109 SPAIN REVOLVING DOORS IN SPANISH CLIMATE AND ENERGY POLICY Greens/EFA Group in the European Parliament REVOLV ING DOORS: S PAI N 110 SPAIN policy, board positions in energy companies (notably, the Revolving doors in Spanish climate and energy policy — Failures in the rules AUTHOR In March 2015, with the Partido Popular (PP) govern- partly public company Red Eléctrica) are used to provide lucrative rewards to politically-connected individuals and to their spouses. ÓSCAR REYES ment facing pressure over a number of high-profile co- — Scale of the problem tion to regulate the appointments of senior officials (Ley The “revolving door” phenomenon in Spain involves Ministers and high-ranking political appointees moving from government and public administration directly into the private sector, generally as board members of major companies. This practice creates fertile ground for corruption and influence-peddling. It is particularly an issue with Spain’s major utilities and oil and gas companies because a large part of their business relies on State infrastructure and on the award of public contracts. Close political ties also help these companies to put pressure on the government to ensure that laws and regulations are favourable to their interests. The scale of the revolving door problem is considerable. In 2016, 58 former Ministers and senior party officials held posts as Directors or senior officials of companies belonging to the Ibex 35, the stock market index of Spain’s leading companies.1 The energy sector was the most heavily represented, with its 26 company directors accounting for more than half of the total number of politicians passing through the revolving door to the private sector. These 58 company directors are paid over €18 million, annually. The revolving door between politics and the boards of large companies is a long standing issue. A review by El Diario newspaper found that almost half of the go- senior officials could not hold positions in private sector vernment Ministers who have served since the return of democracy in 1977 (71 of 176 Ministers) have gone on to work for and advise major private companies after they left office, mostly as company Directors.2 Endesa, Gas Natural and Repsol were the companies most heavily represented on this list. In some cases, the door has also revolved in the opposite direction, with Executives and board members passing into government – a symptom of the close ties that exist between Spain’s political and business elites. As well as the potential impact on climate and energy permission to occupy positions in private companies rruption cases, the Spanish Parliament updated legisla3/2015).3 The revised law was supposed to ensure that companies affected by decisions in which they had had a role, for at least two years. [...] almost half of the government Ministers who have served since the return of democracy in 1977 (71 of 176 Ministers) have gone on to work for and advise major private companies after they left office, mostly as company Directors Yet the revolving doors between high public office and the private sector remain in operation. Between 2015 and Autumn 2017, 137 senior officials were given related to their previous public duties, often without a waiting period.4 In some cases, the move from public office to the private sector was almost instantaneous. A new “transparency” Law, passed in December 2014, has also been undermined by consistent failures in implementation, with the Spanish government repeatedly taking legal action to avoid disclosing information under the Law.5 Efforts to pass new anti-corruption legislation continue, with the Spanish Parliament currently considering Revolving Doors and the Fossil Fuel Industry: Time to tackle conflicts of interest in climate policy-making REVOLV ING DOORS: SPAI N SPAIN a “comprehensive law” against corruption. This could include stronger protection for whistleblowers (workers who expose wrongdoing, corruption or breaches of the law), and the establishment of a new Office of Public Integrity, responsible for enforcing the law – although the PP, in particular, is keen to water down the proposed measures. Given Spain’s poor track record in implementing anti-corruption measures, independent oversight is vital to ensure that the revolving doors between public office and private companies are properly regulated. Even then, the existing