Dalligate - the lobbying, the conspiracy, and the €60 million bribe...

There is no doubt that the way lobbying takes place inside the EU institutions is at the heart of the wrongdoing being alleged by OLAF's director Giovanni Kessler. Dalli - the accusation goes - was aware that Silvio Zammit was using his name with the snus lobby in an attempt at extracting a fee or 'bribe' (although that word is loaded unless Zammit was directly mandated by Dalli to carry out his bidding) to influence legislation on the Tobacco Products Directive.

The existence of an email request by the snus lobby ESTOC's secretary-general Inge Delfosse asking 'Silvio' how much he would charge for an 'informal' meeting, dated 16 March 2012, came just a week after she herself met John Dalli in a public consultation meeting on 7 March with other tobacco lobbies and company reps to discuss his review of the Tobacco Products Directive, that was to target e-cigarettes, cigarette packaging, and the snus ban among other things.

In itself, this request indicates the familiarity between ESTOC and Silvio Zammit, but it also presents an ethical conundrum for Swedish Match in the whole Dalligate affair. ESTOC's chairman is Patrik Hildingsson, who is also vice-president for public affairs for Swedish Match. He also appears as the legal representative for both ESTOC and Swedish Match in the European Commission's public register of accredited lobbies.

This brings into play ESTOC and Swedish Match's ethical position as signatories to the transparency register's code of conduct, which calls on them not to "obtain or try to obtain information, or any decision, dishonestly, or by use of undue pressure or inappropriate behaviour."

If Swedish Match, which filed the complaint to the EC, was familiar with Silvio Zammit when he made his "indecent proposal" of a €60 million bribe - as Hildingsson has confirmed - was he aware that ESTOC secretary-general Inge Delfosse was asking 'Silvio' how much he would charge to set up the Dalli meet? Can the accuser be the same person who attempted to casually ask an unofficial middleman how much he would charge for an informal meeting with Dalli?

Then again, there is the fact that Silvio Zammit himself is no registered 'lobbyist'. And that the circumstantial evidence that OLAF is highlighting, as far as it is publicly known, are two meetings that Zammit would have set up in August 2010 and January 2012 with Dalli, both related to the snus issue: in the first, for some lobbyist to hand over a PricewaterhouseCoopers report on tobacco; the second for a Maltese lawyer enquiring about relevant EU legislation.

On its own, this might form the basis as to the accusation that Dalli knew that Zammit had some relation to the snus lobby over the past two years.

When OLAF director Giovanni Kessler faced the press earlier this week in Brussels, journalists repeatedly asked where did the wrongdoing exactly lie: lobbying is common in Europe where commissioners meet companies and their business associations to talk about EU legislation. Not only, but Brussels was awash with lobbyists and other middlemen bandying about the names of commissioners as 'friends' in a bid to extract payment for their services to organise important meetings. Should every commissioner resign every time this happens, they asked?

The big question here centres around Zammit's request of having asked for a fee, and with two ingredients to this particular request: the first being a €60 million fee to actually influence the Tobacco Products Directive that ostensibly included reversing the ban on snus exports; and additionally, as OLAF later stated in a second press release, repeatedly requesting it. Going by OLAF's findings, Dalli would have been aware that his name was being used for such a financial request abut failed to do anything about it, and if so, he would be guilty of having traded in influence.

Indecent, but impossible request

Zammit's €60 million request seems to require that the price tag would have, as the snus affair implies, led to a change on the EU ban on the sale of Swedish snus outside Sweden, which enjoys a dispensation from the EU.

Dalli has denied any knowledge of the bribe as part of an alleged bid to reverse the export ban in his review of the Tobacco Products Directive he was to launch on 22 October. "They are rather fantastical fees for a request to change something that was simply not possible to consider," Dalli said.

Dalli was leading an anti-smoking campaign culminating in a review of the Tobacco Products Directive which reinforced the ban on smokeless tobacco among other things. "A court sentence already bans the sale of snus outside Sweden. Changing it would have been political suicide. Additionally, I finalised the directive on 25 February, which kept the snus ban and also proposed a ban on all smokeless tobacco," he said this week.

Dalli added that after closing the directive, and carrying out the ensuing public consultation, he was informed in August that the European Commission's secretariat-general and its legal services wanted to overhaul parts of the law due to some proposals they did not consider acceptable. "Although it was postponed to 22 October, the directive still kept the snus ban, so there was no question of any change in the law from its status on 25 February."

Dalli's denials have appear to be of little respite for OLAF, whose circumstantial evidence - so far only known to Kessler and Attorney General Peter Grech - is not a public matter.

