CONTENT Executive summary and recommendations… 2 I. Introduction… 5 II. Mapping the lobbying landscape in Lithuania… 6 Political, social and legal context… 6 Intensity and scale of lobbying…11
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CONTENT Executive summary and recommendations… 2 I. Introduction… 5 II. Mapping the lobbying landscape in Lithuania… 6 Political, social and legal context… 6 Intensity and scale of lobbying…11 Cultural understanding Self-regulation of lobbyist s activities Watchdogs: The role of media and civil society in monitoring lobbying III: Regulating lobbying: Transparency, integrity and equality of access Towards transparency in lobbying Integrity in lobbying Ensuring a level playing field by making access more equal Annex I – Data Collection Questionnaire Annex II: Research Methodology Annex III: A list of interviewees Annex IV: Overview of media publications and press releases for
EXECUTIVE SUMMARY AND RECOMMENDATIONS Even though Lithuania is one of the few EU countries where lobbying is regulated by a specific law, the narrow definition of lobbying and insufficient systems for recording attempts to influence legislation determine that the vast majority of influence on decision-making takes place outside the scope of lobbying regulation and only a small share of actual influence is accounted for. While there is very scarce publicly accessible information about different interests groups influencing legislative processes, business people in Lithuania name associations, registered lobbyists, trade unions and private companies as the most influential interests groups participating in decision making. There are general legal provisions requiring inclusive and open legislative processes, but the actual application of the legislative footprint is very limited. Only written proposals submitted during the official consultation procedures are recorded coherently and provided as supporting documents to the draft laws. Cost benefit analysis and other analytical approaches are used insufficiently making it complicated to evaluate the legislative proposals and ensure that legislation takes into account all arguments and the interests of all interests groups. The oversight of lobbying is not effective since the official mandate of the oversight institution, the Chief Official Ethics Commission, is limited by the legal definition of lobbying. In reality, the Chief Ethics Commission does not control lobbying as it only oversees the registered lobbyists. This also means that the current lobbyists register is not an effective tool, even for the small fraction of currently registered lobbyists and there is no effective sanctioning mechanism: the reports of registered lobbyists do not provide sufficient information on concrete interventions and the requirements for submission mean that they are not available until the February of the following year; by which point their influence would already have taken place. The legal framework criminalising trading in influence and bribery seems to be coherent, but currently there is no significant practice of applying the relevant criminal law articles for undue influence over unchecked lobbying. All of this poses major risks of undue influence and influence trading, for example, allowing narrow interests groups to affect laws undermining the public interest. This may lead to distortion of the legal system, negatively affect different markets and industrial sectors or cause financial losses. The report Backstage Politics. Understanding Lobbying in Lithuania examines lobbying practices in Lithuania, in particular looking at the transparency, integrity and equality of access to decision-makers to ensure that safeguards are in place to ensure ethical and fair lobbying practices. Transparency International Lithuania believes lobbying can be a positive force in a healthy democracy, but at present the regulations are completely inadequate and require urgent reform. Drawing from the findings of this report, here are the six most important recommendations for the Lithuanian decision makers. Lobbying should be clearly defined in law. The current legal definition of lobbying and lobbyists only comprises registered professional lobbyists, thus limiting the scope of regulation to this specific professional group. The definition of those who should be registered should be increased, so that all lobbying activities can be monitored and are open and transparent. The current regulations on lobbyists registration and reporting should be changed to provide timely and concrete information about the aim and scope of lobbying activities. These reports have to be publicly accessible without additional efforts. Laws should require that all attempts to influence decision making are registered. The law makers should be obliged to ensure that a coherent legislative footprint exists allowing to know who has contributed to the development of legislation. The current obligation to record written submissions should be extended to informal submissions, comments and feedback provided in meetings and consultations etc. The current system of citizens engagement and public consultations should be changed by creating an easy to use database of legal acts allowing interest groups to subscribe to updates on specific issues. The current system does not ensure an effective exercise of a right to engage in the legislative process. The role of the Chief Official Ethics Commission (COEC) in overseeing the implementation of the Law on Lobbying Activities should be reviewed ensuring that this institution has the means to actively engage in providing effective oversight. Its competences should be extended to monitor not only activities that fall to the current narrow definition of lobbying, but also actual influence to legislative processes. Also, it should be ensured that law enforcement institutions have sufficient resources to ensure effective oversight and prosecution of potential undue influence. The use of cost benefit analyses and other analytical approaches should be encouraged in legislation. All such analysis should be publicly accessible for all interest groups. 2 3
I. INTRODUCTION Transparency International s report Money, Power and Politics (2012) found that in most European countries the influence of lobbyists is shrouded in secrecy and a major cause for concern. When undertaken with integrity and transparency, lobbying is a legitimate avenue for interest groups to be involved in the decisions that may affect them. However, problems arise when lobbying is non-transparent and unregulated and where privileged access is granted to a select few, while others are excluded from decision-making processes. Corporate lobbying in particular raises concerns because it often involves companies with vast sums at their disposal developing close relationships with lawmakers and thus gaining undue and unfair influence in a country s politics and policies. 1 A recent Eurobarometer report revealed that 81 percent of Europeans agree that overly close links between business and politics in their country has led to corruption and more than a half believe that the only way to succeed in business in their country is through political connections. In Lithuania, respectively 85 and 73 percent of respondents agree. 2 This corroborates data from Transparency International s Global Corruption Barometer 2013, which found that in many European countries more than 50 percent of people believe that their country s government is to a large extent or entirely run by a few big interests: in Lithuania this figure is as high as 63 percent. 3 This report is part of regional project involving the assessment of lobbying regulations and practices in 19 European countries. 4 It begins by mapping the lobbying landscape in Lithuania, providing a contextual analysis of the national historical, socio-political and legal situation with regards to lobbying. It then discusses the intensity and scale of lobbying efforts and the various cultural understandings of the term lobbying and perceptions of lobbying practices. Other relevant issues such as self-regulation and the role of the media and civil society as watchdogs in monitoring and reporting on lobbying are also discussed. Finally, the report assesses the degree to which national regulation (public law and private self-regulation) adequately provides for transparency of lobbying activities and public decision-making, integrity in lobbying and conduct by public officials and equality of access to public decision-making processes, using a series of 65 assessment questions. 5 1 See Transparency International, Money, Politics, Power: Corruption Risks in Europe (Berlin: Transparency International, 2012). 2 See European Commission. Eurobarometer: Special Report on Corruption (Brussels: European Commission, 2014). organized-crime-and-human-trafficking/corruption/anti-corruption-report/index_en.htm. 3 See Transparency International. Global Corruption Barometer (Berlin: Transparency International, 2013). 4 The participating countries are Austria, Bulgaria, Cyprus, Czech Republic, Estonia, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, and the United Kingdom. 5 See Annex 2 for more details on the methodology and research approach used in this study. 4 5
