Germany) have not
  enacted lobbying regs
• Large democracies - Japan and India - no lobbying laws.
• Taiwan only democracy in Asia with lobbying rules
• No lobbying regs in Africa or South American
• Georgia passed the lobbying law (1998) – however ranked
  by the Freedom House as only a ‘partly free.’
             History of EP legislation
• The rationale behind the idea of having a registry
was based on perceptions of less than transparent
practises having occurred in the EP throughout the
1980s and 1990s.
•As a consequence, in the early 1990s calls were
made towards establishing ‘minimalist standards’
in order to clean up the situation, something which
was spearheaded by Marc Galle.
•However, little progress was made at the time
given the upcoming EP election in 1994 and given
the EP’s inability to clearly agree to key terms such
as ‘lobbying and lobbyist’.
             History of EP legislation
• Nevertheless, in 1996 led by Glyn Ford, proposal
that permanent passes be issued to those entering
Parliament frequently to supply info to MEPs.
• In its rules, the EP offers the following definition
for lobbyists: ‘Lobbyists can be private, public or
non-governmental bodies. They can provide
parliament with knowledge and specific expertise
in numerous economic, social, environmental and
scientific areas.’
• Does EP definition portrays lobbying activity as
an utterly ‘altruistic,’ if not ‘good-hearted,’ act?
What about idea of ‘attempting to influence’ to gain
desired outcomes that are in their interest?
        What are the main points of rules?
• Three main points w.r.t. EP rules:
•A) Passes granted for one year for those lobbying
inside (not outside) institution – very important.
What about meeting up in Joe’s Pizza?
•B) A subsequent register of all who lobby will be
available to the public on the EP website (but info
of lobbyists is limited)
•C) In order to get a pass, a lobbyist must respect
the code for conduct and sign the register. But how
effective is this?
   What info does the lobbyist have to provide?
• The lobbyist must provide in writing general
information surrounding the lobbyist’s activities,
including the name of the lobbying organisation,
the general interests (in terms of policies) of the
organisation, the name of the lobbyist and his/her
position, home address of lobbyist (plus a copy of
his/her passport) and how long they seek to lobby
the EP.
•Comparing the information needed to lobby the
EP to that required to lobby the different
jurisdictions in Canada and the United States, one
can see that less information is required.
   What info does the lobbyist have to provide?
• Compared to CAN and US, comparatively less
info has to be given at EP level. For example, the
lobbyist does not have to state:
   • the name of each committee, department lobbied;
  •the subject matters including the specific
  legislative proposal, bill or resolution, regulation, or
  • if there is a contingency fees involved;
  • communication techniques used.
  •whether or not lobbyists is a former public office
  • nor are there rules on individual spending
  disclosure (i.e. a lobbyist is not required to file a
  spending report)
  Is there an effective gatekeeper system in EP?
• Short answer is no.

•Let’s consider what the Commission has done. In
contrast, from the outset, it should be noted that the
Commission’s system is voluntary registration, which
contrasts to other regulatory systems in the world
where registration is voluntary.
•As such, some would even say that the Commission
really has no effective registration system….
        History of Commission’s Initiatives
• 2,500 lobbyists have offices in the European
capital, spending an approximate 60-95 million
Euros in their efforts to influence the Commission:
the Commission is the hot bed of EU lobbying
activity, particularly given its prominent role in the
policy process.
•Yet, the European Commission does not run a
compulsory register of organisations
• History: as early as 1992, the Commission
stressed the need for an ‘open’ dialogue with
interest groups and some 10 years later under the
Prodi Commission,‘White Paper’ stressed the
need for open and transparency in government
      History of Commission’s Inititiatives
• In response to the White Paper, CONECCS
(Consultation, the European Commission and Civil
Society) was subsequently developed.
•CONECCS is a ‘voluntary database’ where civil
society organisation (including, for example, trade
unions, business associations and NGOs) could
sign up in order to provide ‘better information
about (the Commission’s) consultative process.’
•Nevertheless, CONECCS remained somewhat
toothless (see
•Very few signed up
 European Commission: Transparency Initiative
• Thereafter, in November 2005 the Commission
approved the so-called ‘Transparency Initiative’,
which has a broad goal to foster the idea that
‘European leaders, businesses, civil society and
citizens… are making policies in an open and
inclusive way…’. (See Siim Kallas’ webpage).
•Secondly, ‘a Green Paper was published in May
2006 to launch a debate with all the stakeholders
on how to improve transparency on the
Community Funds, consultation with civil society
and the role of the lobbies and NGOs in the
European institutions’ decision-making process.’
 European Commission: Transparency Initiative
• In the Green Paper, the Commission considered
that a credible system for greater transparency in
the EU would consist of a voluntary registration
system and tighter self-regulation by lobbyists
themselves in terms of their conduct.
•Voluntary registration was considered better than
a mandatory one because it was felt that a
mandatory one would a) take too long to develop
and b) have ‘too many loopholes’
•Commission did not seriously consider
advantages to mandatory system and how it could
actually promote transparency.
      European Commission: 2008 Registry
• In 2008 registry set up
• Again, why voluntary? In Its words,
•‘The Commission is ready to trust the profession.
The register offers lobbyists legitimacy and
recognition as a profession. With self-declaration,
the registrant takes responsibility for supplying
correct information, and the Commission believes
this trust should first be tested, before considering
the possibility of more binding regulation.’ (see
      European Commission: 2008 Registry
• There are three main categories of lobbyists that
can register: professional consultancies and law
firms; corporate ‘in house’ lobbyists and trade
associations; and NGOs and think-tanks.

