Cultivating Weeds: Why EU NGO funding needs scrutiny

See the French translation

  • The European Commission gives hundreds of millions of euros annually to NGOs
  • These NGOs often attack EU trade, industry, energy and agriculture policies
  • They under-declare their revenue and surreptitiously give surplus money to other NGOs
  • There is insufficient scrutiny on how these activist groups use these public funds.

Welcome to Brussels in 2016 – the Year of Stupid!

This is the first of a three-part series on the state of NGOs, and how they and other activists are having an influence on policy, society and the economy.

In 2001, the European Commission’s White Paper on Governance called for more dialogue as part of a legitimisation process (to deal with multiple credibility issues the EU was then facing). The term “stakeholder dialogue” was the buzzword of the day and it was determined that a more transparent, inclusive decision-making process was required. NGOs need to be at the table, and it didn’t take long before funding schemes were set up to ensure that NGOs participated in this wonderful (and wonderfully naïve) new engagement and consensus-building process.

The NGOs happily took EU taxpayer money (hundreds of millions are handed out every year to groups who claim to be part of civil society), but rather than contributing to dialogue and joining in consensus building activities, many activist groups used it to strengthen their networks of negativity, blocking the policy process and undermining the European project built on more trade, innovation and technology.

For the last 15 years, the EU has essentially cultivated these weeds to the point that the European garden has become overgrown with pricks and stingers with little means of yielding flowers or nourishing food. The weeds have choked out any productivity, pushed consensus builders and job creators to other pastures, and made Brussels, quite simply an ugly, congested garden teaming with malice and not worthy of tending.

I will argue that there needs to be some overarching scrutiny on the process of funding activists that would encourage transparency and accountability. At the moment, many activist groups are getting European public money to act against the public interest (without proper scrutiny from EU institutions).

There are many instances of wasted public funds, but I want to focus on two case studies and a recent report:

  • The European Commission DG-DevCo (International Cooperation and Development) has given the anti-trade NGO, the Transnational Institute, more than two million euros over three years to campaign against western-oriented trade practices (essentially to campaign against the European Commission’s TTIP and CETA free-trade negotiations with the US and Canada);
  • The DG Environment LIFE+ Programme apparently has little scrutiny on how NGOs request funds and how they use them. Friends of the Earth Europe has taken what they could get from the public trough and then spread the funds to other NGOs in their network.
  • A recent European Parliament report demonstrated how the European Commission has no clear strategy on how to scrutinise the support they give to NGOs; insufficient transparency and what’s worse, they do not even seem to have a clear definition of what constitutes an NGO.

So we find ourselves in a situation where one European Commission DG is funding NGOs to attack a main EU strategy and the efforts of another DG, that there is no common scrutiny or accountability and the EU does not even have a common definition of the groups they are giving hundreds of millions of euros to every year. Sweet!

This exposé may be painful for rational people to read … but even more painful to continue to ignore.

Case 1: Transnational Institute

Between 2013 and 2015, the European Commission had given an anti-trade, anti-industry NGO, the Transnational Institute (TNI), over two million euros to campaign on trade issues (essentially to undermine EU negotiations and public perception toward TTIP and CETA). I don’t think the European Commission had done their homework in selecting the TNI given the ruthless track record of this band of anti-government anarchists. Active in anti-WTO campaigning since Seattle, the TNI served as the base for malcontents like Susan George and Erik Wessalius (founder of Corporate Europe Observatory) from which they ran their “No Campaigns” during the 2005 Dutch and French referenda on the European Constitution. Their populist fearmongering campaign success derailed the Constitutional process, setting European integration and legal clarity back almost a decade.

The TNI funding came from the DG DevCo (International Cooperation and Development)  DEAR programme (Development and Education Awareness Raising) – part of the European Commission which I suppose has not yet received the memo on transparency. I could not find any information on their website on the TNI project or any grants in the last four years. Information about DG DevCo’s funding of the TNI came from the excellent research of ECIPE, their Ask the EU document requests and a random tour of the Transparency Registry. From the TNI’s own admission, they received 1,364,517 from EU institutions in the last year . Nothing is known about 2016 figures yet.

