We continue where we left of yesterday. A conversation with a lobbyist about the culture of lobbying, moral guilt, life in Brussels and more. You can read part 1 of this interview here.
Was there one specific moment that made you decide to step out?
There was not one specific moment. I had set an ultimatum for myself. If it’s not improving, I thought, I would go looking for something else. At first, I didn’t find anything. I was offered a couple of jobs as well, but rejected them. In the financial world you have a couple of organizations where heavy conflictual situations are not part of the daily routine. The world of creditcard companies for instance is completely different than the world of investment banks who are in the business of making money with money. On a certain moment I just stepped out. My backup plan was to pick up my studies again. In the end I found my spot at an organization with refreshing ideas.
How would you describe the lobby culture in the financial world?
It’s changing, but within the financial world you have a lot of alpha males with high levels of testosterone. Its a certain character of people. When you look at backgrounds in terms of education its quite arbitrary. People start working in the business when they are 25 years old and their salary is high. You go home with the idea that you’ve lost 1 billion Euros, but can compensate it by making the same amount next day. You lose every feeling of its value, of what a society should be and what important is in life. Its about making money. The bonuses they receive are not particular spend wise, so to say. At an investment bank the formula is simple. Bonuses are divided according to three factors. Yourself, the team and the company. Very meritocratic. Often 30 procent is for the individual. It stimulates the competition. It influences the atmosphere. Not meant in a positive way.
Is the atmosphere you are describing acknowledged by the people themselves?
Oh, yes. They are proud of it. They all go to the same clubs in London. And on a certain moment you are send home because you’re fired. Then there’s a group of headhunters dancing around those people. They make 50.000 Euros a year searching for folks in their late twenties to hire them for another bank. Its not that people get shaped by the culture. They welcome it, intrinsically. You can argue whether it has to do with high levels of testosterone, assertiveness or a bad youth.
If I look at my colleagues, in their late thirties, they handle the culture in a positive way. Some have a big bank account, some have spend most of the money. You have to acknowledge that it’s a good feeling if you are 30 years old and you have paid off the mortgage on your house. Offcourse not alle those people like this lifesyle. You also have folks who just rent an appartment of 500 Euros and are okay with it.
Is it a male world?
Sure. Especially on the trading floor. You often hear the argument that if more females had worked on the floor, the crisis wouldn’t have been this severe. Public affairs on the other hand is a world where a lot of females are working. That counts both for Brussels and inhouse jobs. Approx. ⅔ is female out there.
You also have a lot of firms that offer training courses for the lobby industry, right?
Yes. Generally speaking, you have two kinds of clients. Subcontractors and inhouse. The latter ones let you do some preperation work like monitoring, making appointments etc. They have their own people to finish the job. Sometimes, especially if they are Americans and cannot fly to Europe all the time, you can do some big work for them. I know some people who have different business cards, but thats a minority of people.
The big companies have their own teams and fall back on the umbrella organization. If they are not satisfied with the work they deliver, they approach a consultant. The Federation of Banks is huge in Brussels. Its the Grand Old Lady of Lobbying. 50 Lobbyists work for all the approx. 8000 banks in Europe. If you are a relatively small bank, you have to make sure you have your own man in Brussels. If you do not have your own contacts, you lose the battle. Really small banks have no money for their own lobbyists. They fall back on the Federation.
Those banks are gambling on different horses with all kinds of information. You also have companies who work with three or four consultancy firms to make sure they get the right information. One of the positive notes on the lobby and PR sector is that the sector and its budgets have been growing enormously. If you look at the big companies in the transparency register, some of them are not making big profits, but the majority of them show growth and some of them even doubled their budgets. It’s now or never. If you can’t sell your case right now, you are worth nothing.
Less transparency means more employment and more income for lobbyists..
Yes, and then you mention something what we call ‘grey information’. Ironically, more and more often this kind of information can be found on the internet. Think about documents, meetings of certain Commissions, webstreams. I do not talk about leaked / illegal information, but general information you can get hold off because somebody in your network knows where you can find it. Or they know how you should read certain documents.
If I work inhouse, I don’t need this kind of information. But there is a huge market for ‘knowing what’s going on’ and ‘understanding what ‘s going on’ and incorporating that knowledge into the processes of your clients and business. ‘Come on board of our helicopter, we are making a trip to Strasbourg.’ Its funny how much time CEO’s and CFO’s of big corporations spend on this ‘knowing and understanding what’s going on’ business if you look at their salaries.
As a simple consultant, I often indrectly had contact with CEO’s. Now we all call them CRO’s, Risk Officers. They lead the law departments and the central lobby. European legislation and legislation in general was seen as a change. Supervision on banks is a form of risk right now. A form of expenses. Thats the reason why lobbyists have such a negative outlook on legislation. They want to stop it. Everyday a lobbyist can postpone legislation, he earns a million more for the company. Their own bonuses continue as well. Its a game of delaying. A couple of months more, a year more, two years maybe. Its a game.
