Slowing down the revolving door

Alternattiva Demokratika (AD) deputy chairman Carmel Cacopardo will be making a case for the regulation of the so-called ‘revolving door’ before the Consideration of Bills Committee in parliament.

The term refers to public officials leaving office and going to work in private sector jobs, often in areas they were responsible for while in government, or vice versa. AD has called for legislation regulating this practice to be included in the Standards in Public Life Bill which is currently making its way through parliament. 

While politicians taking up private sector jobs after their term doesn’t necessarily imply wrongdoing, there have been several instances which have raised serious questions.

In the recent Lowenbrau controversy, it was revealed that minister John Dalli had – in 1990 – granted 24,000 square metres of land to Marsovin company Agrico Limited under perpetual emphyteusis, for Lm10,000 a year. Then, in 2004, shortly after he resigned from parliament, Dalli was appointed chairman of Marsovin, before eventually returning to cabinet in 2008. A year later, a government restriction under which that land could be used solely as a brewery was lifted, and it was eventually sold for €8 million.

At a press conference last month, Cacopardo cited the episode as being one of the reasons to address the ‘revolving door’ in politics, adding that situations like the Lowenbrau one call into question whose interest politicians are really protecting. 

Advocates of regulation will point to cases of politicians advising on how to circumvent regulations they helped put in place, or private sector employees taking up government jobs and retaining too close a relationship with players in the industry they were previously employed in. The NGO Corporate Europe Observatory hosts a regularly updated list of MEPs, commissioners and officials who have moved from EU institutions to private interests and vice versa. 

In 2010, just five months after his six-year term as European commissioner for maritime affairs and fisheries had ended, Joe Borg joined Brussels-based lobby group Fipra, which specialises in regulatory and competition policy matters. Borg took up the position on the condition that he would not advise the group on matters directly linked with his mandate at the Commission. 

Meanwhile, others feel that if individuals were barred from moving between government jobs and the private sector, the political class would consist solely of career politicians with little industry experience. 

Labour MEP and former prime minister Alfred Sant agreed that regulation is the way forward. He said the practice should be legislated for, both in the Standards in Public Life Bill and in the separate pieces of legislation governing the design of “regulatory and executive public agencies”.  

“Malta’s situation is further exacerbated by its small size, and the ‘thinness’ of the human resources market, the fact that many people know each other, and that most political appointees reflect political choices, all contribute to a more complex situation compared to other countries,” he said. 

AD is proposing a ‘cooling off period’ following a term in office, similar to that placed on European commissioners, who must wait 18 months before they can freely take up certain private sector jobs. This would act by withholding “clearance” if conflicts of interest arise, according to Cacopardo. 

Nationalist Party deputy leader Mario de Marco stressed however that even in countries where regulation exists, enforcement is not always straightforward.

“In the UK, former ministers must seek advice of the Advisory Committee on Business Appointments about positions they wish to take up within two years from retirement form public office,” said de Marco. 

He explained that such measures do not stop the revolving door, but rather attempt to regulate it. “[They] seek to achieve a delicate balance between an individual’s interest and the public’s interests,” he said, adding that due to Malta’s size, this should be easier. 

De Marco warned that the perception of government being too close to “special interests” can lead to mistrust by the public and consequently must be addressed to meet the public’s demand for transparency and higher standards. 

Former PN finance minister Tonio Fenech suggested the subject required wider discussion.

“If society wants independence from influence it has to provide for it and protect it,” he said, adding that imposing unrealistic laws could send the message to “good honest people” that the financial consequences of a career in politics are “over-taxing”. If a cooling-off period is introduced there would have to be adequate compensation, as with EU officials. 

Sant too acknowledged that compensation would be necessary. “[A cooling-off period] will need to be backed – where and if relevant – by the provision of some form of compensation, which has to be well defined,” he said. 

In addition to a cooling-off period, AD is also calling for the role of MP to be a full-time one. Cacopardo insisted that this would “substantially reduce, and possibly eliminate conflicts” between MPs’ parliamentary role and other interests. 

Concern over the revolving door in politics isn’t universally held. Labour MP Charles Mangion refuted the suggestion that there is anything “intrinsically unethical” in a politician being engaged by a “business institution.”

He argued that the matter must be evaluated “realistically and not emotionally” and rejected claims that former politicians are engaged for their contacts and influence. “A change in government or the ascendancy of new political personalities will seriously dent any influence the retired politician may have had,” he said.

Mangion also pointed out that ultimately only “good governance” can ensure that conflicts of interest are avoided. This was echoed by Fenech, who stressed that it all boiled down to ethics. 

“Cabinet members should understand the boundaries of good reason. [They] can’t allow themselves to be influenced in their decisions by some consideration of a possible engagement by an interested company in the future,” he said. 

Good intentions notwithstanding, Sant said in order to pursue a career in politics, difficult choices must be made. “I am of the old-fashioned view that people interested in a political career should not have an equal interest in making good money,” he said.