The MEPs hard work has paid off. The European Ombudsman, Emily O'Reilly, concluded on Wednesday 25 November that the Commission should have been “more vigilant” in checking that the US asset manager BlackRock was not subject to a conflict of interest before awarding it a contract to conduct a study on the integration of environmental and social factors in the supervision of banks (see EUROPE 12574/9).
According to the Ombudsman, the Commission’s decision did not provide sufficient guarantees to exclude any legitimate doubts as to the risk of conflicts of interest which could have a negative impact on the performance of the contract. It is, in her view, “questionable” for the Commission to conclude that there was no legal reason to exclude BlackRock from the bidding process.
Mrs O’Reilly also points out that BlackRock maximised its chances of winning the contract by making an unusually low offer, which could be seen as an attempt to exercise influence over an area of investment relevant to its clients.
“Questions should have been asked about the motivation, the pricing strategy, and whether the measures taken by the company to avoid any conflict of interest were really appropriate”, she said.
However, the Ombudsman did not find maladministration on the part of the Commission in this case. She felt that some rules needed to be tightened, and thus this case raised issues that EU legislators should consider.
In particular, she asked the Commission to improve its guidelines for the evaluation of bidders participating in public policy tenders.
In her view, the existing rules are neither rigorous enough nor clear enough to allow public servants to identify conflicts of interest outside a very narrow range of employment conflicts.
The Ombudsman also considered that the definition of conflict of interest in Regulation 2018/1046 on the financial rules applicable to the general budget of the Union is too vague to be used in a situation as specific as BlackRock’s, and therefore asks the Commission to review this definition.
“It is a victory in the fight against conflict of interest and for the integrity of our public policies”, said Damien Carême (Greens/EFA, France), who referred the case to the Ombudsman (see EUROPE 12504/20).
In a new letter sent on the same day, Damien Carême and other MEPs from the Greens/EFA group call on the Commission to immediately cancel the contract awarded to BlackRock. “This is fundamental to preserving both the ongoing work on integrating ESG (environmental, social, and governance) factors into banking supervision and the integrity of our institutions”, they write.
See the Ombudsman’s decision: https://bit.ly/33juHaO and Damien Carême’s letter in French: https://bit.ly/377pCU7 (Original version in French by Marion Fontana)