political networks that closely tie senior politicians to the Boards of major companies would need to be broken down in order to truly tackle the problem. Between 2015 and Autumn 2017, 137 senior officials were given permission to occupy positions in private companies related to their previous public duties, often without a waiting period — Impacts on climate and energy policy Spain’s energy markets have undergone considerable reforms in recent years, with successive governments passing legislation that benefits the large utilities companies that run the country’s fossil fuel and nuclear plants. These interventions have considerably damaged distributed renewable energy producers in the country.6 Sharp cuts to Spain’s renewable energy subsidies in 2010 and 2013, including a retroactive tax on electricity sales, the sudden scrapping of the country’s renewable energy feed-in tariffs, and arbitrary changes to “plant remuneration rates”, have all damaged the profitability of renewable energy generation, with investments in renewables falling dramatically as a result.7 At the same time, reform proposals were designed to help the major utility companies to clear the large debts that they had accrued.8 As a result of these reforms, consumer prices also increased considerably – by an average of 9.9% per year for domestic consumers between 2008 and 2012 – exacerbating fuel poverty at the height of the country’s economic crisis. While slashing renewable energy subsidies, the Spanish government, reportedly under pressure from energy companies, nevertheless managed to maintain a series of fossil fuel subsidies.9 The largest of these measures, capacity payments to keep open old coal and gas power plants, handed out subsidies of between €470 million and nearly €1 billion per year.10 At the same time, new charges and taxes have been levied on the “self-generation” of electricity in order to protect the revenues of big utility companies. The energy regulator and Spanish Competition Authority complained that additional charges for distributed generation were “anticompetitive”.11 Despite this, in 2015 the Spanish government pushed ahead with a new law to implement a tax on the “self-consumption” of solar energy generated and consumed on the users’ own property.12 The lack of transparency makes it difficult to ascribe individual decisions to the revolving door between corporations and public office, but the overall pattern is clear: distributed renewable energy has been undermined, while legislation has been passed that favours politically connected IBEX35 companies. The net effect is disastrous: a delayed transition away from fossil fuels, which damages the climate, and a less just system that contributes to fuel and energy poverty. // Greens/EFA Group in the European Parliament 111 TO P CASES OF REVOLV IN G DOORS IN S PAI N 112 SPAIN 13 revolving door cases ENDESA Endesa, the largest utility company in Spain, has consistently appointed politicians to senior positions after they leave office. José María Aznar, the PP Prime Minister who oversaw the privatisation of Endesa, was appointed as an “external advisor” in 2011, receiving an annual salary of €200,000 (rising to €300,000 with bonuses).13 Elena Salgado, a Spanish Socialist Party (PSOE) Deputy Prime Minister and Minister of Economy and Finance, became a Board Member of Chilectra, Endesa’s Chilean subsidiary, just three months after leaving public office.14 Pedro Solbes, Salgado’s immediate predecessor as Vice Prime Minister and Economy Minister, sat on the board of Enel, Endesa’s parent company, between 2011 and 2014. He has since offered a robust defense of Spain’s revolving doors between government and industry, suggesting that it would be a “disgrace” if they were prevented from operating.15 While Solbes and Salgado took up roles in Endesa once they left government, Luis De Guindos went in both directions. De Guindos took over from Salgado as Minister of Economy and Finance with the change of government in Spain in 2011. He was an Endesa board member immediately before becoming a Minister, having previously served as a Secretary of State for Economic Affairs in the last government led by José María Aznar. // < Left (from top to bottom): José María Aznar Elena Salgado Pedro Solbes Luis de Guindos Revolving Doors and the Fossil Fuel Industry: Time to tackle conflicts of interest in climate policy-making TO P CASES