Friday, January 30, 2004

OTTAWA - Today, Democracy Watch filed open letters with Office of the Ethics Counsellor requesting that it investigate and issue a public ruling on lobbyists who donated to Liberal leadership candidates.  Democracy Watch believes that donors that are registered to lobby the federal government that donated or provided services worth $5,000 or more to Paul Martin, John Manley, or Sheila Copps broke ethics rules for lobbyists by putting these politicians in a conflict of interest (Please see complaint letters below re: Paul Martin, John Manley, Sheila Copps).

"Democracy Watch believes that a lobbyist that donates large amounts of money to a politician puts the politician in a conflict of interest in violation of federal ethics rules for lobbyists and politicians," said Duff Conacher, Coordinator of Democracy Watch.

On July 11, 2002 under guidelines introduced by Prime Minister Chrétien on June 11th, Cabinet ministers Sheila Copps, John Manley and Allan Rock disclosed donations they had received to their Liberal party leadership campaign funds.  At the time, the Ethics Counsellor stated publicly that he had required each of the ministers to return some donations because the source and size of the donation created a conflict for the minister.  Wilson stated that each minister had been required to return less than $50,000 total, and that donations of $5,000 or more caused conflicts of interest.  Wilson did not disclose the identities of the donors.

Democracy Watch believes that the lobbyists involved violated Rule 8 of the Lobbyists’ Code of Conduct, which states that "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".

Democracy Watch filed a complaint about the donations, and the Ethics Counsellor’s ruled that the donations do not violate Rule 8.  Democracy Watch is challenging the Ethics Counsellor’s ruling in Federal Court. (Link to Media Release re: court challenge of Ethics Counsellor's rulings)

Democracy Watch is now filing a similar complaint about donations which have been disclosed since July 2002.  Paul Martin received donations or services of $5,000 or more from more than 600 corporations and corporate law firms.  Of these, 60 corporations or corporate law firms are registered to lobby the federal government, and 30 of the 60 donated or gave services worth $25,000 or more (Total that 60 donated - $2.05 million; Total value of services - $499,287).  Among the registered lobbyists are such corporations as: Imperial Tobacco Canada Ltd., Westcoast Energy, CanWest Global, Magna International, Bombardier (Aerospace), Hollinger Canadian, BCE Inc., Alliance Atlantis, Canada’s Research-Based Pharmaceutical Companies, Inco, Brascan, United Parcel Service (UPS) Canada Ltd., Canadian National, Talisman Energy Inc., ING, and Telus Corporation (Please see full list in letter set out below, and please note that the Ethics Counsellor’s webpage listing the Martin donations is so poorly maintained that Democracy Watch believes that many donations are listed twice or more, as the total of donations listed for Martin adds up to more than $18.2 million, $6 million more than Martin himself claimed as his donations total).  As a result, Democracy Watch believes that Martin is currently in a conflict of interest when participating in any discussions or decisions concerning tobacco, energy, media, transportation, telecommunications, health care and pharmaceuticals, environmental, postal, banking and corporate responsibility issues.

In addition, Martin accepted more than $65,000 of in-kind services from the Earnscliffe Strategy Group.  As a result, Democracy Watch believes Martin is in a conflict of interest when participating in any discussions or decisions concerning any of the subjects for which Earnscliffe lobbyists are registered to lobby the federal government.  As well, Paul Martin accepted donations and in-kind services from several law firms.  As a result, Democracy Watch believes that Martin is currently in a conflict of interest when participating in any discussions or decisions concerning legal services contracted out by the federal government, and concerning any interests represented by these law firms.

"Democracy Watch believes Prime Minister Paul Martin is in a conflict of interest on tobacco, energy, media, transportation, telecommunications, health care and pharmaceuticals, environmental, postal, banking and corporate responsibility issues," said Duff Conacher, Coordinator of Democracy Watch.  “Martin’s multiple conflicts of interest raise the serious question of whether he can uphold the public interest in any of these areas, and whether Martin can even remain as prime minister.”

John Manley received donations of $5,000 or more from 19 corporations, corporate lobbyists and corporate law firms, including Canadian National Railway, Bombardier Inc., Research in Motion, Alliance Atlantis, Torys LLP, Davies Ward Phillips & Vineberg LLP, and the Capital Hill Group lobbying firm.

