A Black Hole in Democracy?
The neoliberal remodeling of the French state has not only profoundly renewed the government’s role vis-à-vis markets. It has also spurred public institutions to cultivate new collusive ties with companies and market intermediaries and to weave a new system of alliances at their periphery. A field of public-private influence has grown up in the interstices, and has grown steadily as the shift to a neoliberal policy agenda has consolidated in Paris as in Brussels. However, we have not yet been able to collectively assess the political and democratic consequences of this major transformation. The “burning obligation” of managerial modernization of the state, a refrain obsessively repeated since the early 1990s, has dulled our capacity to discern in this new public-private partnership anything other than a quest for bureaucratic efficiency or an economic objective to enhance the global competitiveness of the “enterprise France.” Is there nothing else at stake here? Even the critics have too often suggested just this, by framing their questions within the bounds of these very policies; rather than assessing the toolbox itself, the public conversation has remained focused on the cost overruns of PPPs, and debates over individual conflicts of interest of regulators, and so forth.
Of course, political and moral outrage was voiced in the wake of the scandals that emerged in the first decade of the twenty-first century, ranging from the conflicts of interest of Sarkozy’s closest financial adviser turned banker, the tax fraud committed by Hollande’s budget minister, Jérôme Cahuzac, or the many failures to act of the successive governments in the Tapie-Adidas arbitration (see box 4 below). But the main effect of the scandalist framing of these cases was to reduce them to matters of individual deviation from the norm of a political and administrative system deemed to suffer from very little corruption. This viewpoint undoubtedly made it easier to resolve the crises, treating the scandals by identifying individual judicial accountability in each case, and deploying a new arsenal of deontological reforms for the public sector. The reinforcement of policies to prevent conflict of interest will not in itself suffice, however, to rise to the challenge: the juridical and individualizing perspective of the conflict of interest lens underestimates the systemic nature of the blurring of boundaries and its broad political effects. With the eyes glued to a corrupt transaction or a specific conflict of interest, one loses sight of the system as a whole, and runs the risk of not perceiving the political costs and the prejudice to democracy linked to the emergence of a field of public-private influence, whose effects are probably more diffuse and less spectacular but no less corrosive for our democracies. Much more than just an incidental shortcoming in relation to professional norms and ethics, these affairs more broadly highlight the conditions in which the public interest is defined today.1 In failing to measure the structural intermingling of business and state actors, all the periodic attempts to construct Chinese walls are much like a play of shadow theater.
In drawing up an inventory of the corrosive political effects of the blurring of the public-private boundary line, as we intend to do here, one may be taxed with engaging in an exercise of nostalgia for the “strong State” à la française; or even of archaism as it means opposing the modernization of the country and being death to the profound “respiration” of the state coming from its newfound public-private lungs. However, by examining public-private partnerships only through the lens of modernization and competitiveness, one fails to see that we are standing at the very edge of democratic space, in the space where the public interest—which must continually be armed against the inegalitarian tendencies that spring up at the heart of capitalism—is defined. It is certainly not easy to identify let alone measure the costs. While the profits to be gained by the professionals of intermediation, in particular corporate lawyers, from this fuzzy public-private line are readily identifiable, the collective costs remain largely out of sight. Meanwhile this borderline area has grown steadily larger and has all the features of a “black hole” in the power structure, positioned in the blind spot of public oversight, be it political or administrative, and of professional regulations. In short, it is time to conceive a new policy of separation to strengthen the bodies in charge of overseeing this border space and to protect the public sphere from the ever-growing threats to its autonomy.
A Politics beyond Reach
The formation of a field of public-private influence in between the market, politics, and government administration has given rise to a gray area that is sufficiently distanced from political and bureaucratic tutelary supervision and at the same time protected by the rules of professional confidentiality and self-regulation that are the prerogative of liberal professions. Between a Parliament unequipped to deal with the proliferation of regulatory agencies, the Paris bar eager to bolster the economic attractiveness of the legal profession, and a public administration in which the elite corps, starting with the Conseil d’État, are both judge and party to the crossover between public service and private activity, this new field of public-private intermediation largely escapes the public eye and control.
It should be clear by now that corporate lawyers are today a pivotal group connecting the neoliberalized part of the state and the market. And yet, while they do now play a critical part all along the norm-building process, in their roles as lobbyist, representative, legal adviser, and attorney, they bear no direct responsibility for their structuring role in policies. By virtue of its organization as a liberal profession, the legal profession has indeed remained out of public sight and beyond the reach of political and administrative control.
Secrecy and confidentiality are the cardinal virtues of the profession. The profession’s national bylaws state that confidentiality in the lawyer-client relationship is a broad public principle that is “general, absolute and without limitation in time,” and applies to all paper documents, emails, correspondence with clients, with colleagues in the profession, notes on meetings and discussions, the client’s identity, the lawyer’s date book, and so forth. Quite surprisingly, while lawyer-client confidentiality privileges are historically linked to the rights of the defense, this principle has remained unchanged despite the transformation that has taken the legal profession far from the courtroom, and into the business of providing advice and purveying influence. In the aftermath of the 1990 merger between the avocats and the conseils juridiques that widely expanded the scope of the legal profession, the Cour de cassation made a show of resistance (see chapter 1), and issued a restrictive interpretation of confidentiality privileges that it saw as limited to the exercise of defense action before the courts—and not to the activity of drafting documents or acting as negotiator. This interpretation was swept away, however, by legislation enacted in April 1997 giving lawyers a broad jurisdictional immunity, whether acting as defense lawyer or corporate agent. These confidentiality privileges in effect ensure a sort of juridical extraterritoriality for the legal profession2 and constitute a decisive comparative advantage, and even (to quote one former head of the Paris bar) a “formidable marketing tool”3 for corporate law firms as they compete with lobbyists, expert accountants, and consulting firms.
Clinging tightly to its defense of self-regulation, the profession has fiercely opposed all attempts to change the status quo. This is true at the EU level, where lawyers have been the most reticent and the least numerous of all professions to sign onto the Transparency Register established by the European Commission and Parliament.4 This is also true of the various EU directives adopted in the first decade of the twenty-first century to combat money laundering and which aimed to push back against this tradition of secrecy. Consequently, an obligation to submit a “declaration of suspicion” is now imposed on lawyers in the exercise of their counseling activity; they must spontaneously report to the president of their bar association any facts or circumstances that could lead to suspect money laundering operations. The president of the bar acts as an ethical filter and must decide whether the case should be forwarded to Tracfin, the anti-money-laundering unit at the ministry of the economy that is in charge of investigating such operations. But while over the years since 2004 four EU directives have been enacted and transposed into national legislation, the representatives of the legal profession have unceasingly fought to maintain a broad definition of the scope of confidentiality privileges. Even today the profession stands out for its “absence of participation” in the money laundering alert mechanism, to quote the acerbic assessment of the Tracfin unit.5 As the profession has been called upon to become the “intelligence service for the justice system and various financial administrations (customs, taxation, social security)” regarding questions related to partial or total dissimulation of professional activity, underreporting or misuse of income or sales revenue, tax fraud and fraudulent avoidance of social charges,6 the lawyers’ boycott has been confirmed: Tracfin received just one “declaration of suspicion” from lawyers in 2014, a figure to be compared with the 1,040 declarations submitted by notaries for the same year.7 This is all the more problematic in that the instance in charge of sanctioning failures to submit declarations is none other than the bar council itself and its disciplinary commission!
Alongside the lawyer-client privilege, the second fundamental pillar of the legal profession in France is self-regulation of professional ethics and deontology. The disciplinary regime applicable to lawyers was modified in 2005 under a reform intended to bring it into compliance with the “fair trial” standards promoted by the European Court of Human Rights. But in practice only minimal requirements of publicity and transparency have been imposed.8 In the opinion of even some eminent members of the profession, disciplinary action continues to be characterized by its opacity: “unlike many other professions, starting with magistrates, there are no national statistics and there exists no way to track disciplinary action,”9 nor even an annual report listing complaints, the behaviors in question and the sanctions given, as is the case for the magistrates’ disciplinary chamber.10 The general public, the very body that the professional has historically claimed to speak for and defend against the arbitrary decisions of the state, is kept completely in the dark. Litigants cannot register a complaint with the bar’s disciplinary council, and must make do with an appeal to the president of the bar; they have no rights allowing them to take part in a procedure of which they are simply informed. A recent survey conducted by Sophie Harnay and the EconomiX team provides data for an initial assessment of ethics and disciplinary practices in the Paris bar.11 Even beyond the punishment meted out by the disciplinary council, which can scarcely be called severe, this research reveals the extraordinary place of an “informal justice, the hidden face of disciplinary action,” that is conducted upstream of the council. It is the president of the bar and the members of the bar council who filter complaints from clients and colleagues, and decide which ones warrant initiating a disciplinary procedure. So while the annual frequency of complaints is very high—22.6 percent of Paris lawyers have been the object of complaints for breaches of the ethical code—“only 4 [cases] in 1,000 lead to a formal disciplinary procedure.” The bar presidents and members of disciplinary commissions prefer the so-called paternal admonishment, a simple reprimand that the bar president can address to a lawyer without any conditions of form or procedure. The “familial nature” and “paternal spirit of the bar’s jurisdiction” (to use expressions taken from professional ethics handbooks) continue to permeate the way the profession exercises control over its members and their practices. These attitudes keep the bar, its dysfunctional aspects and deontological issues, out of public sight, and allow it to conduct its affairs in a partially public setting that is marked above all by the usages of the legal club.
