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News Release

FEDERAL CONSERVATIVES PROTECT CABINET MINISTERS BY BREAKING PROMISE
TO CLOSE LOOPHOLE THAT ALLOWS MINISTERS TO ADDRESS ISSUES
THAT AFFECT THEIR BUSINESS INTERESTS --
OPPOSITION PARTIES NOT FOCUSED ON CORRECTING MANY
MAJOR FLAWS IN BILL C-2, THE “FEDERAL ACCOUNTABILITY ACT”

Tuesday, June 13, 2006

OTTAWA - OTTAWA - Today, Democracy Watch called on the Conservative government to stop protecting Cabinet ministers and start protecting the public interest by keeping their election promise to close the huge loophole in federal ethics rules that allows ministers to be involved in discussions, debates, policy-making processes and votes on matters that affect their own financial interests.

“By breaking his election promise to close a loophole in federal ethics rules, Prime Minister Harper is allowing his Cabinet ministers to ignore the public interest and make decisions that help themselves and their corporate friends,” said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the Government Ethics Coalition and the Money in Politics Coalition. “The Conservatives promised to close the ethics loophole Paul Martin created so he could be involved in making policies that affected his shipping company, but instead the Conservatives are practising politics as usual by breaking promises and continuing a loophole-filled ethics enforcement system.”

Democracy Watch also called on opposition parties to start protecting the public interest by introducing or supporting key amendments to the “Federal Accountability Act” (Bill C-2 -- the FAA) to close this loophole, force the Conservatives to keep their promises, and to ensure that everyone involved in the federal government is effectively required to act honestly, ethically, openly, representatively, and to prevent waste.  Amendments can still be proposed through the next week, and many key amendments have not yet been proposed.  Some of the amendments proposed by the opposition parties would actually weaken government accountability and ethics, and the Conservatives have also proposed amendments to weaken the FAA. (Please see the Report below for all the details)

In terms of the Conservative Cabinet ministers’ conflicts of interest, as was revealed last Thursday:

The loophole in the Conflict of Interest and Post-Employment Code for Public Office Holders that allows these ministers to continue to be involved in policy-making in the areas in which they have financial or business interests (which the FAA proposes to keep in the proposed new “Conflict of Interest Act”) was created by Paul Martin as soon as he became Prime Minister in December 2003.

In their election platform, the Conservatives identified ethics problems “including the special exemptions Paul Martin created for his own business dealings” and promised to “Close the loopholes that allow ministers to vote on matters connected with their business interests.”  Democracy Watch has filed a complaint with the Ethics Commissioner that the Conservatives have, by breaking this and 20 other promises (including proposing to weaken the ethics rules), violated the rule that requires honesty (To see details about the ethics complaint, click here)

The loophole allows Cabinet ministers, their staff, Cabinet appointees and senior public servants to be involved in discussions, debates and votes on matters that affect their financial interests as long as the matter is of “general application.”  It is a huge loophole because almost every matter Cabinet ministers deal with (except hirings, contracts and a few regulatory decisions) are matters of general application.

As a result, the loophole is a recipe for Cabinet minister’s business interests to drive their policy-making actions and decisions (especially when combined with the extremely weak ethics enforcement attitude and record of federal Ethics Commissioner Bernard Shapiro since he was appointed in May 2004).

Meanwhile, the opposition parties have not proposed an amendment to Bill C-2 (the FAA) to close this loophole, nor have they proposed other key amendments needed to ensure an effective federal government accountability system.  Amendments can still be proposed to the FAA through the next week.

“Canadians have a right to be very disappointed that, so far, especially the Conservatives and Liberals but also the NDP and Bloc are not doing enough to ensure that the Federal Accountability Act creates a loophole-free, effective federal government accountability system,” said Conacher.

