A few weeks ago, the European institutions were shaken by a series of events which, at first sight, could constitute the plot of an institutional thriller. Indeed, Dalligate is a test of strength for parliamentary oversight of the Commission, Maarten Hillebrandt argues.
On 16 October, after an investigation into allegations of corruption conducted by the European Anti-Fraud Office (OLAF), the Maltese Health Commissioner John Dalli was asked to resign. The European watchdog acted on a tip from the tobacco producer Swedish Match, and its Director, Giovanni Kessler, called it a “classic” case of lobbying-turned-into-corruption. Undisclosed sources suggest tobacco interest beyond the Swedish producer may be implicated. When the Head of OLAF’s Supervisory Board, Christiaan Timmermans, stepped down within a week after Dalli’s resignation, this further added to the confusion. As an anonymous MEP stated in the EUobserver “There is a feeling that there is something politically delicate for the Commission in this whole business”.
Dalli’s fall has occurred in the context of a sensitive political dossier attracting the attention of both corporate and public health interests: a draft anti-tobacco law. The opacity which characterises the affair has already led it to be called ‘Dalligate’, and has plunged Commission President Barroso into a battle on two fronts: one with Dalli who seeks to clear his reputation; another with the European Parliament (EP), which wants to establish the facts before formulating its own response. Both ‘fronts’ claim a right to know. Based on the facts of the affair and its legal context, I argue that the principle of transparency is unduly restricted right where it is most needed: in the EP’s exercise of parliamentary oversight.
Facts and rumours
The publicly available version of the facts concerning Dalligate is as follows. In March 2012, contacts were established between the Maltese businessman Mr Zammit and the tobacco firm Swedish Match. They discussed the possibility of setting up a meeting between Swedish Match and Dalli. Zammit would be paid a fee of €60 million if he succeeded in persuading the Commissioner to change the draft directive. It remains unclear which of the two parties approached the other; it is also unclear whether Swedish Match acted of its own accord, or whether other tobacco firms were also involved. What is certain however is that Swedish Match reported the case to the Commission in May.
An internal investigation was started shortly thereafter. At the end of July, Barroso first met Dalli to discuss the matter. Months later, on 16 October, Barroso had another meeting with Dalli, at which he asked him to resign. Barroso had two witnesses present at that meeting who testify that Dalli resigned on the spot: the DG of the Legal Service, as well as Barroso’s Chef de Cabinet. OLAF subsequently forwarded the investigative report to the competent Maltese judicial authorities which is investigating the matter further and may initiate criminal proceedings.
These initial events sparked off a chain of reactions. Barroso immediately entrusted the Health portfolio to Vice-President Šefčovič, while preparatory work on the tobacco directive was put on hold. On 22 October, Dalli defended himself in a letter to the EP, denying all allegations. Two days later, he claimed to have been forced to resign, and blamed Barroso for failing to inform him of the grounds of the accusation. He furthermore categorically denied having been offered “…any money by anyone to alter any issue that I have been responsible for directly or indirectly…”. That same day, Timmermans stepped down as Head of OLAF’s supervisory board. The initial reason provided, failure to properly inform the Board, was later replaced by undisclosed ‘personal reasons’.
Meanwhile, the EP took steps to obtain the OLAF report. Michael Theurer, the liberal chairman of the EP budgetary control committee, declared that a confidential meeting with OLAF Director Kessler did not clear up the situation. In the meeting, Kessler provided only hypothetical scenarios, refusing to go into the actual facts of the investigation. The Socialists and Democrats group (S&D), have also increased pressure on the Commission, holding that “[t]here must be a general clarification and it must come from Kessler and Barroso himself”, and the EP’s President Martin Schulz has demanded an explanation from Barroso. Other MEPS also insisted on full access to the report.
Barroso’s response to the affair has been to attempt to control the damage to the Commission. In a letter to Dalli, he asserted that Dalli’s decision to resign was irrevocable, and rebuked him for damaging the Commission by making insinuations when he could have reacted to OLAF’s investigation at an earlier time. Through his spokesperson, Barroso further maintained that access to the dossier could not be provided: “It’s not a question of the Commission refusing access to the report, it’s a question of the Commission fulfilling legal obligations.”
Dalli and his right to know
Barosso’s formalistic line of reasoning warrants closer consideration in light of the claims for access brought up by Dalli and the EP.
First, there is Dalli’s claim that he should have been notified of the grounds of Barroso’s request for him to resign. A parallel can be drawn with the Franchet and Byk affair. Mr. Franchet and Mr. Byk were top civil servants working at Eurostat, who became implicated in an OLAF fraud investigation in 2001. They requested access to the investigative report and to related communications based on Regulation 1049/2001 on public access to documents. While they received the investigative report soon after it was completed, certain annexes were excluded, and they were not granted access to the additional documents requested.
