Padoan’s appointment highlights the gaps in the Italian law on conflict of interest

Padoan's appointment highlights the gaps in the Italian law on conflict of interest

Pier Carlo Padoan. Emmanuel Dunand/AFP/Getty Images

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Pier Carlo Padoan. Emmanuel Dunand/AFP/Getty Images

  • The sense of the “co-optation” – that is, the collegial choice – of the Board of Directors of Unicredit towards Padoan as director and designated president goes beyond the internal strategies of the institute.
  • In Italy there is no period of cooling-off (a time to “cool” the information held by a subject) which should follow the passage from one office to another.
  • The basic text of the new law on conflict of interest has just been approved by the Constitutional Affairs Commission, but it appears insufficient also for what concerns the period also referred to as pantouflage (from the French slipper, pantofola).
  • A young and fierce European non-profit tries to pinpoint the “i’s” of this risky incongruity, with a petition that has already exceeded twenty thousand signatures, and an appeal launched to the EU.

The enthusiastic “price sensitive” note of Unicredit which on 13 October last reported dell” acceptance by the former minister and still parliamentarian Pier Carlo Padoan of his co-option in the Board of Unicredit, with future nominate President (2021-2023) highlights the gap of the Italian legislation on conflict of interest.

Jean Pierre Mustier, CEO of UniCredit, stated that the important public roles held in Italy by Padoan “will be of great use to the Group”.

The Italian economist and academic, a high-ranking official of the Italian state in the national and international public finance scenario of the last twenty years, in Unicredit will be able to capitalize not only on his skills and experience in economic and financial matters, but also his influence and his network of contacts.

The former minister and still a member of the Democratic Party has procedures to resume his parliamentary office have already begun, but it’s not just the seat that seems inconvenient for his new post. Meanwhile, there is the feeling that the information owned by the member of the Budget, Treasury and Planning Commission of the Chamber can favor Unicredit to the detriment of other competitors in the banking sector.

As soon as he enters the dance, Padoan will probably have already written on top of his booklet the conclusion of the Montepaschi affair, but not only. Business Insider Italy has already given an account of the largest score in which to insert the role of Padoan: the possible spin-off of Unicredit itself into two parties, and the possibility of a merger with BNP Paribas.

All areas in which the manager’s political profile and his economic skills could immediately make the difference: unless Italy did not have a conflict of interest law worthy of the name. Having chosen each other, neither Unicredit nor Padoan violate any kind of existing rule, and this is the point.

If there were rules to protect the strategic areas of the public function as well as the market and competition, Padoan could not enter a revolving door with such ease that from his seat in Montecitorio he would take him directly to Piazza Gae Aulenti.

In its Rule of Law Report 2020 l’The European Union has specified that Italy must act in matters of conflict of interest also as regards the rotation of offices, the so-called revolving doors,”He told Business Insider Italia Alessandro Anghelé, Director of the Italian office of The Good Lobby, a non-profit based in Brussels that deals with democracy, participation and transparency with the aim of rebalancing and making access to power more equitable and inclusive.

An adequate cooling-off, the cooling period necessary to render the power of information held by the incoming office ineffective, does not seem to be on the radar of politics. The basic text of the new law on conflict of interest M5S / PD, just approved by the Constitutional Affairs Commission of the Chamber, in fact, foresees a year of detention between one office and another, a period that is too short.

There is no consideration on this issue, ”Continued Anghelé. “We immediately tried to attract attention with our press release on the advisability of Padoan’s co-optation in Unicredit, but we have not seen a large following from journalists. The M5S senators have issued a press release, but we have not seen other positions taken.”

The press release of the pentastellated senators, while firmly taking up the theme of revolving doors and announcing a parliamentary question on the co-optation of Padoan in Unicredit, however, does not seem to hint at an extension of the period of pantouflage provided for in the basic text just approved, equal to twelve months. The theme was explored in the course of a broadcast by the Lombard broadcaster Radio Popolare, but at the moment media attention mainstream is zero.

The question is not so much whether one cannot pass from the public to the private, but how much the public loses and how much the market is distorted. Knowing the key roles and the state machine from within, especially for a country as slow as Italy, after just one year the information may still be “hot” and that is why the cooling-off period elsewhere should be calculated in at least two years. In Italy the matter of conflict of interest is regulated in an insufficient and chaotic manner,”Concluded Federico Anghelé.

As for the current rules of the European Commission the commissioners follow a period of cooling-off two years, three for the former president of the Commission, in which the professional activities they intend to carry out over this period are subject to acceptance and possible limitations by the Commission.

The Italian law, “Anti-corruption law” (L. 190/2012), prevents conflicts of interest between the public administration and the recipient companies of the latter’s activity, referring however to “employees”, who in the three years following the termination of the public employment relationship cannot provide “work or professional activity for private subjects recipients of the public administration activity carried out through the same powers.” Is a deputy like Padoan still today an “employee” of the public administration? In any case, after the resignation has been acknowledged, the parliamentarian can carry out the new post. The Unicredit press release he speaks of a co-option as a “non-executive director”. The three years from the cessation of the office of minister of Padoan expire on 1 June 2021.

The Good Lobby points out how we are used to the problem of a conflict of interest that arises in the case of the transition from private to public, but the co-optation of Padoan in Unicredit teaches that from now on we will have to also keep an eye on the opposite passage, from appointments in the public sector to positions in private companies, increasingly frequent in Europe. The most striking case was that of Barroso, former President of the Commission casually passed after a year and a half (2016) a Goldman Sachs, of which he is still “non-executive chairman” and “advisor”.

The association has long since opened a petition directed to the Speaker of the Chamber Roberto Fico and to Parliament – which has passed twenty thousand signatures – to urge a law that finally designs this difficult horizon effectively. In Europe, twenty-nine associations including The Good Lobby they ask for specific attention from Commission President Ursula von der Leyen, Vice President Frans Timmermans and the new Commissioner for Financial Services, Mairead McGuinness precisely on the “revolving doors”.

The co-option of Padoan in Unicredit as well as the nomina di Adam Farkas (2019) at the helm ofAssociation for Financial Markets in Europe (AFME) by the previous executive management of the European Banking Authority (EBA), ended up under the lens of the European Ombudsman, appear to be the first signs of an inconvenient way of governance which is announced more and more frequent.


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