Sven Giegold

European Ombudswoman condemns change of former EBA executive director Farkas to finance lobby

Dear friends, dear interested,

Dear media representatives,

The European Ombudswoman today published her recommendation on Adam Farkas’ move from the European Banking Authority (EBA) to the financial lobby. Emily O’Reilly, the Ombudswoman, who is responsible for ethical issues in the EU institutions, comes to a crystal clear conclusion: this move to the investment banking lobby AFME should not have been approved by the EBA. The Ombudswoman’s recommendations today are a milestone against revolving door practices between European public authorities and lobby organisations. This is a great success for my longstanding fight against one-sided lobbying influence. The EBA must now swiftly revise its internal rules to prevent such serious conflicts of interest in the future. Changes like the one of Mr. Farkas between public institutions and lobby organisations without a sufficiently long cooling-off period damage confidence in democracy. Valuable insider knowledge moves directly from a public authority to a private lobby organisation which seeks to influence European legislation

All EU institutions and authorities should take a very close look at this decision of the Ombudswoman, because comparable revolving door moves are a sad reality there too. The Commission should present a legislative proposal to effectively prevent conflicts of interest in the future in all EU institutions and agencies. The Commission needs to carefully check the implementation of the staff regulation. I will now send a letter to each and every EU institution and agency, calling for the recommendations of the Ombudswoman to be implemented there as well and for decisive action to be taken to prevent conflicts of interest in job changes of staff.

The whole process is equally embarrassing for the Commission. It has tolerated the job change by Adam Farkas. The Commission’s position on enforcing the prevention of conflicts of interest in job changes in the EU Staff Regulation was weak. The Commission regularly allows questionable job changes of its own staff. The Commission is now called upon to finally apply the EU Staff Regulation consistently.

On the first of February of this year, Adam Farkas took up his new job with the lobby organisation of the large banks and capital market players (AFME). The EBA’s Board of Supervisors had approved this change under lax conditions and had not withdrawn the decision even after the European Parliament had called for a revision. The European Parliament resolution on Farkas’s change came about on the initiative of Dutch Socialist Paul Tang and myself. The EBA’s decision on Farkas’ move cannot be reversed at this stage. As successor to Farkas, the EBA had proposed Gerry Cross, a candidate who himself has an extensive lobbying history, including with AFME. The European Parliament has rejected this candidate in order to prevent further damage to the reputation of EU authorities.

The complaint against the Farkas case to the Ombudswoman was submitted in January by the NGO group Change Finance together with a number of MEPs including myself. In today’s recommendation, the Ombudswoman states that Farkas’ move to the lobby organisation is a case of maladministration and should not have been authorised. A ban would have been the necessary and proportionate measure. The EBA’s restrictions were too weak and not sufficiently controllable to prevent a conflict of interest and protect confidential information held by the banking regulator. If not even this case would justify a ban, then no case at all would justify it, O’Reilly said. In addition, EBA did not take the necessary safeguards to protect confidential information in time when it learned of the planned move.

O’Reilly recommends that the EBA should in future prohibit planned transfers of senior managers to lobby organisations for a period of two years, for example, if there is a conflict of interest. EBA should also set criteria to clarify when such transfers should be prohibited in the future and establish internal procedures to protect confidential information during planned transfers. The Ombudswoman does not accept the right to work as justification for any revolving door move which is often cited in such cases. It must be weighed against the public interest. One thing I can promise: I will not relax my efforts in this regard.

With green European greetings,

Sven Giegold


More about the change of Adam Farkas/Gerry Cross: 

European Parliament resolution on Farkas’ change: 

Decision of the Ombudswoman:

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