The Jeffrey Archer lookalike was in jovial mood when he let his lunch companions in on his secret. If he were to be employed to change laws in the European parliament, he would have to take precautions to avoid suspicion.
“The problem is, a lobbyist is a lobbyist, yes,” he said in a soft Austrian accent. “And a lobbyist has some special smell. It’s true to be said I am myself something like that. So we have to be very careful.”
He had every reason to take care. Ernst Strasser is a member of the European parliament who moonlights as a lobbyist. A former Austrian interior minister, he claims to be making half a million euros (£436,000) a year from private fee-paying clients on top of his MEP’s salary.
At lunch with him in Brussels were two lobbyists from an British company who were about to hire him as their man in parliament. They were, in fact, undercover reporters.
Over the following months Strasser explained how he would pose as a concerned politician, when he was actually secretly lobbying for clients.
Earlier this month he used this tactic when he was hired by the undercover reporters to amend new banking laws. A change was made and Strasser’s job was done. “This is very good,” he said.
In an eight-month Sunday Times investigation, we found that Strasser was one of three MEPs who were prepared secretly to change legislation for money. The two other MEPs’amendments now appear on the parliament’s books as the reporters had written them.
The cash for amendments scandal is set to spark one of the biggest crises in the parliament’s 53 years. This weekend Diana Wallis, vice-president of the parliament and a Liberal Democrat MEP, will launch an official investigation.
Although, the parliament’s rules are notoriously lax, they do say “members of parliament shall refrain from accepting any … gift or benefit in the performance of their duties”.
The European parliament has grown from a discussion forum to one of the most powerful legislative chambers in the world. Split between bases in Brussels and Strasbourg, it scrutinises about 100 pieces of legislation each year.
Big business is taking an increasingly close interest, and the parliament has become a magnet for lobbyists. The number of accredited lobbyists has grown from 3,500 to 5,000 in the past five years.
Tomorrow SpinWatch, the transparency campaigners, will publish a report showing how reforms to safeguard consumers are being blocked by lobbyists in Brussels working for the banking industry.
The main role of an MEP is to amend legislation initiated by the European commission. On average a piece of legislation attracts 50 to 100 amendments, but a hedge fund directive last year amassed more than 1,600.
“Research shows that two-thirds of these came from the hedge fund industry or lobbyists working on their behalf,” said Olivier Hoedeman of the campaign group Corporate Europe Observatory.
Last summer two separate sources told this newspaper that lobbyists were suspected of going even further and paying MEPs to help change laws in the parliament. If this were so, it was not obvious in the parliament’s register of financial interests, which is treated with disdain by many MEPs.
Posing as a lobbying firm and later as a Russian investment company, the reporters contacted more than 60 MEPs asking if they would be interested in a paid role as an adviser. Many did not reply and others had their assistants issue a curt rejection to the proposal. However, 14 MEPs expressed an interest and met the reporters.
Among them were two British MEPs who seemed keen to work for the fake lobbying firm but became suspicious, and discussions went no further. However, three of the MEPs all indicated they would be happy to help our fictional lobbying firm but became suspicious, and discussions went no further. However, three of the MEPs all indicated they would be happy to help our fictional lobbying company to amend laws. They then went on to do so.
The former Romanian deputy prime minister Adrian Severin had been quick to his feet in a parliamentary debate about censuring Russia for corruption and human rights abuses.
“We’d better continue the dialogue with Russia and stop listening to the assumptions and rumours spread by lobbyists,” the MEP thundered.
Yet on that very day in mid-February Severin was working hard to amend a banking law for one of those supposedly untrustworthy lobbyists. His fee was €4,000 (£3,500) a day.
Severin, 56, is a powerful figure in the parliament. He is a vice-president of the Progressive Alliance of Socialists and Democrats, the second largest group with 186 MEPs. He was also in the running to be the first EU high representative for foreign policy before Britain’s Baroness Ashton got the job.
The undercover reporters first met Severin in a dark corner of the members’ bar overlooking the parliament’s chamber in Strasbourg. They explained they wanted to hire an MEP for their advisory board, to help clients concerned about the impact of new legislation. If Severin took the job, he might be called upon to help change legislation. “I know what you need and I think I can provide you with what you need,” he responded.
It was agreed he would be paid €100,000 (£87,300) to attend the advisory board six times a year. He could also claim a consultancy fee of €4,000 a day for the work he did within parliament.
The work would be registered in his financial declaration but Severin said he would disguise the true amount by only disclosing how much he was paid for one meeting. “The amount looks less because you don’t tell them how many meetings you have per year,” he said. All correspondence about the work would be through his personal email.
In early February, the reporters asked him to help change part of the Deposit Guarantee Schemes directive, to delay the payout to customers if a bank went bust.
Severin agreed to do the work. At a meeting in his office in Strasbourg he said the amendment would stand more chance of becoming law if he found an MEP “insider” on the relevant committees — legal affairs or economic and monetary affairs — to table it for him.
However, the deadline was tight and he offered to put it down himself as a last resort. “The least we could do is to table an amendment by myself. So this could be done,” he said, adding later: “It’s much better to get somebody else to do it and I hope that I could get somebody.”
It proved difficult to find a socialist colleague to table the amendment because it was against his own group’s policy. “[The group] are more inclined to protect the customer rather than the banker,” he admitted.
Still, he was being paid and he found a way. On February 19 he emailed the reporters: “Just to let you know that the amendment desired by you has been tabled in due time by an EPP [European People’s party] MEP.”
The MEP was Sebastian Bodu, a vice-chairman of the legal affairs committee who is also its only Romanian. Severin said Bodu had been persuaded by the power of his argument.
Severin: Eventually he [Bodu] understood and he embraced the idea, he thinking that it is basically a correct thing, not doing it just because I asked him to do it.
Reporter: Did he understand that you were doing it on behalf of a client?
Severin: No. I didn’t say anything.
Earlier this month Severin sent the reporters an invoice for “consulting services concerning the codification of the Directive 94/19/EC, Directive 2009/14/EC and the amendments thereto”. The “amount due” was €12,000 (£10,500) for three days’ work.
When confronted by this newspaper 11 days ago, he said he had checked with unnamed parliamentary officials and had been told it was acceptable to work for the fake lobbyists. “I didn’t do anything that was, let’s say, illegal or against any normal behaviour we have here,” he said.
Contrary to the account he gave to the undercover reporters, Severin claimed he only asked Bodu if he was aware of the problem. He was then “surprised to learn he was already tabling an amendment”.
Bodu confirmed that Severin had spoken to him and “expressed his will”, but said he already had it “in mind” to make the changes suggested.
By the time Severin had tabled the reporters’ amendment, another MEP had already put down a second amendment written by the reporters.
On February 2, Zoran Thaler, a Slovenian MEP and former foreign minister, strode into the Conrad hotel in Brussels to dine with the reporters and a pretend Russian client. Thaler, 49, is a former head of a phone company who still dabbles in business as a partner in a €3m Slovenian restaurant and estate.
In a phone call the week before the dinner, he had confirmed his interest in joining the reporter’s advisory board for €100,000 a year. However, he did not want anything on paper and asked for the money to be routed through a London firm to keep it secret. “There is no way that I disclose this,” he said.