The ECIPE report, entitled Manufacturing Discontent, showed how the TNI detailed their plans to spend 700K a year:

“TNI received about 700,000 Euros from the European Commission in 2013. Explicit “expected results” agreed between the EU Commission’s DG DevCo and TNI: to ensure that 3 Million EU citizens are aware of the link between investment and development, to specifically target MEPs and MEP candidates, to make 200 policymakers call for a revision of EU investment policy, to ensure that 600 civil society organisations are exposed to TNI’s messages and to ensure that 200 civil society organisations engage in e-action (i.e. online campaigns and petitions).”

This money, over at least three years, was to raise public awareness on international trade issues with the EU. So what is the TNI’s position on free trade (and TTIP in particular)? The ECIPE report continues:

“TNI President, Susan George, argued at a TNI-hosted anti-TTIP stakeholder conference at the European Parliament in December 2014 that “TTIP is a very dangerous animal. It is an animal that does not deserve to be on the list of protected species […], and that [TTIP] is a treaty that has to be refused absolutely and entirely”.”

In other words, the European Commission gave two million euros to an anti-trade organisation whose publicly stated goal was to upend an important European Commission trade negotiation strategy (TTIP).  I recommend that you read the full ECIPE report to see how this EU money turned German public opinion strongly against free trade in general, and TTIP in particular.

And it gets worse.

ECIPE’s Access to Documents request of the Description of the Action (description-of-_the-action_-dg-devco-and-transnational-institute-amsterdam-2013-002 – a report on how the beneficiaries intend to allocate public money) signed with DG DevCo also revealed that the Transnational Institute promised the European Commission to use some of the funds to create documents and materials to contribute to at least 200 candidates in the 2014 European Parliament elections (no doubt only those candidates sharing the anti-trade, anti-EU philosophy of the TNI). Seriously, shouldn’t there be a law against the European Commission funding political parties during European election campaigns?

DG DevCo’s DEAR programme call was rather curious and, well, frighteningly Marxist. Part of the call for the programme that funded the TNI anti-industry campaign recognised that there is a bias built into the European system towards investor rights (something I would fondly call a “system based on accountability”) and that the successful candidate for funding should find means to balance that with “investor obligations”. In other words: “Make the rich pay!” It is no surprise then that the anti-investment activists at the Transnational Institute won this DG DevCo call – it was practically written for them!

Giving an anti-trade, anti-industry group like the Transnational Institute two million euros to make the European public afraid of freer trade with the United States is like unleashing a hungry Rottweiler into a toddlers’ playground. It is pretty clear what the result will be; what is unclear is why someone would want to do that!

Who exactly was responsible for the DG DevCo DEAR programme call, how was the selection process managed and how closely did the Project Officers in DG DevCo work with the TNI anti-trade campaigners? Nobody knows, it seems, as transparency is nowhere to be found here. There does not seem to be any public scrutiny at all and this disturbs at least one blogger in Brussels. Why on earth would the European Commission give ammunition to an anti-trade organisation that so readily attacks the EU, especially on the eve of major trade negotiation talks with the United States?

Simply put, the European Commission needs some overall scrutiny (perhaps in SecGen) on how NGOs are selected, funded and what they do with the money once dispersed (funding European election candidates should not be allowed!). One of the main criticisms that the Anti-TTIP campaigners regularly make is that the European Commission is not controlled or scrutinised in its negotiations with the Americans. I suppose they know first hand about the absence of transparency in dealing with the Commission, but should they be biting the hand that feeds them?

One final aside from this sordid story. The TNI promised they would distribute much of the two million euros to other unspecified NGOs and no doubt surely they did. The ECIPE report focused on how much TNI money found its way into funding anti-TTIP campaigners in Germany (where media coverage was measured to be 90% negative towards freer trade). But the TNI, on two occasions during this period, also made contributions to their daughter organisation, the anti-TTIP overlords, Corporate Europe Observatory (CEO). This shouldn’t shock anyone – this two mille TNI honey was buying many favours – but CEO always claims they do not receive money from governments. The Risk-Monger has shown on many occasions how CEO are a band of hypocrites … this is just one more case in point! The TNI “donations” to CEO had taxpayer blood all over it! Shame, shame Martin!

