An investigation uncovers the pressures from energy companies to maximize profits

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Míriam Martos
  • Power companies seek to curry favor with certain political figures, in order to establish a firm agenda of contacts and be able to influence decision-making.
    Power companies seek to curry favor with certain political figures, in order to establish a firm agenda of contacts and be able to influence decision-making. Source: CC License.
  • One of the main public positions with which they seek to have close relations is that of the State Attorney.
    One of the main public positions with which they seek to have close relations is that of the State Attorney. Source: CC License.
  •  The investigation has left uncovered the set of judicial, political and media pressures that are part of the energy companies strategies.
    The investigation has left uncovered the set of judicial, political and media pressures that are part of the energy companies strategies. Source: Unsplash (CC License).

In the report, the full names of the thirteen state lawyers currently working at Spain's three main energy companies are listed: nine at Iberdrola, three at Naturgy, and one at Endesa.

Starting to work in a public institution and, after a while, moving with a contact agenda to the private sector. The phenomenon of 'revolving doors' is not new. In Spain, it has manifested itself in various fields, from finance to real estate, and through the energy sector, where electric companies seek to influence political discourse in order to maximize corporate profit.

Related to this last point, a recent report titled 'Radiography of the energy lobby' has uncovered the range of legal, political, and media pressures that are part of the strategies of Spanish energy companies to maximize their capital, without taking into account aspects like sustainability or the interests of the citizens, taking a step back to combat energy poverty.

This is an internationally-driven investigation led by three energy-related entities: the Aliança contra la Pobresa Energètica (APE), Enginyeria Sense Fronteres (ESF), and Fossil Free Politics, a campaign that collaborates with a long list of European organizations.

Specifically, Raúl Novoa González has been the journalist behind this report, framed within the European campaign People Over Polluters. As the main point to highlight, it exposes a new form of revolving doors with three profiles of officials closely connected to leading energy companies in the country.

The Spanish energy market: an oligopoly based on pressures

To contextualize the report, it is important to understand that the electrical market in Spain is dominated by an oligopoly consisting of five companies, where Endesa, Iberdrola, and Naturgy are the major players, supplying nearly 81% of the total electricity to Spanish households while simultaneously ranking among the ten most polluting companies in the country.

According to Oxfam Intermón, these companies have a total of sixty-eight subsidiaries in tax havens and benefit from subsidies related to nuclear energy, hydroelectric power, and competition transition costs. The Observatori del Deute en la Globalització (ODG) states that these subsidies exceeded seven billion euros between 1998 and 2013.

Another significant fact is that, during the mentioned time frame, Spanish families paid the major electric companies between sixty and eighty billion euros in "illegitimate payments", a strategy that the government promised to eliminate but still exists today, alongside leveraging the inflation crisis to raise electricity prices.

All of this allowed them to finish 2022 with combined revenues exceeding 120 billion euros, making it one of the richest sectors. Despite these enormous economic figures, it is not enough for the energy companies, and they implement maximum pressure in legal, media, and political forms to influence decisions related to energy.

Revolving doors through concealed lobbies

Names of politicians like Felipe González or José María Aznar are mentioned in the report due to their involvement with Spanish electric companies. In the investigation 'YoIBEXtigo' by La Marea, one hundred seventy-five officials of this type were counted in 2017, as companies seek to gain favor with certain political figures to establish a firm contact agenda and influence decision-making.

Not only do these relationships stand out, but they also focus on the opacity of the transparency law and the need to improve it, as MPs are volunteers to share their meetings, but only 10% do so. Nevertheless, sources claim that many politicians have relationships with former officials with interests with whom they share information but do not consider it a pressure strategy.

"A few years ago, I was invited along with other MPs to listen to the opinions of various companies about energy. They wanted to convey their discourse to politicians. It is a kind of hidden lobby as an institutional and neutral act," says Álvaro del Río, former Director-General of the Institut per la Diversificació i Estalvi d'Energia (IDAE).