II. MAPPING THE LOBBYING LANDSCAPE IN LITHUANIA POLITICAL, SOCIAL AND LEGAL CONTEXT Preparing cosmonaut suits to then see if there would be cosmonauts willing to try them on A. Grumadas The first attempts to regulate lobbying activities in Lithuania came with the negotiations for European Union (EU) membership. While some experts claim that it is possible to identify minor regulatory proposals in earlier years, it was Lithuania s EU Accession Programme in that first explicitly indicated the task of regulating lobbying. 6 Many experts in Lithuania argue that the adopted Law on Lobbying Activities was not effectively implemented because the initiative to regulate lobbying was mainly caused by external factors and based on foreign practices instead of being a natural organic development of socio-political life in Lithuania. 7 As there was limited buy-in and internal agreement that the law was the right way to go, its adoption did not trigger all the de facto lobbyists to register and it did not become a catalyst for more accountability in the legislative process. 8 Other reasons identified for the ineffective lobbying regulations were the failure to choose effective and adequate legal instruments and the peculiar socio-cultural context. For the latter, the most often quoted factors include the lack of a lobbying tradition, prevailing negative perceptions of lobbying related activities, high levels of corruption, legal loopholes that were not addressed accordingly and a persistent culture of post-soviet mentality in some areas of political life. 9 The context of the adoption of the Law on Lobbying Activities is vividly illustrated by a quotation from a then member of the parliament, A. Grumadas, in the parliamentary hearing. According to him, while the lobbyists of Capitol Hill would probably envy the working conditions of those actually influencing decision-making in Lithuania, the new law is aiming to prepare cosmonaut suits and then see if there would be cosmonauts willing to try them on. 10 There was a very limited lobbying culture in Lithuania; therefore the concern was that only very few self-identified lobbyists would be affected by the new law. According to the preparatory documents, the declared goals for the law were to regulate lobbying activities in the stages of preparing and adopting bills, provide liability for breaches of these regulations, prevent undue influence in decision-making and activate legislative processes. 11 During the preparations, different foreign legal models were analysed and the US model was selected for further analysis. The law officially came into force on 1 January 2001, 12 with amendments in 2003 following heavy criticism from those defined as lobbyists by the legislation. They claimed that the definition of lobbying was too narrow and that by simply lobbying under associated organisations, and thus avoiding the legal obligations of reporting and registering, it was easy for others to circumvent the regulations; some lobbyists claimed that this amounted to unfair competition. 13 The 2003 amendments partly solved this issue by adding unpaid activities to the official definition of lobbying, but business associations that act solely as representatives of the interests of their members were still excluded from the definition of lobbying; this was still criticised as allowing easy circumvention. 14 The post-regulatory situation in Lithuania was studied by professors J. Hrebenar and C. Thomas in Summarising their results, they noted that the lobbying system in Lithuania is rather primitive; representation of interests groups is still widely perceived as using personal connections and corrupt schemes without using modern lobbying technologies. 15 Furthermore, they noted that the vast majority of de facto lobbying related activities take place outside the regulations. 16 It is now widely accepted that the Law on Lobbying Activities is not working. However there have not been many efforts to fix it in parliament. 17 Since 2005, the oversight institution for lobbying activities, the Chief Official Ethics Commission, has repeatedly noted in its annual reports that the law is not effectively implemented and does not fulfil its declared purposes due to a number of reasons. The major issues identified by the Commission focus on the definition of lobbying, as it is too narrow and based on the fact of registration instead of actual lobbying activities. It does not include business associations that 11 Implementing measures for the Lithuanian Government Agenda, Part on Internal Policies, National legal system development chapter, para 8 (Lithuanian Government Decree 31/08/1999 No. 945). 12 The law itself was adopted over a rather short period of time (draft bill was registered on 27th April, 2000 and adopted on 27th June. 6 Lithuanian Government Decree 29/09/1999 No Ragauskas P. Apie prielaidas neveikti lobistines veiklos teisiniam reguliavimui Lietuvoje. Teisės problemos No. 3(73) Andrikienė L. (ed.) Šiuolaikinės lobistinės veiklos tendencijos. Lietuvos tesiės universitetas, (Vilnius, 2002). 9 Lukošaitis A. Lobizmas uzsienio salyse ir Lietuvoje: teisinio reguliavimo ir institucionalizacijos problemos. Politologija. 2 (62) Ibid, P Rasimavičius B. Lobizmo institucijos problemos Lietuvoje. Justitia. 2001, 4-5: Geleževičius R. Lobizmo teisinis reguliavimas ir institucionalizacija Lietuvoje: Dešimtmečio išdavos ir pamokos. Socialinių mokslų studijos, 5(1), 2013, Hrebenar R.J., Morgan B.B., Lobbying in America: A Reference Handbook (Santa Barbara: ABC-CLIO, 2009), JAV mokslininkai: Lietuvos interesų grupių sistemai ir lobizmui dar toli iki demokratinių standartų. BNS, 31 July Law on the Chief Official Ethics Commission
represent the interests of their members or notfor-profit organisations (among others) and the Commission is only assigned to oversee registered lobbyists as defined by the law. Other issues include inadequate registration fees for lobbyists, inconvenient reporting procedures and an inadequate timeframe for providing lobbying reports. 18 Summarising this in 2005, the Chief Official Ethics Commission prepared a new concept for amending the Law on Lobbying Activities and submitted it to the Parliamentary Anti-corruption Commission. In January 2006, a working group was formed in the parliament to prepare the amendments accordingly. 19 While the amendments were submitted to the parliament in May 2006, the process stalled. 20 The reasons of this remain unknown, but lack of political will is often quoted. Despite all of this, in 2009, only the fact that no lobbying code of conduct exists was identified as one of the major problems 21 in the field of lobbying. While criticism has been on-going, it was only at the end of 2013 that an official working group was created by the Justice Ministry to review the existing regulations and prepare proposals for the much needed amendments. As a result of a basically inoperable law, there have been virtually no cases of sanctioning ille- gal lobbying activities. However, cases related to trading in influence 22 may be mentioned here. Lithuania ratified the international conventions criminalizing trading in influence in (Council of Europe Criminal Law Convention on Corruption in 2002, the United Nations Convention against Corruption in 2006). Before 2011, trading in influence had been partly covered in Article 226 of the Lithuanian Criminal Code Bribery of Intermediaries, 23 but in 2011 the Criminal Code was amended changing Article 226 to Trading in Influence. 24 The amendment follows the wording of both conventions rather closely. The number of cases of trading in influence has been increasing over the years as the practice expands; 25 however, none of these cases have been directly related to illegal lobbying in the public domain. 26 Liability and sanctions for breaching specifically the Law on Lobbying Activities is provided in the Code of Administrative Offences. 27 There have been no cases of applying this Code so far. Furthermore, the Code does not provide liability for legal persons, while the Law on Lobbying Activities explicitly allows both legal and natural persons to register as lobbyists. This means that companies (legal persons) who breach the law are not subject to any sanctions. There is currently one pending criminal case involving accusations against a registered lobbyist. A. Romanovskis was indicted on corruption charges in 2012, in a case of potential bribery of MP V. Matuzas. He refused to testify, thus resulting in detainment for several weeks. In November 2013, the charges of bribery were dropped due to a lack of evidence and A. Romanovskis was indicted on charges of abuse of his official position. In January 2014, the media reported that the charges were related to potential undue influence but there have been no further clarifications so far. 28 While some discrepancies exist in the legal framework on access to information, they alone would not pose a major risk to accountability in policy-making and legislative procedures. The right to information is enshrined in the Constitution and specific laws regulate that information from public institutions is provided in a rather coherent and detailed manner. 29 However, most of the interviewees noted that it is complicated to find out the influence behind particular laws and bills, since in most cases they are influenced off record without any documented trace. Therefore, most interactions between interest groups and decision-makers do not fall under the definition of documents and information in the access to information laws. While access to in- formation acts as an important corruption risk management provision, which allows access to more information on the legislative process, it is not necessarily a significant tool in detecting and deterring undue influence. Another problem of limited access to information relates to the notices for consultations on specific pieces of legislation. Lobbyist T. Vasilevskis, who represents Lithuanian companies in Brussels, criticises the political culture of communication in Lithuania, comparing the amount of information on draft bills and public hearings in EU institutions to the Lithuanian system. A so called white lobbyist, lobbying on behalf of non-profit goals, D. Mikalauskaite echoed these concerns saying that she virtually never receives relevant information about when and in what parliamentary committees the issues she is working on will be heard. 30 Other lobbyists did not uphold this concern claiming that it is your duty as a good lobbyist to find out where and when specific hearings will take place and who to address on them. However, during the interviews, all lobbyists agreed that it would be more convenient to have a system allowing them to subscribe to updates on specific regulatory fields, receiving notifications whenever related draft laws were discussed in the parliament or parliamentary committees. 18 Official Annual Reports of the Chief Ethics Commission. 