OF REVOLV IN G DOORS IN SPAI N SPAIN GAS NATURAL Gas Natural Fenosa, Spain’s third largest utility company, has also welcomed several former politicians onto its Board. Between 2010 and 2014, these included Felipe González – a PSOE politician who was Spain’s longest-serving Prime Minister. His four and a half year stint with the company earned him over half a million euros.16 The catalogue of politicians connected with the company includes Cristina Garmendia (PSOE), a former Science and Innovation Minister who has been a Board member since 2015; and Josu Jon Imaz, former President of the Partido Nacionalista Vasco (PNV), who currently serves on the Gas Natural Board of Directors as representative of Repsol oil company, which is one of the largest shareholders.17 Interestingly, in 2015 Gas Natural Fenosa also hired Benita Ferrero Waldner, who served as Austria’s Foreign Minister (ÖVP, 2000 to 2004) and as European Commissioner for External Relations and European Neighbourhood Policy from 2004 to 2010.18 // < Left (from top to bottom): Felipe González Cristina Garmendia Greens/EFA Group in the European Parliament 113 TO P CASES OF REVOLV IN G DOORS IN S PAI N 114 SPAIN IBERDROLA Iberdrola is Spain’s second largest utility company. Its board members have included Ángel Acebes, former PP Interior Minister, indicted for corruption for his role on the board of the bailed out Bankia bank; and Manuel Marin, a PSOE politician who was formerly President of the Congress of Deputies, the lower house of the Spanish Parliament. Fernando Becker, a current board member, is known to be a close associate of current PP Prime Minister Mariano Rajoy.19 The political patronage network also extends to Iberdrola’s subsidiary companies. For example, Ignacio López del Hierro sits on the board of Iberinco, a scandal-prone engineering and construction subsidiary. López del Hierro is the husband of leading PP politician (and current Defense Minister) María Dolores de Cospedal, an association that has helped him land positions on dozens of company Boards.20 // < Left: Ángel Acebes Revolving Doors and the Fossil Fuel Industry: Time to tackle conflicts of interest in climate policy-making TO P CASES OF REVOLV IN G DOORS IN SPAI N SPAIN RED ELÉCTRICA Red Eléctrica operates Spain’s national grid. It is a partially State owned company, with 80 per cent of shares now floating on the Spanish stock market. As the company managing Spain’s electricity transmission network, Red Eléctrica relies on intricate ties with the Spanish State, so it is little surprise that representatives of both of the traditional major parties are well represented as part of Red Eléctrica’s corporate governance. Five of its twelve Board members have had political careers.21 Red Eléctrica Board membership also contributes a very lucrative retirement fund to Spanish politicans. José Folgado, the company President, was a PP politician who served in various ministerial roles covering the economy and energy between 1996 and 2004. After a period in local politics, he joined Red Eléctrica in 2012 and has been paid around €4 million since then.22 His predecessor, Luis Atienza, was a PSOE Minister under Felipe González – until he left Red Eléctrica with a €2.3 million pay off. The most recent board appointee, Arsenio Fernández de Mesa, is a PP politician who was formerly head of the Guardia Civil police force.23 He will be paid around €175,000 per year.24 Fernández de Mesa took up the board seat left vacant by another PP politician, Agustín Conde, who returned to politics as Secretary of State for Defense. Ignacio López del Hierro (see above) was also, briefly, appointed to the Red Eléctrica board in 2012, but had to resign in the face of public backlash.25 // < Left (from top to bottom): José Folgado Arsenio Fernández de Mesa Greens/EFA Group in the European Parliament 115 TO P CASES OF REVOLV IN G DOORS IN S PAI N 116 SPAIN ENAGÁS Enagás, like Red Eléctrica, is a (mostly) privatised company running national grid infrastructure – in this case, Spain’s network of gas pipelines.26 Seven members of its board have previous political careers (six from the PP, one from PSOE). They include Ana Palacio (a former Foreign Minister), Isabel Tocino (formerly Environment Minister) and Antonio Hernández (former head of Alianza Popular, a post-Francoist party that was refounded as the PP in 1987). // CONSULTANCIES Maite Costa