Sheila Copps received donations or services of $5,000 or more from 8 corporations and corporate law firms, including Telus, Magna International, Bombardier, Alliance Atlantis, McCain Foods Ltd. and Borden Ladner Gervais LLP.

The Ethics Counsellor, in his legal position as enforcer of the Lobbyists’ Code, is required by the Lobbyists Registration Act to investigate if there is a reasonable belief that there has been a violation of the Lobbyists’ Code, and to file a public ruling in Parliament.

Democracy Watch is filing the complaint with federal Ethics Counsellor Howard Wilson despite the fact that it believes that Wilson is biased in his legal position as enforcer of the Lobbyists' Code of Conduct because Wilson also holds the separate legal position of compliance officer for the Public Office Holders Code (a position completely controlled by the Prime Minister).  Democracy Watch filed an application in Federal Court last December challenging a past ruling of the Ethics Counsellor and the legality of Wilson holding both positions.  The case is proceeding through the Federal Court.

Among its rules, the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code) requires public office holders to “arrange their private affairs in a manner that will prevent real, potential or apparent conflicts of interest from arising . . ." (Part I, sub-section 3(1)) and to "take care to avoid being placed or the appearance of being placed under an obligation to any person or organization . . .” (Part II, subsection 23(1)).

Parliament extended the principles upon which these rules are based to political donations when it passed Bill C-24 in June 2003. Bill C-24 prohibits donations to parties and candidates of more than $1,000 from corporations and other organizations, and of more than $5,000 from individuals.  In addition, Canadian  courts have clearly established that decision-makers such as politicians cannot be in even apparent conflicts of interest.

As a result of these rules, Democracy Watch believes that federal politicians cannot accept donations or services worth $5,000 or more from anyone who lobbies the federal government (especially donations from lobbyists who lobby a minister’s department).

"If Paul Martin wants to govern with integrity he should clear the air concerning these conflicts of interest, and what federal ethics rules for politicians and lobbyists permit and prohibit, by immediately referring these complaints to the Supreme Court of Canada for a ruling," said Duff Conacher, Coordinator of Democracy Watch.

Office of the Ethics Counsellor
66 Slater St., 22nd Floor
Ottawa, Canada
K1A 0C9
Fax: (613) 995-7308

RE: Complaint re: donations by lobbyists to Paul Martin’s Liberal Party leadership campaign

January 30, 2004

Dear Office of the Ethics Counsellor:

Democracy Watch is filing this letter to request that the Ethics Counsellor, in the statutory position as enforcer of the federal Lobbyists’ Code of Conduct (the Lobbyists’ Code) as set out in sections 10.1 to 10.5 of the federal Lobbyists Registration Act, CHAPTER L-12.4 (R.S., 1985, c. 44 (4th Supp.)) (the Act), investigate situations that Democracy Watch believes raise serious questions concerning violations of the federal Lobbyists’ Code.

Democracy Watch believes that the current Ethics Counsellor, Howard Wilson, is personally biased in fulfilling the role of enforcing the Lobbyists' Code because he also holds the separate legal position of compliance officer for the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code), a position completely controlled by the Prime Minister. As a result of the Prime Minister’s control of Howard Wilson in this position, Democracy Watch believes that Mr. Wilson personally cannot fairly and impartially uphold the Lobbyists' Code.  As you know, Democracy Watch has filed an application in Federal Court challenging rulings by Howard Wilson and the legality of Howard Wilson holding both these positions.

However, Democracy Watch is still filing this letter without prejudice to that court application because it believes that, if Howard Wilson is replaced by another person in the legal position of enforcer of the Lobbyists' Code, the position could have sufficient independence and powers to fairly and impartially uphold the Lobbyists' Code.

As you know, the Lobbyists’ Code covers all lobbyists required to register under the Act.

In June and early July 2002 Howard Wilson, in one or both of his two, separate legal positions described above (he did not make it clear at the time), required Cabinet ministers Sheila Copps, John Manley, and Allan Rock to return donations they had received to their leadership campaign funds.  Wilson refused to disclose the sources and amounts of the donations, but according to media reports he claimed that the total returned by each minister was less than $50,000.