The state is not exempt from responsibility here, as it can, via the office of the public prosecutor, file complaints with the disciplinary commissions and appeal their decisions. Although the available data is sparse, the EconomiX survey shows that the prosecutor’s office pursues disciplinary action primarily in the cases of lawyers who have been charged in criminal proceedings. Other mechanisms also exist, intended to prevent conflicts of interest or benefiting from “unlawful advantage” by former civil servants who have crossed over to the bar, but their effectiveness often stops at the doors of the law firm. As an example, there is a waiting time during which former public servants are banned from “drawing up arguments and pleading against the government administrations overseen by the ministerial department to which they belonged.” But this ban, based on the individual responsibility of former civil servants, is hard and even impossible to enforce in large firms with many lawyers working together as a team. As one lawyer remarks, there are no rules against sending another lawyer from the firm to work with companies that a former tax inspector in the firm had audited (interview no. 11, man, ENI graduate, tax law).12
Public Ethics’ Default Lines
It is true that the state has not been entirely immobile. A series of scandals that emerged ever since 2008 involving ministers and top civil servants has triggered a “deontological moment” that resulted in the proliferation of norms and standards and the creation of new institutions to prevent and sanction conflicts of interest. An ethics committee was created at the Senate as early as 2009, followed by the appointment of an ethics officer at the National Assembly in 2011, charged with advising the members of the Assembly on these matters. An independent authority in charge of public ethics was instituted in 2013, the Haute Autorité pour la transparence de la vie publique (HATVP, or High Authority for transparency in public life), with a view to identify conflicts of interest and personal enrichment of politicians and top ranked bureaucrats, by gathering and publicizing statements of assets and interests. While progressively expanding the scope of its control to more than fifteen thousand dirigeants publics, the Authority was granted special access to tax administration; it is also charged now with reviewing, preventively, the fiscal circumstances of the incoming members of government cabinets. And last, under the Sapin II legislation passed in December 2016 to promote transparency, fight corruption, and modernize the French economy, a new agency endowed with the power to investigate and to issue sanctions was created, the National Agency for the Prevention and Detection of Corruption (Agence nationale de prévention et de détection de la corruption). The Sapin II legislation also asked the HATVP to keep a transparency registry of lobbyists modeled in many ways on the EU example.
On paper, this array of arms in the new ethics arsenal looks complete. In fact, however, it risks being ineffective. The measures taken fail to avoid the pitfalls of legislation adopted in a panic, leading to a disorderly jumble of ethics watchdogs—two ethics officers in Parliament, the civil service ethics commission, HATVP, and now the corruption prevention agency. Their articulation is neither simple or clear, and may even be counterproductive.13 The scopes of the various instances largely overlap, in terms of their competence as well as the categories of public persons they are meant to oversee. Indeed, this complex, perhaps unintelligible, architecture has its share of incoherent and bizarre features. There is a certain inconsistency of statutes, as the High Authority is legally independent of the government, but this is not the case for the Commission de déontologie de la fonction publique (CDFP)—hereafter, the commission de déontologie, the civil service ethics commission in charge of assessing the lawfulness of pantouflage to the private sector.14 Nor is the ethics officer (the so-called déontologue) of the National Assembly independent with respect to the office of the president of the Assembly. The roles of these bodies are also distributed somewhat incoherently, as the High Authority is endowed with powers to review the statements of assets submitted to the tax administration by elected officials and ministers, but the commission de déontologie does not have equivalent powers regarding high-level civil servants. Last, a lack of coherence persists due to different prevention and oversight strategies pursued by these instances, calling for considerable work to moderate, arbitrate, and coordinate these bodies.
On a more fundamental level, the supervision of the public-private border continues to be characterized by self-regulation, partial transparency, and soft law (without sanctions). The history of the commission de déontologie, which has always been presided over by a member of the Conseil d’État, is emblematic. Under the legislation enacted January 29, 1993, to prevent corruption and promote transparency, in cases of crossover of a civil servant to the private sector, the commission de déontologie must issue a prior opinion on the compatibility, in terms of penal liability and ethical responsibility, of the new activity with the activity of the civil servant in the three years preceding the transition.15 In addition to the progressive enlargement of its scope to include employees in cabinet offices, since the enactment of legislation on the rights and obligations of civil servants (April 21, 2016), the commission de déontologie has “powers to seek information” (which are not investigative powers, however).16 This legislation stipulates that government administrations must monitor the activity of civil servants who have been permitted to move to the private sector, but with “reservations.” But the commission de déontologie has neither the powers nor the means to ensure that former civil servants respect the constraints imposed on them. Most significantly, the control mechanism remains a secret internal process, even for the highest-level civil servants (cabinet officers, directors of administrative divisions, etc.), despite the fact that groups such as Transparency International have called for publication of the commission’s opinions. An emblematic example is the spectacular departure of Bruno Bézard, director general of the Treasury at the time (May 2016), for a Chinese investment fund; the opinion, and eventual reservations, of the commission de déontologie were not made public.
In actual fact, the contentious cases are generally settled by a discussion, without publicity or sanctions, between the crossover candidate, the ethics commission and his or her original administrative branch. Nothing is more revealing of the inadequate oversight of these crossovers than the fierce resistance put up by the executive branch, in the spring of 2016, in opposition to repeated attempts by a number of parliamentarians from the Socialist Party to place the ethics commission within the purview of the Haute Autorité pour la transparence de la vie publique, for crossovers to the private sector concerning members of cabinet offices, collaborators of the President of the Republic, and other staff employed at the discretion of the government. This proposed reform was far from innocuous, for it would have moved the commission de déontologie out of the administrative hierarchy, and would have instituted publication of its opinions on crossovers of civil servants at the highest level.17 A new battle ensued just a year later when the Parliament was examining the Sapin II legislation. Despite the opposition of the government and its secretariat general, a small group of Socialist Party MPs secured language to place the commission de déontologie under the auspices of the HATVP. Without success again, however, because this time the Conseil constitutionnel revoked the measure, even though no recourse had been brought before the council. This gave rise to a polemical debate on the ascendancy of the grands corps and in particular the Conseil d’État on this institution.18 The many resistances coming from within the state grands corps have eventually been overcome in August 2019 when a statutory law was enacted that merged the commission de déontologie with the HATVP. Yet this was only made possible as a counterpart for the unprecedented incentivization of pantouflage by the Macron executive which went as far as granting seniority rights to civil servants during their working period in the private sector.19
This structural reluctance to political oversight and publicity is not a characteristic of state grands corps alone. The working groups of the two chambers of Parliament have also opted for the flexibility afforded by an ethics code, and for pragmatic ethics officers who see their role as an advisory rather than supervisory function. Ironically, the National Assembly even chose as its first ethics officer Noëlle Lenoir, a genuine expert in matters of circulation between the public and private sectors. Lenoir, who served as ethics officer from 2012 to 2014, had previously been a parliamentary administrator, member of the Conseil d’État, member of the Conseil constitutionnel, cabinet head of staff, mayor, partner in a law firm, minister, arbitration officer at the International Chamber of Commerce, and so on. During her term, she actually continued to practice as a corporate lawyer heading the Competition Law–Public Law team at the Kramer Levin firm.20 In the absence of power to make decisions, much less impose sanctions, the parliamentary ethics officers have little room for action. Noëlle Lenoir said so herself, underscoring that “the ethics officer reviews, discusses, advises and perhaps files a report with the bureau of the Assembly as the case may be, but has no power of decision.”21 Her successor announced that he would above all aim for “integration with the parliamentary community,”22 with an emphasis on “closed doors guarantees” and his role as a mere “traffic officer” orienting—if not counseling—MPs as they engage in parallel activities in the private sector At the Senate, the ethics committee proved equally weak. Since its creation, it has issued eight opinions on subjects of an individual or general nature regarding the exercise of the parliamentary mandate.23 All these cases have been found to be in compliance with current legislation, while the underlying discussion and considerations have not been made public.24
Last but not least, the doctrine professed by these oversight bodies is in most cases quite lenient. Once again, the example of the commission de déontologie is edifying. As a former president of the commission noted a few years ago, the commission “takes care not to give an excessive scope to the list of incompatibilities associated with the exercise of (directorial) functions.” Accordingly the CDFP felt it could not oppose the departure of a former secretary general of the office of the President of the Republic who left to join a corporate law firm, nor the departure of a former deputy secretary general of the same office who moved to a bank.25 In fact, negative assessments of the transition of top civil servants to the private sector are extremely rare—three or four a year in the central government administration. The blanket of secrecy covering the “reservations” imposed by the ethics commission to former civil servants’ activities prevents the formation of any coherent “jurisprudence,” as revealed in our interview with a former tax inspector: “This commission had truly asymmetrical opinions, for I know of two people who appeared before me, without limitations of any sort, whereas they had done a lot of work on corporate filings” (interview no. 10, man, ENI graduate, tax law).