The combination of the Conservatives’ broken promises, the Conservatives’ and Liberals’ proposals to weaken the Federal Accountability Act (FAA), and the opposition parties overall failure to propose and/or support key amendments, means that if the parties do not introduce more changes to the FAA or the Senate does not strengthen the FAA, the following flaws and loopholes will continue to undermine the federal government’s accountability system:

(PLEASE NOTE: Many more flaws than those listed below could continue to exist for years because 132 of the 317 sections of the FAA (including the entire proposed new “Conflict of Interest Act”) will not be in force even if Parliament passes the FAA -- these sections will only become law when Cabinet declares that they are in force):

Of course, the above list does not include details about all of the flaws with Bill C-2, nor does it include a summary much-needed election reforms nor Senate reform.  The Conservatives have introduced a proposal for very limited Senate reform (fixed terms for any future senators), and a proposal for very limited elections reform (only partially fixing the date of elections), and the federal Elections Act is required to be reviewed by Parliament in fall 2006.  Democracy Watch’s position on Senate reform is that abolishing the Senate and increasing House of Commons seats in every province except Ontario and Quebec would most effectively ensure regional representation, without the problems of a transition to a new Senate and legislative gridlock that other Senate reform proposals create, and with fewer problems in the area of representation by population compared to other Senate reform proposals.

Democracy Watch’s position on Elections Act reforms is that the priority should be to ensure transparency and fairness and limits on donations and spending in all campaigns, and to increase voter rights by prohibiting false statements by candidates and parties (as in B.C.), and by allowing voters to refuse their ballot if they do not want to support any of the candidates in their riding (as in Ontario).

If the federal parties rush Bill C-2 and refuse to take the time to consider fully and make all the much-needed changes to the “Federal Accountability Act” (Bill C-2), Democracy Watch and its coalitions will continue to lead the push for an effective federal government accountability system, first by pressuring the Senate to make further changes to Bill C-2, and then by pressuring all the parties to include any needed further changes in their next federal election platforms, and to make the changes after the election.

- 30 -

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Coordinator of Democracy Watch
Tel: (613) 241-5179
dwatch@web.net

 Report on Proposed Amendments to Bill C-2 (the "Federal Accountability Act"

Democracy Watch's May 25, 2006 news release detailing the Conservatives' broken promises in Bill C-2

Democracy Watch's May 30, 2006 news release detailing 140 changes needed to Bill C-2 in 15 key areas

Democracy Watch's Report Card on the 2006 Government Accountability Election Platforms
of the five main federal political parties

“Federal Accountability Act” (Bill C-2 -- See it and all related documents at: http://www.accountability.gc.ca)

Conservative Party of Canada platform webpage

Democracy Watch's Citizen Association Campaign
Democracy Watch's Voter Rights Campaign
Democracy Watch's Government Ethics Campaign
Democracy Watch's Money in Politics Campaign
Democracy Watch's Open Government Campaign

Democracy Watch homepage

Report
on How the Amendments Proposed to the "Federal Accountability Act" (FAA - Bill C-2) 
Fail to Ensure an Honest, Ethical, Open, Representative and Waste-Preventing Federal Government

(Democracy Watch -- June 13, 2006)

    1. General Background

    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;
    • budgeting and auditing.

      •  
    On April 11, 2006, the Prime Minister introduced Bill C-2, the "Federal Accountability Act" (FAA) which proposes to change the Conflict of Interest and Post-Employment Code for Public Office Holders (the Code ) into a law called the "Conflict of Interest Act" as well as make changes in the other areas listed above.
     

    2. Background on Amendments to Bill C-2 (the FAA)

    Very unfortunately, as many political leaders and parties in Canada have in the past, Prime Minister Stephen Harper and the federal Conservatives baited voters with false election promises in terms of the FAA, and then switched direction when they won, violating the fundamental right of voters to have honesty in politics.

    To see a detailed report on the Conservatives 21 broken promises related to the FAA, and the 140 total flaws and loopholes in the FAA that need to be closed to ensure everyone in the federal government acts honestly, ethically, openly, representatively and prevents waste, click here.

    Unfortunately, as detailed below, the Conservatives and some opposition parties have proposed to weaken the FAA in a few more ways, and the opposition parties have not proposed amendments to correct the dozens of flaws in the FAA.

    The basis of the amendments Democracy Watch believes are needed to the FAA are the platforms of the nation-wide 31-member group Government Ethics Coalition and the nation-wide, 50-member group Money in Politics Coalition (the groups in these coalitions have a total membership of more than 3.2 million Canadians) and the platform of the 10-member group Open Government Canada coalition (To see details about these coalitions, click here).