•All registrants must disclose: name of the
company, who is the head of the organization,
contact details in Brussels, goals and remit of the
organization, fields of interest of the organization,
and information on the organization’s
        European Commission: 2008 Registry
•Further signatories of the three groups must also
disclose: total revenues relating to lobbying EU
institutions (for professional consultancies and law
firms), an estimate of costs associated with direct
EU lobbying (in-house lobbyists), or the
organization’s overall budget and their main
sources of funding (NGOs and think-tanks).
•Although there is no direct pay-off in signing up
for the voluntary register, the Commission states
that in return for registering, ‘lobbyists will receive
alerts from the EU executive giving details of
upcoming public consultations on policy areas of
interest to them.’ http://www.euractiv.com/en/pa/commission-launches-
       Voluntary Registry: Effectiveness?
•Fall short of ‘one stop shop’ for registry as
outlined as some MEPS and organizations such
as the ECPA
•Considering there are thousands of lobbyists in
Brussels, go and see who’s registered and
consider how effective it has been:

  Measuring the Strength of Lobbying Legislation:
                  The CPI Index
• Opheim’s (1991) rating of stringency of lobbying regulation.
• Index of 22 items from three different dimensions of lobbying
  regulation requirements.
• The dimensions were:
   1. statutory definitions of a lobbyist (seven items);
   2. frequency and quality of disclosure (eight items); and
   3. oversight and enforcement of regulations (seven items).
• Brinig et al.’s, (1993) rating of restrictiveness of state
  lobbying laws
• Consider the frequency with which lobbyists required to
  register and report,
• Scheme emphasises severity of penalties for violations of
  lobbying laws.
                         CPI Index
• Centre for Public Integrity
• Analysed lobbying regulations in 51 jurisdictions in US
• Measures effectiveness of lobbying legislation in terms of
  transparency and accountability.
• Referred to as ‘Hired Guns’ method,
• Results in what we refer to as ‘CPI Scores.’
                       The Eight Key Areas
The Center for Public Integrity created a ranking system that assigns a
score to each state (with lobbying legislation) based on a survey
containing a series of questions regarding state lobby disclosure. The
questions addressed eight key areas of disclosure for state lobbyists and
the organizations that put them to work
•Definition of Lobbyist
•Individual Registration
•Individual Spending Disclosure
•Employer Spending Disclosure
•Electronic Filing
•Public Access (to a registry of lobbyists)
•Revolving Door Provisions (particular focus on ‘cooling off
• Total of 48 questions
• Each question assigned a numerical (i.e. point) value.
• The more points, the stronger the legislation in terms of
  promoting full disclosure, public access, and transparency.
• The maximum score possible 100
• According to the CPI, a score of 60 points + is a ‘pass’
• The lower the CPI score, the less robust the lobbying regulation.
• CPI’s index goes beyond Opheim’s work
   —Individual lobbyist registration, electronic filing, public
      access, and revolving door provisions.
• In setting out 48 separately scored items v Opheim’s 22, CPI’s
  framework is a broader, and deeper.
       Applying the CPI Scoring System to Other
          Jurisdictions With Lobbying Laws
• Given its robustness, CPI’s framework should be applicable
  outside the US.
• CPI scores for US states - from CPI website, (apart from 2007
  federal legislation, and 2007 Pennsylvania legislation)
• CPI scores from Canada, Europe, Australia and Asia calculated by
  research team.
• For Poland, Hungary, Lithuanian and Taiwan, English language
  versions of legislation analyzed with assistance of natives
  speakers to ensure there were no translational errors between
  the original and English versions of legislation.
Jurisdiction     Score Jurisdiction      Score Jurisdiction     Score Jurisdiction        Score

Washington       87    Georgia           63    Vermont          54    Ontario             43

Kentucky         79    Minnesota         62    Hawaii           54    South Dakota        42

Connecticut      75    US Federal 2007   62    Idaho            53    Quebec              40

South Carolina   75    Missouri          61    Nevada           53    Taiwan              38

New York         74    Michigan          61    Alabama          52    Western Australia   38