Blogger and lawyer Jacques Rene Zammit posted the following from one circuit lecturer who pointed out that Dalli's resignation to findings that do not seem to warrant his resignation, appear as pretty much "an overreaction to the questionable behaviour of an individual foreign to his office."

"To what extent Mr Dalli knew that he was the object of lobbying by a member of his Maltese entourage? OLAF seems to suggest that he was actually fully aware of this fact. Did he take any action to limit these lobbying efforts? And more importantly: to what extent Dalli's behaviour, even though a inert one, has been such as to breach the duty of integrity to which he was bound under Article 245 TFEU?" Alberto Alemanno asks.

On his part, Jacques Zammit says Dalli still has to answer some important questions to build his defence: prove that the draft Directive was not influenced by ESTOC; publish the full exchange of correspondence with any lobby teams; procure a list of witnesses to any meetings that occurred; show a list of other companies/associations that he met; possibly provide a timeline that could show that Swedish Match's dealings turned sour after a possible rejection.

"Until that happens we must bear in mind that lobby relations in Brussels have now shifted to a new paradigm. Dalligate will have endless repercussions on the lobbying industry in Brussels, because it will mean that a company/association really has to watch out how to approach any Commissioner, how to word emails and more."

In a rejoinder about the role of Swedish Match and ESTOC in the whole affair, Jacques Zammit goes further, asking whether Dalli and the EC were "an easy target for entrapment by an angry lobbyist combined with the presence of an OLAF that is enthusiastic to prove its worth" - and again raising the question where the Swedes were the victims or creators of the illegitimate relationship.

Sixty million reasons, and more

There's a hint of the absurd in the €60 million request: Zammit, a Sliema kiosk-owner of date-cake fame and circus organiser with untainted loyalty to the Nationalist Party, is to some a figure of ridicule. Was Zammit seriously entertaining the possibility that a €60 million kickback - some time between March and May - was going to reverse a snus ban when the Tobacco Products Directive was scheduled for release in August (it was then postponed to October after the Commission's secretariat-general flagged some outstanding matters)? Was he even aware of the way Directives get legislated in the EU?

To think the Swedes seriously considered Zammit as the man who had Dalli's ear after they must have been rebuffed earlier on in February during the public consultation meetings on the Tobacco directive, is somewhat unthinkable. In Zammit, the Swedes may have found a southern European islander who would fit the stereotype of corruptibility. But to the casual Maltese observer, Zammit's idea of lobbying is more akin to sitting on a plush sofa and getting served complimentary olives and peanuts.

Blogger Jacques Zammit puts it this way: "If Zammit did make the offer" - which he made repeatedly according to OLAF - "then it makes him a very, very naive go-between... On a European level an offer such as Zammit's would be manna for a company like Swedish Match that was at the wrong end of Tobacco consultations... They did not just have one reason to do so. Zammit gave them sixty million."

And there is one additional aspect to Zammit's foolishness. This was fodder not just for ESTOC, the smokeless tobacco lobby. Through its joint-venture with tobacco giants Philip Morris, who sell snus in the United States, Swedish Match was also giving a leg-up to its other tobacco friends who were threatened by Dalli's intention of making cigarette packaging more standardised and unattractive with Bosch-like tableaux of dead youths, rotting teeth, and busted lungs drenched in tar calling it a day.

There is no doubt that with the Tobacco directive on ice, Swedish Match's timely complaint was applauded by their friends in the big tobacco alliance that felt Dalli was conducting an overzealous campaign that seriously threatened their revenues.

Big tobacco conspiracy, or nanny state gone mad?

It has been a busy week of conspiracy theories in the aftermath of the Dalli resignation, not just because of his unceremonious dumping at the hands of Commission president Jose Manuel Barroso, whom Dalli says forced him to resign on the strength of OLAF's statement alone. But also because of the clinking of champagne glasses by the European tobacco growers association (congregating in Budapest this week for an annual chinwag) and the recriminations of the anti-smoking lobby that was waiting with bated breath for Dalli's review of smoking laws.

And not least, the break-in in the offices of three anti-smoking NGOs in Brussels where laptops and confidential documents were stolen: Dalligate is now assuming some very bizarre proportions.

But step back for a moment from the conspiracies to consider the big battle that sees the multi-million industry of tobacco vying with the multi-million industry of big pharma and their nicotine replacement products, and the anti-smoking health groups and other temperance leagues, to directly influence EU legislation.

Inside Brussels, Dalli's review of the Tobacco Products Directive brought to the fore accusations of over-zealousness in the restrictions on tobacco smoking and whether this anti-smoking campaign was based on a real transparent and public process that was evidence-based.

This was the kind of sentiment echoed by ESTOC, whose ultimate aim was to have the EU rethink its ban on smokeless tobacco, because it violates the free trade principle since it can only be sold in Sweden under an EU exemption.