BOX 3. / The very lenient state doctrine on crossovers: The case of Sarkozy’s closest economic adviser
The easy-going tradition regarding civil servants who cross over to the private sector came into the spotlight with the case of François Pérol, former deputy secretary general at the Élysée (office of the president) in charge of economic and financial affairs who in 2009 was appointed to head a new banking network Banque populaire–Caisses d’épargne whose emergence he had himself dealt with directly in the course of his public function under President Nicolas Sarkozy. While the press and the judiciary pointed out the issues raised by the crossover itself, there was less mention of the high level of tolerance manifested by the state itself, and its ethics commission in particular. The content of the letter addressed by the president of the commission de déontologie, himself a member of the Conseil d’État, to the secretary general of the Élysée, and published by the press, provides convincing evidence of this. The letter in effect validates the appointment, arguing that “the members of cabinet offices, unlike civil servants in government departments, do not have, in most cases, administrative authority, whether delegated or held by virtue of their position.”26 This reasoning shows a juridical formalism that runs counter to all that political science has shown to be the role of advisers in the office of the president. The letter pursues with a list of the flexible and tolerant attitudes manifested in preceding years:
In 2007, pertaining to the application of the provisions under discussion, the commission de déontologie accepted the pantouflage of an adviser to the Élysée secretariat general who had come from the financial sector and returned to finance two years later (decision no. 07.A0629 of 22 July 2007); likewise, a member of the Inspection des finances, successively advisor to the prime minister, then director of the cabinet of the minister of the economy, was allowed to become director of strategy at a major bank (decision no. 07.A0627 of 19 July 2007); and yet again, a deputy director who had served in the cabinets of several successive housing ministers was authorized to take a position as director of social housing in a property development company (decision no. 07.A0999 of 5 December 2007). Public reports (of the commission de déontologie) from earlier years contain similar examples. The report for 2004 indicates that the commission authorized the departure of the Élysée palace former deputy secretary general, the former director of the cabinet of the prime minister, and the former director of the cabinet of a finance minister, for positions in an investment bank where they exercised executive functions in the capacity of managing associates (decisions of 24 May 1995, 30 November 1995 and 11 January 1996).27
While the letter of the president of the commission de déontologie attests to the role of “facilitator” that the commission assumed for its work and to its chronic underestimation of ethical risks, the president later adopted a line of defense that demonstrates a form of intolerance to disclosure of these issues that he deemed to be internal affairs of government administration. When two Socialist Party MPs, Arnaud Montebourg and Michel Sapin submitted a question to the members of the commission regarding the conformity of Perol’s crossover, the president of the commission was, in his own words, “flabbergasted,” and added: “only in Soviet countries would you see something like this.”28
There are many other examples of relative insensitivity to situations of conflict of interest, and reticence regarding any form of public scrutiny. In conclusion, nothing has arisen to invalidate the severe assessment given a few years ago by Christian Vigouroux, former alternate president of the CDFP, and eminent member of the Conseil d’État: “the commission is not interested … in the top civil servants’ crossovers and wastes a lot of time on minor cases that are anecdotal…. The commission is, in point of fact, merely a commission to manage transitions between civil service and the private sector.”29
Gaps and Holes in Parliamentary Oversight
As for classical parliamentary oversight, this also appears to be toothless, particularly when it comes to the ongoing development of regulatory agencies within the state, agencies that provide one of the main revolving doors for circulation and exchange between public service and the private sector. As the scope of action of these agencies has been continually extended, by successive acts of law to liberalize insurance markets, banking, rail transport, broadcasting, publishing, and so forth, a crucial question is raised—who controls this “State within the State”?30 Since 2000 one parliamentary report after another has voiced concern over the chaotic expansion of this zone of independent regulation that continues to be only vaguely defined.31 “Unidentified juridical object,” these agencies are so hard to identify that as of this writing, there is no exhaustive list of all these entities in France. In the absence of a unified legal and political framework,32 their structures, hiring policies, jurisprudence (in particular in relation to conflicts of interest), and policy orientations are very poorly known. Furthermore, there is no body charged with systematic monitoring of this space in which public policy is produced. The selection of qualified members appointed to the collegial boards of these agencies, recruitment of collaborators (rapporteurs, deputy rapporteurs) who play a central role in these organizations, the overlapping activity of agency members within or outside of the state apparatus—all these factors are entirely under the radar of Parliament. Although senator Jacques Mézard drew up a report in 2015 that provided initial insight into the staffing of these agencies, and pointed out large areas of opacity, this report said nothing about evaluation of the agencies’ policy orientations as such. In short, faced with steady expansion of this regulatory pole, MPs are very poorly equipped and they themselves confess to having “no consolidated and cross-cutting vision of the resources furnished to these independent administrations, either in terms of budgetary allocations or earmarked fiscal receipts.” And occasional hearings with the presidents of these agencies will not suffice to constitute parliamentary oversight. In point of fact, as the Parliament can neither summon the agencies to appear before the chamber nor demand replies to questions raised by MPs, the Parliament is very hard put to exercise control over this new offshoot of the executive branch. Parliament may not even always receive the agencies’ annual reports, and when it does often the MPs have to make do with documents that resemble tools of media communication rather than actual accounts.
The ramping up of the powers invested in these regulatory agencies encroaches not only on the executive branch, which finds itself despoiled of many of its prerogatives. It is detrimental to the Parliament body as well, which is deprived of tools that allow it to ensure its constitutional role of oversight and evaluation of public policy. In short, the agencies are sheltered from the hierarchical power of the executive branch, and are also safely out of the range of parliamentary supervision. This leads to a bitter assessment: “The State, far from being a vigilant comptroller, is merely an observer.”33 Consequently, regulatory agencies “can, within the scope of their area of competence, conduct policy for which they are not called accountable before the parliamentary assemblies under the same terms as the members of the government.”34 The same reasoning could be applied to the various ways public missions are outsourced to the private sector; to begin with, public-private partnerships, over which Parliament, and also to some extent government ministries, have lost control, if only because of the highly technical nature of these assignments. More often than not the state has deprived itself of the requisite technical competence, by the very act of carving up and farming out these tasks. On the whole, the rise of the regulatory state has brought conventional forms of political responsibility to a stalemate: Parliament can no longer hold the executive branch accountable for the activity of these agencies, and the executive itself has neither the tools for oversight nor the expertise that would enable it to continuously monitor this new regulatory pole.
The new politics of influence that emerged alongside the field of public-private collusion has therefore developed in a blind spot, out of the view of professional regulations, administrative control, or Parliament oversight. The traditional tools of democratic inquiry and oversight are today foiled by the opaque and often informal nature of this border space and its dynamics that lie below the radar of government institutions. The steady enlargement over the past two decades of this “black hole” at the core of France’s field of power leads us to wonder what it is costing us in terms of political and democratic life.
Outsourcing Public Interest: Political and Democratic Costs
Here one must start by pointing out a fundamental paradox. The reshaping of the state and its economic policy according to the neoliberal model—breaking up public monopolies, public-private partnerships, outsourcing, development of independent regulatory agencies—that was justified by the need to correct the short-sighted tunnel vision of public authorities, has created a new form of “rent” at the intersection of the public and private spheres.35 It is as if, to avoid at all costs the purported inefficiency and immobility of public entities, public regulation has been handed over to another form of rent-seeking, even more opaque and unaccountable. By initiating the regulatory turn that thrust public institutions (government administrations, agencies, European institutions, local authorities) into the very heart of markets, these institutions have become the prime target of competition between big companies. For these companies, access to regulators (whether national or European, administrative or political), now determines their capacity to do business and develop over the long term in the marketplace. As they have become increasingly dependent on resources dispensed by governments and administrations, these major players in the economy have focused their strategy on enhancing their capacity to steer political and administrative powers to their advantage. In other words, the public institutions’ zeal in setting up free competitive markets has made them the target of multiple strategies to gain and wield influence, and has spurred large companies to link the accumulation of economic power with the acquisition of political and bureaucratic clout. There is worse to come. Each successive piece of legislation reinforcing the trends to outsourcing, the development of independent regulatory agencies, the breaking up of public monopolies, and encouraging closer public-private partnerships has dug a deeper trench, raising the market value of political and administrative resources and assets. Far from clarifying the respective roles of private enterprise and the state, as the advocates of the neoliberal transformation would have had us believe, these policies have vastly muddied the waters; the intermediate zone where the market meets the state (and the EU) has never had more importance. Far from loosening the ties between economic power and political power, the neoliberal transformation of the state has given birth to a new system of collusive relationships characterized by a configuration of closely imbricated and mutually dependent large companies, corporate lawyers, and public regulators.36
One could choose to minimize the import of this change, and see here only limited mutations of public action, essentially restricted to spaces of economic regulation while most of the state is purported to remain steadily loyal to its tradition of autonomy.37 Or on the contrary, one can emphasize the steep slope of this curve, and point out the steady expansion of this politics of influence over the past two decades—underscoring the deleterious effects of this field’s gravitational force on the public and democratic spirit of our political and administrative institutions. These effects are of course visible in the new forms of corruption (from influence peddling to direct bribes) that have sprouted up in the soil of these dangerous liaisons on both sides of the public-private divide.38 But the corrosive effects of this black hole are much more insidious. To grasp the scope of these effects, one must take a look through the lenses of democratic theory, to see that this border between public and private is not simply a sectoral or professional segmentation.