Massachusetts    73    Nebraska          61    West Virginia    52    New Hampshire       36

Wisconsin        73    Arizona           61    CAN Fed (2008)   50    US Federal (1995) 36

California       71    Colorado          60    Pennsylvania     50    Nova Scotia         36

Utah             70    Maine             59    Newfoundland     48    Wyoming             34

Maryland         68    North Carolina    58    Iowa             47    Australia           33

Ohio             67    New Mexico        58    Oklahoma         47    Alberta             33

Indiana          66    Rhode Island      58    North Dakota     46    CAN Fed (1989)      32

Texas            66    Montana           56    Hungary          45    Poland              27

New Jersey       65    Delaware          56    CAN Fed (2003)   45    EU Commission       24

Mississippi      65    Arkansas          56    Illinois         45    Germany             17

Alaska           64    Louisiana         55    Tennessee        45    EU Parliament       15

Virginia         64    Florida           55    Lithuania        44
• Over 50 per cent of US observations scored 60 +
• US federal legislation (1995) - below most states, US federal
  (2007) scored - above most
• Canadian observations 35 - 50.
• Canadian federal legislation (2008) strongest iteration
• Central and Eastern European states (except Poland) within
  40s range, Taiwan and Australian within 30s range.
• Lowest scoring jurisdictions/institutions Germany, EU
  Parliament, EU Commission and Poland.
          Three Different Regulatory Systems
• Classification scheme as a basis for helping understand
  trends and differences.
• Three categories of lobbying regulatory systems:
   – lowly regulated systems, CPI scores from 1 - 29
   – medium regulated systems, 30 - 59
   – highly regulated systems, 60 +
• Ranges selected for qualitative and quantitative reasons:
   o Qualitatively – legislation within each point range
     possessed similar characteristics.
   o Quantitatively –ranges represent similar distributions on
     the point scale.
      – Lowly regulated systems - point range 28 (CPI between
         1 and 29).
      – Medium regulated systems - range 29 (i.e. 30-59).
      – Highly regulated systems – theoretical range 40 (i.e.
         60-100); the highest ranking jurisdiction (Washington
         state) has 87 points, range effectively 27 points.
• All legislation represents a point on a continuum.
• Canadian and US fed legislation shows where
  systems may change over time.
• We do not wish to imply that ‘high’ is ‘better,’ ‘low’
  is the ‘worst’, or ‘medium’ is a ‘safe middle point.’
• We want a classification scheme to help
  conceptualise the common traits and rigour of
  different regulatory environments
• Ultimately helps us better understand how
  transparency is promoted in political system.
                  Lowly Regulated Systems

• CPI scores 1 – 29,
• Germany, the EP, the EU Commission, and Poland.

   • Individual registration exists, but little details given
   • Does not recognize executive branch lobbyists.
   • No rules on individual and employer spending disclosure.
   • Weak system for on-line registration
   • Lobbyists lists are available to the public, but not all details
   • Generally, No Cooling-Off period.
               Medium Regulated Systems
• CPI score 30 – 59
• All Canadian jurisdictions, several US states, Lithuania,
  Hungary, Australia and Taiwan.

   • Individual registration more detailed
   • Recognizes executive branch lobbyists - exception Hungary
   • Some regs on individual spending disclosures - exception
     Australia fed.
   • On-line registration (Ontario very efficient )
   • Public access to frequently updated lobbying register
   • State agency conducts mandatory reviews/audits
   • Cooling off period before former legislators can register as
     lobbyists - exception Hungary.
                   Highly Regulated Systems
• CPI score 60+
• America federal and states.

