INFLUENCE PEDDLING/TRADING IN INFLUENCE

Influence peddling or trading in influence occurs when an individual who has real or apparent influence over someone else another person exchanges their influence for undue advantage. There are demand and supply sides to this act. The person holding an influential position solicits benefits in exchange for using his or her influence to unduly and unfairly advance the interests of a select third party. An influence peddler receives or accepts the benefit (usually a bribe) from the third party so that he or she can exert her/his influence on another party’s decision. 

Influence peddling is the act of promising or giving a benefit or a payment to a person who has a real or potential influence on the decision-making of a public official. This act is done with the intent that the latter will persuade the decision-maker to act in a desired manner. Influence peddling can be considered a form of bribery. The beneficiary does not necessarily have to be an official and cannot make the decision, yet they hold a prominent position with the power to influence the decision-maker. Trading in influence is considered a violation as a person influencing the decision is seeking an undue advantage, thus influence peddling is different from lobbying or advocacy which are considered legal activities.

Influence peddling is the act of promising or giving a benefit or a payment to a person who has a real or potential influence on the decision-making of a public official for the benefit of a third party. On the other hand, lobbying is the action of influencing policies in favor of a particular cause or outcome. The difference between lobbying and influence peddling is the means by which influence is obtained. One method is via an undue benefit such as bribery or another advantage while the other isn’t. The other method is for personal benefit while the other is actually for the greater good. However, the line between the two activities can get blurred. Even if legal, lobbying, if not kept within the guardrails of transparency and integrity, can become corrupt and distortive, such as when lobbyists hold disproportionate levels of influence.

Trading in influence, or influence peddling, is not something new in the debate on corruption. It found its way in the Council of Europe's Criminal Convention on Corruption (hereinafter ‘COE Convention') as early as 1999. The principal aim of the Convention is to develop common standards concerning certain corrupt offences, although it does not prescribe a uniform definition of corruption. By harmonising the definitions for specific corrupt offences, it aims at meeting the requirement of dual criminality. The COE Convention has been ratified by 43 States, over one fourth of these States have made a reservation against the undertaking to introduce criminal provisions for trading in influence. Among these are the United Kingdom, Denmark and the Netherlands.

The COE Convention describes trading in influence in article 12 as: the intentionally, promising giving or offering, directly or indirectly, of any undue advantage to anyone who asserts or confirms that he or she is able to exert an improper influence over the decision making of any person, whether the undue advantage is for himself or herself or for anyone else, as well as the request, receipt or acceptance of the offer or the promise of such an advantage, in consideration of that influence, whether or not the influence is exerted or whether or not the supposed influence leads to the intended result. One fourth of the European States have reserved the right not to establish as a criminal offence the conduct referred to in this article. Those States which have made these reservations are criticised by the Group of States against Corruption (hereinafter ‘GRECO’), which monitors States’ compliance with the Council’s anti-corruption standards, for not implementing the provision in a satisfactory manner.

States’ arguments for their reservations are fourfold.

The first argument is that some States have similar provisions in place which they regard as sufficient in dealing with trading in influence. Germany does not incriminate trading in influence but German authorities suggest that some offences like “breach of trust towards the enterprise” may, to some extent, allow addressing this kind of criminal behaviour. The United Kingdom’s 1906 Prevention of Corruption Act, describes as an offence “an agency relationship between a person who trades his influence and the person whom he influences”. The Dutch authorities are of the opinion that at that moment the regular bribery provisions – whether or not in the form of an attempt or in combination with the forms of participation– already sufficiently provide for adequate protection against unauthorised and actual exertion of influence on the administrative system and no separate offence needs to be established in order for this to be a criminal offence. The Danish’ view is that trading in influence is considered to be partly covered by the general rules on complicity in conjunction with private sector bribery. Swedish authorities declare that most cases of undue influence of persons covered by article 12 of the COE Convention are already criminalized under the provisions of active and passive bribery.

The second argument given is that the provision could affect acknowledged lobbying activities. Trading in influence is not explicitly covered by the law in the United Kingdom as it is believed that such a criminalization could affect acknowledged lobbying activities. The Dutch authorities maintain that certain forms of influence (whether financial or not) over decisions of public officials or politicians may be lawful, for instance where representatives of interest groups perform lobbying activities. The bounds of propriety are only overstepped, when the lobbying or the attempt to exert influence results in holding out the prospect of specific advantages to public officials who are involved in the decision-making process. To regulate this matter would encroach upon legitimate lobbying and free speech. Swedish authorities regard the situations that might not be covered in current legislation to border on lobbying. Lobbying is not considered illegal, but provides an opportunity for NGO’s and interest groups to exercise political influence. A criminalization of trading in influence might thus come into conflict with the fundamental right in a democracy to influence people in power or others through exercising the right to freedom of expression.

The third argument relates to the complicated structure and lack of clarity of the provision. The Danish authorities’ main reason for not criminalising trading in influence as a separate offence is the complicated structure of this offence. In its evaluation, authorities do not explain what they mean by this. In the view of the Swedish authorities, neither the Convention, nor the Explanatory Report clearly define “undue influence”, against which background the authorities find it difficult to provide a precise definition in criminal law of the acts described in article 12 of the COE Convention.

A fourth argument for making a reservation to article 12 COE Convention is specifically given by French authorities and concerns the reciprocal aspect. Businesses and nationals of Member States which have made a reservation, have an advantage in competition now that this form of influencing decision making is not a criminal offence. In order to minimise this ‘unfair advantage’, France wants to keep this reservation to allow the influence by a French party on the decision making of a foreign public official or an official or a member of a foreign public assembly. France has criminalized active and passive trading in influence on national decision making

GRECO has stressed that “the acknowledged forms of lobbying do not fall under the notion of “improper” influence which must contain a corrupt intent by the “influence peddler”. The provision aims at covering a large variety of situations. GRECO noted that States could think about certain phenomena which may qualify as trading in influence (for instance with the involvement of elected officials); the introduction of criminal provisions in this area would thus fill a gap. GRECO also recalls that the establishment of trading in influence as a criminal offence permits the authorities to reach the close circle of officials, or the political party to which they belong, and to tackle so-called “background corruption”, which undermines the trust of citizens in the fairness of public administration.

States have not criminalized trading in influence according to the requirements of article 12 because they feel that it does not offer a clear, solid and efficient description of trading in influence. Most States try to deal with the phenomenon via the criminalization of other offences such as bribery. The fact that from the provision it remains unclear what can be regarded as justified and unjustified influencing strengthens their belief to keep their reservation to article 12.

The difficulty in criminalising trading in influence is that the corrupt act is not obvious now that influence is bought and not a concrete decision. Whether an official is influenced is often difficult to proof because the causal connection between the actor who acts and the actor who is being influenced is not so clear and remains difficult to investigate and proof. Whether or not Member States agree that a general criminalization of trading in influence and specified legislation is the most effective instrument, the importance of enforcement of anti-corruption legislation by stating “regulation in the absence of enforcement is meaningless at best, it is a political exercise that does not serve the citizens of a State well.