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News Release

Federal Ethics Commissioner Confirms Conflict of Interest Act Does Not Apply to 99% of Decisions and Actions of Cabinet Ministers, Their Staff and Appointees

Loophole in Act Means They Can Take Part in Decisions That Further Their Own, Their Families' and Their Friends' Financial Interests

Friday, December 3, 2010

OTTAWA - Today, Democracy Watch reacted to the summary of compliance measures statement recently posted by new PMO Chief of Staff Nigel Wright on the website of federal Conflict of Interest and Conflict of Interest Commissioner Mary Dawson.

The key part of the compliance measures statement, that reveals the huge loophole that exists in the Conflict of Interest Act, is that "the Conflict of Interest and Ethics Commissioner has determined that a conflict of interest screen is necessary to assist with my obligation to abstain from any participation in any matters or issues, other than those of general application . . ." (emphasis added)

Almost everything (99%) of what Cabinet deals with are matters of "general application" except for staff contracts, and the rare times they make financial institution merger/takeover decisions, issue broadcasting license issues (appeals from CRTC rulings) or review proposed foreign takeovers (like the recent Potash Corp. situation).

As a result, Nigel Wright, and every other Cabinet minister, their staff and appointees, are allowed regularly to take part in decisions in which they or their relatives or friends have a private interest, even if it is a financial interest.

"As long as this loophole is in the Conflict of Interest Act, the Act will not apply to 99% of the decisions and actions of Cabinet ministers, their staff, and senior government officials and appointees, and all of these policymakers and their families and friends will be allowed to profit from their decisions and actions," said Duff Conacher, Coordinator of Democracy Watch.

Former Prime Minister Paul Martin created the "general application" loophole when took office in December 2003.

The Conservatives promised in the 2006 election platform to close the loophole but broke their promise. 

Even though the Conflict of Interest Act requires senior policymakers to put some of their financial interests in a blind trust, they of course still know what these interests are (which is why, as in the U.S., divestment of financial assets should be required in most cases).  As well, even though the Act does not limit "private interest" to only a financial interest, Ethics Commissioner Dawson has issued a ruling imposing such a limitation, as part of her ongoing negligent enforcement record that has dangerously undermined the Act and ethics enforcement greatly and given MPs cause to fire her.

The U.S. federal government's Executive Branch ethics rules are more strict and apply to general decisions including some legislative and regulatory decisions, and also usually require divestment (also click here for more details).

Before Prime Minister Martin's changes, the ethics rules prohibited all senior policy-makers from taking part in decisions if they had an "apparent" conflict of interest, although this rule was never effectively enforced because Ethics Counsellor Howard Wilson was a lapdog under the legal and political control of Prime Minister Chretien between 1994 and 2004, and before that Prime Minister Brian Mulroney didn't really enforce the rule for himself and his Cabinet, staff and appointees back to January 1986 when he first established the ethics rules.

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For more information, contact:
Duff Conacher, Coordinator of Democracy Watch
Tel: 613-241-5179

To see an op-ed on the same issue, click here

Democracy Watch's Government Ethics Campaign webpage


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