   • Rigorous rules on individual registration
   • Recognizes executive branch lobbyists
   • Strong regs on individual spending disclosure
   • Strong regs on employer spending disclosure
   • On-line registration
   • Public access to frequently updated lobbying register
   • State agency conducts mandatory reviews/audits – with
     statutory penalties for late/incomplete filing of registration
   • Cooling off period before former legislators can register as
                      Lowly Regulated                  Medium Regulated                   Highly Regulated
                         Systems                           Systems                            Systems
Registration      Rules       on       individual   Rules       on      individual    Rules       on      individual
regulations       registration, but few details     registration, more details        registration are extremely
                  required                          required                          rigorous
Targets of        Only members of the               Members of the legislature        Members of the legislature
Lobbyists         legislature and staff             and staff; executive and staff;   and staff; executive and staff;
Defined                                             agency heads and public           agency heads and public
                                                    servants/officers                 servants/officers
Spending          No rules on individual            Some       regulations     on     Tight      regulations     on
disclosure        spending   disclosure,   or       individual           spending     individual           spending
                  employer           spending       disclosure; none on employer      disclosure, and employer
                  disclosure                        spending disclosure               spending disclosure
Electronic        Weak on-line registration and Robust system for on-line             Robust system for on-line
filing            paperwork required            registration, no paperwork            registration, no paperwork
                                                necessary                             necessary
Public access     List of lobbyists available, List of lobbyists available,           List of lobbyists and their
                  but not detailed, or updated detailed,      and  updated            spending           disclosures
                  frequently                    frequently                            available,    detailed,   and
                                                                                      updated frequently
Enforcement    Little             enforcement In theory state agency                  State agency can, and does,
               capabilities invested in state possesses         enforcement           conduct mandatory reviews
               agency                         capabilities,          though           /audits
                                              infrequently used
Revolving door No cooling off period before There is a cooling off period             There is a cooling off period
provision      former       legislators   can before former legislators can           before former legislators can
               register as lobbyists          register as lobbyists                   register as lobbyists
     Understanding the Regulatory Environments
• Most US jurisdictions highly/medium regulated,
• Many states on coasts and mid-west highly/medium regulated: Wa, CT,
   NY, MA, CA, MD, VA, ME, and RI (coasts) and WI, OH, KS, MI, and NE
• Many states from south/west lower regulations: LA, FL, ID, NV, AL, OK,
   and ND.
• Significant oultiers to this general rule: KY, AK, MS and GA, high CPI
   scores. Lower scores, IL and OR.

• All Canadian jurisdictions medium regulated.
• Upper medium (Canadian federal 2008)
• Lower medium (Alberta)
• No discernable relationship to the province’s physical location.
• European states medium and lowly regulated
• Middle medium (Hungary and Lithuania),
• Upper part of lowly regulated systems (Poland) and lower part (Germany)
• Both EU institutions lowly regulatory

The Rest of the World
• Taiwan and Australia (fed) lower end of the medium regulated
   Is there a relationship between corruption and lobbying
• Goal of lobbying regs - transparency and accountability in
• Transparency International (TI) - Corrupt Perceptions Index.
• Measures perceived levels of public-sector corruption
• Composite index, drawing on different expert and business
• Scale from zero (highly corrupt) to ten (completely clean).
TI’s Corrupt Perceptions Index (2008) and different regulatory
environments found in the different states.

Table 5: Perceptions of Corruption and Types of Regulatory Systems
    Country TI’s Corrupt Confidence    Overall     CPI values    Lobbying
             PI (2008) range of TIs    Country                   regulatory
                          scoring     Rank by TI                   system
      Aus       8,7      8.2 - 9.1        9         33-38         Medium

      Can       8,7      8.4 - 9.1        9         32-50         Medium

      Ger       7,9      7.5 - 8.2       14          17            Low

      US        7,3      6.7 - 7.7       18         34-87       High/Medium

      Tai       5,7      5.4 - 6.0       39          38           Medium

     Hung       5,1      4.8 - 5.4       47          45           Medium

      Lith      4,6      4.1 - 5.2       58          44           Medium

      Pol       4,6      4.0 - 5.2       58          29         Low System
    Is there a relationship between corruption and lobbying
•   No cogent relationship between perceptions of corruption and regulatory
•   Australia, Canada, Germany US, top of TI index – three types of systems.
•   Maybe robust regs not needed in Aus – little corruption.
•    Countries in middle of TI index – half-clean – Poland, Lithuania, Hungary
    and Taiwan - medium and low regulatory systems.
•    Maybe Hungary and Lithuania set up medium regulatory systems to
    stamp out perceptions of corruption.
•   But, why not implement high regulatory schemes?
•   No discernable relationship between perceptions of corruption and
    regulatory systems.
•   Maybe US and Canada established robust regulatory systems to increase
    awareness of links between policy makers and lobbyists – not simply to
    prevent corruption.
    Why does North America have more robust lobbying rules?

•   Importance of interest groups/civil society organizations,
     o Long Established
     o Large role in policy process –environment, anti-tobacco etc.
     o Welcomed by government for expertise
     o Robust lobbying regs prevent perception that groups exercise undue influence.
     o Regs ensure public is aware of links between policy makes and specific
     o Watchful press, and changing ethics laws, contributed to a professionalised
       lobbying industry.

•   Historical importance of the visibility of scandals
     o Current lobbying regulations were produced in response to Watergate era
     o More recent scandals in various state led to ethics reforms in the early 1990s
     o Honest Leadership and Open Government Act adopted in wake of Abramoff
       scandal – highly regulated
In terms of Europe these two factors are not as significant
• In Central and Eastern Europe, and Taiwan, interest groups have only
    recently gained influence in policy making
• In corporatist Germany interest groups outside the main associations have
    fewer possibilities to access policy-making process.
• Have not seen US type scandals.
• ‘Europe is not America: we have never seen cases like Ambramoff here; we
    can have more trust in our lobbyists.’ - EU Official
     o This means scandalous events have not been uncovered/achieved the
        same publicity in the European media as in the US.