Revolving door (politics)
Critics assert that such a relationship between the government and private sector can lead to conflict of interest and regulatory capture, based on the granting of reciprocated privileges between them.
The term has also been used to refer to the constant switching and ousting of political leaders from office, such as in Australia (which changed Prime Ministers 6 times from 2007 to 2018),[1] interwar Yugoslavia, and Japan.
[11] Economic distortion can be explained through the fact that so-called too-big-to-fail firms generate their power in the market through the mechanism of the revolving door and not through salient choices.
There is a cooling-off period of two years within which they must notify their intention to engage in a new activity to their institution, aiming at constraining the revolving door problem.
If those duties of integrity and discretion are breached, they may be subject to judicial proceedings leading to the suspension of their pension and/or other rights or to be compulsory retired (art.
Since April 2013, the European Parliament adopted implementing measures of the "Code of Conduct on Gifts received in an official capacity, Invitations to events organised by third parties and Monitoring procedure[19]".
Since 31/01/2019, the EP has also amended its Rules of Procedure saying that "rapporteurs, shadow rapporteurs or committee chairs shall, for each report, publish online all scheduled meetings with interest representatives falling under the scope of the Transparency Register[20] If the European Parliament's Code of Conduct seems permissive (e.g. there is any cooling-off period), the Parliament is concerned by the revolving door effect and has used its power over other institutions to prevent them.
People going through the revolving door bring industry expertise and insight that can be valuable for regulators,[10] it can sometimes be conceptualized as an educational process [12] by researchers working on the topic.
At the same time, the report found that 15 out of 27 Commissioners who finished their service in 2014 entered employment with organisations on the EU lobby register after the end of their 18-month cooling-off period.
[25] In November 2011, Mario Monti came back in the public sphere to lead the Italian government formed by technocrats in the sovereign debt crisis.
The revolving door that received the most media coverage in Europe concerns José Manuel Barroso, president of the European Commission for 2 consecutive terms between 2004 and 2014.
[26] In July 1999, Martin Bangemann the Commissioner for Industrial Affairs was suspended from his duties after his decision to accept a position with Telefónica, Spain largest telephone company.
The practice was increasingly viewed as corrupt and a drag on unfastening the ties between private sector and state which prevent economic and political reforms.
Amakudari was a minor issue before World War II since government officials could be outplaced to a large number of industrial organization that were nationalized.
Such outplacement is inevitable in a personnel system where traditional Confucian values prevent one who entered the organization at the same time as another to become his subordinate[citation needed] A 1990 study suggested that amakudari retirements to large companies by bureaucrats from prominent ministries, such as the Ministry of Finance, had peaked in 1985 but that the practice was on the increase by bureaucrats from other types of government organisations such as the National Tax Agency.
In the 1994 general contracting (zenekon) scandal, corruption was uncovered among bureaucrats associated with building contractors, leading to the jailing of high-ranking politician Shin Kanemaru for tax evasion.
In the mortgage scandal of 1996, Japanese housing lenders went on a lending spree and racked up bad debts worth 6 trillion yen ($65.7 billion) sparking a financial crisis.
In July 2002, Prime Minister Junichiro Koizumi ordered that strict amakudari be ended, because of its association with corruption between business and politics.
[35] Koizumi's successor, Prime Minister Shinzo Abe enacted new rules as part of a policy pledge to completely eradicate amakudari in 2007, but his reforms were criticised as toothless (see below) and a campaign ploy for Upper House elections in July 2007.
[31][36] While policy has focused on limiting amakudari to private companies, the number of bureaucrats retiring to jobs at other government organisations (yokosuberi or "sideslip") has surged reaching 27,882 appointments in 2006 up 5,789 on the previous year.
These organisations, numbering 4,576, received 98 percent of the expenses for state projects without being subject to the bidding processes faced by private companies.
[31] In October 2006, 339 public entities were violating the guidelines concerning amakudari, a figure 38 times higher than the number for the previous year.
[43] There is also no cooling off period for public officials before they can enter the lobbying industry in New Zealand, allowing politicians and Parliamentary staffers to immediately become lobbyists after leaving office.
[45] Similar to Japan's "amakudari" concept, Singaporeans use the phrase "parachuted generals/ officials" to refer to the tradition of high ranking generals of Singapore Armed Forces landing in executive posts in statutory boards and large government-linked corporations.
The Channel Four Dispatches programme 'Cabs for Hire', broadcast in early 2010, which showed several sitting members of Parliament and former ministers offering their influence and contacts in an effort to get lobbying jobs, has generated renewed concern about this issue.
A Transparency International UK report on the subject, published in May 2011, called for ACOBA to be replaced by a statutory body with greater powers to regulate the post-public employment of former ministers and crown servants.
The higher expertise of revolving door individuals can refer to policy matters, the inner workings of the legislative process, or even the preferences of particular constituencies.Examples of individuals who have moved between roles in this way in sensitive areas include Dick Cheney (military contracting),[52] Linda Fisher (pesticide and biotech), Philip Perry (homeland security), Pat Toomey,[53] Billy Tauzin (pharmaceutical industry),[54] Dan Coats,[55] John C. Dugan, a Department of the Treasury official in the administration of President George H. W. Bush who pressed for banking deregulation and repeal of Glass-Steagall Act, then as counsel to the American Bankers Association lobbied for the Gramm-Leach-Bliley Act of 1999 repealing key provisions of the Glass-Steagall Act, and then starting in 2005 returned in a senior government role as Comptroller of the Currency,[56] and former FCC commissioner Meredith Attwell Baker[57][58] (media lobbying).
High-profile Democratic Representative Dick Gephardt left office to become a lobbyist and his lobbying agency, Gephardt Government Affairs Group, earned close to $7 million in revenues in 2010 from clients including Goldman Sachs, Boeing, Visa Inc., Ameren Corporation, and Waste Management Inc.[59] Many former commissioners of the Securities and Exchange Commission and SEC employees have also been employed by private firms in the industry they once regulated.
[74] This, in turn, led to a fall in investor and institutional confidence and a collapse of the stock market, ultimately developing into a global economic crisis.
Through the process of the revolving doors not only Wall Street veterans occupied key positions in Washington, but it also fostered the development of strong personal connections between senior bankers and high government officials, which gave the so-called "too-big-to-fail" banks, privileged access to decisions-makers and contributed to promoting the Wall Street worldview in the political world.