19 Official Annual Report 2005 of the Chief Ethics Commission, Geleževičius R. Lobizmo teisinis reguliavimas ir institucionalizacija Lietuvoje: Dešimtmečio išdavos ir pamokos. Socialinių mokslų studijos, 5(1), 2013, National Anti-Corruption Programme 2009 (national strategic document planning and coordinating anti-corruption efforts on the national and local levels). inter3/dokpaieska.showdoc_l?p_id= According to the UN Convention against corruption, trading in influence is the promise, offering or giving to a public official or any other person, directly or indirectly, of an undue advantage in order that the public official or the person abuse his or her real or supposed influence with a view to obtaining from an administration or public authority of the State Party an undue advantage for the original instigator of the act or for any other person; or The solicitation or acceptance by a public official or any other person, directly or indirectly, of an undue advantage for himself or herself or for another person in order that the public official or the person abuse his or her real or supposed influence with a view to obtaining from an administration or public authority of the State Party an undue advantage.(un Convention Against Corruption, Art. 8, showdoc_l?p_id= ) 23 Evaluating the legal environment around trading in influence, in 2009, GRECO recommended incriminating trading in influence in line with Article 12 of the Criminal Law Convention on Corruption, thus clarifying some notions of criminal responsibility in such cases and making sure that all cases of trading in influence fall under the national law. Evaluation Report on Lithuania on Incriminations (ETS 173 and 191, GPC 2) (Theme I) Adopted by GRECO at its 43rd Plenary Meeting (Strasbourg, 29 June 2 July 2009); Greco Eval III Rep (2008) 10E Law amending Article 226 of the Criminal Code. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=402516&p_tr2=2. 25 According to the data sets provided by the Information Technology and Communications Department under the Ministry of the Interior of the Republic of Lithuania, in 2013, 49 cases of potential trading in influence cases were registered in Lithuania For example, the latest pre-trial investigation was started in March, 2014 an associate lawyer was suspected to have demanded a bribe from a person he was representing, suggesting that the bribe would be given to the judge aiming for a favourable decision in an administrative case Article 172/25 provides that breach of requirements of the Law on Lobbying Activities shall be fined between 500 and 1000 LTL ( EUR) or, accordingly LTL ( EUR) for a repeated offence. The Code of Administrative Offences. www3.lrs.lt/pls/inter2/dokpaieska.showdoc_l?p_id= Korupcijos neradusi STT teismą verčia aiškintis, ar lobistas Andrius Romanovskis darė įtaką politikams Law of the Republic of Lithuania on the Right to Obtain Information From State and Municipal Institutions and Agencies, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_ id=471234; Law on Provision of Information to the Public, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=280580&p_query=&p_tr2= ; Constitution of the Republic of Lithuania, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Public interviews in Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January
ARE POLITICAL DONATIONS A PROBLEM IN THE LOBBYING CONTEXT? In June 2009, the Baltic News Service (BNS) published an article reporting that the then Minister of Social Security and Labour, Jonas Dagys, had signed an order to assign EU funds to a private company, Elektros zona (Electricity Zone). This company, BNS reported, was among five companies that had donated 83,000 LTL in total for the politician when he ran in the parliamentary election in Elektros zona donated LTL. 31 While the order to assign EU funds (252,000 LTL) to this company was signed in 2009, an article in another media outlet, Lietuvos rytas implied that there might have been a conflict of interests 32. The head of the company, A. Lukasevicius was quoted as saying that he did not see any problems in the fact that his company received funding based on a document signed by a politician to whom they had made a generous donation previously: we are friends both with him and the Conservative party. The Minister also distributed a negation to these allegations, arguing that he could not have foreseen that he would become Minister and that according to official regulations all of the orders to assign EU funding must be signed by the Minister. 33 The Chief Official Ethics Commission, based on this published information and following an analysis of additionally requested information, started an investigation. 34 Virtually all of the interviewees noted that ties between businesses and political parties pose a clear threat to accountability and transparency in decision-making. While legal persons (companies) are prohibited from donating to parties and politicians and natural persons (individuals) are allowed only limited contributions to political campaigns, 36 the problem of indirect contributions remains. The interviewed representatives of the General Prosecution Office and Special Investigation Service noted that businesses have already found ways to circumvent regulations and provide either very big discounts for some of the services during political campaigns or donate off record by providing cash contributions. Based on the 2011 Lithuanian Map of Corruption survey, according to residents and civil servants, political parties fall into the top three most corrupt institutions in Lithuania along with the parliament and the courts. 37 During the investigation, it was confirmed that Jonas Dagys in 2009 signed the order to assign EU funds (252,000 LTL) to a company that in 2008 had donated 16,000 LTL to him during the parliamentary elections. The Commission stated that this was a breach of public and private interests adjustment principles, as he had not abstained from the decision and had not declared a potential conflict of interest. J. Dagys appealed the decision of the Commission, first to Vilnius County Administrative Court, then to the Supreme Administrative Court (the highest in the judicial hierarchy). In 2011, the Supreme Administrative Court dismissed his request to annul the decision of the Commission, noting that J. Dagys indeed had to declare his conflict of interests to the prime minister. 35 While in this case, the courts did not evaluate whether the decision to provide financial support for the company had otherwise been well grounded, this case illustrates why even lobbying executive politicians can have clear financial consequences as it might have direct influence on their executive orders and as was in this case funding allocation. Lack of records on meetings with different interest groups creates more space for allegations that politicians may be influenced unduly. Furthermore, it illustrates how easily undue influence may be legalized for further stages of implementation. Since 2012, companies in Lithuania are banned from making donations to politicians and political parties, but both experts and law enforcement institutions note that this does not stop businesses from finding ways to support politicians, thus hoping for favorable decisions afterwards. The problem of close links between politicians and businesses remains an issue. There is a strong need for effective oversight of private interest declarations. At the same time, it is equally important that these declarations are public since the amount of such declarations suggests that it would be nearly impossible to ensure oversight by one institution. Furthermore, it is very important to ensure that such systems work in practice. INTENSITY AND SCALE OF LOBBYING Those who do not know the lay of the land cannot manoeuvre their forces Sun Tzu, Art of War According to the Chief Ethics Commission s annual report, only 13 registered lobbyists were actively engaged in lobbying activities in As of May 2014, there were 35 lobbyists on the official register; in the case of six the Chief Official Ethics Commission had suspended their licences. 39 As mentioned above, due to the loopholes in the Law on Lobbying Activities, a vast majority of actors that engage in lobbying are excluded from the lobbying definition and are thus not re- quired to register. The Chief Official Ethics Commission itself has noted a number of times that registered lobbyists only comprise a small share of de facto lobbying activity. 40 Due to this lack of clarity on the definition of lobbying, it is complicated to estimate the scale of lobbying activities. A tentative overview of public information regarding legal initiatives and legal amendments proposed by different interests 31 Ministras R.Dagys rėmėjams atsilygina su kaupu (Atnaujinta 14.43), BNS 2009 June 2 d. 10:00, online news portal delfi.lt R.Dagys supainiojo viešus ir privačius interesus BNS ir lrytas.lt inf June 7, online news portal lrytas.lt 33 Ministras R.Dagys rėmėjams atsilygina su kaupu (Atnaujinta 14.43), BNS 2009 June 2 d. 10:00, online news portal delfi.lt Chief Official Ethics Commission Decision, 9 September 2009, No. KS Chief Official Ethics Commission press release, 2011 April The Law on Financing and Financial Control of Political Parties and Political Campaigns provides that the maximum amount one natural person can donate to a political campaign is 10 times the average monthly wage. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Sociological Representative Survey Lithuanian Map of Corruption (Vilnius: Special Investigation Service, VILMORUS, 2011) 38 Official Annual Report 2012 of the Chief Official Ethics Commission, p The register is public and accessible online Official Annual Report 2005 of the Chief Ethics Commission, p , and subsequent annual reports