As a key political thinker of social differentiation, Michael Walzer puts us on the right track: the emergence of a democratic space was made possible by drawing borders, always uncertain and constantly contested, that ensured the relative autonomy of the public sphere. The protection of the public sphere from the “tyranny” of adjoining sectors governed by other types of authority—religious, military, economic, or other—or, to put it another way, this policy of containment that holds these authorities at bay, sufficiently distant from the spaces where the public interest is deliberated, is a social and institutional condition needed to ensure equal exercise and enjoyment of political liberties, of conscience, expression, demonstration, and so on. Absent this separation that distinguishes the rationales and interests of the public and private spheres, the egalitarian aspirations that are part and parcel of citizenship in a democracy are countered by the anti-egalitarian pressures that are inherent to the functioning of the market economy. What is at stake here are forms of negative conversion, or in Walzer’s terms, tyrannical conversion, because “those who could succeed in a specific sphere may be excluded from this success by the success of powerful entities who convert assets drawn from another sphere.” In sociological terms, this vision of the democratic space can be read as the preservation of a low political convertibility of social capital accumulated in one or another of the sectors mentioned here. To put it differently, the norms of equality and liberty, conditions that are inherent to the definition of the public interest, can exist only if the dividing line between public and private remains unblurred. In this sense, as Walzer says, “the interference between the spheres,” that is in this case the domination of market logic over the functioning of the public sphere, constitutes one of the pathological situations of democratic societies.39 If one follows the theory of normative social differentiation as developed by Michael Walzer, “society enjoys both freedom and equality when success in one institutional setting isn’t convertible into success in another, that is, when the separations hold,”40 and thus the protection of the borders of each sphere against the mechanisms of tyrannical conversion is not simply a matter of sector or professional stakes, or even a matter of state, but well and truly an issue of democracy.
In this sense, the blurring of the public-private dividing line described above is accountable not only under the ordinary categories of law (conflict of interest, misuse of corporate assets, unlawful advantage, etc.) and of professional ethics, as applied for professions such as doctors, architects, and so on. Blurring this distinction calls into question the very conditions in which the public interest is defined.41 In other words, the marking of social space established by the public-private distinction pertains not only to the applicable legal regime or to the type of economic profitability in place. It also delimits the legitimate space and jurisdiction of the public will, set out by procedures of deliberation, decision-making, and conflict resolution that are necessarily different on the two sides of the dividing line. And because the integrity of the two spheres, public and private, is valuable in and of itself, the line that separates them is a particularly precious object. To express this in the terms of the theory of “the Commons,” here there is a “common good” that cannot be legitimately seized by anyone.42 In this instance, it is a symbolic good, differing from the material goods (air, pasture land, etc.) most often invoked by the theory of Commons, when it suggests ways to establish a regime of shared property. But it would be a mistake to fail to see the very real effects that would be felt by all if this symbolic good was seized or captured by the development of a field of public-private intermediation.
In recognizing the collective and fully political value attached to the preservation of the dividing line between public and private, it becomes possible to determine the costs incurred when this field of intermediation becomes increasingly autonomous. The first of these costs is related to the seizure of this space by a group of intermediaries and major market players, who in this way acquire an unprecedented political capacity to define the public interest at stake when public services are organized as competitive markets. The notion of “capture” developed in American economics literature since the late 1960s expresses one of the corollaries of the autonomization of the politics of influence. If defined broadly, the notion allows us to underscore how doctrinal, professional, and methodological pressures can be exercised to bring a policy or institution under the control of a group of actors and institutions, and inversely the eviction and silencing of citizen’s voices and causes in this framework.
Along with the emergence of this field of public-private intermediation, a sort of fence has emerged around a relatively small number of protagonists who manage to move from one side of the public-private dividing line to the other, as evidenced by the impressive array of clubs, talks, and other meetings and conferences in the public-private domain. Taking advantage of looser statutory constraints on the part of the state in the spaces of economic regulation, in particular in the areas entrusted to regulatory agencies, and of the flexible conditions granted to the exercise of the profession of corporate lawyer, the crossovers and, by extension, the corporate law firms are now in a position of brokers. Having acquired the know-how specific to this hybrid space, they are well placed to profit from the successive waves that have shaped the neoliberal state and its relationship to the marketplace. The Cour des comptes itself has expressed concern with respect to some particularly visible phenomena, such as “former public servants who participate in missions involving their former administrations,”43 and what the Cour calls “subscriptions,” pointing at repeat players who get past the rules of public procurement by positioning themselves as the systematic advisers of a given state administration. As a result, 40 percent of the total amounts billed to the state for private consultancy services between 2011 and 2013 was paid to just ten consulting firms.44
This social and professional fence also has a cost in terms of the ways public institutions (agencies, administrations, even jurisdictions) use their regulatory capacity to impose sanctions. The public-private revolving door, and the increasing confusion regarding the arenas where public economic policies are produced, evaluated, and overseen, have the effect of undermining the ethical yardsticks designed to gauge conflict of interest as well as corruption. The blurring of the public-private dividing line makes it more difficult to exercise criticism “from the outside,” and hinders consideration of interests and causes that are not those of stakeholders. It also undermines the effectiveness of internal evaluation and of oversight systems. In a context in which law firms and public-private professionals emerge as border guards, the public interests and values at stake tend to be underestimated, a euphemistic vision of the risk of conflict of interests holds sway, and the costs of publicity, disclosure, and public regulation are overestimated. As a result, the increasing autonomy of the field of influence politics diminishes our collective capacity to regulate the pressure exercised by the main market players and the professionals who represent them on public regulation.
The related risks are not just the influence of a small group of intermediaries, or weaker control mechanisms. The development of bureaucratic expertise and the politicoadministrative networks of large law firms give major market players—large companies and economic interest groups—an unprecedented political capacity that cuts to the very core of the state. Harnessing these law firms, the new middlemen between the state and the marketplace, large companies have boosted their skills and capacity to undo or at least mitigate the constraining effects of national and EU legislation, or to play on their contradictions. Using their political and administrative influence, corporate lawyers work to reinforce the capacity of major companies to steer rulemaking to their advantage and to disarm penal and administrative control mechanisms and sanctions, or to minimize their effects.45 This is readily seen in fiscal matters, where tax lawyers make it possible for “dominant categories to domesticate fiscal constraints” via “measured application” of the relevant legislation.46 It is also seen in regulation of competition:47 crossovers from the civil service are asked to do in the private realm “exactly the opposite of what they were paid to do in the public sector,”—that is, “remove the company from the scope of any eventual inquiry”48 and the application of constraining legal measures. In so doing, they undermine the effectiveness of public action, and all the more that, as policy to farm out and “agencify” its action has taken effect, the state has deprived itself of the technical expertise that would enable it to pursue its action in critical areas such as public-private partnerships, competition policy, and financial and stock market operations. This has created a vicious circle, in which the relative lack of state expertise in these domains reinforces the conviction, within the state structure, of incompetence and even illegitimacy, further justifying the need for ever greater recourse to the expertise and services of private operators. This is spelled out in the above-mentioned report of the Cour des comptes, which states that the state has lost some of the “core competencies of the trade [sic]”:
even if consultancy services remain limited in volume and in value in State expenditure, they are concentrated on certain themes of strategic importance for conducting public policy (assistance to decision-making, project support, investments, modernization of the State, etc.) and can gradually create a dependence on key outsourced competencies, entraining a risk for the State of loss of internal expertise and capacity to conduct its strategic projects. The capital of experience amassed by certain firms that are strongly implanted in different administrations gives them a far-reaching transversal vision of interministerial activity that no one State administration possesses.49
BOX 4. / How the state lost control: Christine Lagarde and the Tapie-Adidas arbitration case
The trial that opened in December 2016 before the Cour de justice de la République (France’s special court to try ministerial misconduct) in which the defendant was former minister of the economy Christine Lagarde, was destined to delight lovers of riddles and enigmas. How could it be that in an affair with several hundreds of millions of euros in public money at stake, the state had twice removed itself from the procedure? The first time, the state (under the lead of its economic ministry) chose to abandon action before the courts and turned to a trio of arbitrators to settle its dispute with Bernard Tapie. The second time, the state chose to forgo its right to recourse in response to the extremely heavy sanction inflicted by this arbitration tribunal.
To help us unravel this enigma, the work accomplished by the pretrial inquiry commission of the Cour de justice de la République provides highly valuable documentation. Beyond the strictly judicial question of the penal accountability of the different protagonists in this affair, who were charged with “negligence” or “conspiracy to commit fraud,” the pretrial inquiry offers a singular viewpoint for observing the functioning of the economic and financial arm of the state. One aspect is immediately apparent: business lawyers were omnipresent in the halls of government administrations and the antechambers of ministerial cabinet offices. They are found at each of the cardinal points of the decision process, posted like a backup to political and administrative instances. There was the minister of the economy herself Christine Lagarde—who came from a prominent career in the Baker McKenzie law firm—and on this occasion was advised by August & Debouzy, one of the most influential law firms in Paris. There was also a nebula of public bodies involved in the case—the public refinancing office (Établissement public de financement et de restructuration, EPFR) entrusted with defending the interests of the state within the liquidation consortium (Consortium de réalisation, CDR) tasked with clearing the assets and debts mishandled by the Crédit Lyonnais bank, plus the state holding agency (Agence des participations de l’État, APE)—all of which had engaged their own lawyers. In fact, much of the debate that roiled the state, on the subject of the utility of arbitration, or the risks of appealing the arbitration decision, took place through and among lawyers. The impact of their involvement can also be measured by the essential role they played at key junctures in the case. These crucial junctures came when the state was in talks with the liquidators or with Bernard Tapie, and the lawyer Gilles August was all alone in conducting “in the name of the minister” the negotiations that led to the arbitration compromise. Another key stage came when the option of recourse to seek annulment of the arbitration decision was being debated, and Christine Lagarde and her head of cabinet preferred to call upon outside corporate lawyers rather than turn to the legal affairs division of the ministry, or consult the Conseil d’État informally. It looks very much like the law firms constituted in the case a sort of exoskeleton of the state, an auxiliary bureaucracy, that bypassed and deactivated the internal spaces of evaluation and oversight.
