NOTE: The news release set out below was modified from its original form on December 20, 2007 as part of the settlement of a lawsuit initiated by Barry Campbell and the Honourable James Peterson..

Thursday, January 25, 2007

OTTAWA - Today, Democracy Watch released details about the case it has filed in Federal Court challenging the ruling by federal Registrar of Lobbyists Michael Nelson in which the Registrar concludes that a lobbyist raising money for a Cabinet minister they are lobbying does not create a conflict of interest. (To see the Registrar's ruling, click here -- To see Democracy Watch's court application, click here -- To see Democracy Watch's factum for the case, click here)

“With this ruling, the Registrar joins the former Ethics Counsellor and current Ethics Commissioner in failing to enforce federal ethics rules,” said Duff Conacher, Coordinator of Democracy Watch.

The Registrar’s ruling was on the complaint filed by Democracy Watch on April 13, 2000 about former Liberal MP-turned lobbyist Barry Campbell organizing and holding a fundraising event that raised more than $70,000 for Jim Peterson, then-Secretary of State (International Financial Institutions), Department of Finance.  Campbell was registered as Chairman of the company APCO Canada to lobby the Department of Finance at the time 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 and his riding association. (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 10-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."

Even though Rule 8 of the Lobbyists’ Code prohibits lobbyists from placing “public office holders” (which are defined by the federal lobbying law to include all federal politicians, all their staff, all government employees, and all Cabinet appointees (except judges and lieutenant governors)) in a “conflict of interest” through “improper influence” actions, the Ethics Counsellor’s interpretation of Rule 8 does not even mention the 21-year-old federal Conflict of Interest and Post-Employment Code for Public Office Holders (which applies to Cabinet ministers, full-time ministerial staff, and many senior government officials) nor the two-year-old Conflict of Interest Code for Members of the House of Commons nor the two-year-old Conflict of Interest Code for Senators nor the 10-year-old Values and Ethics Code for the Public Service nor any of the many rules in these codes that clearly define what types of influence are improper.

The Registrar took over the responsibility for enforcing the Lobbyists’ Code in May 2004, and finally issued the ruling on Democracy Watch’s complaint in October 2006.  In the ruling the Registrar uses the former Ethics Counsellor’s interpretation of Rule 8 and finds Campbell not guilty of violating Rule 8. (To see the Registrar's ruling, click here -- To see the interpretation, go to: Interpretation Bulletin for Rule 8 of Lobbyists' Code)

Democracy Watch’s position is that Rule 8 prohibits lobbyists from doing anything for any government, politician or government official they are lobbying. (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)

The Registrar has not yet ruled on seven other complaints Democracy Watch filed between April 2000 and January 2004 with the former Ethics Counsellor [NOTE: As of December 11, 2007, the Registrar had ruled on two other complaints, but still not ruled on five other complaints (For details, click here)].  The Ethics Counsellor ruled on four of the seven complaints, but Democracy Watch challenged two of the four rulings in Federal Court in 2003 and in July 2004 the Court concluded that the Ethics Counsellor’s rulings were all invalid because the Ethics Counsellor was not independent of the federal Cabinet (because Cabinet could dismiss him from his position at any time for any reason, and Cabinet controlled his office’s budget and staffing).  The Court also ruled that the Ethics Counsellor was biased against Democracy Watch. (To see a summary of the 2004 Federal Court ruling, click here)

The Federal Court’s July 2004 ruling ordered the federal government to ensure that a person fully independent from Cabinet review Democracy Watch’s eight complaints  (To see a summary of the history of the 8 complaints, click here).  The federal government has refused to ensure this independent review, instead having the Registrar of Lobbyists review the complaints.  Like the former Ethics Counsellor, the Registrar is not independent of federal Cabinet because the Cabinet can dismiss the Registrar from his position at any time for any reason, Cabinet controls his office budget, and at any time for any reason Cabinet could take control of the staffing of the Registrar’s office. (To see details about Democracy Watch's court challenge of the federal Registrar's lack of independence, which was launched in September 2005, and which the Registrar is challenging with a preliminary motion, click here)

Democracy Watch’s case challenges the Registrar’s ruling in part because the Registrar is not independent of the federal Cabinet.  If the federal Cabinet proclaims the sections of Bill C-2 (the so-called “Federal Accountability Act”) that change the federal lobbying law, the Registrar position will be eliminated and, finally, a new, much more independent Commissioner of Lobbyists position will be created.

“The Supreme Court of Canada stated in 1996 that strict enforcement of strong ethics rules is needed to have a democratic government, and the Federal Court echoed this conclusion in 2004.  Democracy Watch’s court challenge is aimed at ensuring that these court rulings federal ethics rules are no longer ignored by federal lobbyists, politicians and ethics enforcement officers,” said Conacher. (To see a summary of the 1996 Supreme Court of Canada ruling, click here -- To see a summary of the 2004 Federal Court ruling, click here)

Bell Phillips Gill Young LLP, a Toronto law firm, is representing Democracy Watch in the case on a pro bono basis.  The Federal Court file number for the case is T-1942-06.