groups provides that a vast majority of all de facto lobbying seems to be conducted by interest groups that are not required to register, i.e. trade and business associations, public institutions, etc. 41 This is further confirmed by sociological data. According to a 2014 business survey Attitudes towards Lobbying Activities, only a small share of interest groups or their representatives use official legal instruments to influence decision-making in Lithuania. The most prevalent ways of influencing decisions are considered to be: using personal acquaintances (59 percent), offering financial incentives for favourable decisions (53 percent), donating or otherwise financially supporting political parties (53 percent), negotiating during unofficial meetings (52 percent) and promising employment for favourable decisions (39 percent). The more legitimate routes such as participation in official working groups (22 percent), participation in official meetings (19 percent) and official submission of legal proposals (18 percent) were the least mentioned options. 42 More than a half (58 percent) of businesspeople in Lithuania admit to having heard that businesses and private individuals seek to influence decision-making; moreover, the vast majority also admitted to having heard of instances where politicians seek to benefit particular interest groups (77 percent) instead of taking into account the public interest. 43 Therefore, there are no official and exact estimates on the number of de facto lobbyists. Due to this situation, it is complicated to evaluate the level of accountability of and trust in decision-making decreases. Only 6.4% of Lithuanians declare that they trust political parties; 44 and 68 percent of Lithuanian businesspeople claim that when decision-making lacks accountability, it is the citizens trust that is harmed most (other identified negative outcomes include the harm for the financial well-being (66 percent), national budget (64 percent) and business/investment environment (64 percent)). 45 According to Lithuanian businesspeople, associations (59 percent) are among the interest groups that are most active in seeking to influence decisions, along with registered lobbyists (52 percent), trade unions (41 percent) and companies (35 percent). These interest groups have also been claimed to be the most effective in their attempts to influence decisions. 46 Some researchers even argue that such a situation where the most common types of de facto lobbying activities in Lithuania are informal (shadow), the law on lobbying is not operating and the relations between interests groups and politicians are mostly informal, amounts to a situation of oligarch relations. 47 In the same way it is difficult to estimate the most active sectors engaged in lobbying. According to a businesspeople survey, the top spheres where interest groups seek to influence decision-making are energy (81 percent), pharmacy and healthcare (58 percent), construction (65 percent), and alcohol and tobacco markets (58 and 53 percent). The same survey results suggest that politicians mostly take into account suggestions from interest groups working in the spheres related to energy, pharmacy and/or healthcare, and construction. 48 According to a lobbying survey conducted by Burson-Marsteller, the most effective corporate lobbying efforts are in energy, healthcare, agriculture, IT/ telecommunications and financial services. 49 Out of these, energy, healthcare (and pharmaceuticals), IT/ telecommunications also emerged in CULTURAL UNDERSTANDING This research suggests that lobbying does not seem to be high on the public agenda, as people do not fully understand the concept and policy-makers do not seem to be too interested in raising it as an issue. While some researchers track different interest groups and their influence in the decision-making processes back to the period of the Soviet regime in Lithuania, 50 there has been no coherent tradition of lobbying in the country s history. Most of the interviewees noted that the term lobbying itself seems to have negative connotations, even though it is clearly defined in the law as a legal activity. 51 Furthermore, they noted that since originally there was no tradition of lobbying, people often struggle to understand what kind of activities actually amount to legal lobbying and what is undue influence. answers during the interviews conducted during this research. Interestingly, some of the interviewees noted that the sectors most affected by lobbying are actually the sectors that are most regulated. There were no distinctions drawn between national and regional lobbying sectors. While registered lobbyists and some politicians raise the question and encourage discussion of related issues, lobbying is still more often perceived as a business instead of being a coherent part of public policy or a tool to enable citizen participation in the legislative and policy process. 52 At the same time, there is a sense that there have been some positive changes in attitude as more Western conceptions of lobbying have begun to emerge. 53 This was also stressed by the lobbyists interviewed for this research. There are two dominant perceptions of lobbying in Lithuania. The first is mainly promoted by registered lobbyists and follows the rationale of lobbying related activities being defined through the participation of different interests groups in the decision-making process. This definition also promotes the need for more awareness about lobbying related activities as a way to present lobbying in a more objective light. The second that seems to prevail in society is the perception of lobbying as undue influence on decision-makers. 54 Even further, it seems that Lithuanians tend to think that the government 41 See overview of media publications and press releases for in Annex 4). 42 Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 43 Ibid. 44 VILMORUS, Survey Trust in Lithuanian Institutions (Vilnius: VILMORUS, April 2014) Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 46 Ibid. 47 From the seminar on lobbying organised in the Parliament in 10 June Presentations of J. Novagrodckienė, A. Lukošaitis, overview with some quotes provided in the article in the news portal 15min.lt Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 49 Burson-Marsteller, A Guide to Effective Lobbying in Europe. The View of Policy Makers (Brussels: Burson-Marsteller, 2013),p. 64, wp-content/uploads/2013/05/european_lobbying_survey_2013.pdf. 50 Andrikienė L. (ed.) Šiuolaikinės lobistinės veiklos tendencijos. Lietuvos teisės universitetas, Vilnius, 2002, monografija, prieiga internete: [žiūrėta ]. 51 Valdelyte E., Slavickaite L m. lobizmo ir lobistines veiklos tendencijos Lietuvoje. Viesoji politika ir administravimas. 2014, T.13, Nr. 1/2014, t. 13, Nr. 1, p ( P ). 52 Rasimavicius A. Šiuolaikinės lobistinės veiklos tendencijos. L. Andrikienė (red.) Lobistinės veiklos praktiniai pavyzdžiai ir praktiniai patarimai. P Vilnius: Lietuvos teisės universitetas, Sutkus V. Atstovavimas verslo interesams politinės kultūros dalis straipsnis interneto portale veidas.lt, 2011 m. sausio 19 d. [žiūrėta ]. 54 Leontjeva E. Interesų grupės, valdžia ir politika: metinės konferencijos tekstai. Interesų grupės, valdžia ir politika: pasiūlos ištakos. Vilnius: Pradai,
is to a large extent or entirely run by a few big entities acting on their own best interests. 55 As many interviewed experts also noted, lobbying related activities in Lithuania are often perceived as corrupt and illicit activities by shadow lobbyists. Such definitions dominate the public domain. Furthermore, many experts noted that public pressure along with the above mentioned loopholes in the national regulations thrust some interest groups into the shadow, thus confirming these perceptions. 56 There seem to be conflicting perceptions on how politicians perceive lobbyists. While many politicians claim that they see lobbying in positive light, some lobbyists see it differently. According to one registered lobbyist, he had only once heard a person being silenced in the public parliamentary hearings when requesting to voice concerns through a registered lobbyist. Another lobbyist, D. Mikalauskaite, claimed that politicians seem to be more benevolent to representatives of business associations who are less inclined to report their lobbying than the registered official lobbyists. According to her, it is obvious from the Parliamentary hearings where such representatives get more time to present their arguments. 57 Sometimes the registered lobbyists even have to struggle to obtain permission to enter the premises of public institutions, thus looking for a blat (a Russian term deriving from the Soviet Union, usually describing societal networks, where people exchange favours) in the secretariat. 58 SELF-REGULATION OF LOBBYIST S ACTIVITIES Currently, there is nothing to self-regulate Interview with a lobbyist All of the interviewed experts, politicians, lobbyists and representatives of oversight institutions noted that while registered lobbyists are interested in a more accountable process aimed at fairer competition, they only represent a small share of de facto lobbyists. Their efforts in promoting more accountable and regulated lobbying activities are usually limited to compliance with the regulations and publicly endorsing the need for reforms in this field. Such a situation does not come as a surprise and does not seem to be unique to Lithuania. Although it is widely assumed that professional lobbyists in Europe tend to oppose the creation of a lobbyist registry or public disclosure of their lobbying activity, a survey by the OECD shows evidence that lobbyists are in fact willing to participate in a registry, even a mandatory one (61%), and disclose information publicly on the Internet (82%). 59 In Lithuania there have not been any significant self-regulation initiatives by lobbyists or businesses. A Code of Conduct for Lobbyists 60 usually considered a self-regulatory tool was prepared by the Chief Official Ethics Commission (as was foreseen in the Law on Lobbying Activities), 61 and there is a legal obligation for lobbyists to comply with the Code. 62 There seems to be a professional association of lobbyists in Lithuania, the National Lobbyists Association, but none of the interviewed active lobbyists could provide information on whether it is actually effective or even active. 63 It seems that it was created to participate in drafting some legal acts, but then failed to develop sustainably. The Association of Public Relations Agencies currently unites 16 Lithuanian agencies providing public relations and consultation services. The Association was established on 17 February 2009, with the aim of ensuring ethical and professional standards among the agencies, improving the business environment in this field and following strict ethical standards in their operations. 64 While the Association s Code of Ethics does not explicitly mention any commitment to accountability in influencing decision-making, it does declare an aim to follow the standards of personal and professional accountability, integrity, transparency and honour principles. 