This astonishing penetration of corporate lawyers into the affairs of the state had a cost, of course. A budgetary cost—to suggest a first-order estimate, let us consider the fees incurred for the arbitration process alone, evaluated at approximately one million euros, each arbitrator receiving remuneration of 300,000 euros … or the words of the former minister of the economy at her trial, who spoke of the “hemorrhage of legal fees,” “up to 32 million euros a year”!50 But perhaps more significant there was a political cost, from the point of view of the action of the state. In deciding not to develop the in-house expertise needed for large-scale financial transactions (divestiture of share capital, capital increases, etc.), the state created the conditions for its own marked dependency on outside private counsel (legal and financial). Indeed, the Cour des comptes had diagnosed this state of dependency in its 2014 report mentioned above. The pretrial inquiry shows how the political and professional corporate mindset made its way into the heart of the state: how a preference for the justice of business lawyers came to prevail, opting for the private justice of arbitration that is deemed to be quicker and better suited to the needs of the business world. Inversely, how the risks, difficulties, and costs of retaining the affair within the purview of the state and its judicial system were overestimated—as it was feared that the intervention of public judiciary deemed too critical or exterior to market actors could drive away future investors. Last, how the decision in favor of a confidential arbitration procedure took shape allowing avoidance of the scrutiny of public exposure and parliamentary oversight.
Deprived of the necessary expertise to carry out its own assessment of the public interest at stake, the state created its own disability as it were, being persuaded that it was not founded to act and defend its own rights. In sum we have here an archetypal case of the collapse of self-confidence on the part of the state, as described by the British sociologist Colin Crouch in relation to the effects of the neoliberal shift. Beyond the finding of individual responsibility, which was ultimately handed down in condemnation of Christine Lagarde, the negligence is above all a systemic negligence, tied to the net of private counseling and revolving doors that now underpins the economic and financial pole of the state.
Placed beyond the reach of parliamentary oversight and administrative hierarchy, wedged in between the pole of agencies and the corporate bar, the developing field of public-private intermediation thereby fosters a form of outsourcing of the public interest, benefiting first and foremost the professionals of influence and major private corporate groups. Because they impinge upon the principles of equal citizenship, on the possibility of public ethics, and in fine on the conditions ensuring the functioning of the democratic state, the collapse of the wall separating public from private (and the monopolization of the profits drawn from this intermediate space) constitute a definite risk for democracy, and oblige us to reflect on the framework of a new separation policy. From this point of view, the issue of the line between the public and the private spheres is not merely an internal administrative problem at the level of career management, let alone a matter of efficiency of public institutions, as successive governments have held it. The dividing line, in a democratic regime, is a common good, as defined in the theory of Commons,51 underscoring that it cannot be appropriated and must remain common property—because this line determines the conditions under which public decisions are constructed and controlled. This is not a purely theoretical distinction. Depending on the administrative or democratic nature attributed to this line, different forms of protection and degrees of vigilance ensue. Either we collectively settle for the current system of self-regulation under the auspices of the state grands corps, a system that has now become problematic as the latter are the ones most immediately affected by the dividing line between public and private. Or we consider that the degree of permeability, or impermeability, at the summit of the state—the degree that we deem to be compatible with the proper functioning of our democracy and public action—is a determination that must necessarily be made by bodies that are open and public, with a regime of collective deliberation that extends well beyond the circle of stakeholders alone.
The Difficult “Art of Separation”
Let us say it outright: we do not envision a complete impermeability, that in fact has never existed, nor do we long for an unlikely return to an earlier state of affairs. Social and political criticism has too long been inclined to go no further than an evocation of a golden age of the state that is more myth than reality, and which confines us to an attitude of indignant lamentation. The continual reference to this idealized past is not unrelated to the feeling of impotence that disturbs us as we face these transformations that escape us and over which we seem to have no control. To think about this new situation, surely one should start by “forgetting nostalgia”52 that too often induces a form of intellectual laziness when discussing the unprecedented challenges raised by the neoliberal evolution of democratic states. One should not be too quick to forget that these “Hegelian” top civil servants leading the nation in the name of a higher ideal of the public interest, and keeping their distance from the world of business—an image sometimes called up with nostalgia today—formed a “State nobility” firmly ensconced in a deeply stratified class structure.53 Last and most important, there is a kind of irreversibility in this history. It is not possible to upend, by the magic of a political crisis or emotional response to a scandal, a collusive system that has been consolidated by nearly three decades of neoliberal legislation, and is supported by a social and institutional groundwork of multiple public policies, professional groups, and legal mechanisms, both French and European.
Blind Spots in the Transparency Paradigm
It is true that there are new tools for fighting the adverse effects of this blurring of the lines; over the last fifteen years, policies in favor of transparency in public life and prevention of conflicts of interest have emerged as the principal toolkit used by advocates of reform as well as moral entrepreneurs in Europe.54 Transnational expertise in fighting corruption has developed over the years, driven by the recommendations of the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe, the media campaigns of Transparency International and other NGOs, and the mobilization of EU institutions. Intended to foster the emergence of a virtuous lobbying force that would be useful to public decision makers, this new policy of public ethics is framed in the neomanagerial lexicon of accountability. Its main objective is to ensure that public decisions are “traceable,” and that the “legislative footprint” is transparent, by making public the schedules of ministers and top civil servants, by publishing the content of their talks and discussions, by facilitating access to administrative documents, by listing the identity of lobbyists and special interest groups, and so forth. The EU has become the prime laboratory for these new techniques of public ethics. In the wake of the collective resignation of the European Commission in 2000 on charges of conflicts of interests, and following publication of the White Paper on European Governance, the EU Commission and Parliament launched the European Transparency Initiative (2005) and created what has since become the flagship measure of this new arsenal—namely, the Transparency Register, a register that includes a large variety of EU public affairs specialists from lobbyists to NGOs, think tanks, and lawyers. The stakes are high, because the consulting and lobbying industry without a doubt has an in-built preference for informal and opaque settings in which their activities are more difficult to identify.
These new instruments of democratic governance also raise some problems, however. Inspired by the theory of public choice that disaggregates all players (whether public or private) into separate interest bearers fighting for influence in the norm-making process,55 these new mechanisms are most often blind to the distinction between public and private actors. This was pointed out in the 2003 OECD report on “conflict of interest” in public service that was in many ways a seminal publication: “The strategy devised to manage conflict of interest relies not only on rigorous oversight of private interests,” but also on the equally dangerous risk of competing public interests that may interfere in the decision-making process. In other words, the conflict of interests is not just between private and public interests but equally among different public interests. As a result, each public entity (state-owned companies, regulatory agencies, government departments, etc.) is a lobbyist that should be overseen in the same way as private entities in the economy.56 The recent Sapin II legislation (2017) in France, enacted to promote transparency and fight corruption, partly adopted this perspective. The definition it gave of the notion of conflict of interest (the first official definition in French law) stems directly from this paradigm as it includes “any situation of interference between a public interest and [other] public and private interests, that might influence the independent, impartial and objective exercise of a function.” While the Transparency Register created to list all potential “lobbyists” does not encompass parties and government administrations, it does cross a symbolic threshold by adopting a broad conception of the notion of “interest representatives,” extending beyond private interest groups to include publicly owned companies or public bodies engaged in industrial or commercial activity. Better yet, as it pursues its search for a full transparency over normative footprints, whatever the interests at stake, this legislation approves a redefinition of the political playing field, less focused on the classical actors of representative democracy than on stakeholders, whoever they may be—interest groups, private operators in the economy, NGOs, religious denominations and entities, government administration, and so on. In the end—and this is only an apparent paradox—these new measures for fighting corruption do nothing to prevent the blurring of the public-private line. On the contrary, they make it even more difficult to distinguish between public and private.
