Friday, April 11, 2008

OTTAWA - Today, Democracy Watch released details about its appeal of the recent Federal Court of Canada ruling by Deputy Judge Orville Frenette that does not mention relevant evidence or ethics rules and legalizes federal registered lobbyists raising money and doing favours for Cabinet ministers they lobby. (To see Democracy Watch's Notice of Appeal to the Federal Court of Appeal, click here)

Federal Registrar of Lobbyists Michael Nelson initially ruled in October 2006 (on a Democracy Watch complaint filed on April 13, 2000) that a lobbyist raising money for a Cabinet minister while also lobbying the same minister does not create a conflict of interest.  (To see the Registrar's ruling, click here)

Democracy Watch challenged the Registrar’s ruling in the Federal Court (To see Democracy Watch's court application, click here -- To see Democracy Watch's affidavit for the court case, click here -- To see Democracy Watch's factum for the case, click here) and on February 19, 2008 (just three weeks after the court hearing), Deputy Judge Frenette issued his ruling upholding the Registrar of Lobbyists’ ruling and ordering Democracy Watch to pay the costs of the other parties. (To see Deputy Judge Frenette's ruling, click here)

"The Federal Court ruling makes it legal for federal lobbyists to do things for federal Cabinet ministers that the ministers’ ethics rules say ministers cannot have done for them by lobbyists," said David Baker of bakerlaw, counsel for Democracy Watch for the appeal and a member of Democracy Watch’s Advisory Committee.  The appeal application is Federal Court of Appeal file number A-128-08.

The Registrar’s ruling was on the complaint filed by Democracy Watch on April 13, 2000 about former Liberal MP-turned lobbyist Barry Campbell who, as a favour for Jim Peterson, then-Secretary of State (International Financial Institutions), “organized a benefit dinner for Mr. Peterson’s re-election campaign in 1999, at which $70, 000 was raised, while registered to lobby the Finance Ministry for a variety of financial institutions” (as Deputy Judge Frenette decribed it in para. 2 of his ruling).  Campbell was registered as Chairman of the company APCO Canada to lobby on issues for which Peterson was responsible.  The invitation to the fundraising event was sent out on letterhead, in an envelope and with a return envelope all identifying APCO Canada as the main organizer of the event on behalf of Peterson. (To see Democracy Watch's April 13, 2000 complaint, click here)

Democracy Watch alleged in the complaint that Campbell’s actions violated Rule 8 of the 11-year-old federal Lobbyists' Code of Conduct (Lobbyists’ Code), which states:

"8. Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder."

However, in September 2002 Wilson issued, in the opinion of Democracy Watch, an incorrect and illegal interpretation of Rule 8 that stated a federal lobbyist would only violate Rule 8 is if the lobbyist’s actions:

interfere with the decisions of a public office holder (meaning a federal politician, member of their staff, Cabinet appointee, or a public servant) in a way that amounts to a “wrongful constraint whereby the will of the public office holder was overpowered” and/or if the public office holder  “was induced to do or forbear an act which he or she would not do if left to act freely” and/or “whether the lobbyist took advantage of a public office holder's weakness, infirmity or distress to alter that public office holder's actions or decision.”(To see the full text of interpretation, go to: Interpretation Bulletin for Rule 8 of Lobbyists' Code)

Democracy Watch’s position is, given that the Preamble of the Lobbyists' Code states that together it and the ethics codes for public office holders (politicians, their staff and government officials) “play an important role in safeguarding the public interest in the integrity of government decision-making”, therefore the interpretation of Rule 8 of the Lobbyists' Code must be based on public office holders' ethics rules.

There are rules that make it clear what types of influence are improper and cause conflicts of interest in the 21-year-old federal Conflict of Interest and Post-Employment Code for Public Office Holders (which applies to Cabinet ministers, ministerial staff, and many senior government officials) and the Conflict of Interest Act which replaced this Code last July, and in the three-year-old Conflict of Interest Code for Members of the House of Commons and in the three-year-old Conflict of Interest Code for Senators and in the 10-year-old Values and Ethics Code for the Public Service.

Specifically, all of these codes state that it is improper to receive a gift of money, property or services that could influence a decision.  Given that lobbyists, by definition, try to influence the decisions of public office holders, Democracy Watch’s position is that Rule 8 of the Lobbyists' Code prohibits lobbyists from providing money, property or services to a public office holder.

After an exceptionally brief, two-paragraph-long review of the Registrar’s ruling that did not even mention let alone review very relevant ethics rules in the politicians’ codes, Federal Court Deputy Judge Frenette concluded that the Registrar’s ruling was reasonable.  This is the main reason for Democracy Watch’s appeal of Deputy Judge Frenette’s February 19th ruling.

Democracy Watch is also appealing Deputy Judge Frenette’s ruling because, in its opinion:

• the ruling did not take into account clear evidence that Ethics Counsellor Wilson had told Secretary of State Peterson he must avoid close contact with people lobbying him, including the fact that Wilson had ordered Peterson to stop using Campbell as his trustee because Campbell had registered to lobby Peterson; (CORRECTION AND CLARIFICATION: Under his powers under subsections 5(1), 7(4) and 13(2) of the Conflict of Interest and Post-Employment Code for Public Office Holders, then-Ethics Counsellor Howard Wilson did not "order" Secretary of State Jim Peterson to stop using Barry Campbell as his trustee because Barry Campbell had registered to lobby Mr. Peterson's Department, he made a "determination"  that it would be appropriate for Mr. Peterson to stop using Mr. Campbell as his trustee because Mr. Campbell had registered to lobby Mr. Peterson.  Mr. Peterson and Mr. Campbell had discussed Mr. Campbell's impending registration to lobby Mr. Peterson and his Department , and had decided it would be appropriate for a new trustee to be appointed.  On the date of Mr. Campbell's registration Mr. Peterson discussed the matter with Mr. Wilson.  Mr. Wilson determined a new trustee should be appointed and undertook to call Mr. Campbell and see if arrangements could be made to do so.  Democracy Watch wishes to apologize to Mr. Campbell and Mr. Peterson for any inference that might have been drawn that the Ethics Counsellor’s determination was resisted by either of them or that it involved a finding that either had violated their ethical or legal obligations), and;
• the ruling did not properly apply the test for determining whether a public interest organization should pay the costs of the other parties in a case.