A top EU official helps run a luxury hotel in Bali — and never had to tell Brussels – POLITICO

BRUSSELS — The European Union’s executive body requires all employees to submit their “outside activities” for scrutiny — an attempt to catch possible conflicts of interest before they become a problem.

But buying a hotel in Bali? That apparently doesn’t count. 

In 2009, Gert Jan Koopman did just that, purchasing the plush Munduk Moding Plantation Nature Resort & Spa. Yet Koopman wasn’t a hotelier — he was, and is, one of the most senior officials within the European Commission in Brussels. 

At the time, the property was just five rooms. But over the next decade, Koopman, head of the EU executive’s powerful DG NEAR enlargement division, and his family developed the resort into a premiere destination, billed as an “eco-luxury resort” renowned for its infinity pool.

During that period, Koopman and his family — who took over ownership at some point — visited the hotel regularly, were in frequent contact with its managers and signed off on developments, according to statements from the European Commission, the hotel’s website and articles in local media. As recently as April 2022, they met with local dignitaries to discuss pandemic aid for local businesses.

Yet at no point did Koopman need to tell his employer, the European Commission, back in Brussels, despite conflict-of-interest rules that require all staffers to disclose — and get permission for — all “outside activities.”

The reasoning, according to the Commission: outside ownership isn’t considered “doing” anything.

“Being an owner is not considered an outside activity — as it doesn’t imply ‘doing something’ (an activity) in the sense of investing an amount of time that might have an impact on the performance of duties at work,” the spokesperson said.

It’s an explanation that beggars belief for transparency activists, who say it highlights exactly the problem with the EU’s conflict-of-interest rules. If the Commission doesn’t consider owning and helping operate a hotel something it needs to know about, they say, how will it properly determine whether or not there’s a conflict? 

It is, said Nick Aiossa, deputy director of Transparency International in Brussels, “a broken system.”

“There needs to be much higher financial disclosure across the board to bring it into line with best practices and to mitigate any potential conflicts of interests,” he argued, adding that the setup “speaks to a culture — they are surprised to be in the spotlight because this is how things have always been done.”

The rules 

The Commission rulebook does put some parameters around what its employees can do on the side.

To start, staffers are not allowed to earn more than €10,000 per year from any “outside activity.” Employees are also barred from taking on “assignments and activities” for commercially oriented companies, according to a 2011 document from the Commission’s Investigation and Disciplinary Committee. 

Yet the institution’s financial disclosure rules are more nebulous. The Commission’s own employees — even very high-ranking staff — don’t have to disclose their personal financial interests. 

Instead, staff must self-disclose actual or potential conflicts of interest — essentially relying on the staffer’s goodwill to self-report. The rules also don’t spell out any sanctions in the case of failure to comply. 

Taken together, that means the rules never required Koopman to declare his ownership of the hotel, either as an outside activity or as a financial interest that could raise potential conflicts of interest.

The fact that senior Commission staff aren’t required to disclose their financial interests is out of step with practices in the U.S. or French executive branches, as well as with the recommended best practices of both the World Bank and the Organization for Economic Cooperation and Development (OECD). The latter says that mandatory financial asset declarations are key “to increase transparency and the trust of citizens in public administration.”

It also cuts against the Commission’s own advice to EU countries and aspiring members, which encourages mandatory asset declarations for public officials.

And, coincidentally, news of Koopman’s interest in the Bali hotel coincides with the Commission unveiling plans on Thursday for a long-awaited ethics body meant to oversee all EU institutions. The body would help everyone adopt minimum standards, including on side jobs and asset declarations, but would not have enforcement or investigative powers itself. 

Assessing Koopman

The Commission’s assessment of just how much Koopman was involved with the hotel — based on his own “clear” statements, according to the spokesperson — appears to clash with texts on the hotel’s website, as well as other accounts, that point to more intensive participation by the family.

A post on the hotel’s website, signed by someone named Irene, states that the owners meet with their Indonesian team “at least twice a year” to “review progress” and that they are in touch “every week — often every day.”

At the outset of the project, the Koopman family “bought it [the property], mortgaged our house in Europe to finance the investment, and never looked back,” another text on the website reads.

Contacted by POLITICO, an employee of the hotel identified Gert Jan Koopman as the hotel’s “owner,” and a blog post from April 2022 — in which he is seen meeting with local dignitaries — said he was “none other than” Munduk’s owner.

The Commission acknowledged that the family “is in contact with the management team on issues which require the owners to sign off and to review progress.”

But the spokesperson said that “these contacts take a limited amount of the Director General’s time and do not interfere with his work at the Commission.”

Koopman himself referred POLITICO to the Commission spokesperson’s comments.

DGs in the spotlight

At the heart of the matter is how closely the Commission scrutinizes its most senior staffers for potential conflicts of interest in the wake of a wider reckoning about transparency in EU institutions following the Qatargate cash-for-influence scandal.

In March, POLITICO revealed that Henrik Hololei — an Estonian official who at the time was in charge of the Commission’s transport department — had accepted free flights aboard Qatar Airways while his team was negotiating a major deal with the Gulf kingdom.

The Commission said that Hololei had “self-approved” the flights and cleared himself of any conflict of interest because there was no procedure in place for officials at that level to seek approval from higher-ups.

The parallel with Koopman’s case: he also appears to have “self-approved” his purchase and ownership of the Bali hotel.

Informed by POLITICO of his links to the Munduk Moding Plantation Nature Resort & Spa, the Commission said permission was “deemed to be granted” for Koopman’s side gig as a hotel owner.

But the institution could only make that judgment once informed of Koopman’s ownership. The fact that rules didn’t compel Koopman to reveal his ownership led to something of a catch-22, said Aiossa, the transparency campaigner. 

“How can they assess for a conflict of interest if they are not aware of the interest to begin with?” Aiossa asked.

The case also shines a light on the role of directors-general in the Commission — senior bureaucrats who sit right below politically appointed commissioners, but are not subject to the same public scrutiny.

Paid around €17,700 per month after tax in Koopman’s case, directors-general have considerable latitude to develop and implement policy. They can also remain in post longer than their bosses — Hololei spent eight years heading the transport department — and accumulate wide-ranging contacts and experience, which transparency campaigners warn can produce conflicts of interest.

Yet unlike the commissioners, DGs don’t have to go through confirmation hearings and are regulated under a different set of rules.

While unknown to most EU citizens, Koopman is well-known inside the Brussels system. Prior to becoming head of DG NEAR — which is now grappling with the question of whether to admit Ukraine — Koopman was in charge of DG BUDGET, which deals with some of the most politically sensitive financial issues in the EU.

Before DG BUDGET, Koopman was in charge of state aid and was the architect of a tax case against Apple that was shot down by the courts and is now being appealed before the EU’s top court in Luxembourg.

Now he can add a new line to his well-furnished public CV: owner of a luxury hotel in Bali.