As a result, we are still short of a new microphysics of the public-private border, which would do away with the black hole that obscures the dividing line. A separation policy will certainly make use of the classic set of tools that traditionally serve to protect professionals from outside pressures: these are rules for managing conflicts of interest (incompatible functions, recusal procedures, mandatory resignation, regimes of immunity and protection of position, waiting periods, etc.), and the array of penal statutes, from influence peddling to unlawful advantage, that sanction violation of these rules.57 They constitute a key institutional toolbox to protect the integrity of the public sphere. But this barrier is most often weakened by policies that aim to “let the public sector breathe [sic]”: legislation to modernize the public service (February 2, 2007) sought to incite all civil servants to be mobile in their careers, by reducing from five to three years the waiting period to be respected before former civil servants can take a job (or work as a consultant) in sectors which were under their supervision in the public service. This toolbox is also often criticized, and preference given to the flexible law of ethics codes and prevention policies. Mistakenly. Because they touch upon the conditions that allow civil servants to gainfully exploit in the private sector their experience in the public sector, these tools are particularly well suited to address the growing fuzziness of the dividing line. In other words, they provide the most effective way to juridically and symbolically delimit the public sphere. Because it is out of the question to impose a general and absolute interdiction banning civil servants or politicians from crossing over to the private sector—something that would be neither feasible, nor desirable—the whole system of incompatible positions and waiting periods must be overhauled, to target the most exposed sectors (banking, taxes, etc.) and the most vulnerable public positions.58 Why not consider the idea, outlined with reference to central banks by the American political scientist Christopher Adolph, that “noncompetition clauses” be required for appointments to executive positions in regulatory agencies and the highest jurisdictions (Conseil d’État, Conseil constitutionnel, Cour de cassation), along the lines of the clauses companies include in their contracts with newly hired employees, to protect their legitimate corporate interests?59 These clauses could specify the sectoral fields that would be off limits, and the waiting period to be respected before taking employment in the private sector.
As necessary as these instruments are to symbolically and juridically trace the borders of the public sphere, they also have their limits. Their first drawback is the structural weakness of penal action intended to sanction violation of these rules.60 While the legislation on transparency in public life (enacted October 11, 2013) did indeed stipulate stiffer punishment of unlawful advantage, it is generally agreed that these charges are rarely effectively pressed.61 For instance, charges were dropped in 2009 in the case of François Pérol, who pivoted to the large French banking federation Banque populaire–Caisses d’épargne (see box 3), just a few months after having himself directly overseen the creation of this federation in his role as Sarkozy’s main economic adviser; and the former ministry of economy Christine Lagarde, who was actually proved guilty of “negligence” in the handling of the Tapie-Adidas arbitration case and yet suffered no penalty—just two examples among many others. Moreover, these mechanisms aimed at preventing conflicts of interest, constructed first and foremost for legal and judiciary purposes, focus on corrupt practices or on individual circumstances. They thus underestimate the systemic dimension, and the more diffuse corruption of the “public spirit” that is taking hold in political and administrative institutions, with the emergence of a field of public-private brokerage. In addition, as the conflict of interest paradigm merely focuses on the prevention of conflict of interests, it fails to address the broader need for an active protection that would positively ensure that all parties are equally equipped in the process of defining the public interest. In other words, when it comes to securing the autonomy of public decision-making, there are not only negative obligations, but also positive ones.
It is not within the scope of this book to prescribe in detail the content of this new policy of separation, but it is easy to see—on the basis of our inquiry—the forces that could serve to leverage a new stewardship of the public sphere. These would be: reinforced vigilance and oversight of the various hubs in this field of intermediation (consulting firms, regulatory agencies, grands corps); a policy of knowledge and intelligence that would make it possible to map out the structuring dynamics in this border space (crossovers, outsourcing, consulting, and also the policy orientations of regulatory agencies, etc.); a precaution principle with regard to laws that further neoliberalize the state, such as those that have progressively undermined the public-private dividing line.
A New Stewardship of the Public Sphere
The transparency policy put into place by public institutions in Paris and Brussels is not in itself sufficient. It can even create a halo that renders our understanding of the phenomenon even hazier, buried underneath an avalanche of data. Paradoxically, the policy may add another veil of opacity if one does not undertake the necessary work of aggregation and analysis. As of this writing, the state has not yet embarked on this task: it does not possess today “a global vision of the networks of influence that it has itself nourished,”62 to quote the lucid remarks of a report drawn up by the corruption prevention office (Service de la prévention de la corruption), nearly twenty-five years ago. In its 2015 report on public sector outsourcing, the Cour des comptes recognized that there is “no common reference shared by all government administrations pertaining to the departure of public employees to the private sector, and notably to consulting activity.”63 Likewise, no statistical treatment or summary analysis is made of the statements of interests and assets that are collected by the High Authority for transparency in public life, and which could constitute a valuable resource of knowledge about public managers, ministers, and members of Parliament. To complete the picture, the extremely fragmented institutional framework and the limited resources of the public entities in charge of inducing more ethical behavior in public life, restrict these bodies to a partial view of the situation. In short, the state is afflicted with short-sightedness, and continues to be astonishingly ill equipped to see what is going in its backyard. Is it not surprising that to date there exists no interministerial observatory capable of mustering an overall view of this borderline space, and of the flows of dossiers, funds, and people that stream through the revolving door by virtue of the private careers of crossovers, the outsourcing of the state. Furthermore, the recent abundance of figures has not yet produced the type of data activism that has proliferated around EU institutions ever since transparency policies have emerged—for example, the Integrity Watch launched by Transparency International in 2015, and the work of Spinwatch and LobbyControl that describe themselves as lobby surveillance groups that cross academic research with advocacy.64 These groups, which are often linked to militant organizations and to activist media, collate, organize, and contextualize data generated by numerous transparency mechanisms. For certain groups, the purpose is to establish a critical analysis of public data (structural bias, incomplete scope, unwanted side effects, etc.); others aim to complete the necessary task of compiling and analyzing data available online. Working from publicly available schedules of the top tier of political and administrative figures at the EU Commission, from statements of assets held by members of Parliament, and from the EU Transparency Register, these groups have developed search engines and tracking mechanisms that reveal the interaction between elected officials, civil servants, and lobbyists and interest groups.65
Perhaps we must also collectively change our thinking about the stewards of public ethics. Today three corps of magistrates, the Cour des comptes, the Cour de cassation, and the Conseil d’État dominate and confer a strongly bureaucratic coloring to the scene. Let us take a look. The Haute Autorité pour la transparence de la vie publique is currently presided over by Jean-Louis Nadal, former prosecutor general at the Court of Cassation. The membership of this body includes, in addition to six qualified members who are elected, two magistrates from the Council of State, two judges and two representatives from the Court of Accounts. In the same way, the commission de déontologie is headed by a member of the Conseil d’État, and relies on the work of a rapporteur general and a deputy rapporteur general, both from the Conseil d’État, assisted by a team of some twenty rapporteurs drawn for the most part from the younger portions of the grands corps. Generally speaking, all the thinking on public ethics seems to have been delegated to this trio of magistracies—judiciary, administrative, and audit of public accounts. This is illustrated in an emblematic fashion by the commission constituted by Nicolas Sarkozy in 2010 to make proposals in the field of “prevention of conflict of interest in public life,” which was organized around the triumvirate of the vice president of the Conseil d’État, the chief presiding judge of the Cour de cassation, and the president of the Cour des comptes. This is not an insignificant circumstance, for these commissions devoted to thinking about the ethics of the state form what the political scientist Philippe Bezes calls the “reflexive fraction of the state”66—that is, the space in which the state is examined and diagnosed, calibrated, evaluated, and supervised. Nourished by a broad body of documentation, from annual reports to judicial rulings, in this space is discussed the border between what is in the public purview and what falls into the private domain, and what, in this age of competition, is subject to public regulation and what is decreed to be a question of economic freedom. Here the ethical norms are defined that are used to judge the state and its political and administrative personnel. Last, this is the triage center where social demands for ethical conduct are deemed acceptable, or inversely extravagant, and where the toolkit of options is assembled, from which politicians draw their ideas for reform. In this sense the triumvirate that oversees stewardship of public ethics in France has a strong political meaning: it signifies the role of stewardship granted to these three grands corps with respect to definition of the public interest, and reveals the unwritten administrative constitution that underpins the Fifth Republic today. But it also underscores, by the negative, the marginal role assigned to nonstate entities, NGOs, citizens’ groups, and so on, in the oversight of public integrity.
For a long time, this state of affairs was accepted. The omnipresence of these state grands corps even seemed to be the best way to ensure the independence of the state vis à vis the individual interests of parties in civil society. Today, this arrangement is no longer satisfactory. First and foremost because it is now well established that these very top portions of the state have often been the vector—not the shield—for the penetration of managerial imperatives, reaching into the heart of the state and actively abetting the blurring of the public-private line. And also because these stewards of the state are today the prime purveyors of private consultants and corporate lawyers, transmogrifying the marches of state into a flourishing marketplace of public affairs. Can the elite of the Conseil d’État be at once the guardians of the public spirit, the judges of government administration, the main breeding ground for regulatory agencies, and prime players in the corporate bar? Judge and plaintiff, guardians of the temple and go-betweens, the members of the Conseil d’État no longer have the legitimacy they once had to profess to be impartial spokespersons proclaiming the public interest.67 The art of separation does not easily tolerate this confusion of roles.
