Wednesday, February 22, 2006

OTTAWA - Today, Democracy Watch revealed the details of the promises Stephen Harper broke on his first day as Prime Minister when he released his new Conflict of Interest and Post-Employment Code for Public Office Holders (the Code -- See link to the Code on the following webpage: http://www.parl.gc.ca/oec/en/public_office_holders/conflict_of_interest).  The promises were all contained in the “Federal Accountability Act” section of the Conservative Party’s election platform, and on February 6th when the new Cabinet was introduced PMO officials claimed that the changes made to the Code were among many measures the new Prime Minister had implemented immediately because they did not require legislation to be implemented.

Prime Minister Harper and the Conservative Party pledged before and during the election campaign to close five loopholes in the Code.  All five loopholes have been left open in the new Code (Please see Backgrounder below for all the details).

The first promise Harper broke was the promise to apply the Code to all ministerial staff and unpaid ministerial advisers.  In fact, changes made in this part of the Code increase the number of part-timers and unpaid advisers not be covered by most of the requirements in the Code.

The second broken promise was the failure to extend to five years the cooling-off period before Cabinet ministers, ministerial staff and senior public servants can become lobbyists after leaving office.  In fact, unless Cabinet ministers put ministerial staff on a list, the staff person will be allowed, as they were already, to become a lobbyist one year after they leave their staff position.

The Prime Minister’s Office was also dishonest about the failure to keep this commitment in the February 6, 2006 news release it issued.  The “Backgrounder” of the release, under the heading “Reinforcing Government Accountability”, made the false claim that the revisions to the Code:

“include: • a five-year ban on former ministers, ministerial staff and senior public servants from acting as lobbyists to the Government of Canada, a ban which cannot be waived or reduced by the Ethics Commissioner.” (SEE release at:  http://pm.gc.ca/eng/media.asp?id=684)

The fourth broken promise was the failure to prohibit “venetian-blind” trusts that allow ministers to stay informed about their business interests while in office.  In fact, such trusts are still allowed under the new Code -- only the circumstances under which ministers can be informed have been restricted.

The fifth broken promise was the failure to allow members of the public to file complaints with the federal Ethics Commissioner.  In fact, the new Code only allows the public to bring an issue to the attention of an MP or senator, but the MP or senator has to file the complaint, and the Ethics Commissioner is not even required to investigate the complaint.

“On his first day as Prime Minister, Stephen Harper with some of his Cabinet appointments showed that he’s hypocritical. By failing to keep his pledge to close five loopholes in ethics rules for Cabinet ministers, Cabinet staff and senior bureaucrats he’s showed that he’s dishonest,” said Duff Conacher, Coordinator of Democracy Watch.

The broken pledges show the clear need for a federal “honesty-in-politics” law with high penalties for anyone in the federal government who acts dishonestly.  Every poll conducted in the past several years shows that passage of an honesty-in-politics law is Canadians’ number one priority in the area of government accountability, and a top-five priority of Canadians overall.

Democracy Watch will file a complaint with the federal Ethics Commissioner against Prime Minister Stephen Harper for violating the Code by breaking the pledges and issuing a misleading news release that about the broken pledges.  Among many other rules, the Code requires that public office holders “act with honesty and uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and enhanced.” (subsection 3(1))

Democracy Watch filed a court challenge of the Ethics Commissioner last on September 29, 2005 for bias against maintaining a reasonable standard of enforcement of federal ethics rules for Cabinet minister, ministerial staff, and MPs.  As a result, unfortunately Democracy Watch does not expect that the Commissioner will issue a fair, impartial ruling on the complaint.  Democracy Watch expects long-term court challenges will be necessary to obtain fair rulings on this and several past complaints it has filed (TO SEE details about Democracy Watch's court challenge of the federal Ethics Commissioner, and past ethics complaints, click here)

1. Key Background Information
In its 2005-2006 federal election platform, the Conservative Party pledged to pass a “Federal Accountability Act” containing more than 50 measures, all aimed at closing loopholes in laws, regulations and codes, and strengthening enforcement, in the areas of:

• ethics;
• lobbying;
• money in politics;
• Cabinet appointments (especially of key government accountability watchdogs);
• government contracting (including for polling and advertising);
• whistleblower protection;
• access-to-information, and;
• budgetting and auditing.

On February 6, 2006, new Prime Minister Stephen Harper introduced a new Conflict of Interest and Post-Employment Code for Public Office Holders (the Code -- See link to the Code on the following webpage: http://www.parl.gc.ca/oec/en/public_office_holders/conflict_of_interest) and on that day officials from the Prime Minister’s Office claimed that the changes made to the Code were among many measures pledged in the election platform that the new Prime Minister had implemented immediately because they did not require legislation to be implemented (SEE PMO news release at:  http://pm.gc.ca/eng/media.asp?id=684).

Set out below is a summary of how the new Code fails to close five loopholes that the Conservative Party and Stephen Harper pledged to close before and during the federal election campaign (Conservative Party of Canada platform webpage).

Please note, page references for the pledges refer to pages in the Conservative Party platform, while all other page references refer to pages in the new Code.
 
