Financial Transparency Coalition

The Financial Transparency Coalition, together with its coalition members, partners and allies, wish to denounce the OECD’s decision to allow the recent appointment of Pascal Saint-Amans – outgoing head of the OECD Centre for Tax Policy and Administration (CTPA), which provides the secretariat for the G20/OECD corporate tax proposals – to the private sector lobbying firm Brunswick Group.

This move demonstrates the risks between the “revolving door” between private and public office, as there are no safeguards in place to protect against and manage conflicts of interest. This in turn threatens to raise the perception of a conflict of interest, since as long as Saint-Amans is still employed at the OECD, there would appear to be a risk that the views of those contracting for his future employment could influence decisions within the ongoing negotiations.

Brunswick itself presents the problem in their press release: “Pascal has been at the center of the biggest changes to the international tax framework in a generation. Drawing on his deep experience at the OECD and in politics, he is extremely well-placed to advise organizations on how to engage key stakeholders on tax and other critical policy issues.”

Their press release allows then to establish two facts: a) that his new employer does in fact expect him to have a role of a lobbyist (see subpoint below) and b) make use (and potentially misuse) information and experience gained in public office (already stated by Brunswick).

This openly contradicts the OECD’s own 2010 Recommendation Principles for Transparency and Integrity in Lobbying which state that:

“Countries should consider establishing restrictions for public officials leaving office in the following situations: to prevent conflict of interest when seeking a new position, to inhibit the misuse of ‘confidential information’, and to avoid post-public service ‘switching sides’ in specific processes in which the former officials were substantially involved. It may be necessary to impose a ‘cooling-off’ period that temporarily restricts former public officials from lobbying their past organisations. Conversely, countries may consider a similar temporary cooling-off period restriction on appointing or hiring a lobbyist to fill a regulatory or an advisory post.”

 Other international organisations are more advanced in terms of preventing conflicts of interests. Guidelines developed in the EU Commission, for instance, require a cooling off period of three years for the President and two years for Commissioners, while EU Staff (Directors-General, Deputy Directors-General, Directors and Heads of Cabinet) are banned from lobbying the EU institution for 12 months. Revolving door cases involving senior officials are made public and complaints are investigated by the Ombudsman.

No similar rule exists for OECD officials, only for conflicts of interest during the employment which apply to Saint-Amans. His new role in Brunswick will start on November 1, the following day of his role ending at the OECD on October 31. So he has announced his next job while still occupying his public position, and among other duties has taken part in intergovernmental negotiations at the meeting of the OECD Inclusive Framework on October 6, where he gave his farewell.

More broadly, the OECD’s decision to allow their head of tax to move directly into private sector lobbying is, sadly, in line with the organisation’s entire approach in handling the mandate provided to it by the G20 group of major economies, to reform corporate tax. The OECD secretariat has long publicly claimed that it seeks to give civil society the same access as it does to lobbyists from the private sector. In addition, the recently created ‘Inclusive Framework’ is claimed to give all countries, including lower-income countries which are not OECD members, an equal voice in the decisions being taken.

In practice, neither of these OECD claims is borne out by the evidence. Within the Inclusive Framework, lower-income country groups such as the G-24 intergovernmental group, the African Tax Administrators Forum (ATAF) and the intergovernmental South Centre, have repeatedly called out the lack of time given for their members to review documents (sometimes just overnight), and noted that only G7 countries ultimately had significant influence. The lack of voting or any other representative decision-making also ensures that dissent is largely invisible.

Civil society has often highlighted the lack of fair access, and last year this was confirmed in spectacular style when the main business lobby group wrote publicly to the OECD, detailing the hitherto unknown set of working groups and special channels established for their benefit – and claiming it still allowed them insufficient influence!

We call for an urgent independent ethics review on the relationship of the OECD, the CTPA in particular, and the private sector. The terms of reference for such a review should include this specific appointment, and the apparent absence of any safeguards on cooling off periods and how to manage conflicts of interest – present and future. The review should also evaluate the degree of private sector access to the OECD’s process for setting international tax rules, comparing this to national best practice for on transparency and integrity in lobbying. Lastly, the review should consider and recommend policies to ensure that the OECD can end the “revolving door phenomenon”.

 For interview requests, please contact Alfonso Daniels from FTC’s media team at adaniels@financialtransparency.org

NOTES TO EDITORS:

• The Financial Transparency Coalition (FTC) is a global civil society network, operating as a collaborative coalition of eleven civil society organizations based in every region of the world. The FTC works to curtail illicit financial flows through the promotion of a transparent, accountable and sustainable financial system that works for everyone.
• The Financial Transparency Coalition members are: Asian Peoples Movement on Debt and Development, Centre for Budget and Governance Accountability, Christian Aid, European Network on Debt and Development, Fundación-SES, Global Financial Integrity, Latin American Network on Debt, Development and Rights, Pan-African Lawyers Union, Tax Justice Network, Tax Justice Network Africa, and Transparency International.