Case 2: Friends of the Earth

One of the worst cases of abuse of public funds has got to be from the European Office of Friends of the Earth. This anti-industry, anti-trade, anti-dialogue NGO has been feeding at the trough of the European taxpayer for more than a decade via the European Commission DG Environment LIFE+ programme designed to distribute public funds to environmental NGOs. As I had written before, they receive an average of €750,000 per year for an office with six full-time equivalents, without any obligations, expected deliverables or scrutiny. I fear that the European Sugar-Daddy has been far too lenient on its little suppliant. With such lax scrutiny and zero accountability, with the NGO being a little more than comfortable with a regular stream of free money from the European taxpayer, it seems that Friends of the Earth’s principles have apparently been badly compromised. In order to continue usurping the European taxpayer, Friends of the Earth has effectively been under-reporting its income to the European Commission in a massive way – in the most recent year reported, by more than 350% to be precise.

In 2014, like most other years, Friends of the Earth received €763,269 from the LIFE+ Programme for the purpose of  “increasing public participation and democratic decision-making” on the environment. According to their request, this amounted to more than 55% of their declared total revenue of €1,385,272, and thus essential for the NGO to be able to engage in the Brussels dialogue process (what LIFE+ funds are intended for even though Friends of the Earth can hardly be considered as open and engaging with other stakeholders like industry or the scientific community). But the reality shows a completely different picture.

If you look at the Friends of the Earth Europe transparency registry page, their 2014 revenue is much higher. Rather than €1,385,272, they actually received €4,830,196 with revenues from other governments like Norway, the Netherlands and Germany of €3,050,338  as well as ample funds from other European Commission offices (included “DG Dev” which must mean DG DevCo although there is no further information available anywhere).

Even worse, Friends of the Earth had so much money flowing into their accounts in 2014 that they decided to share their largesse with other unnamed NGOs. They actually gave away 1,722,489 euros to other groups (including, once again, their office-mates at Corporate Europe Observatory via their shared front-group, ALTER-EU … et tu Martin?). All of this was apparently done outside of any scrutiny by the European Commission and when I went to their link for more information about their financials, I found it was broken. (Editor’s note: An FoE supporter provided the correct link on social media, but it got even stranger. When I went to their 2014 report, the numbers again were all different, briefer than the Transparency Registry, and with no reference at all to the LIFE+ funds. Shouldn’t accounting be taken seriously, even for NGOs?)

Let me repeat this, because I’m sure I must not be the only one who is totally blown away by these numbers. Of the 4.8 million Friends of the Earth Europe’s six employees received in 2014, over 3 million from public, taxpayer sources, they gave 1.7 million euros to other NGOs and activist groups in their network – WITH NO ACCOUNTABILITY, NO TRANSPARENCY AND NO ETHICAL INTEGRITY. A simple back of the envelope calculation shows what a slimy band of parasites this office is.

€4,830,196 – €3,050,338 = €1,779,858

Friends of the Earth Europe essentially gave away almost every penny (€1,722,489) that was not tied to public contracts to other, undisclosed NGOs and activists. For an office of six (6) full-time equivalent employees, 4.8 million euros is more than enough to cover expenses. In other words, Friends of the Earth Europe is essentially a complex NGO money laundering organisation, siphoning taxpayer funds out of public institutions. They have played the European Commission brilliantly by under-reporting their 2014 revenue massively!

Like the TNI, this buying of friendships through a complex web of shadow organisations means that activist campaign groups who declare themselves to be free from outside influence are in reality using public funds via a contrived NGO money redistribution process. It is not the millions that is the big issue, although it stinks, but rather the ready disposition of these NGOs to lie and hide these undisclosed funds. So much for the transparency to which Friends of the Earth so zealously hold others accountable!

This goes back to my article on the clever network of networks that these activist NGOs use in the incestuous cesspool known as the Mundo-B Building in Brussels. Different NGOs work together, multiplying their networks, sharing employment contract percentages, public funds and other resources. Like the TNI in the previous case, Friends of the Earth had money and influence to share (like a rich drunk at a bar, it was easy to find friends).