It had to be on the very day that Dalli resigned that Imperial Tobacco's head of regulatory science, Dr Steve Stotesbury, penned the case of smokeless tobacco on euractiv.com in which he argued against the EU's dogmatic opposition to snus.

Stotesbury argued that the EU's opposition made little sense when even the World Health Organization (WHO), believes it may have a positive impact on the incidence of smoking-related diseases. In 2008, a WHO report (WHO Technical Report Series report 951, 2008) stated that: smokeless tobacco and Swedish snus were less harmful than cigarettes.

"At present, the Swedes have the highest prevalence of snus use and the lowest prevalence of smoking in the EU, down to a mere 13% in men and 16% for women in 2008/2009. By contrast, the per-capita consumption of snus approximately doubled between 1970 and 2008 (Drug Trends Sweden, 2010), with 21% of male adults now using smokeless tobacco.

"This constitutes a major change in tobacco consumption preferences, and when coupled with the view of the WHO quoted above, marks an important development that needs to be better understood and warrants closer examination."

Stotesbury complained that while snus allowed Sweden to enjoy the lowest mortality rates from smoking-related diseases in Europe, irrespective of this "outstanding success story" the EU's decision-makers had no intention of lifting the 1995 ban

"That opportunity could be at hand as the European Commission currently prepares its revision of the existing European Tobacco Products Directive... given the evidence collected over the past decade, it could easily reverse the snus ban. Surprisingly the EU Commission does the exact opposite - it seems that it intends to make the Swedish 'exception' even more exceptional by actually extending the ban on oral tobacco to all types of smokeless tobacco products throughout the whole European Union.

"Why would the Commission take a decision that flies in the face of such a solid body of evidence?" Stotesbury asked, branding this opposition a dogmatic position driven by prejudice. "Their hatred of tobacco has itself become such a passion that it blinkers them and those activists driving the anti-tobacco agenda internationally from recognising the historic opportunity now sitting on Europe's doorstep."

Then there was Dalli's intention to review the status of the €500 million electronic cigarette industry. In celebratory mode, the Electronic Cigarette Industry Trade Association came down hard on John Dalli, with a muck-raking blog of the allegations of nepotism that haunted his cabinet career in Malta. Illustrating the acrimonious split between tobacco lobbies and health groups in Europe, ECITA was responding to Dalli's tobacco laws review which threatened a ban on the marketing of all electronic cigarettes unless they are authorised as medicinal products - a process that would require the onerous validation from medicinal authorities across Europe.

ECITA's opposition to the review was in part founded by their belief that electronic cigarettes - which vaporize a polyethylene glycol liquid into an aerosol mist to simulate the act smoking - is 99 per cent safer than smoking because it does not include nicotine (according to researchers from Boston University School of Public Health).

This is a market valued at €500 million with 7% of EU citizens believed to have tried e-cigarettes. This fact alone, supporters of such devices claim, flies in the face of 'big pharma' giants who want to protect their business of nicotine replacement chewing gum and patches, whose quitting appeal may be threatened by e-cigarettes. Companies like Novartis are actively involved in lobbying EU lawmakers in promoting nicotine replacement therapy over 'smoke-free' laws.

ECITA celebrated Dalli's departure by calling on the European Commission to scrap the existing consultation on the Tobacco Products Directive, and restart the process - something that has effectively taken place within the Barroso Commission - after it was decided that only a new health commissioner, and not the interim one, should take care of the legal review that Dalli was spearheading.

"One wonders how else they can possibly proceed, if they are to regain any of the credibility they have so publicly lost. If there were any doubt about this, Dalli himself confirmed the utter futility of the Commission's attempt to pursue this consultation, in his own statement: 'I will continue to work so that all efforts made by myself and my services to revise the Tobacco Directive will proceed as planned'.

"Let us hope that in waving goodbye to John Dalli, we can also wave goodbye to the anti-public health agenda he was attempting to enforce."

Open the doors to conspiracy

Less happy where lobbies representing the health industry and anti-smoking charities, who suspect that the complaint by Swedish Match to the European Commission, is vitiated by the very fact that its vice-president Patrik Hildingsson is also the chairman of the European Smokeless Tobacco Council, the lobby which asked former PN councillor Silvio Zammit how much he would charge to set up meeting with Dalli.

As Mariann Skar, the secretary-general of the European Alcohol Policy Alliance commented, "It is sad to see a health Commissioner having to resign because of bribery scandals. But it is very alarming to note that it is Swedish Match was raised the allegations in the first place. They have been fighting for years to get snus into the European market. Are they hoping for a new health commissioner that would support their economic interests?"