 

2. The Conservatives’ Broken Pledges - Gaps Between Rhetoric and Reality
Beyond the quotations set out above, the Conservatives’ election platform, and statements by Stephen Harper, have been shown by the broken pledges to be false claims, as follows:

RHETORIC THAT APPLIES TO PLEDGES #1 TO 4:

“If there are MPs in this room who want to use public office for their own benefit, or if there are Hill staffers who dream of making it rich by trying to lobby a future Conservative government -- if that’s true of any of you, then you better make other plans or leave.”
Stephen Harper, introducing the “Federal Accountability Act” pledge,
November 4, 2005

THE RHETORIC: "A Conservative government will: Make part-time or non-remunerated ministerial advisers subject to the Ethics Code." (Conservative Party 2006 federal election platform, “Stand Up for Accountability” chapter, p.12)

THE REALITY: Clause 4(3)(b) of the Code states that only the Principles set out in Part I of the Code apply to part-time or non-remunerated ministerial advisers, and Prime Minister Stephen Harper actually increased the loophole by adding part (iii) as follows:

“4.(3)(b) Public office holders who are:
(i) persons other than public servants who work on average fewer than fifteen hours a week on
behalf of a minister, including persons working on a contractual or voluntary basis;

(ii) part-time Governor in Council appointees who are not in receipt of an annual salary or benefits from the appointment; or

(iii) part-time ministerial appointees who are designated by the appropriate minister as a public office holder

are subject only to the Principles set out in Part I and such other compliance measures as may be determined by the head of the organization in question, for whose application that individual is responsible.”

THE RHETORIC: "A Conservative government will: Extend to five years the period during which former ministers, ministerial staffers, and senior public servants cannot lobby government." (Conservative Party 2006 federal election platform, “Stand Up for Accountability” chapter, p.8)

“We’re going to make sure that in future people can’t leave minister’s offices, former ministers, former senior civil servants will not be able to lobby our government for five years after they leave office.” (Stephen Harper, during the 2nd English debate, January 9, 2006)

THE REALITY: In Part III of the Code, entitled “Post-Employment Compliance Measures”, new subsection 29(1) states that only ministerial staff “designated” by the minister under section 24 of the Code are subject to the five-year ban on being a lobbyist, as follows:

“29. (1) In addition to the limitations set out in section 28, former ministers, senior public servants and ministerial staff designated under section 24 may not act as consultant lobbyists, or accept employment as in-house lobbyists, for a period of five years after leaving public office.”

Section 24 of the Code is also new and states:

““Public office holder” refers to the same positions subject to Part II, as set out in section 4, with the exception that ministerial staff and other public office holders as defined at paragraph (b) of the definition of “public office holder” under subsection 4(1) must be designated by their minister for this Part to apply.”

As a result of these measures, the promise to ban all ministerial staff from becoming lobbyists for five years after they leave office has been broken.  Only “designated” staff will be banned from becoming lobbyists for five years, and there are no effective measures requiring ministers to designate staff.

In addtion, by breaking pledge #1 above, part-time and non-remunerated ministerial staff are not covered by the ban, whether or not they are designated by the minister, because they are not covered by Part III of the Code.
 
 

PLEDGE #3 - Prohibit ministers from handling files connected to their interests

THE RHETORIC: "A Conservative government will: Close the loopholes that allow ministers to vote on matters connected with their business interests." (Conservative Party 2006 federal election platform, “Stand Up for Accountability” chapter, p.12)

THE REALITY: Subsections 3(4) and 3(5) of the Code state:

“Private Interests
(4) Public office holders shall not have private interests, other than those permitted pursuant to this Code, that would be affected particularly or significantly by government actions in which they participate.

“Public Interest
(5) On appointment to office, and thereafter, public office holders shall arrange their private affairs in a manner that will prevent real, potential or apparent conflicts of interest from arising but if such a conflict does arise between the private interests of a public office holder and the official duties and responsibilities of that public office holder, the conflict shall be resolved in favour of the public interest.”

““Private interest” does not include an interest in a matter
(a) that is of general application;
(b) that affects a person as one of a broad class of the public; or
(c) that concerns the remuneration or benefits of a public office holder.”

Prime Minister Stephen Harper has not removed this definition of “”private interest” from the new Code, and so the loophole has not been closed.
 
 

PLEDGE #4 - Ban “venetian-blind” trusts and require fully blind trusts

THE RHETORIC: "A Conservative government will: End “venetian blind” trusts that allow ministers to remain informed about their business interests, and require all ministerial assets to be placed in truly blind trusts." (Conservative Party 2006 federal election platform, “Stand Up for Accountability” chapter, p.12)

THE REALITY: Under subsection 1(b) of the Schedule in the new Code (pp. 29-34), public office holders are still allowed (as they were under the old Code) to set up a “blind management agreement” and are still allowed to “be kept informed of the basic value of the assets” under management, and are still allowed to receive information about the assets under management in the case of “an extraordinary corporate event.”

As a result, the promise to end “venetian blind” trusts has been broken.
 
 

PLEDGE #5 - Allow the public to file complaints with the Ethics Commissioner

THE RHETORIC: "A Conservative government will: Allow members of the public - not just politicians - to make complaints to the Ethics Commissioner." (Conservative Party 2006 federal election platform, “Stand Up for Accountability” chapter, p.12)

THE REALITY: Subsection 5(4) of the new Code is new and states:

“In fulfilling the functions under 72.07(a) and (b) of the Parliament of Canada Act, and subject to 72.08 of that Act, the Ethics Commissioner shall consider information from the public that is brought to his attention by a member of Parliament suggesting that a public office holder has not complied with this Code, and may take such action as the Ethics Commissioner deems appropriate in the circumstances.”