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Secret donations and unethical actions will continue to corrupt Canadian politics regularly until key changes are made

Politicians of all stripes continue to protect a corrupt system

Set out below is an op-ed by Democracy Watch Coordinator Duff Conacher which was published in slightly different, edited form in the November 3, 2009 issues of the Guelph Mercury and Kitchener-Waterloo Record, in the November 4th issue of the Montreal Gazette and in the November 9th issue of the Hill Times.

The allegations concerning Quebec provincial and Montreal city politicians and government officials accepting secret gifts and donations from making decisions that favour companies and individuals, along with many other recent similar scandals across Canada, reveal the loopholes in money in politics and ethics laws that continue to undermine our democracy 142 years after Canada became a country supposedly based in part on good government.

Of course, every government in Canada should have long ago passed laws that:
  • prohibit donations by any type of corporation or organization (because these entities don’t vote);
  • limit donations or gifts of any kind by any individual given to any party, candidate or official to a level that an average voter can afford (a combined total of no more than $500 annually);
  • require regular disclosure of all donations of money, property or the use of property, and services (including volunteer labour);
  • provide public financing of parties and candidates on a democratic basis (for example, number of votes won);
  • prohibit policymakers from making any decision if they are in any type of conflict of interest, and;
  • impose penalties for violating these rules that ensure any violators are drummed out of politics.
The fact that most governments in Canada do not have political finance and ethics laws that include these rules and penalties shows just how much politicians of all stripes continue to protect a system that is corrupt at its core.

Do you know that loopholes in ethics laws across Canada allow every politician to make decisions about matters in which they have a financial interest, as long as the decision is general in nature and/or applies to a broad group of people or organizations?  This loophole allows, for example, the federal finance minister to own $1 million of shares in a bank while making decisions about changes to the Bank Act (because the Bank Act applies to a broad group of banks).

Of course, even if politicians removed all the loopholes in donation and ethics laws, the laws would only work if they were enforced by fully independent, fully empowered and fully resourced watchdog agencies.

While all governments in Canada have fully independent election agencies, Quebec is still lacking an independent ethics watchdog, and most watchdog agencies lack key investigative powers or are protected from public accountability when they fail to do their job.

For example, federal and provincial political parties and candidates audit their own finances (which allows them to easily cover up illegal donationsor spending), instead of Elections Canada and provincial watchdog agencies being required to do the audits.  And the federal Ethics Commissioner refuses to conduct audits of the financial statements of federal politicians, and like many provincial ethics watchdogs is not required to investigate if a member of the public files a complaint (nor has the power to penalize violators of key ethics rules).

Giving money in secret to candidates and senior politicians and senior officials (the real decision-makers in government) would also be much more difficult if federal politicians had made the changes needed to fulfill the Canadian federal government's commitments under section 52 of the United Nations Convention Against Corruption, and the international Financial Action Task Force (FATF) standards, by amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in 2004 to require Canadian financial institutions to monitor the bank accounts of senior politicians and government officials and their families and associates in all levels of government, thereby adding them to the watch-list of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Canada's federal government signed the UN Convention and it became international law in spring 2004 after more than 140 governments ratified it.  But federal politicians waited until December 2006 to change Canada's laws to comply with the Convention, and then they quickly and quietly passed Bill C-25 in one month, and that bill only added foreign politicians and key officials and their families to FINTRAC’s watch-list so Canadian financial institutions are required to track their accounts and report suspicious transactions to FINTRAC.

As a result, no accounts of any Canadian politician or government official for any level of government are tracked for suspicious deposits.

By passing Bill C-25 but leaving this huge loophole open, federal politicians all agreed to continue to pretend that corruption only happens in other countries.

Federal politicians failed to implement this important anti-corruption measure after the Liberals' Adscam scandal was fully exposed (with $45 million still missing), and after lobbyist Karlheinz Schreiber's cash payments to Brian Mulroney had been made public, and after dozens of others donations scandals had been come to light across Canada.

The federal Conservatives' so-called "Accountability Act", which also passed in December 2006, made it illegal to make a secret donation of money, property or services worth more than $500 to federal election candidates, but left open loopholes so that secret, unlimited donations can still legally be made to nomination race and party leadership race candidates (as long as they do not use the donation for their campaign).

Across Canada, such secret donations to all types of political candidates are legal.

While no law or enforcement system will stop everyone from trying to corrupt politicians and government officials, as long as these loopholes and weak enforcement systems allow for and encourage such scandalous activities, these activities will occur much more regularly than they would if they were clearly illegal and violators faced a high chance of getting caught and significant penalities.

Given the failure of politicians across Canada to establish effective anti-corruption laws and enforcement systems, no one should be surprised at all to hear about many more corruption scandals in Canadian politics for many more years to come.

Canadians deserve better.

For more details, go to Democracy Watch's Money in Politics Campaign and Government Ethics Campaign

TV INTERVIEW (Part 1): Duff Conacher interviewed by StraightGoods.com about lobbying, ethics and political donation rules and weak enforcement in Canada and unethical lobbying activities (November 7, 2009)

TV INTERVIEW (Part 2): Duff Conacher interviewed by StraightGoods.com about loopholes in Canada's political donations system and weak enforcement that allow wealthy interests to buy influence (November 7, 2009)