The CRD directive is a good example. It starts on januari 2014, but it was on the edge of delay. Behind the scene, the political process is frustrated to the maximum with the purpose to miss deadlines. There’s so much money involved that expenses of 10 million on a certain lobby is normal business. That’s the reason why the business is still growing.
What’s the ultimate goal in the work you are doing right now?
The ultimate goal is to reach a stage where the financial world works for society again and not the other way around. You do not succeed in that task just to lobby a bit or make minor changes in legislation. You succeed in first creating a vision on where the financial world should go to. We are working on that right now. It’s difficult, because we try to be politically neutral while working on it. We will not reject capitalism.
First, we should define steps where to go to and lobby for these goals. Thats where we are working on for a couple of years now. How do these initiatives fit in to a larger strategy? We communicate these kind of questions and subjects to MEP’s and members of the Commission. You talk about subjects like splitting up banks. That should happen right away, but there is still a lot of discussion about it. There is even no proposal yet. Other activities like speculating on food derivatives behind the comma should be banned. Maybe anti capitalistic for some, but it’s simply choosing between the costs and the benefits on damaging our society on the one hand and private income on the other hand. If you do not split banks, the taxpayer will be punished in the end. If this takes 10 years or more, we will arrive at a stage where the enery of telecom sector is right now. You will have Deutche Bank or BNP Paribas. ING will survive maybe, but smaller banks will disappear. If you want to stop that process, cross subsidies should stop. All the money flows to the big banks right now.
Is there a point when more transparency is in the interest of banks?
No, never. You have a couple of big banks who’s goals is world domination. In 1981 the Americans cut AT&T in pieces. There comes a moment when this happens to the banks as well. Its just a story of competition. That is what’s going on in Brussels right now as well. If, on the German market, 60% of all retail custumors are with Deutche Bank, the German supervisor will think about slpitting the bank. You get the Nord or Sud Deutche Bank or something alike. Those players are becoming so dominant. Small banks like Triodos are not in the business of export credits. Big banks are. So small companies will eventually make the step if they want to keep growing.
You also have a limit on ‘good’ investments.You cannot invest all your money in windmills for instance. If the oil market collapses en oil becomes increasingly cheap, your company is bankrupt. The supervisor will never allow that. So, they are going to hedge here and there, they speculate on oil. There’s a certain automatism in the system creating consolidation.
Are schools and education in general not a good starting point for your lobby?
In Belgium you have a couple of schools where children receive an agenda of the KBC Bank. You should keep your savings with us, the line goes. One of our goals is to educate the general public. We always reserve a good amount of time to talk to media outlets and journalists and have conversations with students. I have visited the most strange places. Between the age of 14 or 15 en your 25th most of your thoughs on politics is formed. That matches with another theory I have. Its pretty easy to convince a group of students, but convince a politician is hard and takes longer. They are often far above their thirties and their opinion is formed. Its easy to understand their arguments, but influencing them is a much harder job. Sometimes they act like they understand you, but they are looking out of the window or are busy with Twitter. 15 Minutes later your message didn’t came through at all. But, as a lobbyist you should keep pushing it and work around this fact. If you tell them your story 10 times over a certain period, eventually the message will come through. Sending a letter over and over again, making an appointment around a subject again and again. A politician’s job is to convince somebody else, and not themselves. You see the same at (TV) debates. They are trained like that.
On the other hand, some lobbyists are stuck in their own language. I have seen so much inefficient lobbies. Lately an MEP asked the question if the markets don’t close at night. An industry lobbyist answered him on a somewhat resentful tone that you have markets in Amsterdam, Singapore, New York.. You lost, my thought was. Just because of the tone and the way he answered the question.
What makes a good lobbyist?
Sometimes your age plays a role if your MEP is Professor in Economics. Important is to link subjects. Sometimes you just have to approach them on subjects that touch their self-interest. When you enter the room and you approach a German, you tell him you are from Deutche Bank. You’ve scored three points already then. Employment always works. You have to be aware they are all people with certain interests. You have a couple of intellectuals, but most of them just think about the next election, their constituents and hopefully not to much about their own bank account. But, also those folks are present.
Someting that happens quite often is ‘delivering information sideways’. We should be very aware of it. When the early morning newspaper runs the same line or story that I have told the politician the day before, I know my lobby is working. If, in the same article, the name of a Minister of Finance or some think thank is mentioned, it becomes serious. Or, what happens, it to deliver information by approaching somebody’s spouse. If he or she has a job in a valuable position it can be useful. You never know what they discuss during their early morning breakfast chat. Thats the reason why a lobbyist is such a fool when he neglects seemingly uninteresting human interest publications.
What’s the average age of lobbyists in Brussels?
In general, pretty young. Desk officers at the Commission are in their late twenties, early thirties. Heads of Units are approx. 40 years old. You also see a lot of junior figures. Sometimes these are natonal experts who have to leave the Commission. Quality lobbyists I know have worked for the Commission quite some time. They have been assistent or have worked for the Council. You have people who know how the game of politics is being played, and people who have no idea. In this work you must have a certain political antenna. You cannot learn it. On a certain moment its your career that predicts the future and not your education. Then you are, like me and a lot of other folks, a lobbyist.