Friday, September 17

Competition hides the conflicts of interest of its president for “the client-lawyer confidentiality relationship”

The National Commission of Markets and Competition (CNMC) uses “the client-lawyer confidentiality relationship” in order not to detail the conflicts of interest in which its president, Cani Fernández, has been immersed since her appointment in June 2020.

The last file in which Fernández had to be inhibited has been the fine of 61.2 million to a cartel of 12 construction companies for distributing contracts for the conservation and operation of roads from the Ministry of Development, with which the entity has asked to disqualify subsidiaries of all the large companies in that sector (ACS, Ferrovial, Acciona, Sacyr, FCC and OHL) to receive public contracts.

The body that ensures the proper functioning of the markets explains that Fernández, who worked at the Cuatrecasas law firm from 1997 to February 2020, “was in conflict” in this procedure, without specifying the reason for the inhibition or the company or companies affected.

Competition also does not facilitate the list of files and decisions in which its president has had to be inhibited due to being in conflict since she was appointed, nor the companies affected. This information is in the possession of the secretary of the council, a State attorney responsible for exercising control of the legality and defense of the institution.

“It is not a public issue” and “there are rights to defend” because “former clients are protected by the client-lawyer confidentiality relationship,” explains Competencia. The agency recalls that “as soon as a conflictive issue appears, a mechanism is deployed by which the president does not access the file” and refers to the resolutions published so far on its website. In them appear the names of the councilors of the organism that have approved the decisions and some of these abstentions can be guessed.

Elite advisor

The issue of potential conflicts of interest has been with Fernández since she was nominated for the position. For her past as an elite advisor for numerous companies such as Mediaset, together with Atresmedia she was fined 77 million euros by the CNMC for the television duopoly in a dispute pending resolution in court. And for the activity of her husband, Jorge Padilla, another renowned competition lawyer, senior managing director and head for EMEA of the consulting firm Compass Lexecon. This firm specifies on its website that Padilla “will not represent clients” before the CNMC for the duration of his wife’s mandate as head of this body.

When he was proposed for the position, an appointment that the extreme right of Vox tried to torpedo without success before the Supreme Court (it cut down its resources in May), Fernández guaranteed in Congress that “there will never be a conflict of interest” and would abstain ” voluntarily when the law does not require it but must go a step further “, to comply with the Law of Incompatibilities of Senior Officials.

“I do not foresee a significant number of issues in which there will be conflict and of course that situation of lack of operation that worries them will not occur, which I understand that worries them but that it will not occur,” Fernández told deputies , who announced her resignation from the leave of absence that she had requested months before in Cuatrecasas to join as an advisor to the Cabinet of the Presidency of the Government that Iván Redondo headed at that time.

In February, in another appearance in Congress in which she denounced the lack of resources and autonomy of the body, the president of the CNMC gave some information to the deputies about the conflicts of interest that had surfaced until then. He explained that he had had to abstain 11 times, in reference to six cases, out of a total of 698 decisions. “I abstain when appropriate” and this situation “is not blocking” the “normal” operation of the institution, he said.

The data available on the agency’s website show that, in addition to the file known as the “coffee cartel” (the construction companies used that excuse, drinking coffee, to distribute the contracts), Fernández was already inhibited shortly after taking office in another sanctioning procedure also related to the six large construction companies: the restart of the file for possible anticompetitive practices in the civil works market that opened in October 2018 and whose instruction period had expired.

Fernández has also not acted in another sanctioning proceeding opened in 2019 against Warner Bros, Paramount, Walt Disney and 11 other companies in the film distribution sector; nor in the fine to several solid fuel cartels announced last January; nor in the authorization of the sale of Nortegas assets to the oil company Cepsa; nor in the purchase of the Autogrill restaurants by the Áreas group.

Among the many matters in which it has participated are the opinion regarding the absorption of Bankia by Caixabank or the new remuneration of Red Eléctrica or the Electric Market Operator, to name a few of the most recent. In the last year, it has signed resolutions on other large Spanish companies such as Banco Santander, Telefónica, Repsol, Naturgy, Grifols, Telxius, the steel companies Celsa and Gallardo, the private health group Vithas, the oil company Disa, the Konecta call centers, Idealista , Cristian Lay or the Boluda shipping company. Also in a file related to a concentration operation carried out by an Acciona subsidiary, which Fernández advised in the takeover of Endesa more than a decade ago.

It has also participated in the last year in CNMC resolutions that affected multinationals such as ArcelorMittal, the pharmaceutical companies Astrazeneca or MSD, the electricity giant China Three Gorges, Google, Carrefour, the Mexican cement company Cemex, the Belgian chemical Solvay, the oil company Shell. , the insurer AXA, or investment giants such as PAI or Macquarie funds.

The CNMC has been in the pillory these days after announcing that some electricity marketers (it has not said which ones) have irregularly inflated electricity prices taking advantage of the new rates that came into force in June. The non-publication of these names has generated controversy and on Friday Iberdrola, Endesa and Naturgy, the three largest electricity companies, assured that they have correctly applied the methodology of electricity tolls set by the agency and that they have not received any communication from it to correct errors in the adaptation of contracts to the new regulations.

Facua has considered “intolerable the lack of transparency of the CNMC, which hides the names of the electricity companies that have incurred this illegality, a fact that makes it difficult for those affected to claim the amounts overcharged.” This investigation corresponds to the Agency’s Regulation Chamber, to which Fernández does not belong, who presides over the Plenary and the Competition Chamber. In a first analysis, there are about 240,000 contracts affected, 1.4% of those examined.

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