It’s a Fine Line Between Sleaze and Advocacy in Latest U.K. Scandal
(Bloomberg) -- Sleaze is back in the spotlight in the U.K., and the target is a 2 billion-pound ($2.8 billion) industry many associate with secret meetings, backhanders and murky moral standards.
Blame Hollywood and television shows like “House of Cards” for helping to foster the impression of lobbyists as backstabbing consultants with questionable ethics trying to influence those in power. Those in the industry say the reality is far different, but the latest revelations in and around Westminster, all tangled up in an insolvent firm, will do little to shake the perception.
The issue has largely centred on former Prime Minister David Cameron, who sent text messages to government ministers last year about financial aid for Greensill Capital, where he was an advisor. On top of that came revelations of double-jobbing senior civil servants and regulations that are lax at best, setting the scene for the public to cry foul.
Multiple inquiries into the issues have already started, and the opposition Labour Party is piling pressure on the government with accusations of corruption and cronyism. The controversy intensified further on Friday when it emerged a health service contract was awarded to a company in which Health Secretary Matt Hancock owns shares.
But it all comes back to Cameron, who ironically in 2010 delivered a speech decrying secret corporate lobbying. Though his actions didn’t break any rules, the outcry at his behavior has again underlined the paucity of Britain’s regime for regulating corporate interests and how they influence policy. Britain's lobbying rules were last updated in 2014 by Cameron's coalition government, though they're widely argued to be too lax. The latest scandal could even spread into Europe after the Financial Times reported Cameron pitched Greensill's servces to a German government official.
Facing a daily drip-feed of negative media coverage, Prime Minister Boris Johnson has been forced to act. His government has ordered all civil servants to reveal any second jobs they have, and there is pressure to tighten the rules policing the work of former holders of high office like Cameron. Johnson is also facing calls to urgently publish the financial interests of his current ministers, which is required twice a year under the ministerial code but hasn't been published since July.
“I hope this is the moment for change; how often can we have a lobbying scandal before something is done?” said Bob Seely, a lawmaker in Johnson’s Conservative Party. “There is too much requirement on trust and not enough on transparency.”
Lobbying scandals haven't been the preserve of Britain's Conservative Party. Under the premierships of Tony Blair and Gordon Brown, Labour also had to weather controversies.
The wider question now is whether Johnson will pursue a root-and-branch overhaul of how corporate lobbying writ large works in the U.K., where current legislation pales in comparison to far stricter regimes in the U.S. and the European Union. In the EU, corporate lobbyists must sign up to a transparency register and must have a transparency ID in order to access EU buildings and attend meetings. In the U.S., there is extensive public disclosure on the activities of corporate lobbying.
In Britain, while there is a register of consultant lobbyists, it doesn’t cover the overwhelming majority of lobbying activity, which is performed by in-house staff at companies. They can interact with MPs, most civil servants, ministerial staff and special advisers without any requirements for disclosure or openness.
These professionals are eager to distance themselves from what many see as Cameron’s amateurish approach, hoping their industry won’t be caught in the political backlash. They say the bulk of their work is far more mundane and run-of-the-mill: drafting policy papers, briefing officials and lawmakers on issues, long-term strategic planning. This, they argue, helps the democratic process because it leads to better-informed decisions by politicians and ensures the interests of different groups are considered. And sending an 11th-hour text message to a minister, as Cameron did, is unlikely to change an outcome, one lobbyist said, who asked not to be identified.
“Most of the chaos is caused by current or former politicians getting it badly wrong,” said Scott Colvin, a registered lobbyist at Finsbury Glover Hering, which is majority-owned by London-based communications giant WPP. “I often challenge people to tell me what is the last lobbying scandal which involved a professional, paid lobbyist.”
The Cameron scandal could force companies to reassess the risk-reward of bringing in a politician trading on their name rather than a particular set of skills. They may be less willing to stump up large sums if they perceive a higher chance of negative headlines down the road.
The practice of employing the services of former politicians such as Cameron already divides opinion. An in-house lobbyist for a large media firm, who asked not to be identified, said they would never hire an external lobbying firm which employed former ministers who boasted of their deep political connections, because of the potential reputational damage that could occur if such lobbying were to be revealed. Companies are able to access officials through formal channels and make their arguments to ministers without the need for such people, the person said.
Nevertheless, the U.K. has developed a well-established industry of public affairs firms founded by senior figures from the closely-connected worlds of politics, media and business who successfully offer just such access and expertise. The likes of Portland Communications, which is owned by Omnicom Group Inc., Brunswick and Finsbury are go-to sources of consultancy and advice for FTSE-100 firms, and are staffed by various former special advisers and government officials. Meanwhile the likes of Facebook Inc., Deliveroo Holdings Plc and cybersecurity company Darktrace all count high-ranking members of Britain’s political elite in their senior staff or advisors.
Critics say the system gives too much influence to deep-pocketed corporations and the public is left unaware about how and why policy decisions are being made. It’s too easy for people with the right contacts to gain privileged access in politics, said Steve Goodrich, senior research manager at Transparency International.
“You’ve got far too little transparency over who is trying to lobby government,” Goodrich said on Bloomberg Radio. “You have got really weak checks on the revolving door between the public and the private sector which leaves it wide open to abuse.”
Despite the public furore, it appears unlikely that Johnson will make a major move to reform U.K. lobbying. Passing primary legislation through Parliament would risk months of media focus on “sleaze,” which would be associated with the Conservative Party. Johnson may not want to expend his political capital given it’s also unclear how much the issue of lobbying cuts through with voters in key northern constituencies that he must win to retain power.
Yet Cameron’s behavior and the subsequent backlash may cause a change in and of itself, with companies and other politicians not wanting to be stung in a similar fashion.
“A good rule I was told to follow in both politics and when advising companies is not to do a single thing that didn’t feel right or would not seem correct if on the front page of a newspaper,” said Peter Cardwell, who was a special adviser to four Cabinet ministers and who works part-time for a lobbying company. “A wise instruction that anyone seeking to influence government should keep in mind.”
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