POTENTIAL CORRUPTION RISKS RELATED TO LOBBYING

There are perceptions of corruption in the interaction between lobbyists and those lobbied. But equally there is also evidence from both lobbyists and the lobbied as to the professionalism of the lobbying industry, and the ethical conduct of both lobbyists and the lobbied. The two viewpoints are not inconsistent. In any endeavour, the activities or perceived activities of a few individuals can affect the reputation of a whole industry, even if the actions of the majority are above reproach.

Widespread concerns about lobbying have led to adverse perceptions as to the impact of lobbying on government decision-making. Public perception of a lobbyist is that private advantage is being promoted at the expense of the public interest. Even without evidence of actual corruption, adverse perceptions can have a corrosive effect on public confidence in government. These perceptions, however, do not exist in a vacuum; they are created and reinforced by evidence of actual corruption in lobbying activity. In other cases, evidence has emerged not of actual corrupt behaviour but of conduct that falls short of the standards of probity and ethical conduct expected by the broader community. As with most activity involving interaction between private and public interests, corruption risks exist in lobbying, and these risks can lead to corruption. The risks also serve as a foundation for adverse community perceptions of lobbying.

Corruption risks

Corruption risks arise from the way in which lobbying can be conducted, the nature of the lobbying activity, and the background of the person undertaking the lobbying.

1. Lack of transparency: Lobbying is often conducted in private. Whether intentional or not, this can mean that the lobbying activity is effectively secret, since there may be no mechanisms in place for information on the activity to be made available to members of the public. This lack of transparency in the lobbying process fuels adverse perceptions. The public perception is limited because lobbying activity occurs in private. The limitations on public accessibility mean that there are fewer educative mechanisms available for public consumption, evaluation and interpretation which in turn creates a limited and thus negative perception of a valuable political activity. A lack of transparency in any process involving government decision-making can be conducive to corruption. The corruption risk is exacerbated when secrecy of the lobbying activity itself is allied with secrecy surrounding the basis on which a decision has been made. When information on lobbying activity is not available to the public, those engaged in the lobbying activity can make representations that other interested parties are not in a position to address because they are not aware that they are being made. This can lead to false or misleading claims being made by a lobbyist that may adversely affect the exercise of official functions by the public official being lobbied. Private meetings that are kept from public disclosure also give rise to the perception, sometimes backed up by reality, that both parties have something to hide and that decisions are not being made in the public interest. The corruption risk needs to be addressed by ensuring that there is an adequate mechanism in place to document that the meeting took place and document the result of the meeting, and that this information be available to the public. The lack of effective means to access information on lobbying activity involving a public official is a strong corruption risk.
2. Inadequate recordkeeping: If records of communications between lobbyists and public officials are not made or adequately recorded, there may be no way for a third party (not present at the time) to ascertain what was communicated. This means that persons in a public sector agency where a decision is to be made may not be aware of the full details of the lobbying activity. The same applies to persons outside the agency who are attempting to ascertain what lobbying activity occurred. The making of accurate records is an important accountability mechanism. Accurate recordkeeping makes it less likely for a lobbyist or the lobbied to hide or misrepresent the lobbying activity. An unscrupulous lobbyist is less likely to make inappropriate or improper proposals if they know that an accurate record of the meeting will be made. A public official is less likely to be receptive to such proposals or to directly or indirectly invite such proposals if they know the meeting is being recorded. The presence of another public official who is responsible for recording the activity taking place can also be an important corruption prevention mechanism. The presence of such a person can act as a restraint on improper conduct and can ensure that an accurate record of the lobbying activity is kept. The making of accurate records is only one part of good recordkeeping. The other essential part is to ensure the records are properly maintained and are accessible to those who are entitled to see them, including those within the public sector agency that has been the subject of the lobbying activity. Records that cannot be found when needed do not perform an adequate corruption prevention role.
3. Involvement in political fundraising: Corruption risks are heightened when the lobbying of politicians is combined with the lobbyist or the lobbyist’s client making donations to the politician or the politician’s party or engaging in fundraising for the politician. Obvious corruption will occur when a decision is made in return for a political donation or when the eventual decision is influenced by such a donation. Corruption will also occur when a politician refuses to see a lobbyist or to make a decision unless a donation is made. Even when there is no intention to act corruptly, the nexus between lobbying and the making of a donation or engaging in fundraising creates perceptions of corruption that are difficult to counter.
4. Gifts and benefits: The giving of gifts or provision of other benefits to a public official by a person seeking a favourable decision from the public official poses an obvious corruption risk. Such conduct can involve bribery or an attempt to bribe for which there is sanction under criminal law. In other cases, gifts or benefits may be proffered not for the purpose of influencing any particular decision but rather to develop a relationship, which can be subsequently exploited to the giver’s advantage.
5. Difficulty of access: The complexity of government and the decision-making process can mean that ordinary citizens have little prospect of navigating the regulatory or bureaucratic maze to be heard. A complex process can defeat attempts by the wider public to be involved in important decision-making. The corruption risk is that those who are powerful or wealthy enough to understand how government works or to engage the services of someone who can navigate the decision-making maze on their behalf will exploit their position to their advantage and to the detriment of the public interest.
6. Former public officials acting as lobbyists: Corruption can arise when former public officials, including politicians, political staffers and senior public servants, who have become lobbyists, use relationships they developed when they were public officials to gain an improper advantage. A related corruption risk arises when former public officials, who lobby in the public sector area in which they were previously employed, improperly use confidential information to which they had access in their public career for their own benefit or that of their clients. Many jurisdictions seek to address these corruption risks by restricting post-separation employment for classes of public officials who leave public sector employment.
7. Exploitation of privileged access: Lobbyists of all types tend to accept that relationships with public officials matter and are helpful in obtaining access. They stressed, however, that access to a decision-maker does not guarantee a favourable decision. Having access to decision-makers does not imply that lobbyists are acting improperly or corruptly. Building relationships is part of their day-to-day work. There is, however, a risk that some lobbyists may build up relationships with public officials or exploit existing relationships in order to exert improper influence. The problem arises when the lobbyist is someone who claims to have privileged access to decision-makers, or to be able to bring political influence to bear. The use of such privilege or influence is destructive of the principle of equality of opportunity upon which our democratic system is based. The purchase or sale of such privilege or influence falls well within any reasonable concept of bribery or official corruption.
8. Payment of success fees: Success fees can be divided into two categories. The first involves a lobbyist who undertakes to engage in lobbying for a client on the basis that they need be paid their normal fee only in the event that their lobbying is successful. This type of arrangement is often referred to as a contingency fee. The second category involves a client who agrees to pay a lobbyist an additional sum of money on top of the lobbyist’s normal fee by way of a bonus, in the event the lobbyist is successful. Both categories pose corruption risks. Any incentive-based monetary payment for lobbyists such as success fees has the potential to create a higher corruption risk environment than a fee for service approach. This is because success fees change the incentive from simply doing the job to achieving the outcome in order to obtain payment from the client. Some jurisdictions, have addressed this corruption risk by banning success fees.

 Addressing a dilemma

 The adverse perception of corruption and the existence of corruption risks create a dilemma. While lobbying has become the subject of suspicion and complaint, sometimes backed up by evidence of corruption, it can also be an important and valuable contribution to decision-making processes. There is considerable evidence that demonstrates that lobbying is not only an essential part of the democratic process but that it can positively enhance government decision-making. It does this by ensuring that arguments being put forward are well researched, clearly articulated and address relevant government concerns. Lobbying assists government to consult widely in a timely manner, and better understand the potential implications of its decisions.