According to the Ottawa Citizen, Howard Wilson stated on July 11th (the date the ministers disclosed donations they had received) that his reason for requiring each minister to return some of the donations was as follows: "I was concerned that the minister was going to have to stand back on files that were just so important to their ministerial responsibilities that it would represent a serious impairment of the minister's abilities to carry out his or her responsibilities."  Wilson also made it clear that the donations were of amounts of $5,000 or more from sources which lobby the ministers, and that therefore the donations created a conflict that would require a minister “to have to stand back on files”.  The one returned donation which was made public, a $25,000 donation from BCE Inc. to Industry Minister Allan Rock, clearly fits within the standard Wilson articulated, as BCE Inc. is registered to lobby Industry Canada.

Principles set out in the Lobbyists’ Code require that all lobbyists follow "not only the letter but the spirit" of the Lobbyists' Code and all relevant laws, including the registration requirements of the Lobbyists Registration Act, and that lobbyists conduct all their relations with " integrity and honesty" and "observe the highest professional and ethical standards."

In addition, Rule 8 of the Lobbyists’ Code states the following:
“8. Improper influence
 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.”

The Act defines public office holders as including all members of the House of Commons and the Senate (subsection 2(1)).

The Public Office Holders' Code requires ministers, ministerial staff, and others covered by the Code to adhere to the following rules (NOTE: "Every public office holder" (including, Democracy Watch believes, all members of the House of Commons and the Senate) is required to conform with the principles set out under Part I, section 3 of the Code, while only specific public office holders (defined in section 4 of the Code) are required to adhere to the other rules contained in the Code):

• under Part I, sub-section 3(1), " to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and maintained.”
• under Part I, sub-section 3(2), “to perform their official duties ... in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law."
• under Part I, sub-section 3(5), "to 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 office duties and responsibilities of that public office holder, the conflict shall be resolved in favour of the public interest."
• under Part II, subsection 23(1), to "take care to avoid being placed or the appearance of being placed under an obligation to any person or organization, or the representative of a person or organization, that might profit from special consideration on the part of the office holder."

By requiring ministers to return donations of $5,000 or more in June and July 2002, Howard Wilson clearly indicated that he agreed with this interpretation of federal ethics rules for public office holders and lobbyists.

It is important to note that through the time period of the Liberal Party leadership campaign, there was no law that permitted donations to federal politicians of any amount for a party leadership campaign.  In June 2003, Parliament endorsed Democracy Watch’s interpretation of federal ethics rules and how donations to party leadership candidates above a certain amount cause conflicts of interest when it passed a new political donations law that prohibits donations to party leadership candidates of above $1,000 from corporations or other organizations, and above $5,000 from individuals.

Between September 2002 and December 2003, Paul Martin periodically disclosed donations to his Liberal Party leadership campaign, and lists of these donations were posted on a webpage maintained by the Office of the Ethics Counsellor.

The following donors are registered to lobby the federal government, and according to the Ethics Counsellor’s webpage made donations of at least $5,000 to Martin’s campaign (PLEASE NOTE: the Ethics Counsellor’s webpage listing the Martin donations is so poorly maintained that Democracy Watch believes that many donations are listed twice or more, as the total of donations listed for Martin adds up to more than $18.2 million, $6 million more than Martin himself claimed as his donations total.  As a result, it is possible that some of the donors listed below under the heading “Donors of $5,000 or more” actually donated less than $5,000):

Donors of $100,000 or more
• Grant Forest Products Inc.
• CanWest Global
• Deloitte & Touche (LLP)
• KPMG
• Westcoast Energy (listed in Lobbyist Registry as Foothill Pipelines)
• PriceWaterhouseCoopers

Donors of $75,000 or more
• Imperial Tobacco Canada Ltd.
• Torys LLP
• Gabriel A. Mordo & Son Ltd.

Donors of $50,000 or more
• Cinemas Guzzo
• Canadian Automobile Dealers Association
• Fasken Martineau
• Magna International
• Bombardier (Aerospace)
• Hollinger Canadian
• Gowling Lafleur Henderson LLP
• BCE Inc.
• Alliance Atlantis

Donors of $25,000 or more
• Canada’s Research-Based Pharmaceutical Companies
• Inco
• Brascan (listed as Direct Interest)
• Borden Ladner Gervais, LLP
• United Parcel Service (UPS) Canada Ltd.
• Woodbridge (listed in Lobbyist Registry as Thompson-Woodbridge)
• Seaspan International Ltd.

