The new lobby register and the code of conduct – simple in theory, difficult in practice

Since the beginning of the year Germany has a lobby register. The introduction of a statutory, legally binding lobby register was long overdue. Over the years, there have been numerous impulses from civil society. However, all previous parliamentary attempts had failed. Draft legislation failed to find a majority in the parliamentary groups. Finally, in the last legislative period, the parliamentary blockade in Berlin broke due to many scandals involving Members of Parliament and the grand coalition had to respond to the enormous loss of confidence. It did so both with a law to introduce a lobby register and with a considerable tightening of the Code of Conduct for Members of Parliament. Since April 2021, there is now the “Law on the Introduction of a Lobby Register for the Representation of Interests to the German Bundestag and to the Federal Government” (LobbyRG). The law obliges, among others, the entire sector of professional interest representation to register in a public register kept by the Bundestag. It entered into force on January 1, 2022. Thousands of organizations and individuals must have registered within a transition period no later than February 28. In addition, the states have developed additional legislative activity in this area. In addition to the federal level, there are now state-specific regulations to consider, some of which vary widely in content.

Good start

The law is a first, important step toward greater transparency in the representation of political interests. The lobby register fulfills its purpose of making interest representation more transparent and comprehensible. Protected by constitutional law, the lobby register only makes structural data public. This structural transparency first of all underscores the importance of the constitutionally protected right to represent interests vis-à-vis the legislative and executive branches. At the same time, it also illustrates the demand for modern professional interest representation that actively participates in shaping policy. When contacting the Bundestag or the federal government, all interest representatives, regardless of their organizational structure, are now required to register in order to make their influence on opinion-forming and decision-making processes visible. This seems like a simple matter. Unfortunately, it is not easy to implement. The text of the law very clearly reflects the coalition’s tough struggle to reach a compromise. The law is riddled with unclear formulations, gaps, technical deficiencies, and difficult issues relevant to fundamental rights.

Sticking point: compulsory registration

There is a long list of exceptions from the requirement to register. They range from constitutionally privileged employee and employer associations to cultural organizations of the Federal Republic and ethnic minorities. This may be justifiable in the case of transparency obligations. However, it is not clear why some of the non-registrants do not have to submit to the code of conduct. Thus, the lobby register introduces differences, not only in structural transparency, but also in the day-to-day work of organizations. Why should the rules of conduct regarding establishing contact, information procurement as well as the handling of confidential information not apply to everyone?

Another crucial point is, that the obligation to register is so broad that less structured organizations and loose associations will become more transparent. However, upon implementation, it will certainly be an exciting challenge to enforce the registration obligation for less formalized forms of organization such as campaigns, initiatives or networks, since those commissioning lobbying activities at the federal level must be named and registered. Group companies that are centrally entrusted with public affairs activities must also register. This also applies to the entire legal profession if its representation of interests is directed at the enactment, amendment or omission of a legal regulation by the German Bundestag or the federal government. As far as the contents of the register are concerned, the text of the law also bristles with gaps and ambiguities. These must be eliminated so that an entry in the lobby register can be made according to clear and comparable standards. In principle, the contents of the register make sense, but the imprecise wording of the law makes it difficult to implement. The Bundestag administration, as the body in charge of the register, is currently trying to create more clarity in many discussions with lobbyists, civil society and, not least, de’ge’pol.

What needs to be specified?

But even after many joint discussions, important questions remain unanswered. This also applies to the financial disclosures. After lengthy discussions, the grand coalition agreed on the term “financial expenses for interest representation” – in deviation from the regulation of the EU transparency register. There is hardly any further explanation of this in the legislative process. While this makes it clear that those required to register must look at the cost side at the respective organizational level, no further details follow on cost types or demarcations of interest representation within the meaning of the law from other expenses. Moreover, from the wording of the law, it can only be inferred that it is a matter of “plausibility” of the information. Therefore, anyone who can distinguish personnel costs, direct costs of interest representation and overhead costs in a sufficiently concrete manner and show them with comprehensible distribution standards is not subject to sanctions. The de’ge’pol is currently developing, in dialogue with other associations, a model for the indication of the financial expenses for professional interest representatives along the ideas of the Bundestag administration. In this way, all parties aim to simplify the task of financial disclosure and, above all, create good practices in the constellations and questions of distinction and calculation of expenses that arise time and again.

The lobby register also introduces a rule on both financial transparency that creates an obligation to publish the annual financial statements. This applies not only to registered associations, but also to other forms of organizations that are not subject to mandatory publication. Only those who are already required to file balance sheets with the commercial register are exempt from having to file them again. The explosive nature of this regulation is obvious: Organizational forms that may have previously handled financial issues more loosely must now prepare accounts and disclose them. This is bound to cause a stir in the media. In the same way, equality before the law does not allow a distinction to be made between “good” and “bad” donations, which must also be declared. Anyone who donates thousands of euros to Diakonie or Caritas, for example, must provide the same information as organizations whose common good value cannot be deciphered in the same way.

Control and sanctioning

Of course, the effectiveness of the lobby register also depends on the quality of the deposited data and its accuracy. Here, the law provides for fines of up to 50,000 euros in the event of incorrect, omitted or delayed information. However, the Bundestag administration has no legal mandate to actively verify this information. Random checks are therefore not carried out. Audits are more likely to be triggered by submissions from interested parties, competitors or whistleblowers. In addition to the fine procedure, the law provides for a verification procedure regarding the Code of Conduct, which is part of the law. The de’ge’pol had already raised issues in the participation procedure regarding the Code of Conduct, which have not yet been resolved. The code does not apply equally to all stakeholders. It is also questionable whether an annex to the rules of procedure or a cabinet resolution is sufficient to interfere with the fundamental right of freedom of expression in this way. There is nothing to be said against the postulate of a statutory model of honest representation of interests. However, the execution of duties in a code of conduct does not fit into this system. Experience with voluntary self-regulation, not least with the now emerging DRIV (German Council for Interest Representation), speaks a different language. Our industry has impressively demonstrated that functioning self-regulation can be successfully implemented without statutory regulation. The future will show whether this encroachment on the freedoms of the Basic Law is not contrary to a democratic constitutional state. There is still much work to be done. All lobbyists are called upon to prepare for registration now, even though the effort involved is considerable. The introduction of the lobby register is a necessary signal in the commitment to democracy through more transparency in the political representation of interests. But transparency must never become an end in itself. It must not determine its content and processes. Ultimately, transparency is only a functional concept and never a concept of substance. Therefore, any legislation on interest representation needs sufficient conceptual specification, legal clarity and detail. This is the responsibility of every legislator.

 

A German version of the article appeared in the December 2021 issue IV 2021 of Politik & Kommunikation.