65 An interesting trend re-emerged throughout the interviews with both lobbyists and representatives of oversight institutions. They were not hopeful about self-regulation alone actually working to increase accountability. However, they stressed that foreign companies operating in Lithuania are more inclined to follow higher standards of accountability in lobbying due to their international ethics standards. Currently, only a few of the officially registered lobbyists are actually private companies, but the interviewees note that international companies operating in Lithuania are less likely to engage in shadow lobbying and are more ready to hire professional lobbyists. In general, the situation on self-regulation of lobbying is vividly illustrated by a quotation of one expert interviewed for this research: there is nothing to self-regulate currently; there is no effective community of lobbyists at all. At the same time, some organisations, regardless of whether or not they are covered by official lobbying definitions, provide reports on their attempts to affect decision-making. Often, this is done as part of advocacy work, but it also emphasises that some reporting may simply be done voluntarily. 55 Transparency International, Global Corruption Barometer 2013: 63% of Lithuanians believe that their government is to a large extent or entirely run by a few big entities acting in their own interests: 56 Lukosaitis A. Interesų grupės Lietuvoje: raidos dinamika ir institucionalizacijos bruožai. Politologija, 2(18) 2000, p Public interviews in article Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Transparency International Lithuania, interview with A. Romanovskis, originally aired in October 2013 on Ziniu radijas, transcription accessible online. Lietuvoje/lietuvoje-klesti-seselinis-lobizmas/ OECD, Lobbyists Attitudes Toward Self-Regulation and Regulation of Lobbying in Europe. In Lobbyists, Governments and Public Trust, Volume 2: Promoting Integrity through Self-regulation (Paris: OECD, 20 September 2012), p The full Code of Conduct for Lobbyists Article 13, para 1, sub para 4. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Article 4, para 2, sub para 2. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Contact details are provided online ( but according to the representative of the Chief Ethics Commission, the Association has been silent since The interviewed lobbyists were not able to provide any information about the recent activities of the Association either. 64 The official website of the Association of Public Relations Agencies: 65 The official website of the Association of Public Relations Agencies, Code of Conduct:
REPORTING VOLUNTARILY In 2012 Law on Charity and Sponsorship was amended providing regulations for the set up and running of endowment funds. 66 According to the lobbyists and politicians, the idea had been proposed and lobbied for by NGO sector representatives. While these representatives were not registered as lobbyists (as the law currently does not require NGOs to register), they all reported their activities in their press releases and lobbying was conducted during official parliamentary hearings in the committees and by organizing public discussions and preparing studies. 67 One of the main initiators of this law was A. Pemkus, then a member of the boards in different NGOs and the head of a PR agency, who claimed that this is a very positive development allowing for innovations and further development of transparent and integral NGOs. 68 In March 2014, the Human Rights Monitoring Institute (national human rights NGO) submitted proposals for the draft law amending the Criminal Procedures Code using the general legislative procedure, allowing the participation of multiple actors. While the same proposals had been submitted a year ago to the Ministry of Justice they had not been taken into account at that stage. This time, the Human Rights Monitoring Institute included the international NGO Fair Trials International in the process. The proposals were presented during the official hearing in the Law and Order Committee in the parliament by representatives of the NGO. This time, most of the proposed amendments were taken into account. The official agendas of these hearings were published online in the parliamentary website 69 and the NGO provided information on participation in this legislative process in its annual report. 70 These examples provide that while there already are some NGOs that would be prepared to disclose their de facto lobbying activities, the current framework does not provide clear guidelines either on how such activities should be defined, or how to manage the risks of undue influence in cases where NGOs are only used for cover. WATCHDOGS: THE ROLE OF MEDIA AND CIVIL SOCIETY IN MONITORING LOBBYING The transparency of media organisations is insufficient and the ethical self-regulatory system is not effective enough. Media accountability is legally well covered, but it is not extensively developed in practice and media outlets often fail to meet the legal standards of accountability. Investigative journalism is under-developed and attempts by the media to inform the public of corruption issues and their impact are quite limited. 72 This is probably the reason that the media does not play any significant role in monitoring lobbying. During the interviews, interviewees also noted that lobbying is not really a hot topic on the public agenda, thus making it unattractive and too complicated to write about in the media. The few examples of journalists actually reporting on lobbying are limited to general articles interviewing politicians and lobbyists about the greatest issues of accountability in legislation (most of these articles are quoted in this research). The role of civil society in regard to the lobbying issue is extremely low. Aside from the NGOs that engage in non-profit lobbying activities, 73 NGOs rarely have anything to do with lobbying monitoring or oversight. NGOs have also claimed that they do not have sufficient human resources, and that they face difficulties in attracting donors, which makes it hard to operate effectively. 74 There are currently no examples of citizens initiatives for monitoring lobbying or related issues. In general, there is a favourable legal framework covering the work and independence of the media. Lithuania has repeatedly scored as satisfactory in international indexes for media independence. 71 However, in practice insufficient restrictions on the media concentration and complicated economic conditions of the media outlets reduce the variety of content. 66 Parliamentary Press Release, 19 June 2012: www3.lrs.lt/pls/inter/w5_show?p_r=4445&p_k=1&p_d= Nelieciamojo fondo koncepcijos teisine analize bendros prielaidos efektyviam jos veikimui ir galimybės Lietuvoje (Vilnius:NVO teisės institutas, 2007). See: u4/tyrimas_nelieciamas_fondas.pdf. 68 R. Rutkauskaite. Lietuvių nobeliai gales užsitikrinti nemirtingumą. Online news portal vz.lt (127/2012). See: 69 Parliamentary agenda 20th March 2014 SeimSee: 70 Human Rights Monitoring Institute Annual Report 2013 See: 71 For example, Reporters Without Borders has been ranking Lithuania among satisfactory countries, not citing any significant breaches of freedom of media. lithuania.html. 72 Media (D. Jastramskis) in Transparency International Lithuania, National Integrity Study (Vilnius: Transparency International Lithuania, 2012). national-integrity-study/. 73 Environment, human rights and health care have been identified as the sectors with the most effective NGO lobbying efforts. Burson-Marsteller, A Guide to Effective Lobbying, Civil Society (E.K. Ragauskiene) in Transparency International Lithuania, National Integrity Study,
III: REGULATING LOBBYING: TRANSPARENCY, INTEGRITY AND EQUALITY OF ACCESS TOWARDS TRANSPARENCY IN LOBBYING This section provides a more detailed assessment of the regulation of lobbying and related activities in Lithuania, with a focus on transparency, integrity measures and equality of access to decision-makers. The declared goals of the Law on Lobbying Activities were to regulate lobbying activities in the stages of preparing and adopting bills, to provide liability for breaches of these regulations, prevent undue influence in decision-making and activate legislative processes. 75 The law itself provides that it aims to ensure publicity and transparency and prevent illegal lobbying activities. 76 However, the many loopholes contained in the law and its limited definition of lobbying that fails to capture much of the de facto lobbying that takes place in Lithuania poses serious questions about its effectiveness. First, the legal definition of lobbyists in Lithuania creates many exemptions and grey zones allowing de facto lobbying off the record. A lobbyist in Lithuania is defined as a natural or legal person recorded in the Register of Lobbyists in accordance with the procedure laid down by the Law on Lobbying Activities. 77 In other words, it is hard to objectively establish who should register and the entire system is often approached assuming that those who register become lobbyists, as opposed to the approach where those who lobby need to register. Moreover, the definition of lobbying activities is very narrow and does not provide adequate clarity. According to the law, lobbying activities are defined as actions taken by a natural or legal person for or without compensation in an attempt to exert influence to have, in the interests of the client of the lobbying activities, legal acts modified or repealed, or new legal acts adopted or rejected. 78 The law provides a detailed list of activities and actors that may not be considered lobbying or lobbyists, but it does not really add much more clarity to the legislative process. These exceptions include the mass media (except when owners, publishers or employees of the mass media receive remuneration for lobbying activities); the activities of persons who officially participate as experts or specialists for or without compensation in the preparation, consideration or explanation of draft legal acts; state politicians; state officials or civil servants (when such activities are carried out in accordance with their official powers granted to them by legal acts); activities of non-profit organisations aimed at exerting influence in the common interest of their members to have legal acts modified or repealed, new legal acts adopted or rejected; activities of scientists (pedagogues) (except when they act in the interests of a client of lobbying activities); an opinion expressed by a natural person regarding modification or repeal of legal acts, adoption or rejection of new legal acts (except when that natural person acts in the interests of a client of lobbying activities). 