European commission rebuked over ex-chief's Goldman Sachs job

José Manuel Barroso’s role at bank caused serious public disquiet and called trust in EU into question, says ombudsman

An EU watchdog has rebuked the European commission for failing to prevent potential lobbying by a former president who took a job at Goldman Sachs.

In a stinging report, Emily O’Reilly, the European ombudsman who acts as the EU’s public administration watchdog, said the commission had committed “maladministration” by not taking any decision after an ethics inquiry into its former president, José Manuel Barroso.

O’Reilly called on the commission to refer Barroso’s appointment to its internal ethics committee, while raising questions about the independence of that body.

“Ex-commissioners have a right to post-office employment, but as former public servants they must also ensure that their actions do not undermine citizens’ trust in the EU,” said O’Reilly, Ireland’s former national ombudsman. She said Barroso’s new post had “generated serious public disquiet”, which should have raised commission concerns about whether he had complied with the “duty of discretion” incumbent on all former officeholders under EU treaties.

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“Much of the recent negative sentiment around this issue could have been avoided if the commission had at the time taken a formal decision on Mr Barroso’s employment with Goldman Sachs. Such a decision could at least have required the former president to refrain from lobbying the commission on behalf of the bank,” she said.

The ombudsman examined a private meeting between Barroso and a serving commission vice president, Jyrki Katainen, in October 2017, concluding that it “had the appearances of a meeting for the purposes of lobbying”.

Katainen, who is responsible for EU policy on jobs and growth, confirmed he had met Barroso at a Brussels hotel, where they “mostly discussed trade and defence matters”. The meeting had been arranged at Barroso’s request and no notes were taken, Katainen later told EUObserver.

Barroso, who led the commission for a decade until 2014, on Thursday repeated his denials that he had ever or would lobby EU officials.

“The independent ad hoc ethical committee reviewed my professional appointment well over a year ago and did not find that it involved any breach of my duties,” he wrote on Twitter, minutes after the report was published. “l have not and will not lobby EU officials.”

He said he had no objection to the ombudsman’s recommendation that the commission take a formal decision on the ethics committee opinion.

Barroso, a former Portuguese prime minister, led the commission for a decade until 2014. He took a job at Goldman Sachs in July 2016, after an 18-month cooling-off period during which ex-officials are required to notify the commission of any new jobs and are banned from lobbying.

His decision to become a Brexit adviser at the bank triggered an avalanche of criticism, especially as Goldman Sachs had come under fire for its alleged role in the Greek debt crisis that dominated Barroso’s final years in Brussels. More than 150,000 people signed an EU staff petition calling for Barroso to lose his EU pension, while his successor, Jean-Claude Juncker questioned the choice to work for “this bank”.

In response to the outcry, Juncker introduced a new code of conduct for senior officials, extending the cooling-off period to two years for ex-commissioners and three for the former president.

O’Reilly said the changes did not go far enough to prevent “a Barroso-like situation arising in the future” and called for a notification period of “several years”.

She also raised concerns about potential conflicts of interest in the commission’s ethics committee. The three-person panel that assessed whether Barroso had broken the EU’s code of conduct comprised an ex-EU judge, ex-MEP and ex-official. Two of the panellists were advising the commission on other matters. Such arrangements were not “advisable” and risked conflicts of interest, the ombudsman said, urging a larger committee membership.

The commission has been set a deadline of 6 June 2018 to make a formal response to the ombudsman.

Responding to the report, which followed a one-year investigation, the commission’s chief spokesman said: “The former president joined his current employer after the then applicable cooling-off period of 18 months.

“The commission drew a political conclusion from the situation that we inherited by extending this cooling-off period for former presidents from 18 months to three years.”

He added that vice-president Katainen had “explained, I think, repeatedly” the context of his meeting with Barroso and reported it less than 24 hours after it took place. “This happened precisely because we have these rules that allow these things to happen.”


Jennifer Rankin in Brussels

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