of the Socialist Party of Catalonia (PSC), a former President of the National Energy Commission, is a senior politician who walked through a well-hidden “revol- PHOTO SOURCES AND CREDITS ving door.” She does not work directly for a utility company, but she set up a consultancy firm whose main clients include many of the largest electricity companies in Spain. As a former head of the energy regulator, her contacts and inside knowledge could help these companies to gain influence and exploit holes in the rules and regulations governing their activities.27 // José María Aznar © www.kremlin.ru / https://commons. wikimedia.org/wiki/File:Jos%C3%A9_Mar%C3%ADa_Aznar_in_Moscow_29_May_2002-1.jpg Elena Salgado 09/10/2011 © Gobierno de España / https:// commons.m.wikimedia.org/wiki/File:Elena_Salgado,_durante_la_rueda_de_prensa_posterior_al_Consejo_de_Ministros_(9_de_octubre_de_2011).jpg Pedro Solbes by International Monetary Fund https://commons.wikimedia.org/wiki/File:Pedro_Sorbes_IMF.JPG Luis de Guindos by World Economic Forum CC BY-SA 2.0 https://commons.wikimedia.org/wiki/File:Luis_de_ Guindos_Jurado_-_World_Economic_Forum_Annual_Meeting_2012.jpg Felipe González by Alfredo Pérez Rubalcaba, CC BY-SA 2.0, https://commons.wikimedia.org/wiki/File:Felipe_Gonz%C3%A1lez_(2012).jpg Cristina Garmendia by Campus Party Europa 2010, CC BY-SA 2.0, https://commons.wikimedia.org/wiki/File:Campus_Party_Dia2_(4523490664).jpg Ángel Acebes by Ppcatalunya CC BY-SA 4.0, https://commons.wikimedia.org/wiki/File:Angel_Acebes-edit.jpg José Folgado by PP Madrid, CC BY-SA 2.0, https://commons.wikimedia.org/wiki/File:Jos%C3%A9_Folgado_2015_(cropped).jpg Arsenio Fernández de Mesa by Guardia Civil, CC BY 3.0, https://es.wikipedia.org/wiki/Archivo:Arsenio_Fern%C3%A1ndez_de_Mesa_2014_(cropped).jpg Revolving Doors and the Fossil Fuel Industry: Time to tackle conflicts of interest in climate policy-making REVOLV ING DOORS: SPAI N SPAIN END NOTES 1 Clavero, Vicente. ‘’Al menos 58 ex altos cargos políticos trabajan ahora para el Ibex.’’ Público, March 17, 2017. http://www.publico.es/economia/ trama-puertas-giratorias-58-ex.html 2 OMAL. ‘’El 40% de los ministros de la democracia se ha pasado al sector privado.’’ Observatorio de Multinacionales en América Latina. March 17, 2016. http://omal.info/spip.php?article7767 3 BOE. ‘’Ley 3/2015, de 30 de marzo, reguladora del ejercicio del alto cargo de la Administración General del Estado.’’ March 31, 2015. https://www. boe.es/buscar/doc.php?id=BOE-A-2015-3444 4 Díez, Luis. ‘’La ley de "puertas giratorias" no logra frenar el trasiego de altos cargos al sector privado.’’ Cuarto Poder. September 15, 2017. https://www.cuartopoder.es/espana/gobierno/2017/09/15/la-ley-depuertas-giratorias-no-frena-el-trasiego-de-altos-cargos/ 5 Sevillano, Elena. ‘’Spanish government using courts to avoid freedom of information requests.’’ El País. February 10, 2016. https://elpais.com/ elpais/2016/02/09/inenglish/1455011670_395417.html, https://www. access-info.org/article/28951 6 7 8 9 10 11 Robinson, David. ‘’Pulling the Plug on Renewable Power in Spain.’’ Oxford Institute for Energy Studies. December 2013. https://www. oxfordenergy.org/wpcms/wp-content/uploads/2013/12/Pulling-thePlug-on-Renewable-Power-in-Spain.pdf Deign, Jason. ‘’Spain Is a Case Study in How Not to Foster Renewables.’’ Green Tech Media. May 05, 2017. https://www.greentechmedia.com/ articles/read/spain-is-a-case-study-in-how-not-to-foster-renewables#gs. aU0o8iQ; Deloitte. ‘’European energy market reform: Country profile: Spain.’’ 2015. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Energy-and-Resources/gx-er-market-reform-spain.pdf, pp. 12-13 Rojas, Arturo, Tubío, Belén. ‘’Spain´s renewable energy regime: Challenges and uncertainties.’’ AFI. http://www.afi.es/webAfi/descargas/1456896/1413285/sefo-spanish-economic-and-financial-outlook-funcas-spain-s-renewable-energy-regime-challenges-and-uncertainties-arturo-rojas-and-belen-tubio.pdf ; Deloitte. ‘’European energy market reform: Country profile: Spain.’’ 2015. https://www2.deloitte. com/content/dam/Deloitte/global/Documents/Energy-and-Resources/ gx-er-market-reform-spain.pdf, p.5 Sérvulo González, Jesús. ‘’Brussels chides Spain over subsidies for harmful fossil fuels.’’ El País, February 08, 2017. https://elpais.com/ elpais/2017/02/07/inenglish/1486458200_710646.html?rel=mas Warrel, Leah and Runkel, Matthias. ‘’Phase-out 2020: monitoring Europe’s fossil fuel subsidies.’’ ODI, September 2017. https://www.odi.org/ sites/odi.org.uk/files/resource-documents/11785.pdf ;Wynn, Gerard and Julve, Javier. ‘’Spain’s Capacity Market: Energy Security or Subsidy?’’, December 2016. http://ieefa.org/wp-content/uploads/2017/11/Spains-Capacity-Market-Energy-Security-or-Subsidy_December-2016.pdf Robinson, David. ‘’Pulling the Plug on Renewable Power in Spain.’’ Oxford Institute for Energy Studies. December 2013. https://www. oxfordenergy.org/wpcms/wp-content/uploads/2013/12/Pulling-thePlug-on-Renewable-Power-in-Spain.pdf , p.7 12 Tsagas, Ilias. ‘’Spain Approves 'Sun Tax,' Discriminates Against Solar PV.’’ Renewable Energy World. October 23, 2015. http://www.renewableenergyworld.com/articles/2015/10/spain-approves-sun-tax-discriminates-against-solar-pv.html 13 Eco Diarios. ‘’Aznar, González, Guindos, Salgado, Solbes, Acebes...: la peligrosa relación entre políticos y eléctricas.’’ December 20, 2013. http:// ecodiario.eleconomista.es/politica/noticias/5410569/12/13/Aznar-Gonzalez-Serra-Guindos-Salgado-Solbes-Acebes-la-historia-de-amor-entre-los-politicos-y-las-electricas.html 14 Agustín, Marco. ‘’Endesa ficha a Elena Salgado como consejera tres meses después de dejar el Gobierno.’’ El Confidencial. March 05, 2012. https://www.elconfidencial.com/economia/2012-03-05/endesa-ficha-a-elena-salgado-como-consejera-tres-meses-despues-de-dejar-el-gobierno_417872 By attaching herself to a subsidiary outside of Spain, Salgado was able to circumvent the conflict of interest rules. 15 Público. ‘’Solbes, exconsejero de Enel y de Barclays, sobre las puertas giratorias: "Si no existen es una desgracia.’’ Público, January 10, 2018. http://www.publico.es/politica/solbes-exconsejero-enel-barclays-puertas-giratorias-no-existen-desgracia.html 16 Montaño, Baltasar. ‘’Felipe González se habrá embolsado 566.000 euros cuando deje Gas Natural en mayo.’’Voz Populi, April 04, 2015. http://www.vozpopuli.com/economia-y-finanzas/empresas/Felipe_Gonzalez-Gas_natural-Venezuela-Nicolas_Maduro-Repsol-Conflicto_diplomatico-felipe_gonzalez-gas_natural_0_794020638.html 17 For a more complete list, see https://www.yoibextigo.lamarea.com/ informe/gas-natural-fenosa/quienes-son/las-puertas-giratorias-de-gnf/ 18 Austrian Parliament: Dr. Benita Ferrero-Waldner, https://www. parlament.gv.at/WWER/PAD_03130 and Gas Natural Fenosa: 2015 Corporate Responsibility Report, http://www.gasnaturalfenosa.de/servlet/ ficheros/1297151996398/CorporateResponsabilityReport,0.pdf 19 Greenpeace. ‘’Iberdrola y los políticos: Puertas giratorias.’’ June 04, 2013. http://archivo-es.greenpeace.org/espana/es/Blog/iberdrola-y-los-polticos-puertas-giratorias/blog/45367/ 20 Gracia, Ana I. ‘’El marido de los "27.000 líos": López del Hierro o la pesadilla de Cospedal.’’ El Español, May 04, 2017. https://www.elespanol. com/espana/20170513/215728737_0.html 21 Bolinches, Cristina. ’’La cercana marcha de Folgado abre la 'carrera política' por la presidencia de REE.’’ El Español, February 05, 2017. https:// www.elespanol.com/economia/empresas/20170203/190981861_0.html 22 Bolinches, Cristina. ’’La cercana marcha de Folgado abre la 'carrera política' por la presidencia de REE.’’ El Español, February 05, 2017. https://www.elespanol. com/economia/empresas/20170203/190981861_0.html Own calculation based on annual remuneration of between €575,000 and over €700,000. 23 Vélez, Antonion M. ‘’Red Eléctrica coloca a otro político del PP: nombra consejero a Arsenio Fernández de Mesa.’’ El Diario. January 31, 2017, http://www.eldiario.es/economia/Electrica-PP-Arsenio-Fernandez-Mesa_0_607540225.html 24 El Confidencial. ‘’¿Puertas giratorias? Red Eléctrica ficha a Fernández de Mesa como consejero.’’ January 31, 2017. https://www.elconfidencial.com/empresas/2017-01-31/arsenio-fernandez-de-mesa-consejero-red-electrica_1324462/ 25 Forcada, Daniel. ’’El marido de Cospedal renuncia a su cargo en Red Eléctrica.’’ El Confidencial, March 15, 2012. https://www.elconfidencial. com/espana/2012-03-15/el-marido-de-cospedal-renuncia-a-su-cargoen-red-electrica_232451/ 26 The Spanish state retains a 5 per cent stake in Enagás, with the rest of its shares trading on the stock market. 27 Bautista, José. ‘’Las puertas giratorias de GNF.’’ Yoibextigo, May 30, 2017. https://www.yoibextigo.lamarea.com/informe/gas-natural-fenosa/ quienes-son/las-puertas-giratorias-de-gnf/ Greens/EFA Group in the European Parliament 117