By Tobias Buck and Stephanie Kirchgaessner

October 3, 2005

Gerald Cassidy has spent 30 years turning Cassidy & Associates into one of the most powerful lobbying firms in Washington. Now, he says, he is readyto bring to Brussels - and ultimately more European cities - the same resolve that has made his firm such an influence in the nation'scapital.

Sitting in his office in north-west Washington, just two blocks from the White House, Mr Cassidy explains why he has made the decision to enter the European market. 

He offers up a historical perspective on what lobbying means in America and explains his belief that it is becoming, for the first time, relevant in Europe. 

"Our system starts from a different point from Europe. The first amendment says that Congress can do nothing to interfere with - to prevent - citizens from participating in government. And they could have advocates to do that. 

"Madison said in the Federalist Papers that DC is the place to do that, where the nation's conflicts will be resolved," he says. "Europe has had for a very long time a system where power elites resolve problems. 

"In this country, we call it an 'old boy's network'. Our system is open to much wider participation; it comes out of a political system of more direct action." 

But Mr Cassidy believes "the old boy's network" is about to change, and that Europeans - and European companies - are "learning to be more influential". 

"They are understanding it is an acceptable thingto do," he says. 

There is perhaps a more practical reason - beyond the lessons of America's founding fathers - for Mr Cassidy's move into the Belgian capital. 

Washington is traditionally where the regulation of US companies comes head-to-head with corporate lobbyists who, in many cases, try to prevent it from happening. But there is now a growing realisation in many quarters that Brussels, not Washington, is shaping the global regulatory standards companies will have toabide by. 

"In a lot of areas, Europe has got ahead of the US . . . [in] agriculture, where they took the lead on regulating the use of bio-engineered foods, and on food inspection . . . Their stance on antitrust seems to be setting a new standard, which is based more on

the potential for concentration of economic activity rather than the present situation," says Mr Cassidy. 

His views on the growing powers of the European Union were, in many ways, shaped by the soft-spoken Mario Monti who, on July 3, 2001, announced his decision to block the merger between General Electric and Honeywell, a combination of two US companies that would have created a globalpowerhouse, and a union that had the backing of US regulators. 

The companies had committed a grave error in initially paying little attention to the European Commission, despite the body's formal powers in the area of merger control. The Commission's action proved that it was more than happy to wield those powers - even in the face of two multinational giants. 

Mr Cassidy also cites the competition-related rows Microsoft faces, not in the US, but in Brussels, which have dogged the company for years. In the wake of the GE/Honeywell ruling, few US groups now make the mistake of ignoring the EU's top competition regulator. 

Many have also since discovered that Brussels is the source of an increasingly large volume of legislation, ranging from environmental and labour standards to labelling requirements and new rules for the financial services industry. 

America's industrial groups have, for example, joined European counterparts in calling for a less stringent version of a sweeping new regulation for the chemicals sector, which is currently being debated by the European parliament and the Union's 25 member states. 

US technology companies have been active in lobbying the EU institutions on a planned software patents law, which failed earlier this year after much controversy. 

The dramatic increase in US lobbying activity in recent years means that companies such as Microsoft, Intel, Procter & Gamble, General Electric and General Motors have already opened offices in Brussels to lobby the Commission, the European parliament and the Council of Ministers - the three institutions that call the shots in the EU capital. Their desire to influence the political and regulatory process in Brussels has also swelled the ranks of the professional lobbyists in the city, now estimated to stand at 13,000. 

One of them is Tom Brookes, a partner at consultancy GPlus Europe, who advises both Microsoft and Wal-Mart on EU strategy. He says: "I think Brussels continues to increase in importance for US companies, because it is one of the two main hubs of global policymaking. 

A great number of policies that define how you do business in the world are defined in those two centres and if you're operating in a global market you have to treat those two centres with pretty much equal weight." 

Mr Brookes points out that the Commission not only acts as the Union's main competition and trade regulator but that Brussels is also the starting point for about 80 per cent of the legislation that affects a market with more than 450m consumers. It is not least to discuss new EU rules on issues such as the services industry and food labelling that Lee Scott, Wal-Mart's chief executive, comes to Brussels about once a year for meetings with key commissioners. The influx of American and US-style lobbyists in Brussels may underscore Mr Cassidy's conclusion about the power of the EU - but the rapid development of the lobbying industry also raises another question. 

By opening an office in Brussels four years after the GE/Honeywell decision, is Mr Cassidy, one of the most effective lobbyists in Washington, arriving too late? 

He believes not - mainly, he says, because American-style lobbying is still only in its infancy in Brussels. 

"I think what they call lobbying [now] we call public affairs - monitoring information campaigns, and conversations and meetings with regulators. I think that what you are seeing of direct lobbying is really at the beginning. Lobbying is direct advocacy with people that are making political decisions, whether they are regulators or legislators, and public affairs is trying to influence those people through the techniques of public affairs," he says.  

Mr Cassidy's assertions about ineffective lobbying in Brussels to date were underscored recently by Sir David Arculus, deputy president of the CBI, in an interview with the Financial Times. 

Sir David contended that business groups have been too reactive in their approach to lobbying in Brussels by not creating the right business alliances during the early stages of the development of a proposal. 

"While British business is rather good at lobbying Whitehall, European business as a whole is quite weak at getting together and joining forces to put [across] its point of view," he said. 

Andreas Geiger, former head of Ernst & Young's European law centre, was hired by Mr Cassidy to set up the Brussels office. 

He agrees that European companies have not yet mastered the lobbying techniques Americans deploy in Washington. 

These include the practice of "legal lobbying", in which a lobbyist will influence the wording of a directive in order to spare their client future problems. 

Mr Geiger says that European companies have depended too much on industry associations comprised of groups with sometimes diverging goals to try to assert influence. 

"The problem that arises in these associations, for example in the automotive industry, is that they would talk about car emissions, and all three companies,for example, would have different attitudes toward it," he says. 

While the vast and long-established Brussels lobby is perhaps more sophisticated than Mr Cassidy suggests, it may yet have something to learn from the techniques and tricks of an old master, developed over decades.