    All of the coalitions' platforms are based on historical experience which has proven that, in order to ensure people working in large, powerful organizations such as government institutions follow the rules:

    • the rules must have no loopholes; 
    • the institutions must operate as transparently as possible;
    • enforcement agencies must be fully independent, well-resourced and fully empowered (including having the power to penalize rule violators in significant ways), and must conduct regular inspections;
    • whistleblowers must be effectively protected.

      •  
    This is not to claim at all that everyone involved in the federal government intends to violate rules. However, some people will try to break the rules and so, in line with the common sense sayings "People do what you inspect, not what you expect" and "When all is said and done, more is said than done", an enforcement system must include all the above key elements.

    Because the Conservatives broke 21 election promises by failing to include promised measures in Bill C-2 (the "Federal Accountability Act" (FAA)), and because the Conservatives did not include in their promises proposals to close many other loopholes in the federal government's accountability system, and because opposition parties are not proposing and/or supporting proposed amendments to force the Conservatives to keep their election promises (and/or to correct all the other key flaws and close other loopholes in the FAA), if the FAA is not strengthened before it is passed the government's accountability system will continue to include the following key flaws and loopholes.

    (PLEASE NOTE: Many more flaws than those listed below could continue to exist for years because 132 of the 317 sections of the FAA (including the entire proposed new "Conflict of Interest Act") will not be in force even if Parliament passes the FAA -- these sections will only become law when Cabinet declares that they are in force):

    • lying to the public will still be legal, and as a result (of course) not penalized (the FAA will, if not changed, delete the only ethics rule that requires Cabinet ministers, their staff and senior public servants to "act with honesty");
    • Cabinet ministers, their staff and senior public servants will be allowed by flawed ethics rules to be involved in policy-making processes that help their own financial interests, and will be allowed to use government property for their own purposes;
    • secret, unethical lobbying will still be legal, and many ministerial staff will be allowed to become lobbyists too soon after they leave their position;
    • the new ban on secret donations to politicians will not be effectively enforced (because Canada is not complying with an international agreement it signed);
    • the public will still not be allowed to file ethics complaints against politicians (even though politicians are the public's employees);
    • the Prime Minister and Cabinet will still be able to appoint party loyalists and cronies to more than 3,500 key government and law enforcement positions without any effective review or parliamentary approval process;
    • government institutions will be allowed to keep secret information the public has a clear right to know because of loopholes in the Access to Information Act ;
    • secret funds like the Adscam fund will not be effectively banned, and politicians and officials will not have to provide detailed receipts to ensure expenses are justifiable;
    • federal government institutions will still not be required to consult with Canadians in a meaningful way before making most significant decisions;
    • citizens will still face very high barriers to banding together into watchdog groups that have the resources to match the resources of industry sector lobby groups;
    • secret rulings will still be possible by the ethics watchdog for the Prime Minister, Cabinet ministers, ministerial staff and senior public servants;
    • the identities of politicians, political staff, Cabinet appointees and public servants who are guilty of wrongdoing will often be kept secret;
    • the Information Commissioner, Conflict of Interest Ethics Commissioner, Auditor General, Procurement Auditor, and Public Sector Integrity Commissioner will lack key powers needed to ensure everyone in the government follows the rules, which will delay accountability for years as cases of violations are processed through courts;
    • penalties for unethical, secretive and wasteful activities (especially by politicians) will still be too low to discourage these activities (on average, the maximum penalty will only be a fine of $5,000), and;
    • whistleblowers who are not public servants will not be effectively protected from retaliation, and no whistleblowers will receive compensation adequate to seek another job (even if the whistleblowing process leaves them completely alienated from all their co-workers).

      •  
    Of course, the above list does not include details about all of the flaws with Bill C-2, nor does it include a summary much-needed election reforms nor Senate reform.  The Conservatives have introduced a proposal for very limited Senate reform (fixed terms for any future senators), and a proposal for very limited elections reform (only partially fixing the date of elections), and the federal Elections Act is required to be reviewed by Parliament in fall 2006. 

    Democracy Watch’s position on Senate reform is that abolishing the Senate and increasing House of Commons seats in every province except Ontario and Quebec would most effectively ensure regional representation, without the problems of a transition to a new Senate and legislative gridlock that other Senate reform proposals create, and with fewer problems in the area of representation by population compared to other Senate reform proposals.