  • It only makes sense within that context for a group like Friends of the Earth to have 11 lobbyist passes to the European Parliament when they only employ six full-time-equivalents.
  • It only makes sense for Friends of the Earth to be able to get away with this year after year if there were either collusion with civil servants in DG Environment or if there were no system in place within the European Commission to scrutinise this abuse of public funds.
  • It only makes sense for Friends of the Earth to give back all taxpayer money they have spent or shared with undisclosed NGOs under false pretences. The European Commission should be screaming for an audit!!!

I’m outraged to think that Friends of the Earth feel entitled to this public money. And that is before we even consider what horrible, reputation assault artists they actually are, and the offensive bile coming out of their derisive anti-industry campaigning.

Sadly, this story gets worse!

Case 3: So … what exactly is an NGO?

For that ideal of stakeholder dialogue to progress since those optimistic days in 2001 under the White Paper on Governance, we would need to have a clear idea of what stakeholders we are dealing with. But does the European Commission even have a definition of an NGO – something quite necessary if there is to be a structure guiding how they can scrutinise them? Apparently they do not!

There is a recent report presented in November to the European Parliament Budget Control Committee entitled: Democratic Accountability and Budgetary Control of Non-Governmental Organisations Funded by the EU Budget. It was prepared for MEP Markus Pieper and is available as pre-release (download available at item 6) pending final editing.

For convenience, I’ll refer to this as the Pieper Report. It concludes that:

  • The European Commission has no common scrutiny procedures on how public funds given to NGOs are spent, redistributed or accounted for.
  • There is no EU-wide definition of an NGO, with Commission DGs or Units defining and acting with NGOs differently. This then explains why the European Commission does not have general rules dealing with NGO funding;
  • The European Union gave €610 million to NGOs in 2015;
  • If NGOs don’t fall under any of the exclusion criteria of Article 106(1) of the EU Financial Regulation, they are then eligible for public funding;
  • Far too often NGOs do not credit EU funding on their websites or project literature (what should be a mandatory requirement);

The Pieper Report acknowledges the problem I had highlighted in my August blog of how the NGOs create these complex networks where money secretly moves around, free from any possible scrutiny from funding authorities.

Analysis reveals a complex web of interconnected NGOs linked through membership of numerous overlapping networks that address many different issues. It is often difficult to identify which organisations in a network or consortium are undertaking which activities or how funds flow between them in relation to those activities.

As NGOs receive funding from a vast variety of sources, quite often they are free from widely accepted financial reporting mechanisms. The Report observes that there “appear to be gaps between NGOs’ declared aspirations regarding accountability and transparency and actual practice.” The European Commission is not too transparent either. My difficulties in finding any information at all on how DG DevCo distributed public money to the TNI were echoed in the Pieper Report where, outside of the LIFE+ programme, users are expected to search manually for information about project funding.

I don’t think EU citizens should have to resort to doing an Access to Documents request to know how their money is being spent. What the Pieper Report highlights is the need for a wider general system of scrutiny, transparency and proper project management. I would suggest that they follow the Research Executive Agency standards for funding, management and reporting, as exemplified in the operating procedures of the FP6, FP7 and Horizon 2020 programmes. Although the bureaucracy is heavier, the accountability is undeniable.

The Pieper Report proposes:

“A single, centralised EC system for recording and managing grant funding would enhance transparency and analysis by eliminating variations that currently exist between different EC systems. This would ideally record not only forecast commitments, but actual disbursements.”

This would remove the “Sugar Daddy” complex (seen in the Friends of the Earth and TNO cases) where one NGO spreads largesse non-transparently around its networks of activists. If I could add to that recommendation, if there were to be an EU-registered NGO status, as part of this system, there should also be a “Ethical Code of Conduct” for all recipients of public funds to adhere to. Often activist groups have no declared ethical standards (many like Friends of the Earth praise the rule-breaking antics and indecent public assaults of their campaigners). This seems like a basic point, but at the moment the NGOs seem to have carte blanche – no accountability, no transparency requirements and no scrutiny!

I also feel that there needs to be more competition and stricter requirements for access to funding. It strikes me as abnormal for an NGO like Friends of the Earth to feel entitled to the same amount of funding for decades without any clear deliverables being completed or basic codes of conduct or fair-play being respected. The €750,000 a year they get from the LIFE+ Programme should be our privilege to give them rather than their right to receive.