Controlling Intermediaries between the State and the Marketplace
If it is true that the politics of influence described here has its professionals, they should be the prime focus of reform efforts. Maybe the first step should be to scrutinize the off-radar position acquired by the legal profession, and to point out that this profession is reticent to accept that its new role at the intersection of the state and the marketplace warrants new guarantees and new controls. Over time, a powerful system has been erected to protect the independence of lawyers, relying on a three-pronged array: monopoly privileges to represent and assist parties before judiciary and disciplinary tribunals, self-regulation in deontological and disciplinary matters, and rules of professional confidentiality.68 Yet it is important to recall that this singular status of this profession, liberal and monopolistic, finds its theoretical grounds in the mission to protect citizens and uphold the rights of defendants. Codes of ethical conduct and the discourse of the representatives of the legal profession alike exalt the mission of lawyers, raised to the level of “auxiliaries of justice” (article 3 of the 1971 legislation), and their function as spokespersons for the public, a role that goes beyond that of a mundane merchant of law or an ordinary vendor of services. As stated by the Code of Conduct for European Lawyers the “independence [of the lawyer] is as necessary to trust in the process of justice as the impartiality of the judge.” In other words, a sort of proxy has been given to the profession to take charge of managing a public interest—namely, the proper functioning of the justice system and of the state of law.69
These guarantees and privileges, designed to ensure the independence of lawyers with respect to the political and judiciary branches of power, take on entirely new dimensions in a context where the profession has become a multifaceted profession. At the crossroads of business, politics, and government, lawyers can exercise multiple activities, often far from the functions of judiciary assistance and defense. In this context, the outlines of the profession have been nearly totally redrawn, and if its privileges are conserved in toto, it may be to the detriment of another public interest—namely, our collective capacity to maintain a dividing line between the public and the private. It is not necessary to dwell on the central role played by lawyers (Swiss ones, in particular) in the international system of money laundering and fiscal fraud revealed by the Panama Papers, to point out the limitations of self-regulation for a profession that today plays a crucial role at the crossroads where the state meets the marketplace.
Maintaining professional secrecy and confidentiality for all lawyers’ activities is hardly compatible with the art of separation. A line would have to be drawn between legal defense and assistance, on the one hand, and consulting services and lobbying on the other.70 This is undoubtedly not easy to achieve, but bar associations in other countries have opened the way. Some limit lawyer-client privilege to the traditional roles of the legal profession, legal advice and litigation. The Flemish bar in Belgium, for example, issued a statement in 2010 indicating that “it is not accurate to say that because lawyers are in all areas and at all times ‘interest representatives,’ the fact of representing interests as a lobbyist falls within the limits of normal and essential law practice…. It is completely incorrect to claim that the name of a client is ipso facto a professional secret belonging to the lawyer…. Lobbying cannot be considered to be among the basic tasks of lawyers. This activity is not protected by rules of lawyer-client confidentiality.”71 And the Flemish bar suggests that “firewalls” or systems of “separation of activities” could be instituted. The French bar is far from such an audacious stance. Anticipating the introduction of mandatory registration with the EU Transparency Register for all lobbyists, the National Council of Bar Associations (Conseil national des barreaux) did however take an initial step in 2016. The CNB accepted a first incursion into the domain of professional secrecy when a clause was included in its rules of procedure indicating that “members who represent third parties’ interests before European or national public administrations, must, as the case may be, and after having informed their clients, mention the identity of these parties in the registers opened by these institutions and administrations, and must report the fees pertaining to these missions.”72 But the road to enforcement of these rules is a long one, judging by the strong reticence manifested by the profession, as mentioned above, which is reluctant to take up its part in the public money-laundering alert system set up the Tracfin unit.
One question remains: are lawyers well placed to identify and judge, all alone, behaviors that are contrary to their mission in the public interest that has historically been their charge? Doubt is permitted. Not because one should doubt the good will of the representatives of the profession who participate in disciplinary and ethical conduct bodies, but because they are also mandated by their peers to ensure the economic attractiveness of the bar, subject to ever sharper competition from other professionals in the field of consulting and influence. From this point of view, the control over the conditions of access to the profession itself (i.e., the dispensatory conditions of access given to top civil servants and politicians, incompatibility rules, bans on multiple functions, etc.) are an essential stake of interprofessional competition. For instance, the goal to forge a broad cross-disciplinary advisory profession is backed by a broad segment of the bar elites when they call for a merger of the bar with in-house legal counsels, and when they seek to have the many bans on multiple functions lifted. Likewise, the sweeping interpretation of the decree pertaining to bridges between the public sector and private sector that is pushed by certain bar associations, in particular the Paris bar, when it comes to integrating members of Parliament and ministers into the categories of civil servants targeted by the decree. Because they are caught between objectives that are contradictory in their terms—fostering an economically dynamic profession, for one, and defending its ethics, for the other—the representatives of the bar do not appear to be in the best position to assume alone the responsibility for ethical matters linked to the development of the business bar. And yet citizens and civic groups, of consumers, human rights advocates, opponents of corruption, and so on, have no voice today in deontological and disciplinary affairs. They have no capacity for direct recourse before the ethics commissions of bar associations and are not represented on any of the disciplinary bodies, which all function along the lines of professional chumminess.
There is no lack of ideas, however, for ways to eliminate the blind spots in self-regulation. Via the office of the public prosecutor, the state has a key role in the oversight of the professional activity of lawyers: it can file complaints with the bar’s disciplinary council and can appeal its decisions in disciplinary matters, and even in cases to grant dispensatory access to the profession to this or that politician or top civil servant. But for lack of time or motivation, the office of the prosecutor has kept a low profile. It does use its capacity to pursue disciplinary action, but most often this action accompanies penal charges that are brought elsewhere.73 As for oversight of decisions to allow dispensatory access to the bar for politicians, for a long time the office of the prosecutor was silent. It was not until 2011 that it decided to examine a deliberation of the council of the order of the Paris bar, and contested the decision to admit ex–transport minister Dominique Bussereau to the bar—not ineffectively, as ultimately Bussereau withdrew his candidacy.74 But beyond the reappearance of the prosecutor’s office in oversight of the profession, litigants and citizens are still missing from the scene. A first breach could be pierced by opening disciplinary commissions to litigants, or by granting human rights bodies and anti-corruption organizations the right to issue alerts or the right to file complaints. Unless it becomes necessary to adopt a radical reform along the lines of the Legal Services Act enacted in the United Kingdom in 2007 that instituted a Legal Ombudsman, breaking with the centuries-old tradition of self-regulation of the bar. Conceived as an “independent body representing the interests of the public and consumers in a responsible, coherent, flexible and transparent way”75 appointed outside the profession by a public body whose members are in majority not lawyers, this Legal Ombudsman can undertake legal action on the basis of complaints filed by clients of legal services providers. The ombudsman has broad powers of inquiry into questions of professional misconduct and ethics, and can also award financial compensation to victims.
In sum, the traditional path of self-regulation chosen by lawyers and top civil servants alike has its limitations. We do not impugn the competence or the integrity of the grands corps or the representatives of the legal profession when we write that they are not the best placed to assume, alone, the role of border guard at a dividing line that is highly sensitive and which concerns their professions first and foremost. Indeed, it is a common trait of social and political elites, as underscored by French sociologist Pierre Lascoumes, that they are structurally insensitive to the possibility of conflict of interest, and have a strong tendency to deny that conflicts exist, either because said conflicts are justified by the considerable responsibility assumed and personal sacrifices made by the elites in the collective interest, or because they are deemed to be necessary, in the name of pragmatism and the efficacy of public action. The elites protest that they are in absolute good faith, witness the financial sacrifices they have made in pursuing public careers that are much less well paid than in the private sector. But this line of argument neglects the process of symbolic accreditation that the exercise of public functions (cabinet offices, directorial positions in regulatory agencies, etc.) continues to play as it builds reputation and expertise that are then convertible in the private sector at a high price, particularly in the corporate bar. These tendencies to minimize, tolerate, and euphemize76 are an incitation for more comprehensive oversight of this dividing line. The separation of the public and private spheres is a common good that cannot be allowed to be monetized or appropriated by a few, and management of the border and establishment of its rules cannot be left to the grands corps nor to stakeholders alone. This is the very spirit of article 15 of the Declaration of the Rights of Man and of Citizens, which proclaims that it is “society” as a whole that “has the right to hold all public servants accountable for their administration.”
1.John Galbraith, The Economics of Innocent Fraud (Boston: Houghton Mifflin, 2004), 32–34.
2.On this point, see Georges-Albert Dal, Le Secret profession de l’avocat dans la jurisprudence européenne (Brussels: Larcier, 2011), 114.
3.“Déontologie, esprit d’entreprise: Faut-il choisir?,” Les Petites Affiches, March 11, 2015.
4.Christian Lahusen, “Law and Lawyers in the Brussels World of Commercial Consultants,” in Vauchez and de Witte, Lawyering Europe, 177–93.
5.Tracfin, Rapport annuel d’activité 2011 (Paris: Ministère de l’économie et des finances, 2012), 45.
7.Marine Babonneau, “Lutte contre le blanchiment: Les avocats toujours mauvais élèves,” Dalloz Actualité, April 20, 2015.
8.Likewise, the deontological and professional code of the Paris bar cannot be accessed by the general public on the bar’s website, nor can the pages that refer to the bar’s ethics commission.
9.Thierry Wickers, La Grande transformation des avocats (Paris: Dalloz, 2014), 122.
10.Researchers who have examined the disciplinary practices of the Paris bar also point to “significant difficulty in accessing data”: Camille Chaserant and Sophie Harnay, “La déontologie professionnelle en pratique: Enquête sur l’activité disciplinaire de la profession d’avocat,” Revue française de socio-économie 16 (2016): 119–39.