    Democracy Watch’s position on Elections Act reforms is that the priority should to ensure transparency and fairness and limits on donations and spending in all campaigns, and to increase voter rights by prohibiting false statements by candidates and parties (as in B.C.), and by allowing voters to refuse their ballot if they do not want to support any of the candidates in their riding (as in Ontario).
     

       

    3. Summary of Proposed Amendments to Bill C-2 (the FAA) That Either Weaken or Strengthen the Bill

    Set out below is a summary of the key amendments proposed by the Conservative government and the opposition parties to the FAA, beginning with changes that weaken the FAA, followed by changes that strengthen the FAA.

    The Conservatives have proposed some amendments to weaken the FAA in key ways, as follows:

    • a change to remove the requirement that hired-gun lobbyists disclose their meetings with Cabinet ministers, their staff, and senior government officials; 
    • a change to remove the power of the Public Sector Integrity Commissioner to award up to $1,000 to whistleblowers who have acted with courage.

      •  
    The Liberals have proposed some amendments to weaken the FAA or government accountability in key ways, as follows:
    • the Liberals are trying to weaken voter rights by proposing a process full of barriers for voters wanting to stop floor-crossing MPs (including a $5,000 charge to do a petition that more than 50% of voters in the riding must sign within 30 days to recall the MP and force a by-election) -- voters should not be required to do anything to force a by-election (instead, MPs should be required to resign and run in a by-election if they switch parties, unless they have a justifiable reason such as their party leader being found guilty of violating a law or code and refusing to resign or a key change in their party's direction or policies);
    • the Liberals are trying to double the amount individuals can donate to $2,000 (which is a much higher amount than an average Canadian can afford);
    • the Liberals are trying to reduce the ban on senior politicians and officials becoming lobbyists from 5 years to 3 years;
    • the Liberals are trying to allow the Senate to keep their lapdog Senate Ethics Officer;
    • the Liberals have proposed a change (and the NDP a similar change) that would allow government institutions to continue to hide travel and hospitality expenses.

      •  
    The Conservatives have proposed one amendment to strengthen the FAA in a key way, as follows:
    • a new measure that would ban people who serve a new Prime Minister on a "transition team" from becoming lobbyists for five years.

      •  
    The opposition parties have also introduced amendments that will strengthen the FAA in key ways, as follows:

    Ethics enforcement strengthening measures

    • the Bloc proposed a change (the other parties rejected it) allowing the public to file ethics complaints directly with the Conflict of Interest and Ethics Commissioner (NOTE: the FAA breaks the Conservatives' election promise to "allow members of the public -- not just politicians -- to make complaints to the Ethics Commissioner" because it proposes to force the public to file complaints through an MP or senator);
    • the NDP have proposed a new measure that would prohibit the government from awarding contracts for goods or services to companies that lobby the government;
    • the Bloc have proposed a change to increase the penalty to $50,000 for Cabinet ministers and some senior government officials violating some of their ethics rules (NOTE: the FAA proposes a ridiculously low maximum fine of $500);
    • the Liberals have proposed a change to remove the protection from court review that the FAA gives to the proposed new Conflict of Interest and Ethics Commissioner.

      •  
    Lobbying disclosure and regulation strengthening measures
    • the Liberals have proposed a new measure requiring Cabinet ministers, their staff, some Cabinet appointees and some senior government officials to disclose their meetings and communications with lobbyists (NOTE: the FAA breaks the Conservatives' election promise to to "Require ministers and senior government officials to record their contacts with lobbyists" -- instead,. the FAA only requires some lobbyists to disclose some of their communications with some senior officials);
    • the Bloc have proposed a change to ensure emails from lobbyists to government officials would have to be disclosed (NOTE: the FAA only requires other types of lobbying communications to be disclosed);
    • the Liberals have proposed a change to extend the five-year ban on becoming a lobbyist, and other lobbying restrictions, to the leaders, deputy leaders, house leaders, whips (and their senior staff and unpaid advisors) of all parties (NOTE: the FAA only bans government ministers and some of their staff from becoming a lobbyist for five years);
    • the Bloc have proposed a new measure to require the new Commissioner of Lobbyists to undertake an investigation if an MP or senator requests (NOTE: the FAA only requires an investigation if the Commissioner believes it is necessary).