79 Alarmingly, actors identified as the most active de facto lobbyists by the interviewees are not covered by the legal definition of lobbyists at all. Therefore, it seems that most of the de facto lobbyists do not have to officially register and the vast majority of lobbying activities are off the record as elaborated above. Companies acting in their own interests, business associations, trade unions, religious organisations, various public institutions, and non-profits are usually named to be the most active de facto lobbyists and yet none of them are defined as lobbyists in the legal sense. 80 Lithuanian businesses identify interest represen- When looking at transparency around lobbying practices, the research sought to answer the following overarching questions: to what extent does the public have sufficient knowledge of (a) who is lobbying public representatives; (b) on what issues they are being lobbied; (c) when and how they are being lobbied; (d) how much is being spent in the process; (e) what is the result of these lobbying efforts etc.? It also sought to investigate whether the onus for transparency is placed on both lobbyists and public officials/ representatives. The findings offer a rather bleak picture with regard to transparency of lobbying in Lithuania. 75 Implementing measures for the Lithuanian Government Agenda, Part on Internal Policies, National Legal System Development chapter, para 8 (Lithuanian Government Decree 31/08/1999 No. 945). 76 Article 1, Law on Lobbying Activities, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Ibid. 78 Article 2, Law on Lobbying Activities. 79 Article 7, Law on Lobbying Activities. 80 Law on Lobbying Activities; Ragauskas P. Apie prielaidas neveikti lobistines veiklos teisiniam reguliavimui Lietuvoje. Teisės problemos, No. 3(73), 2011, P
tation among the major benefits of being in an association (46 percent of businesses perceive interest representation and problem solving to be the major benefit of being in a business association): associations (59 percent) are among the interests groups that are most active in seeking to influence decisions, along with registered lobbyists (52 percent), trade unions (41 percent) and companies (35 percent). It is also claimed that these interests groups are the most effective in their attempts to influence decisions. 81 Interestingly, several business associations have been assigned offices on the premises of the government and are listed in the official contact list as representatives to the Government. 82 While the fact that the contacts of these institutions are public is positive, the fact that they would not fall under the lobbying regulations mean that there is no publicly accessible information about their particular input to laws. On a similar note, according to a study by Burson-Marsteller, trade associations and NGOs best match the definition of a lobbyist ; trade associations and companies have also been identified as the most effective lobbyists. 83 Law firms were identified as somewhat effective lobbyists by some of the interviewees, who noted that such firms often engage in paid services for legal consultations in drafting legal documents that often might mean preparing written legal proposals for decision-makers; it is only natural that in some cases the law firms also engage in further promoting such drafts using their own connections. Also there are interesting results available from a small poll survey in 2011, where members of parliament and government representatives were asked to identify the top five most active lobbyists. Of these none were registered as their activities would not fall under the legal definition of lobbying; they were either representatives of business associations or companies acting in their own interests. 84 Despite all of this, the representatives of business associations that are often said to engage in lobbying related activities do not seem to perceive their activities as lobbying. In 2011, for example, the president of the Alcoholic Beverages Traders Association, L. Vilimas, noted that the activities of the association have nothing to do with lobbying, but rather aim to provide politicians with arguments and needs of the traders and therefore there is no need for us to register as a lobbyist. 85 Meanwhile, in an unofficial survey poll conducted by the journalists, L. Vilimas was reported to have been one of the most active lobbyists in Interestingly, it was the year that the amendments in the laws regulating trading of alcoholic beverages and excise reduction were taking place. Both of these parliamentary decisions were later vetoed by the president citing open lobbying activities of particular interests groups. 87 After hearings in parliament, MP Z. Silgalis also declared that, the Parliament is obviously ruled by lobbying of alcohol. 88 The business representatives interviewed noted that it is only natural that business associations represent the interests of their members. According to the executives of some of the leading business associations, they do not mind disclosing which legal acts and to what extent they are seeking to influence, but the current system does not offer an easy solution for that and the current regulations do not require it. It seems that business representatives and business associations not registering as lobbyists would not be a problem in itself, if there were an accountable and open decision-making procedure based on publicly accessible arguments, ensuring that their inputs were recorded and publicly accessible. In 2005, the Chief Official Ethics Commission investigated two cases of potentially illegal lobbying. In the first case, the activities of the executive directors of two companies, UAB Orakulas and UAB Top Sport were investigated. They were both acting on behalf of the Alliance of Betting Operators aiming to amend the Gaming Law and engaging in activities to affect the law without a registered lobbyist. The Alliance s Charter establishes that its main goal is to participate in preparing laws and other bills in the field of betting games. As the Law on Lobbying Activities provides that the activities of non-profit organisations in their own members interests does not constitute lobbying, the Chief Official Ethics Commission concluded that there had been no breach of the law. Another investigation came to an identical conclusion. In 2012, the Chief Ethics Commission received a request to investigate the activities of the National Gambling and Gaming Association; this time the Chief Ethics Commission did not even start the investigation citing the same argument. 89 A major loophole in the current legislation is the fact that companies acting on behalf of their own interests do not need to register as lobbyists and the potential risks posed by the exemption of direct lobbying activities is vividly illustrated by the case of Gazprom – E.ON Ruhrgas International GmbH. In this case, the Chief Official Ethics Commission seems to have been forced to acknowledge that acts of direct lobbying did not fall in the legal definitions of lobbying despite being widely practised. 81 Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 82 Official website of the Government Lobbying survey conducted by Burson-Marsteller, A Guide to Effective Lobbying, 2013, P. 64, A survey was conducted by Prime Consulting on the request of local media outlet Veidas it does not aim to be sociologically representative, but to rather overview the emerging trends: Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Public comment of L. Vilimas in an interview: Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Prezidentė vetavo pataisas dėl mažesnio alkoholio akcizo ir pailginto prekybos juo laiko (Baltic News Service press release). See: Jūratė Ablačinskaitė. Po prezidentės nepritarimo atviram lobizmui smalsumas, kas yra lobistinė veikla 88 Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Official Annual Report 2012 of the Chief Ethics Commission, p Official Annual Report 2005 of the Chief Ethics Commission, p
GAZPROM – E.ON RUHRGAS INTERNATIONAL GMBH CASE: IS DIRECT LOBBYING STILL LOBBYING? In 2011, three members of the parliament submitted a complaint to the Chief Official Ethics Commission providing that the board vice-president of AB Lietuvos dujos and executive director of E.ON Ruhrgas International GmbH, Peter Frankenberg and Gazprom board vice president, Valerij Golubev, sent out a note to the members of parliament encouraging them to not support the draft amendment of the Law on Natural Gas (that was drafted by the government) thus not applying the respective EU directives. According to the MPs who had submitted the complaint, the official note provided only one side of the information clearly seeking to affect the outcome of the voting on the draft bill, even though the parties had all the possibilities to participate in the legislative procedures drafting the bill before. In a somewhat complicated case related to gas production diversification process, both sides provided lengthy explanations related to the issue of lobbying, but also to gas production diversification as such. In a very interesting decision, the Chief Official Ethics Commission rejected the complaint submitted by the MPs. However, in the final decision, the Commission provided that this was clearly an act of direct lobbying and that the Commission had repeatedly filed notes to the Parliament asking to review the current lobbying regulation in this regard. Since according to the law, such direct lobbying is not lobbying legally speaking, the Commission cannot analyse the case in question, as it may only look into issues related to registered lobbyists, not companies representing their own interests. One of the arguments used by the lawyers of the companies was that the current Law on Lobbying Activities only defines lobbying as an act on somebody s else behalf, thus excluding cases where a representative of a company seeks to influence the decisions in their own interests. This is still the case now as the Law on Lobbying Activities excludes cases where a representative of a company influences decision-making on his/her own behalf from the definition of lobbying activities. 