In short, the excellent Pieper Report draws conclusions that much needs to be done to clean up how the European Commission distributes public funds to NGOs. It is a first important step in cleaning the garden of the rampantly spreading weed infestation. The exploitation, non-transparency and unaccountability seen in cases like Friends of the Earth and the TNI highlight the need to implement fast and far-reaching changes to the present (lack of) European Commission procedures.

The Risk-Monger Just Shot Bambi!

Many people have come to me over the years outraged, saying how terrible it is that so much public money is given freely and without strings attached to irresponsible militants bent on disrupting the European Union project, jobs, innovation and access to public goods. I usually lend a sympathetic ear but tell them that making a fuss about it is a little like shooting Bambi. Most NGOs enjoy the public trust and use it to deflect any demand for accountability.

I am not, in any way demanding that we must stop providing civil society groups with the means to engage in dialogue at the European level. But if, like Friends of the Earth, they take public money and provide neither accountability nor deliverables, or worse, use the benefits of the public purse to undermine trust in job-creators and innovators, then there needs to be some system in place to intervene and defend the public interest. There are indeed some very good groups out there doing wonderful things that would merit such funds instead (like the Pastafarians of Europe asbl who rightly deserve their 12 million euros a year for network support!).

But for the European Commission to continue to fund NGOs, there needs to be some common scrutiny and accountability.

  • Is it reasonable to give a group like Friends of the Earth, with an office of six full-time equivalents, over € 4,800,000 a year and leave them in a situation where they don’t have to be transparent or responsible with the public purse? People like me pay the taxes that go into their campaigns against job creators and innovators, so I for one would like to see some scrutiny.
  • Is it reasonable for one part of the European Commission to give over € 2,000,000 to an activist group with a large network committed to undermining the public trust concerning a key strategy of another part of the European Commission? In the case of the TNI, not only would some transparency and scrutiny be necessary, but I believe the SecGen should look into this. Somewhere in DG DevCo something went badly wrong with the entire process.

There will be a hearing following the Pieper Report in the European Parliament on 6 February 2017 to consider means to scrutinise the European Commission’s funding of NGOs. I for one plan to attend and I look forward to seeing my dear friends from Friends of the Earth, the Transnational Institute and Corporate Europe Observatory! Who am I kidding? They aren’t paid enough to attend and engage in dialogue with those whom they disagree with!

In any case, smoked venison will be on the menu, with a side order of nettles.

 

 

13 Comments Add yours

  1. If you had checked with TNI, or the EC itself before publishing your blog, your blog would not have been based on erroneous information provided by ECIPE.

    ECIPE claims TNI received €718,000 Euro in 2013 and €699,188 in 2014 from The European Commission’s Directorate-General for International Development and Cooperation (EC DG DEVCO). It further suggests that these European Commission funds received by the Transnational Institute were used for work on TTIP. This is incorrect. In 2013, funds were received for three different projects, two of which continued into 2014. Respectively, these concerned awareness-raising in Europe about (i) EU trade policy and the Millennium Development Goals (ii) Land grabbing in the Global South and (iii) the impact of EU investment policy and investor protection on the Global South. The total amounts received from EC DG DEVCO were €476,274 in 2013 and €510,663 in 2014. The balance of EU funds were received from DG Justice & Home Affairs for a project concerned with European drugs policy.
    In short: TNI did not receive funding from EC DG DEVCO to work on TTIP.

    This information was publicly available on the Transnational Institute website http://annual2013.tni.org/#summary and http://annual2014.tni.org/ at the time the ECIPE report was published. Like you, ECIPE should have checked with TNI, or the EU itself, before publication, in keeping with proper research standards.