      •  
    Appointments process strengthening measures
    • the Bloc have proposed a change eliminating the section of the FAA that allows Cabinet to create a Public Appointments Commission and instead requiring approval by a House of Commons Committee of all Cabinet appointments (NOTE: the problem with the Bloc's proposal is that if the ruling party has a majority, the ruling party MPs on the Committee will very likely rubber-stamp proposed Cabinet appointees -- the Liberals and NDP have proposed separate, similarly weak measures that, while they set out operational rules for the Public Appointments Commission, do not require Cabinet to create and maintain the Commission);
    • the Liberals have proposed a new measure requiring approval from a majority of MPs and senators for appointees to the Public Service Commission (NOTE: currently, Commissioners are selected by Cabinet only); 
    • the Bloc have proposed a new measure to make the Parliamentary Budget Officer fully independent of Cabinet by placing the Officer within the Auditor General's office (NOTE: to force the Conservatives to keep their election promise to "Create an independent Parliamentary Budget Office" -- the FAA does not give the Officer independence from Cabinet);
    • the Bloc have proposed a change to require that the appointment of the proposed new Director of Prosecutions be approved by a committee of MPs;
    • the Bloc have proposed a change to require approval by resolution of the House of Commons for the dismissal of the Director of Prosecutions;
    • the NDP have proposed a change to require merit-based approval by a House of Commons committee of appointments to the National Capital Commission (NCC).

      •  
    Whistleblower protection strengthening measures
    • the NDP have proposed two changes to extend whistleblower protection to everyone (NOTE: forcing the Conservatives to keep their election promise to "Ensure that all Canadians who report government wrongdoing are protected, not just public servants" -- the FAA only proposes protecting public servants who blow the whistle);
    • the NDP have proposed a change to allow anyone to file a complaint with the proposed new Procurement Auditor (NOTE: the FAA only allows people or companies who supply products or services to the government to file complaints);
    • the Bloc have proposed a change that would ensure that information about whistleblower investigations would become public after one year (NOTE: to force the Conservatives to keep their election promise to "Require the prompt public disclosure of information revealed by whistleblowers, except where national security or the security of individuals is affected").

      •  
    Money in politics regulation strengthening measures
    • the Liberals (and the NDP in a different measure) have proposed a new measure to allow only citizens and permanent residents who are 18 or older to make political donations; 
    • the Liberals and NDP have both proposed a new measure to prohibit election candidates from benefitting from secret trust funds (NOTE: the FAA only bans candidates from accepting secret donations or gifts directly, and only bans MPs from having secret trust funds);
    • the NDP have proposed a new measure to limit loans to candidates (except loans made by financial institutions).

      •  
    Access-to-information and open government strengthening measures
    • the NDP have proposed a new measure that would ensure that the federal Access to Information Act (ATI Act) covers almost all federal government institutions (NOTE: including entities that receive two-thirds or more of their funding from the government -- forcing the Conservatives to keep their election promise to extend the coverage of the ATI Act to all government institutions, including all "foundations, and organizations that spend taxpayers' money or perform public functions") -- the Bloc has proposed adding several government institutions to the list covered by the ATI Act;
    • the NDP have proposed a new measure requiring government officials to create records to document decisions and actions (NOTE: forcing the Conservatives to keep their election promise to "Oblige public officials to create the records necessary to document their actions and decisions");
    • the NDP have proposed a new measure that would require disclosure of information under the ATI Act if the disclosure is in the public interest (NOTE: forcing the Conservatives to keep their election promise to "Provide a general public interest override for all exemptions, so that the public interest is put before the secrecy of the government");
    • the NDP have proposed a new measure that would require the disclosure of most of the information now kept secret through abuse of the exemption in the ATI Act for "Cabinet confidences".

      •  
    Anti-floor crossing strengthening measures
    • the NDP have proposed three new measures that: would prohibit what David Emerson did (switching parties in return for Cabinet post); would require a floor-crossing MP to sit as an independent until the next election, and; would require donations to the floor-crossing MPs election campaign to be returned to the donors.

      •  
    Waste prevention strengthening measures
    • the NDP have proposed two new measures to require the disclosure of basic information about government contracts;
    • the Liberals and NDP have proposed a new measure that would ensure that band councils established under the Indian Act and their agencies are covered by the requirements of the Financial Administration Act.
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