The Franchet and Byk case on access to documents that followed established a blueprint for the access rights of implicated parties in an EU internal investigation. The Court pointed out that the applicants’ reliance on 1049/2001, a Regulation on public access, requires an erga omnes reasoning, meaning that the applicants be treated in the same way as any other person. Nevertheless, the Court held that OLAF had not respected its duty to consult with the relevant national authorities on whether disclosure would be problematic. Furthermore, the Commission failed in all but one instance to establish a specific, reasonably foreseeable risk pertaining to the investigation, in disclosing the documents, as 1049/2001 requires. If the Court would also have found an overriding public interest in disclosure, it might have required all of the requested investigative documents to be made public; however, it did not.
In a subsequent case, Franchet and Byk sued the Commission for having breached the presumption of innocence. Although many of the case’s facts differed from that of Dalli, there are some parallels. Dalli decided to resign of his own accord, to avoid being fired. This allowed the Commission to circumvent a conflict between the required presumption of Dalli’s innocence and the political tenability of his office, nor did it have to consider disciplinary action – two issues that led the Court to chastise it in the Franchet and Byk case. Of course, the extent to which Dalli resigned freely (rather than being forced to) is a separate matter that remains open for debate. What is important to note here, is that, as the Franchet and Byk case law indicates, Dalli can secure access to the relevant documents even without an invocation of Regulation 1049/2001, relying merely on his right to be heard guaranteed in the Terms and Conditions of Internal Investigation (Art. 4) and his right to an effective defence in the European Charter of Fundamental Rights (Art. 48).
Parliamentary oversight: making institutional democracy work
Although Dalli’s legal position seems sufficiently protected, the overarching problem of Dalligate is of course the fact that those who were not directly involved don’t know what exactly happened. Did Dalli, OLAF, or the Commission at any point overstep their prerogatives? Arguably, Dalli’s position is a matter for the Maltese Court, if and when a case gets to it. Beyond the individual legal position of Dalli is the question of institutional accountability. In an EU that values democratic checks and balances highly, it seems crucial that the EP should be informed about the affair as completely as possible and in a timely manner in order to prevent an accountability gap.
OLAF spokesman Johan Wullt recently expressed the view that it may be possible to grant public access to the report. In his view, a disclosure is possible where an overriding public interest exists, as stipulated by Article 4(2) of Regulation No. 1049/2001, provided that the provisions of Regulation No. 45/2001 on the protection of privacy are respected. It can be quite convincingly argued the resignation of a Commissioner, certainly where it occurs under controversial and contested circumstances, amounts to such a public interest. Equally, it seems appropriate that the privacy of the parties involved be interpreted narrowly given that what is at stake are possible power abuses occurring within the exercise of a public office. Furthermore, the EP acts as an institution that legislates on the basis of proposals prepared by the Commission. It is therefore imperative that it has full access to any information that could affect the Commission’s legislative proposals. No matter how the accountability and democratic relations are conceived, the EP should be informed as directly and exhaustively as possible about whom the Commission hires and fires – a point all the more pressing when it concerns irregularities of the nature that Commissioner Dalli stands accused.
An interpretation that protects the investigation that is still ongoing in Malta is more realistic. Until the case has been closed, the Maltese judiciary will not provide access to the file. In Franchet and Byk the Court took a line that to some extent supports this interpretation, by finding that the ‘widest possible access’ to documents was not undermined by non-disclosure of investigative documents so long as procedures at the national level were carried out within a “reasonable period”. In the case of Franchet and Byk, the Court found more than six months to be a reasonable period; hence, the EP might need to be patient before it is able to get access under Regulation No. 1049/2001.
Yet the Court indicated another line of reasoning by which direct parliamentary access would be possible – ironically it did so in exactly the case that the Commission cites to support its view that its hands are tied. With OLAF’s Franchet and Byk investigation finalised, and proceedings ongoing at the national level, the Court held that the Commission was free to share the details of the investigation with the EP without being obliged to consult with the parties involved, since it had not drafted the document itself, and it did not adversely affect the position of the investigated parties. This turns the question of immediate parliamentary access into one of privileged parliamentary access as a matter of inter-institutional cooperation rather than of public access under Regulation No. 1049/2001.
What does all of this mean for the principle of transparency in the EU? In legal terms, public access may well be problematic. Yet, the Commission, contrary to what it argues, is in fact free to provide the EP with all the Dalligate-related documents that it requires, including OLAF’s investigative report. Whether the Commission is willing to do so in practice is another question. The EP should flex its muscles and insist that the Commission does so if it takes its role as an accountability forum seriously. Dalligate is nothing less than a test of its real world powers of parliamentary oversight.
Maarten Hillebrandt MSc is a doctoral researcher at the Amsterdam Centre for European Law and Governance. His personal page can be accessed here.
This piece was originally posted on the ACELG blog.