90 DO POLITICIANS LOBBY? In one of the most infamous cases regarding potential undue influence, in 2004, the Parliamentary Anti-Corruption Commission submitted a request to the Chief Official Ethics Commission asking to investigate whether the actions of MPs G. Steponavicius and E. Masiulis had breached the Law on Lobbying Activities and other regulations. According to the Anti-Corruption Commission, these MPs sought to influence the voting of their fellow parliamentarians after discussing certain issues related to regulations with A. Janukonis, a shareholder of the Rubikon Group and board member of UAB Rubikon group, UAB Dalkia Lietuva, AB Vilniaus energija and UAB Litekso (all companies were directly working on energy issues), and acting board member of the Lithuanian Heating Suppliers Association. These discussions between A. Janukonis and the MPs had been taped on the phone and allegedly indicated that these MPs were coordinating their actions following the guidance provided by A. Janukonis, who sought to protect the interests of his business. The Commission explained that while generally politicians activities are excluded from lobbying activities and thus cannot count as undue influence in the light of lobbying, such behaviour does breach the high ethics standards that should be applied to MPs. 93 The above mentioned 2011 survey identified members of parliament and ministers as some of the most actively engaged in lobbying related activities. 91 The interviews conducted for this research illustrated this alarming pattern. Interviewees from oversight and law enforcement institutions noted that politicians often engage in lobbying activities that exceed their constitutional mandate, especially in the municipal councils. For example, according to lobbyist A. Romanovskis, members of parliament often engage in making phone calls for municipalities, councils of the municipalities and assert pressure, declaring that it is all in the interest of the people. 92 The law enforcement institutions representatives noted that politicians in the municipal councils often tend to engage in border line activities that might amount to influencing decisions on behalf of their own private interests or the interests of their acquaintances. Due to loopholes in the Law on Lobbying Activities, the public register of lobbyists only captures a very small share of de facto lobbyists. For example, there are only four registered lobbyists representing pharmaceuticals. 94 According to politicians, experts, oversight officials and even registered lobbyists, the intensity and scale of lobbying by far surpasses the lobbying activities that are officially visible. This grey zone is often mentioned as one of the major reasons why lo- bbying activities are often perceived as being synonymous to corruption. 95 While lobbying targets are not explicitly defined, the law provides that state and municipal institutions must create conditions for legal lobbying activities and state politicians, state officials and civil servants must neither constrain legal lobbying activities nor interfere with the activities of lobbyists lawfully representing the interests 90 The full text of the Chief Official Ethics Commission A survey was conducted by Prime Consulting on the request of local media outlet Veidas it does not aim to be sociologically representative, but to rather overview the emerging trends: Užsiregistravusiųjų lobistų vienetai. Online portal veidas.lt, 17 January Transparency International Lithuania interview with A. Romanovskis, originally aired in October 2013 on Ziniu radijas, transcription available online The full texts of the decisions of the Chief Ethics Commission (2004 /09/03 No. KS-38; and 2004 /09/03 d. No. KS 39) The official register on the Chief Official Ethics Commission Valdelyte E., Slavickaite L m. lobizmo ir lobistines veiklos tendencijos Lietuvoje. Viesoji politika ir administravimas. 2014, T.13, Nr. 1/2014, Vol 13, No 1, P ,
of clients. 96 While the definition of lobbying activities does not provide an explanation, it may be implied that any actor who is engaged in the process of modifying, repealing or drafting new bills is potentially a subject to be lobbied. Unsurprisingly, all the interviewees noted that the public does not have sufficient knowledge of who is lobbying public representatives, on what issues they are being lobbied and when and how they are being lobbied, even more so how much is being spent in the process and what is the result of these lobbying efforts. According to a business survey, businesses and interests groups operating in energy (48 percent), pharmacy (52 percent) and gambling (52 percent) provide the least public information about their attempts to influence decision-making. 97 The list of registered lobbyists is publicly accessible and there is no possibility to register retrospectively (according to the Law on Lobbying Activities, a person becomes a lobbyist after official registration). However, it only provides very basic information. A person who wishes to engage in lobbying activities is obliged to file the following documents and a pre-defined form with the Chief Official Ethics Commission: an application for being recorded in the Register of Lobbyists, a lobbyist s questionnaire and a declaration. The A detailed financial report on the income and cost of political campaigns, a report of the liabilities along with a list of donations and donators has to be submitted to Central Electoral Commission in 25 or 85 days after the results of the election are announced (depending on whether an audit is needed for large donations). 102 This way, donors are disclosed in the general financiapplication to the Register of Lobbyists contains the name and surname, personal number, place of residence and the place of work within the last one year of the lobbyist. If an application is filed by a natural person; the name, registration number, address of the head office; if a legal person files an application; information about the employees of the legal person (names, surnames, personal numbers) who will engage in lobbying activities. 98 The public register only lists the names / titles of the registered lobbyists and the date of recording (and termination or suspension). 99 Other information is included in the reports of lobbyists. 100 The Chief Official Ethics Commission notes that the timeline for reporting by lobbyists poses a separate risk; a concern that lobbyists echo. Lobbyists must file their reports to the Chief Official Ethics Commission on lobbying activities of the previous calendar year no later than 15 February of the current year; the content of these reports is defined in the Law on Lobbying Activities. In the report, the lobbyist is obliged to indicate his/her name, surname (if a lobbyist is a natural person), a name (if a lobbyist is a legal person), the number of the lobbyist s certificate; the name, surname or a name of each client of lobbying activities, personal or registration number, address of a place of residence or the head office; a title of a legal act or a draft of a legal act with respect to which the lobbyist has acted; the lobbyist s income gained from lobbying activities; the lobbyist s expenditure on lobbying activities. 101 This reporting mechanism has been repeatedly identified as inadequate, as it does not offer a timely reporting obligation making it complicated to monitor the activities that are reported in the beginning of the year after more than a year (when the report is filed in February the next year). Lobbyists donating to politicians in exchange for favourable decisions in the future seems to be one of the key corruption and undue influence risks in the legislative process. While there are no separate regulations requiring lobbyists to disclose their donations to politicians or political parties separately, the general requirements apply for financial reports from political parties and politicians. al reports (they are published in separate financial sheets, but are also available in the online search data base). 103 In 2011, donations from legal persons were prohibited and donations by individuals were restricted to independent members of political campaigns only. However, the risk of indirect funding through divisions and branches, other sub-structures or through external entities, which are indirectly related to political parties remains relevant. 104 Many interviewees also highlighted that this is an issue as some interest groups or individuals that are willing to support politicians or political parties, do so by donating to charity funds or related public institutions, etc. Taking into account the above raised issues, oversight of lobbying activities should be extremely important. However, the lack of effective control is a major problem. Control of lobbying is designated to the Chief Official Ethics Commission. It is granted the rights to check lobbying activities, obtain from state or municipal institutions and other persons any necessary information, explanations, orders, decisions and other documents related to the implementation of this law, inspect reports on lobbying activities, and check persons activities if it comes to its knowledge that someone has engaged in illegal lobbying activities Article 11, Law on Lobbying Activities. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Article 17, Law on Funding of and Control over Funding of Political Parties and Political Campaigns. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Article 5, Law on Lobbying Activities. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 98 Article 9, Law on Lobbying Activities. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= The list of registered lobbyists is accessible online: All reports accessible online: The Chief Election Commission online data base allows searching based on the name and surname of the natural person Third Evaluation Round, Second Compliance Report on Lithuania Incriminations (ETS 173 and 191, GPC 2) Transparency of Party Funding Adopted by GRECO at its 60th Plenary Meeting (Strasbourg: GRECO, June 2013) for more also see the policy paper prepared by Transparency International Lithuania in the framework of National Integrity Study in Lithuania Article 13, Law on Lobbying Activities. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=