Donors of $20,000 or more
• McCarthy Tetrault LLP
• Canadian National
• Ontario Sewer and Watermanin Construction Association
• Goldcorp Inc.
• Canadian Natural Resources Ltd.
• Astral Media

Donors of $10,000 or more
• Aventis Pharma Inc.
• Aecon
• Canadian Pacific Railway Company
• Tempest Management Corp.
• Talisman Energy Inc.
• MacDonald Development Corporation (parent of Texada, which is in Lobbyist Registry)
• Lafarge Canada Inc.
• International Union of Operating Engineers Local 793
• ING
• Finning
• Bristol-Myers Squibb Canada Inc.

Donors of $5,000 or more
• Interior Systems Contractors Association of Ontario
• GlaxoSmithKline
• Provincial Airlines Ltd.
• Sun Life Assurance Company of Canada
• Canadian Construction Association
• Brewers Association of Canada
• The Capital Hill Group Ottawa Inc.
• Pope & Talbot Ltd.
• Merck Frosst Canada & Co.
• Goodmans LLP
• Drug Trading Company Ltd.
• Corus Entertainment Inc.
• AVS Technologies Inc.

In addition, according to the Ethics Counsellor’s webpage, the following lobbyists provided in-kind services valued at $5,000 or more to Paul Martin’s leadership campaign:

In-kind services of $100,000 or more
• McCarthy Tetrault

In-kind services of $50,000 or more
• Earnscliffe Strategy Group
• Telus Corporation

In-kind services of $25,000 or more
• Emera Inc.
• Maple Financial Group Inc.
• Bell Canada

In-kind services of $10,000 or more
• Research in Motion Ltd.
• Clearwater Fine Foods
• Strauss Communications
• Alliance Atlantis

In-kind services of $5,000 or more
• Grant Forest Products Inc.

The legal position of Ethics Counsellor enforcing the Lobbyists' Code is required under the Lobbyists Registration Act to investigate if there is a reasonable belief that a violation of the Lobbyists’ Code has occurred.  The Ethics Counsellor in this position has the full powers of a judge in the investigation (including the power to subpoena witnesses and compel evidence), and is required to report the ruling on the complaint to Parliament (via the Registrar General of Canada).

Democracy Watch believes that the above donations and in-kind services to Paul Martin’s Liberal Party leadership campaign cause a reasonable belief that the lobbyists that made the donations and provided the services violated Rule 8 of the Lobbyists' Code.

Democracy Watch therefore requests that the Ethics Counsellor use the full powers under the Act to investigate and rule on this situation, and to report the ruling to Parliament as legally required.

The standard for evaluating activities of public office holders under the Public Office Holders Code is whether "real, potential or apparent conflicts of interest" have been created (emphasis added).  This standard creates an affirmative obligation on all public office holders to avoid even potential or apparent conflicts of interest.

We look forward to receiving the ruling on this complaint.

Sincerely,
Duff Conacher, Coordinator
On behalf of the Board of Directors of Democracy Watch

Office of the Ethics Counsellor
66 Slater St., 22nd Floor
Ottawa, Canada
K1A 0C9
Fax: (613) 995-7308

RE: Complaint re: donations by lobbyists to John Manley’s Liberal Party leadership campaign

January 30, 2004

Dear Office of the Ethics Counsellor:

Democracy Watch is filing this letter to request that the Ethics Counsellor, in the statutory position as enforcer of the federal Lobbyists’ Code of Conduct (the Lobbyists’ Code) as set out in sections 10.1 to 10.5 of the federal Lobbyists Registration Act, CHAPTER L-12.4 (R.S., 1985, c. 44 (4th Supp.)) (the Act), investigate situations that Democracy Watch believes raise serious questions concerning violations of the federal Lobbyists’ Code.

