Swiss ministers move easily between the public and private sectors

Former Transport Minister Doris Leuthard is expected to join the board of directors of train manufacturer Stadler, a controversial mandate. © Keystone / Ti-press / Gabriele Putzu

Should the employment of ex-government ministers be better regulated? The nomination of Doris Leuthard, former transport minister, to the board of directors of the Swiss train maker Stadler rekindles an old debate. Switzerland must legislate, says the NGO Transparency International.

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When a government minister withdraws from public life, only to take on a well-paid position in the private sector soon afterwards, this situation – known as “revolving doors” – can easily give rise to a conflict of interests.

The latest such controversy stems from the link between Doris Leuthard, former head of the Federal Department of the Environment, Transport, Energy and Communications, and the rolling stock manufacturer Stadler. The shareholders will vote on her nomination to the company’s board of directors at their general meeting in April 2020.

The case is deemed “problematic” by Transparency International Switzerland, since Leuthard’s business mandate covers the very field she was responsible for in government from 2010 to 2018 – namely transport. “It is awkward, even if she did respect a cooling-off period of one year. We would have expected greater sensitivity from a former minister,” says Martin Hilti, director of the Swiss branch of the NGO, which fights corruption.

The former Federal Councillor is also on the boards of industrial food producer Bell and its parent company, the retailer Coop. She took on these new functions in March 2019, a mere three months after leaving government. Such a rapid changing of hats also poses a problem, Hilti believes.

A common practice

The case of revolving doors that lit the powder keg dates back to 2010. Just weeks after leaving government, where his ministerial portfolio covered infrastructure, Moritz Leuenberger joined the board of the leading construction company Implenia. He later told Radio Télévision Suisse (RTS) that his goal was to provoke: “I was pushed into retirement, I was dropped, also by the party. I thought, if you don’t want me, then I’ll also do something you don’t like.”

In 2007, the former economics and agriculture minister, Joseph Deiss, joined the Emmi dairy group, which is majority-owned by farmers. Kaspar Villiger’s mandates also gave rise to controversy. A member of government until the end of 2003, the following year he was elected to the executive boards of Nestlé and the insurance and reinsurance company Swiss Re. In 2009, he also became chairman of the board of the leading Swiss bank, UBS.

Confidence in democracy at stake

Switzerland has not yet adopted a law regulating the post-public employment of its ministers. Parliament has tried to legislate on several occasions, but to no avail. The most recent attempt was in September, when the Senate rejected a parliamentary initiative to this effect. The text sought to prevent former Federal Councillors (government ministers) from accepting paid mandates or positions in companies whose activities were closely linked to the portfolio of the department they used to head.

To preclude any conflict of interests, Transparency International is calling for the introduction of a mandatory cooling-off period before outgoing ministers can accept a paid mandate. “If we do not legislate, trust in democratic institutions is likely to suffer,” laments Hilti. However, as he points out, parliamentarians themselves are “the greatest lobbyists”, which could well prompt them to take no action in this area.

Nonetheless, the head of the Swiss branch of Transparency International pins his hopes on the new parliament, which is younger and more left-wing: “We now have a new generation that is more aware of the problem of lobbying and could improve the situation.” The left will, however, need to find allies in the centre if it wants to make anything happen.

Some rules for former ministers

When a former government member takes up a paid post, this may impact their pension. After leaving the cabinet, ministers are entitled to receive an annual pension of just over CHF200,000 ($202,000), which corresponds to half the gross pay of their colleagues in office.

However, a federal decree on cabinet members’ salaries and benefits establishes that they must not earn more after leaving office than their colleagues who are still serving. Thus, former ministers who decide to engage in a paid activity or who sit on boards of directors must cede back to the Confederation any earnings that exceed those of an incumbent minister.

This was, for instance, the case for Kaspar Villiger. Since his various mandates netted him considerably more than his pension as a former Federal Councillor, he had to pay much of it back.

 (source: RTS)

(Translated from French by Julia Bassam)