Allegations of a big tobacco conspiracy yesterday were evident in two particular statements from anti-smoking groups. The European Public Health Alliance claimed Dalli's resignation showed "how powerful the tobacco industry can be in influencing and undermining decision makers that are trying to support public health measures.

"We hope that this will not achieve precisely what big tobacco intended with this action: blocking a reinforced and stronger future Tobacco Product Directive. We trust that the European Commission and Member States will fulfil their duty as representatives of the public interest, acting for the health of their citizens and will not delay the adoption of the Directive," secretary-general Monika Kolinska said.

The cancer charity Smoke Free Partnership called on the European Commission to "take its foot off the brakes" on the review of the Tobacco Products Directive that Dalli was leading.

SFP director Florence Berteletti Kemp said Dalli's resignation was an unfortunate event. "A few months ago, we exposed the tobacco industry's block, amend and delay tactics on the 2001 Tobacco Products Directive and warned that these tactics are being deployed again in this review process.

"Today we are witnessing a major potential setback in the TPD review and we call on the Commission, European Parliament and on Member States not to let themselves be detracted from the goal of reviewing legislation to improve public health in Europe."

Just a day later on 18 March, the Brussels offices of three anti-tobacco NGOs - EPHA, SFP, and the European Respiratory Society (ERS) - were ransacked during the early of hours of the morning.

According to one of the NGOs, Smoke Free Partnership, the offices were "overturned and ransacked by intruders". EPHA said it was too early to comment on any relation between the break-in and the planned Tobacco Directive review, but it reiterated its call to the European Commission to release the directive in the interests of public health and transparency.

In a separate statement, ERS said that confidential data relating to the revision of the directive and other issues were stolen from its office. "As a professional medical society, we take precaution to protect our data and premises. Of all offices in the eight-floor building where we are situated in Brussels, together with the Smoke Free Partnership (SFP), only one - ERS/SFP - has alarm sensors on their balcony," it said.

"While the office initially seemed carelessly ransacked, our security report shows that the break-in was in fact very methodical and calculated."

According to the ERS, the outdoor sensors were destroyed and the intruders "managed to skilfully evade indoor sensors within the office".

"We are an evidence-based organisation and we do not subscribe to conspiracy theories. However, in light of the evidence we feel we have legitimate reason to suspect the intrusion was well-planned, researched and targeted."

Another statement issued by SFP, the NGO said that all organisations' offices were situated in the same building on 49-51 Rue des Treves, Brussels on the second and fifth floors.

"When the Police arrived, it was soon apparent that only three offices - from a building with over 20 - had been broken into with SFP, ERS and EPHA being the only organisations ransacked and with multiple items missing."

During a press conference held this afternoon, EPHA stressed that the organisations were situated on different floors in the same building. A fourth office was forced into but nothing was disturbed.

The NGO insisted that the break-in "was not opportunistic, but a professional and well-equipped team".

The EPHA said that two laptops were stolen from its offices: "Desktops and further laptops were not taken. The two laptops belonged to the policy team and a senior staff member."

Together with the laptops, cash and personal belongings were removed. "Some early indications are that both electronic and physical files were targeted including policy and strategy documents, as well as confidential internal documents relating to EPHA's organisation and staff," it added.

SFP that in total four laptops were stolen, "three of which belonged to people working on tobacco control".

EPHA went on to say that it remained committed to its position on the need for stricter legislation on tobacco products, greater enforcement of lobbying transparency and ensuring that policymaking is not controlled by powerful vested interests.

The European Voice's Dave Keating noted the day of conspiracy theories: "An evasive press conference by the European Commission and the EU anti-fraud office OLAF didn't do much to quell the speculation. Some people are suggesting that Dalli could have been the victim of a set-up by the invisible hand of big tobacco. Dalli himself has floated this possibility. This morning saw new accusations, this time of a not-so-invisible hand. Last night the offices of two anti-tobacco campaign groups - the SmokeFree Partnership and the European Public Health Alliance (EPHA) - were broken into and ransacked."

Given that the break-in came just hours after ex-commissioner Dalli suggested that the tobacco lobby could be behind his unceremonious dismissal from the Commission, the suspicions of foul play were almost immediate.

Privately, one anti-tobacco campaigner told Keating: "we're not believing in coincidences any more."

"It is clear the anti-tobacco campaigners are quite rattled by this," Keating wrote. "The tobacco lobby has been lobbying fiercely against ideas floated by Dalli to require all cigarette packs in the EU to have plain packaging with no branding and to be hidden from public view."

"The whole episode is very strange, and last night's break-in makes it even stranger. The timing may have just been a coincidence, and it may have just been a run-of-the-mill burglary. Right now it is very unclear what is going on."