McCreevy strikes back, ridiculing Commission's rules

McCreevy stepped down as a Commissioner in 10 February 2010. In October 2010, he became the first former Commissioner ever to be banned from a job by the Commission when he was told to resign from the board of the London based bank NBNK Investments. Former commissioners must inform the Commission of new roles for 12 months after they step down – and during this period the Commission can object to new positions if there is a conflict of interest.

Commission officials justified the decision regarding his post at NBNK Investments saying: “The ad-hoc committee signaled a direct link with the portfolio of the former commissioner, privileged information to which he has had access in his mandate, the risk of conflicts of interest and the risks of compromising his obligation of discretion.”

“For us, it’s clear that a former internal market and financial services commissioner can’t work in an investment bank.” Asked if there was any period after which it could be deemed appropriate for a former internal markets commissioner to join the board of a financial institution, the spokesman said commissioners make a “lifetime commitment” after they join the EU executive to observe the treaties.

On February 18 2011, however, McCreevy joined the Bank of New York Mellon, specifically its department dealing with clearing derivatives. As a Commissioner, McCreevy was scandalously late in initiating regulation for these highly speculative products, which played a major role in the financial meltdown in the US in 2007. He set up two working groups that were entirely dominated by the derivatives industry, and which promoted self-regulation. This self-regulatory approach failed to curb speculation in government bonds, contributing to the Eurozone crisis in 2010. McCreevy’s legacy permeates in the very weak regulation of derivatives markets that is currently under way in the European institutions.

As well as his job with BNY Mellon, McCreevy also works for Ryanair – a post that was approved by the European Commission despite controversy - and he has also joined sportswear company SportsDirect. His overall payment from these posts is unknown, but if does not exceed 20,000 euros per month, McCreevy will still be entitled to his post-employment allowance from the European Commission which is supposed to “guarantee his independence” for three years.

The case highlights very clearly the lack of ambition in the revision of the code of conduct for Commissioners currently under way. In the draft from December 2010, the notification period is only extended from one year to 18 months. McCreevy is clearly abusing the confidence of the institution. His new role contravenes the principle of the regulations, but as he no longer has to report to the Commission, he feels he can get away with this.

Throughout last autumn’s media controversy surrounding the Commissioners’ revolving doors, the Commission’s spokespeople have highlighted the importance of Commissioners remaining loyal to the Commission “until the end of their career”.

But this case shows the Commission has no means to defend itself from irresponsible behaviour as exhibited by McCreevy. It also shows the European Parliament is making a mistake in accepting the Commission’s weak draft for a new Code of Conduct. While reinforcing its own rules, the Parliament should also insist on a three-year cooling off period for Commissioners.