Democracy Watch believes that the current Ethics Counsellor, Howard Wilson, is personally biased in fulfilling the role of enforcing the Lobbyists' Code because he also holds the separate legal position of compliance officer for the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code), a position completely controlled by the Prime Minister. As a result of the Prime Minister’s control of Howard Wilson in this position, Democracy Watch believes that Mr. Wilson personally cannot fairly and impartially uphold the Lobbyists' Code.  As you know, Democracy Watch has filed an application in Federal Court challenging rulings by Howard Wilson and the legality of Howard Wilson holding both these positions.

However, Democracy Watch is still filing this letter without prejudice to that court application because it believes that, if Howard Wilson is replaced by another person in the legal position of enforcer of the Lobbyists' Code, the position could have sufficient independence and powers to fairly and impartially uphold the Lobbyists' Code.

As you know, the Lobbyists’ Code covers all lobbyists required to register under the Act.

In June and early July 2002 Howard Wilson, in one or both of his two, separate legal positions described above (he did not make it clear at the time), required Cabinet ministers Sheila Copps, John Manley, and Allan Rock to return donations they had received to their leadership campaign funds.  Wilson refused to disclose the sources and amounts of the donations, but according to media reports he claimed that the total returned by each minister was less than $50,000.

According to the Ottawa Citizen, Howard Wilson stated on July 11th (the date the ministers disclosed donations they had received) that his reason for requiring each minister to return some of the donations was as follows: "I was concerned that the minister was going to have to stand back on files that were just so important to their ministerial responsibilities that it would represent a serious impairment of the minister's abilities to carry out his or her responsibilities."  Wilson also made it clear that the donations were of amounts of $5,000 or more from sources which lobby the ministers, and that therefore the donations created a conflict that would require a minister “to have to stand back on files”.  The one returned donation which was made public, a $25,000 donation from BCE Inc. to Industry Minister Allan Rock, clearly fits within the standard Wilson articulated, as BCE Inc. is registered to lobby Industry Canada.

Principles set out in the Lobbyists’ Code require that all lobbyists follow "not only the letter but the spirit" of the Lobbyists' Code and all relevant laws, including the registration requirements of the Lobbyists Registration Act, and that lobbyists conduct all their relations with " integrity and honesty" and "observe the highest professional and ethical standards."

In addition, Rule 8 of the Lobbyists’ Code states the following:
“8. Improper influence
 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.”

The Act defines public office holders as including all members of the House of Commons and the Senate (subsection 2(1)).

The Public Office Holders' Code requires ministers, ministerial staff, and others covered by the Code to adhere to the following rules (NOTE: "Every public office holder" (including, Democracy Watch believes, all members of the House of Commons and the Senate) is required to conform with the principles set out under Part I, section 3 of the Code, while only specific public office holders (defined in section 4 of the Code) are required to adhere to the other rules contained in the Code):

• under Part I, sub-section 3(1), " to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and maintained.”
• under Part I, sub-section 3(2), “to perform their official duties ... in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law."
• under Part I, sub-section 3(5), "to 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 office duties and responsibilities of that public office holder, the conflict shall be resolved in favour of the public interest."
• under Part II, subsection 23(1), to "take care to avoid being placed or the appearance of being placed under an obligation to any person or organization, or the representative of a person or organization, that might profit from special consideration on the part of the office holder."

By requiring ministers to return donations of $5,000 or more in June and July 2002, Howard Wilson clearly indicated that he agreed with this interpretation of federal ethics rules for public office holders and lobbyists.

It is important to note that through the time period of the Liberal Party leadership campaign, there was no law that permitted donations to federal politicians of any amount for a party leadership campaign.  In June 2003, Parliament endorsed Democracy Watch’s interpretation of federal ethics rules and how donations to party leadership candidates above a certain amount cause conflicts of interest when it passed a new political donations law that prohibits donations to party leadership candidates of above $1,000 from corporations or other organizations, and above $5,000 from individuals.

Between July 2002 and June 2003, John Manley periodically disclosed donations to his Liberal Party leadership campaign, and lists of these donations were posted on a webpage maintained by the Office of the Ethics Counsellor.

The following donors are registered to lobby the federal government, and according to the Ethics Counsellor’s webpage made donations of at least $5,000 to John Manley’s campaign:

Donors of $25,000 or more
• Torys LLP
• Canadian National Railway
• Davies Ward Phillips & Vineberg LLP
• Bombardier Inc.