12.In addition to this is the fact, reported in work by various researchers, that both the administration and judges are lenient with intermediaries (lawyers, expert accountants), who are rarely charged. Spire and Weidenfeld, L’impunité fiscale: Quand l’État brade sa souveraineté.
13.Pierre Lascoumes and Carla Nagels, Sociologie des élites délinquantes: De la criminalité en col blanc à la corruption politique (Paris: Armand Colin, 2014).
14.Following a new law of August 2020 on civil service, the Commission de déontologie de la fonction publique has eventually been integrated within the HATVP, thereby benefiting from its independent statute.
15.“In the first instance [penal liability] the task is to verify that the private-sector activity envisioned by the public employee does not place the latter in contravention with the Penal Code (e.g., working in a company that the former civil servant had to control in his previous State functions); the second instance [ethical responsibility] ascertains that the private-sector activity does not impinge on the dignity of the former administrative functions or jeopardize the normal operations, independence and neutrality of the public service.” Olivia Bui Xuan, “La moralisation de la vie publique,” Droit administratif, 2014, 10–16.
16.Yves Benhamou, “Pantouflage des juges: Un danger pour l’impartialité de l’État?,” Recueil Dalloz, 2001.
17.“La commission de déontologie des fonctionnaires sauve (encore une fois) ses prérogatives,” Acteurs publics, June 10, 2016.
19.On these policies, see Antoine Vauchez, “L’Etat public-privé”, AOC, September 13, 2018: https://aoc.media/analyse/2018/09/13/letat-public-prive/.
20.“L’ex-déontologue de l’Assemblée nationale désormais avocate d’un laboratoire pharmaceutique,” Libération, November 3, 2015.
21.Hélène Bekmezian, “Le premier bilan de la déontologue de l’Assemblée,” Le Monde, November 18, 2013.
22.Ferdinand Mélin-Soucramanien, Rapport annuel du déontologue de l’Assemblée nationale (Paris: Assemblée nationale, 2015), 34.
24.See Noëlle Lenoir, Rapport public annuel du déontologue de l’Assemblée nationale (Paris: Assemblée nationale, 2013).
25.Cf. Service central de la prévention de la corruption, Rapport annuel (Paris: La Documentation française, 2000), 48–49.
26.Letter of February 24, 2009, from Olivier Fouquet, president of the Commission de déontologie, to Claude Guéant, secretary general of the presidency: see “Pérol, la commission n’a pas statué,” Le Figaro, February 24, 2009.
28.Patrick Roger, “Affaire Pérol: La commission de déontologie a été ‘tout près de démissionner collectivement,’ ” Le Monde, March 12, 2009.
29.Nicolas Tenzer and Christian Vigouroux, “Les règles du ‘pantouflage’ sont-elles respectées?,” Acteurs publics, June 28, 2010.
30.Mézard, Un État dans l’État.
31.Patrice Gélard, Rapport sur les autorités administratives indépendantes: Rapport du Sénat (Paris: Sénat, 2006).
32.A recent piece of legislation (January 20, 2017) has attempted to clarify the situation by defining a list of twenty-six “autorités administratives indépendantes” (regulatory agencies) for which a number of obligations in terms of transparency, accountability, and deontology are specified. Yet the list of regulatory agencies has remained so far incomplete.
33.Mézard, Un État dans l’État, 27.
35.On this, see Colin Crouch, The Strange Non-Death of Neoliberalism (Cambridge: Polity, 2011).
36.This evolution parallels the emergence of a “private technocratic capitalism” that has made considerable gains in the wake of privatization trends; this phenomenon is marked by the enhanced role of business leaders drawn from the pool of political and administrative talent (between 40 percent and 49 percent of French top corporate executives in the 1990s) and the simultaneous sidelining of leaders who do not come from the elite managerial corps. Dudouet and Grémont, “Les grands patrons et l’État en France, 1981–2007.”
37.See recently Pierre Birnbaum, Où va l’État? Essai sur les nouvelles élites du pouvoir (Paris: Seuil, 2018).
38.Guillaume Sacriste, “Sur les logiques sociales du champ du pouvoir européen: L’exemple de l’affaire Dalli,” Politique européenne 44 (2014): 52–96.
39.Walzer, “Liberalism and the Art of Separation.”
41.For a constitutional discussion in a similar vein about the threat of privatized and businesslike government, see Jon Mitchaels, Constitutional Coup. Privatization’s Threat to the American Republic (Cambridge: Harvard University Press, 2017).
42.Pierre Dardot and Christian Laval, Common: On Revolution in the 21st Century (London: Bloomsbury, 2019).
43.Cour des comptes, Le Recours par l’État aux conseils extérieurs, 9.
45.Generally speaking, on the growth of political power held by large corporations, we refer readers to Crouch, The Strange Non-Death of Neoliberalism.
46.Spire, “La domestication de l’impôt par les classes dominantes.”
47.Angela Wigger and Andreas Nölke, “Enhanced Roles of Private Actors in EU Business Regulation and the Erosion of Rhenish Capitalism: The Case of Antitrust Enforcement,” Journal of Common Market Studies 45, no. 2 (2007): 487.
48.Service central de la prévention de la corruption, Rapport annuel, 1990, 43.
49.Cour des comptes, Le Recours par l’État aux conseils extérieurs, 35–36.
50.Quoted in La Croix, December 12, 2016.
51.Dardot and Laval, Common.
52.Albert Ogien and Sandra Laugier, Le Principe démocratie (Paris: La Découverte, 2015).
53.Bourdieu, The State Nobility.
54.On this point see “L’Europe en transparence: La mise en politiques d’un mot d’ordre,” special issue, Politique européenne 3 (2018).
55.Sylvain Laurens, “Des élites politiques et économiques encore loin d’une réelle transparence,” Médiapart (blog), March 29, 2016, https://blogs.mediapart.fr/les-invites-de-mediapart/blog/290316/loi-sapin-ii-des-elites-politiques-et-economiques-encore-loin-d-une-reelle-transparenc.
57.Working out the details is far from simple, as shown by a ruling of the Conseil constitutionnel in January 2013 that annulled a legislative provision that would have prohibited members of Parliament from becoming lawyers in the course of their term of office.
58.Other ideas can be found in Joël Moret-Bailly, Hélène Ruiz Fabri, and Laurence Scialom, “Les Conflits d’intérêts: Nouvelle frontière de la démocratie,” Terra Nova, 2017, http://tnova.fr/rapports/les-conflits-d-interets-nouvelle-frontiere-de-la-democratie.
59.For the proposal developed for central banks, see Christopher Adolph, Bankers, Bureaucrats and Central Bank Politics: The Myth of Neutrality (Cambridge: Cambridge University Press, 2013), 311.
60.On the general issues of differential treatment of illegal practices see Lascoumes and Nagels, Sociologie des élites délinquantes.
61.See Teitgen-Colly, “Déontologie et pantouflage de la haute fonction publique.”
62.Service central de la prévention de la corruption, Rapport annuel, 2000, 50.
63.Cour des comptes, Le Recours par l’État aux conseils extérieurs.
64.See Cécile Robert, “Les dispositifs de transparence entre instruments de gouvernement et ‘machines à scandales,’ ” Politique européenne 61, no. 3 (2018): 174–210.
66.Bezes, Réinventer l’État.
67.Indeed voices are heard today in favor of eliminating the counseling role of the Conseil d’État that has been traditionally conceived around a double role, counsel to the government and judge of state practices; see Dominique Rousseau, Radicaliser la démocratie: Propositions pour une refondation (Paris: Grasset, 2015).
68.The conditions prevailing at the inception of this system show that the aim was to escape, insofar as possible, the oversight of judges over the profession: Jean-Louis Halpérin, “L’indépendance de l’avocat en France au XIXe et au XXe siècle,” in L’indépendance de l’avocat, ed. Louis Assier Andrieu (Paris: Dalloz, 2015), 65–76.
69.Wickers, La Grande transformation des avocats, 30.
70.In this sense, see the reasoning of the European Court of Human Rights in the ruling Michaud v. France of December 6, 2012.
71.Orde van Vlaamse Balies, “Lobbying, avocats et secret professionnel,” October 10, 2010, quoted in Coraline Schornstein. “Les Avocats-lobbyistes: Émergence, légitimité, incertitudes.” Master’s thesis, Université Paris 2, 2015.
73.Chaserant and Harnay, “La déontologie professionnelle en pratique: Enquête sur l’activité disciplinaire de la profession d’avocat.”
74.Olivier Toscer, “Le parquet recale Dominique Bussereau,” Nouvel Observateur, May 11, 2011.
75.Mary Seneviratne, “The Legal Ombudsman: Past, Present, Future,” Nottingham Law Journal 24 (2015): 1–19; this article assesses the first five years of operation of the ombudsman’s office and the 24,000 complaints received.
76.Pierre Lascoumes, “Condemning Corruption and Tolerating Conflicts of Interest: French ‘arrangements’ Regarding Breaches of Integrity,” in Corruption and Conflicts of Interest, ed. Jean-Bernard Auby, Emmanuel Breen, and Thomas Perroud (London: Edward Elgar, 2014), 67–84.