Europe

EU seeks Barroso 'clarifications' on role at Goldman Sachs

Jose Manuel Barroso, 30 Oct 14 Image copyright AFP
Image caption Mr Barroso respected the EU's mandatory 18-month break before joining Goldman Sachs

The European Commission is seeking "clarifications" from its former president, Jose Manuel Barroso, about his controversial job at Goldman Sachs.

Last week the European Ombudsman voiced concerns to European Commission President Jean-Claude Juncker about Mr Barroso's new role at the US investment bank. Part of that role will involve advising Goldman Sachs about Brexit.

An EU expert panel will assess whether it conforms with EU ethical standards.

Mr Barroso joined the bank in July.

He headed the EU executive from 2004-2014 and worked closely with ex-financial services commissioner Michel Barnier, a French politician named as a lead negotiator on the terms for UK withdrawal from the EU.

French President Francois Hollande called Mr Barroso's appointment "morally unacceptable", saying Goldman Sachs was implicated in the US sub-prime mortgage scandal that caused the 2008 financial crash and in helping Greece to mask the true size of its debts.

Ethical questions

In a letter to the EU ombudsman Emily O'Reilly, Mr Juncker said Mr Barroso would be received in the Commission on the same terms as any other "interest representative" - or lobbyist - and would have to comply with the EU's transparency rules.

Mr Juncker said Mr Barroso would be asked to "provide clarifications on his new responsibilities and the terms of reference of his contract, on which I will seek the advice of the Ad Hoc Ethical Committee".

That EU committee has three members - a Dutch former judge at the European Court of Justice, a German former MEP and an Austrian former director-general in the European Commission.

In his letter, Mr Juncker pointed to a treaty article called 245 TFEU, which says former commissioners have a "duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits".

If a breach of that ethical code is proven, the Commission can deprive a former commissioner of his/her EU pension.

Image copyright AFP
Image caption Mr Barroso and Michel Barnier (left) launched far-reaching banking reforms after the 2008 crisis

'Widespread concerns'

Ms O'Reilly said she was "pleased to see that President Juncker has responded to the widespread concerns about this appointment". She investigates complaints about EU maladministration, and can order the release of documents, but cannot impose penalties.

In April Goldman Sachs agreed to pay $5.06bn (£3.8bn) to settle claims that it misled mortgage bond investors in the US.

Mr Barroso's new post is described as a "non-executive chairman of Goldman Sachs International (GSI)" and "an adviser to Goldman Sachs". He joined after respecting the EU's 18-month "cooling off" period, having left the Commission in 2014.

The bank has much influence in the City of London, which dominates the EU's financial sector.

Like many other powerful voices in the City, the bank backed the Remain camp, which lost in the UK's 23 June referendum. Ahead of the vote, Mr Barroso argued for the UK to remain in the EU.

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