As the Commission is only designated to oversee lobbying activities as defined in the law, de facto lobbying by actors who are not obliged to register as lobbyists does not fall under its competence. In an interview in 2013, the head secretary of the Chief Ethics Commission, T. Caplinskas, noted that, in reality, the Chief Ethics Commission does not control lobbying as it only oversees the registered lobbyists. 106 According to Lithuanian businessmen, this Commission is not very effective in its role to oversee lobbying activities : only 14 percent of Lithuanian businesspeople think that this institution is performing very well or well in this activity. 107 Liability and sanctions for breaching the Law on Lobbying Activities is provided in the Code of Administrative Offences. 108 However these provisions have never been applied. It might also be noted that currently, only a half of one employee s time (0.5 FTE) is designated to overseeing lobbying in the Commission. At the same time, while criminal liability is possible in cases of trading in influence or illegal lobbying, representatives of the Prosecutors Office and the Special Investigation Service (national anti-corruption agency) claim that they do not have many powers or tools to investigate potential cases of undue influence. The lack of criminal cases related to specifically influencing the legislative process suggests that this is not completely effective either. An effective and operating legislative footprint would add more accountability to the legislative process even with the flawed national regulation. However, the only instrument reminiscent of a legislative footprint is the fact that when official written proposals are submitted to parliament, they are collected and published in a comparative table along with the draft bill. This table, however, does not reflect more than written interactions, nor does it include the proposals submitted to MPs personally. According to some interviewees, such a legal instrument providing information on who has influenced draft laws and to what extent would help to disclose which interest groups are active in certain fields. 109 At the same time, most interviewees noted that such a legal instrument alone would not solve the problem of lack of accountability in lobbying activities and may only be an addition to other reforms and tools. A sound legal framework for access to information is often quoted as an effective measure to manage corruption and add accountability to processes in the public sector. As mentioned above, despite several implementation issues, the legal framework for access to information is sufficient. 110 However, due to the prevailing off the record nature of lobbying, access to information does not offer a significant remedy. INTEGRITY IN LOBBYING Transparency of lobbying must be embedded within a broader public sector integrity framework, which mitigates the risks of conflicts of interest when important decisions are being taken. This research sought an answer to the following overarching questions about integrity: Is there a robust ethical framework for lobbyists (and companies) and lobbying targets in the country and to what extent is it working? Is the onus for integrity placed on both lobbyists and public officials/representatives? The broader landscape for related integrity mechanisms includes the tools for managing revolving doors and codes of ethics for politicians and public sector employees. 106 Online portal veidas.lt. Šešėlinis lobizmas reikalingiausias Seimo nariams? 11 December Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 108 Article 172/25 provides that breach of requirements of the Law on Lobbying Activities shall be fined between 500 and 1000 LTL ( EUR) or, accordingly LTL ( EUR) for a repeated offence. The Code of Administrative Offences. www3.lrs.lt/pls/inter2/dokpaieska.showdoc_l?p_id= Among them, see Transparency International Lithuania interview with A. Romanovskis, originally aired in October 2013 on Ziniu radijas, transcription accessible online. lzinios.lt/lzinios/lietuvoje/lietuvoje-klesti-seselinis-lobizmas/ Law of the Republic of Lithuania on the Right to Obtain Information From State and Municipal Institutions and Agencies, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_ id=471234; Law on Provision of Information to the Public, www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=280580&p_query=&p_tr2=. There is a prohibition on former state politicians, state officials, civil servants or judges from becoming a lobbyist if less than one year has elapsed from the expiry of the term of office or power, or dismissal until the filing of an application for 111 Article 3, Law on Lobbying Activities. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= entering the Register of Lobbyists. 111 However, interviewed lobbyists and representatives of law enforcement institutions noted that since only registered lobbyists fall under the legal definition of a lobbyist, there are no restrictions for former 26 27
politicians to start working in, for example, business associations that engage in lobbying activities and vice versa. The Law on the Adjustment of Public and Private Interests provides restrictions for employment contracts: after leaving office in the civil service a person is prohibited for a period of one year to take up employment as company head (or as head of the company coordinated by this company) or take other senior/decision making positions in such a company, provided that during the one year period immediately prior to termination of his/her service in public office his/her duties were directly related to the supervision or control of the business of said undertakings or the person participated in consideration and making of favourable decisions towards these companies for obtaining state orders or financial assistance in the course of public contests or otherwise. 112 While the revolving door issue was not named as posing a great transparency and accountability threat by most interviewees, some experts noted that even now there are examples where former public officials become, for example, attorneys and thus use their personal acquaintances to understand what is happening in politics. Furthermore, 62 percent of Lithuanian businesspeople admit to having heard of instances where politicians and civil servants took employment in the private sector after serving in the government as an unofficial repayment for favourable decisions. 113 The Code of Conduct for State Politicians names transparency and publicity as one of the main principles of conduct. While there are no direct references to lobbying related activities, the Code of Conduct provides that when making decisions, politicians shall not raise doubts as to their honesty, shall reveal the motives of their conduct and decisions to society, always keep to the principles of openness and publicity, except for the cases specified by laws restricting the disclosure of information, and declare their private interests. 114 Aside from the legal obligations laid out in relevant laws, civil servants are obliged to follow the Civil Servants Ethics Rules. These are broad and only require the servants to adhere to a list of rather declarative principles of behaviour and to act honourably, to not accept any kind of gifts or other remunerations that may cause private-public interest conflicts. 115 Transparency is mentioned as one of the principles on which the Public Service of the Republic of Lithuania shall be based, along with the rule of law, equality, political neutrality, transparency and career development. 116 The Law on the Adjustment of Public and Private Interests provides guidelines for the adjustment of private interests of persons employed in the civil service and the public interests of the community, aiming to ensure that holders of public office make decisions solely in terms of the public interest, secure the impartiality of the decisions being made and prevent the emergence and spread of civil service corruption in the public service. In general, while there are general regulations and restrictions in place, due to the overarching systemic problems in lobbying regulations, integrity in lobbying is not properly ensured. ENSURING A LEVEL PLAYING FIELD BY MAKING ACCESS MORE EQUAL Regulating lobbying transparency and integrity measures are crucial, but they must be accompanied by rules that allow for equality of access to decision-makers, which is essential to fairness and pluralism in the political system. This research asked whether there are enough spaces in the system to allow for diverse participation and contribution of ideas and evidence by a broad range of interests that lead to policies, laws, and decisions which best serve society and broad democratic interests. The findings are mixed in this regard. 112 Article 18, Law on the Adjustment of Public and Private Interests in the Public Service. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Transparency International Lithuania, Business Survey Attitudes Towards Lobbying Activities, (Vilnius: Transparency International Lithuanian Chapter, VILMORUS, 2014). 114 Article 4, The Code of Conduct for State Politicians Article 2, Civil Servants Ethics Rules. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=169819&p_query=&p_tr2=. 116 Law on Public Service. www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id= Only 14 percent of businesspeople thought that the decision-making process is open enough for all interested groups to be able to engage. They suggested that when it comes to arranging meetings on decision-making with politicians, it is easiest for associations (43 percent), registered lobbyists (34 percent), trade unions (27 percent) and public relations agencies (25 percent) 28 29
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