State lawyers, the energy companies' preferred officials

Through legal means, the electric lobby aims to influence the reformulation of laws and regulations. Filing legal challenges to the majority of measures implemented by the Spanish government is a common, almost routine practice with which they seek to avoid anything that does not benefit them. In fact, the investigation confirms that they usually hire the best lawyers to ensure profitability, even if they do not win the cases.

Precisely, one of the key public officials they seek to establish close relationships with is the state lawyer, high-level officials with an in-depth knowledge of government regulations who often specialize in the energy sector. With a detailed understanding of the laws, they can influence reformulation, a critical aspect of the companies' strategy.

Most of them earn between sixty and one hundred thousand euros per year, but nevertheless, they seek opportunities in the private sector to obtain a higher salary, without leaving their permanent positions by requesting a leave of absence. The investigation has shared the names, surnames, and positions of the main state lawyers who currently also work for the major energy companies: nine with Iberdrola, three with Naturgy, and one with Endesa."

Other hidden profiles within the public administration

The investigation does not end here, as it confirms the existence of other types of revolving doors, in this case of a technical profile. The report also focuses on tax inspectors. Their close relationship with taxation and tax reduction is of great interest to businesses.

As an example, they mention Begoña García-Rozado, a highly reputable tax professional who went from being a tax inspector to becoming the Director of Taxation at Iberdrola. Finally, the investigation confirms that energy companies also benefit from their relationships with the State's Industrial Engineers Corps since it is common for public officials to move to the private sector, specializing in the electrical sector.

However, pressures in this profile are exercised "informally" since sources claim that they can discuss law reforms during working hours through daily conversations, details that are of great interest to the electricity companies, and the Ministry almost always ends up accepting their proposals in full.

Pressures even extend to Europe. However, unlike the lack of transparency in Spain, the European Union allows you to access the investments made in lobbying by each of the companies, as well as the meetings that are held to ensure that euro-deputies take them into account when shaping laws.

In total figures, the major electric companies invest 1.5 million euros in pressures on the EU. Breaking down the amount, Aelec, which includes companies like Endesa and Iberdrola, is the biggest spender, with 900,000 euros a year. Iberdrola follows with 400,000; Eurelectric, the employers' association of electric companies in Europe, with 100,000; Naturgy with 50,000 and Endesa with 25,000.

Public opinion, one of the areas where they invest the most

Regarding meetings, about 225 have been counted since records exist. However, they are not the only pressure strategy. The sending of emails and postcards with ideological positions is a common practice.

Public opinion is also crucial, using all available communication channels. The main companies often advertise during prime time hours, for example, through sponsorships of sports teams or ads in the most-watched television content.

In the press, they tend to appear in the most widely-read newspapers, especially those with a conservative ideology. Although investments in advertising and marketing are evident, the companies do not disclose specific figures on this.

Finally, as a strategy to protect their image, they invest in promoting themselves at universities, sponsoring all kinds of chairs related to energy, innovation, or social impact, for example.

Electric companies that exacerbate energy poverty

In addition to revealing the pressures, the investigation also highlights a highly relevant aspect that remains unanswered: who will pay for the debt of the electric social bond? This government measure was implemented to help the most vulnerable families in the wake of the coronavirus crisis and rising electricity prices. The problem lies in the fact that the moratorium on supply cuts expires on December 31.

Today, vulnerable families are in a state of uncertainty because no authority has specified what will happen with the debt accumulated by households. Unfortunately, voices warn that it will be the incomeless families, the same ones who cannot afford to pay their bills, who will be responsible for financing the debt.

Associations fighting against energy poverty consider the situation concerning, as according to sources from the electric lobby, companies believe it should be the state that finances the social program through the General Budgets, thus passing the buck from one rooftop to another.

Although those responsible for the information have tried to clarify the situation by speaking with the Ministry for Ecological Transition and Demographic Challenge, they have encountered a void, which only deepens the mysteries.

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