Donors of $10,000 or more
• Capital Hill Group
• Borden Ladner Gervais LLP
• Ernst & Young LLP
• Bennett Jones LLP
• Herb Metcalfe
• Wildeboer Rand Thom Dellelce LLP
• Research in Motion
• MDC Corporation
• Commercial Alcohols Inc.
• Alliance Atlantis Communications Inc.

Donors of $5,000 or more
• Canada’s Research Based Pharmaceutical Companies
• Gowlings
• Merck Frosst Canada Ltd.
• Astrazeneca Canada Inc.
• Astral Media

The legal position of Ethics Counsellor enforcing the Lobbyists' Code is required under the Lobbyists Registration Act to investigate if there is a reasonable belief that a violation of the Lobbyists’ Code has occurred.  The Ethics Counsellor in this position has the full powers of a judge in the investigation (including the power to subpoena witnesses and compel evidence), and is required to report the ruling on the complaint to Parliament (via the Registrar General of Canada).

Democracy Watch believes that the above donations to John Manley’s Liberal Party leadership campaign cause a reasonable belief that the lobbyists that made the donations and provided the services violated Rule 8 of the Lobbyists' Code.

Democracy Watch therefore requests that the Ethics Counsellor use the full powers under the Act to investigate and rule on this situation, and to report the ruling to Parliament as legally required.

The standard for evaluating activities of public office holders under the Public Office Holders Code is whether "real, potential or apparent conflicts of interest" have been created (emphasis added).  This standard creates an affirmative obligation on all public office holders to avoid even potential or apparent conflicts of interest.  We look forward to receiving the ruling on this complaint.

Sincerely,
Duff Conacher, Coordinator
On behalf of the Board of Directors of Democracy Watch

Office of the Ethics Counsellor
66 Slater St., 22nd Floor
Ottawa, Canada
K1A 0C9
Fax: (613) 995-7308

RE: Complaint re: donations by lobbyists to Sheila Copps’ Liberal Party leadership campaign

January 30, 2004

Dear Office of the Ethics Counsellor:

Democracy Watch is filing this letter to request that the Ethics Counsellor, in the statutory position as enforcer of the federal Lobbyists’ Code of Conduct (the Lobbyists’ Code) as set out in sections 10.1 to 10.5 of the federal Lobbyists Registration Act, CHAPTER L-12.4 (R.S., 1985, c. 44 (4th Supp.)) (the Act), investigate situations that Democracy Watch believes raise serious questions concerning violations of the federal Lobbyists’ Code.

Democracy Watch believes that the current Ethics Counsellor, Howard Wilson, is personally biased in fulfilling the role of enforcing the Lobbyists' Code because he also holds the separate legal position of compliance officer for the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code), a position completely controlled by the Prime Minister. As a result of the Prime Minister’s control of Howard Wilson in this position, Democracy Watch believes that Mr. Wilson personally cannot fairly and impartially uphold the Lobbyists' Code.  As you know, Democracy Watch has filed an application in Federal Court challenging rulings by Howard Wilson and the legality of Howard Wilson holding both these positions.

However, Democracy Watch is still filing this letter without prejudice to that court application because it believes that, if Howard Wilson is replaced by another person in the legal position of enforcer of the Lobbyists' Code, the position could have sufficient independence and powers to fairly and impartially uphold the Lobbyists' Code.

As you know, the Lobbyists’ Code covers all lobbyists required to register under the Act.

In June and early July 2002 Howard Wilson, in one or both of his two, separate legal positions described above (he did not make it clear at the time), required Cabinet ministers Sheila Copps, John Manley, and Allan Rock to return donations they had received to their leadership campaign funds.  Wilson refused to disclose the sources and amounts of the donations, but according to media reports he claimed that the total returned by each minister was less than $50,000.