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    1. riskmonger says:

      Thank you very much for your reply. Usually NGOs do not engage with me, or if they do, it is to create an unpleasant atmosphere so I appreciate the information you have provided me.
      However I am still confused with your financial numbers as they are quite different from the figures provided in the links to your accounts and also not the same as in the Transparency Registry. This is a problem also for ECIPE – it is not that their numbers are inaccurate, but rather that the TNI changed the data in their Transparency Registry two days after the ECIPE report was published. I used the latest figures from the Transparency Registry, which, again, are quite different from the numbers provided both in the ECIPE and in your data above and in the links to the TNI accounts provided.
      In your message above, you did omit the funds from the project: Making EU Investment Policy work for Sustainable Development (which was listed on your accounts for 2013 and 2014) – this, I believe, was trade related. If you see the Description of Action which was acquired from an Access to Documents request (https://riskmongerdotcom.files.wordpress.com/2016/12/description-of-_the-action_-dg-devco-and-transnational-institute-amsterdam-2013-002.pdf), it talks about distributing funds to other NGOs, supporting European Parliamentary candidates in the 2014 elections and raising awareness on trade-finance and investment-related issues. I suppose funds that were redistributed to other NGOs did not factor into your accounts, but how much and to whom is important given that it was money earmarked for trade and finance, and given the public position of the TNI on TTIP, you can imagine why transparency is important to maintain trust in your organisation.
      So while you would like to reassure me that none of the DevCo funds were for TTIP, “Making EU Investment Policy work for Sustainable Development” funds were for trade and finance awareness raising and it was shared with other NGOs at the time when anti-TTIP campaigning was at a high level in Europe. I know that the TNI had donated at least twice in this period to Corporate Europe Observatory, but I am sure you will be able to show that it was not connected to their anti-TTIP campaigning either.
      The purpose of my blog was to show why the European Commission needs to be more transparent and provide more scrutiny in their funding of NGOs. This was one of the points of the Pieper Report and the upcoming hearing in the European Parliament.
      I understand that NGOs like the TNI do not have to provide accurate financial statements (the different numbers between your message above, the TNI accounts and the number on the Transparency Registry attest to this point). Corporations and profit-driven organisations do not have the same luxury – they are scrutinised by regulators, shareholders and external auditors. They cannot be so lax, unaccountable and non-transparent.
      I appreciate you sharing information with me in this exchange – it would be useful if you make public the full accounting of all of the monies received and redistributed to whom in the Making EU Investment Policy work for Sustainable Development programme. Non-disclosure of such funds is something many European taxpayers would be alarmed to find being common practice (many would also be alarmed to see how Friends of the Earth has become a non-transparent re-funder with public funds). This was a clear message in the Pieper Report to the European Parliament and it will be something I and others will pursue in the coming months.
      If the TNI were to take the lead and demand that all NGOs become fully transparent and accountable with the use of European taxpayer money, it would greatly improve your reputation and public trust.

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  2. ericb609 says:

    And I suppose that these fundings do not cover the costs that are covered directly by the EU Agencies to allow participation of such NGO’s in specific policies implementations where they have an invited role as recognised stakeholder organisations. For example, in the realm of the REACH regulation, for their participation to various committees meetings, stakeholder days, guidance documents reviewing panels, …
    Would be interesting to sum up all those little streams to have a good picture to how much they add up, and try to match the added value their participation has brought to the process.

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    1. riskmonger says:

      As these NGO offices get bigger, they have more people attending more meetings. Some activist groups have dozens of activists employed on a variety of policy issues. Meanwhile, the average EU liaison office for a large chemical company will have 3 to 6 representatives. I think it is about time for the EU to start giving money to big chemical companies to be able to build the capacity to attend all of the meetings the NGOs are calling!

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  3. Reblogged this on Peddling and Scaling God and Darwin and commented:
    An interesting post deal with financial aspects of Friends of the Earth Europe.
    How sound this is I don’t know and I reckon I will soon be told it is very right wing.
    However many of the points raised with what we fond with Friends of the Earth UK

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  4. probahblah says:

    This is not going to stop until the EU is scaled down under the threat of complete abandonment. It is effectively an imperial court. What it needs to become is a platform for the member states to negotiate and conclude agreements and to guard their implementation. Then NGO’s will need to address the governments and parliaments of the member states.

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    1. riskmonger says:

      Too true – like the UN, it seems that the EU is getting in bed with NGOs as a validation tool and a means to oppose and disrupt national governments. It is not a long-term strategy and will likely undermine its credibility. The UK is already looking at opportunities for its agricultural sector once it is free from the regulatory stranglehold. Other farmers are watching.

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