According to the Ottawa Citizen, Howard Wilson stated on July 11th (the date the ministers disclosed donations they had received) that his reason for requiring each minister to return some of the donations was as follows: "I was concerned that the minister was going to have to stand back on files that were just so important to their ministerial responsibilities that it would represent a serious impairment of the minister's abilities to carry out his or her responsibilities."  Wilson also made it clear that the donations were of amounts of $5,000 or more from sources which lobby the ministers, and that therefore the donations created a conflict that would require a minister “to have to stand back on files”.  The one returned donation which was made public, a $25,000 donation from BCE Inc. to Industry Minister Allan Rock, clearly fits within the standard Wilson articulated, as BCE Inc. is registered to lobby Industry Canada.

Principles set out in the Lobbyists’ Code require that all lobbyists follow "not only the letter but the spirit" of the Lobbyists' Code and all relevant laws, including the registration requirements of the Lobbyists Registration Act, and that lobbyists conduct all their relations with " integrity and honesty" and "observe the highest professional and ethical standards."

In addition, Rule 8 of the Lobbyists’ Code states the following:
“8. Improper influence
 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.”

The Act defines public office holders as including all members of the House of Commons and the Senate (subsection 2(1)).

The Public Office Holders' Code requires ministers, ministerial staff, and others covered by the Code to adhere to the following rules (NOTE: "Every public office holder" (including, Democracy Watch believes, all members of the House of Commons and the Senate) is required to conform with the principles set out under Part I, section 3 of the Code, while only specific public office holders (defined in section 4 of the Code) are required to adhere to the other rules contained in the Code):

• under Part I, sub-section 3(1), " to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and maintained.”
• under Part I, sub-section 3(2), “to perform their official duties ... in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law."
• under Part I, sub-section 3(5), "to 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 office duties and responsibilities of that public office holder, the conflict shall be resolved in favour of the public interest."
• under Part II, subsection 23(1), to "take care to avoid being placed or the appearance of being placed under an obligation to any person or organization, or the representative of a person or organization, that might profit from special consideration on the part of the office holder."

By requiring ministers to return donations of $5,000 or more in June and July 2002, Howard Wilson clearly indicated that he agreed with this interpretation of federal ethics rules for public office holders and lobbyists.

It is important to note that through the time period of the Liberal Party leadership campaign, there was no law that permitted donations to federal politicians of any amount for a party leadership campaign.  In June 2003, Parliament endorsed Democracy Watch’s interpretation of federal ethics rules and how donations to party leadership candidates above a certain amount cause conflicts of interest when it passed a new political donations law that prohibits donations to party leadership candidates of above $1,000 from corporations or other organizations, and above $5,000 from individuals.

 Between July 2002 and December 2003, Sheila Copps periodically disclosed donations to her Liberal Party leadership campaign, and lists of these donations were posted on a webpage maintained by the Office of the Ethics Counsellor.

The following donors are registered to lobby the federal government, and according to the Ethics Counsellor’s webpage made donations of at least $5,000 to Sheila Copps’ campaign:

Donors of $25,000 or more
• Telus
• Magna International

Donors of $10,000 or more
• Bombardier
• Alliance Atlantis Communications Inc.
• McCain Foods Ltd.

Donors of $5,000 or more
• Ipex Inc.
• Astral Media

In-kind services of $10,000 or more
• Borden Ladner Gervais LLP

The legal position of Ethics Counsellor enforcing the Lobbyists' Code is required under the Lobbyists Registration Act to investigate if there is a reasonable belief that a violation of the Lobbyists’ Code has occurred.  The Ethics Counsellor in this position has the full powers of a judge in the investigation (including the power to subpoena witnesses and compel evidence), and is required to report the ruling on the complaint to Parliament (via the Registrar General of Canada).

Democracy Watch believes that the above donations and in-kind services to Sheila Copps’ Liberal Party leadership campaign cause a reasonable belief that the lobbyists that made the donations and provided the services violated Rule 8 of the Lobbyists' Code.

Democracy Watch therefore requests that the Ethics Counsellor use the full powers under the Act to investigate and rule on this situation, and to report the ruling to Parliament as legally required.

The standard for evaluating activities of public office holders under the Public Office Holders Code is whether "real, potential or apparent conflicts of interest" have been created (emphasis added).  This standard creates an affirmative obligation on all public office holders to avoid even potential or apparent conflicts of interest.

We look forward to receiving the ruling on this complaint.

Sincerely,
Duff Conacher, Coordinator
On behalf of the Board of Directors of Democracy Watch