"I have always practised full disclosure. I believe the Canadian people are entitled to full disclosure."
Paul Martin, June 11, 2002

Friday, June 14, 2002

OTTAWA - Today, Democracy Watch released two letters it sent to then-Finance Minister Paul Martin in April and October 2000 requesting that he disclose all donations to himself, his riding association, any related trust fund or leadership campaign fund from any person or organization involved in lobbying the Department of Finance, and a January 2000 letter it sent to Prime Minister Jean Chrétien with a similar request. Martin did not even respond to either letter, let alone disclose the donations and identities of donors, while Chrétien ignored the disclosure request in his response letter. (Please see text of April 2000 letter, October 2000 letter, January 2000 letter, and Chrétien's March 2000 response letter, set out below).

"Martin and Chrétien claim to believe in full disclosure of donations they receive, but less than two years ago both refused to disclose their donations," said Aaron Freeman, Board member of Democracy Watch.

Democracy Watch sent the first letter to Martin in April 2000 because legislation was being drafted which amended financial institution laws (it became Bill C-38) and Martin was being heavily lobbied by banks and other interest groups. The October letter sent was sent to remind Martin of the April letter, and repeat the request for disclosure of donations. Democracy Watch sent the January 2000 letter to Chrétien requesting disclosure of donations received by him in 1999 and 2000 from any person or organization benefitting from a government grant or contract because a highly suspicious pattern had been revealed about several grant and contract recipients who also donated to the Liberal Party of Canada.

A fatal flaw of the new leadership campaign donation guidelines is that the Prime Minister has made the Ethics Counsellor the enforcer of the guidelines. The Ethics Counsellor has no investigative powers or independence and has proven his complete ineffectiveness in enforcing similar ethics guidelines in the past eight years in several cases when he has either ignored clear violations of ethics rules or simply ignored the existing rules.

In one of numerous examples of the Prime Minister's control over the Ethics Counsellor's and his ineffectiveness, on March 20, 2000 Democracy Watch filed a complaint letter with the Ethics Counsellor about ministers fundraising for the Liberal Party, which is a private entity (ethics rules clearly prohibit ministers from assisting private entities). On March 29, 2000, the Ethics Counsellor sent a letter to Democracy Watch stating "I will get back to you after I have had an opportunity to consider the matter." Over two years later, and despite repeated requests, Democracy Watch is still waiting for a ruling on the matter from the Ethics Counsellor (Please see text of March 20, 2000 letter, and March 29, 2000 letter, set out below).

"Paul Martin, the Prime Minister, ministers and others with party leadership aspirations should not be trusted to follow donation disclosure guidelines," said Freeman. "To be effective disclosure must be legally required and enforced by a fully independent, fully empowered ethics commission with high penalties for violations, not by the Ethics Counsellor who is under the Prime Minister's thumb."

The Hon. Paul Martin
Minister of Finance
L'Esplanade Laurier, 21st Floor, East Tower
Ottawa, Ontario
K1A 0G5
Fax: 613-995-5176

April 13, 2000

Dear Mr. Martin:

We are writing to request immediate and full disclosure of whether any lobbyists have been or are in any way involved in any fundraising activities for you. We also request that you disclose all donations to yourself, your riding association, and any related trust fund or leadership campaign fund from any person or organization involved in lobbying the Department of Finance.

Under current disclosure rules, donations to political parties do not have to be made public until six months after the end of any year, MPs and riding associations do not have to disclose donations received outside of election campaign periods, and donations to trust funds and leadership campaign funds never have to be disclosed. As a result, many donations can remain secret; 1999 donations to the Liberal Party will not be made public until this July; and donations to the Party made at any time in 2000 will not be made public until July 2001.

Despite the current rules, Canadians have a right to know whether and how much key interested individuals and organizations are donating to the responsible Minister, the Minister's riding association, and any related funds maintained on behalf of the Minister at the time of any major policy decision. Donations are one way among many of influencing government decision-making. In order for Canadians to judge whether your Department's decisions on issues such as taxes, takeovers of financial institutions, and changes to financial institutions laws are made "in the public interest and with regard to the merits," as required by the Conflict of Interest and Post-Employment Code for Public Office Holders, they need to know all the details concerning the means by which interested individuals and organizations have tried to influence your decisions.

We trust that, in respect of Canadians right to know to the details of all factors involved in your decisions, you will disclose the identity of the donors and amount of any donations from individuals and organizations involved in issues under your department. We are also requesting that the Liberal Party immediately disclose donations received from people or groups involved in these issues.

We also urge you to ensure that the government closes the undemocratic loopholes in our political finance system that allow secret donations in some cases, and unjustifiable delays in disclosure of donations in other cases, before the current Bill C-2, which amends the Canada Elections Act, is enacted into law. Such loopholes do not exist in many other jurisdictions and should not exist at the federal level in Canada.

We look forward to your response.

Sincerely,
Aaron Freeman, Board member Democracy Watch

October 16, 2000

Dear Mr. Martin:

On April 13, 2000, we wrote you requesting immediate and full disclosure of whether any lobbyists have been or are in any way involved in any fundraising activities for you. We also requested that you disclose all donations to yourself, your riding association, and any related trust fund or leadership campaign fund from any person or organization involved in lobbying the Department of Finance since the 1997 election.

Although six months have passed, you have neither acknowledged nor responded to our letter in any way. As a result, we are again requesting disclosure of the above information.

Under current disclosure rules, donations to political parties do not have to be made public until six months after the end of any year, MPs and riding associations do not have to disclose donations received outside of election campaign periods, and donations to trust funds and leadership campaign funds never have to be disclosed. As a result, many donations can remain secret and donations to the Party made at any time in 2000 will not be made public until July 2001.

Despite the current rules, Canadians have a right to know whether and how much key interested individuals and organizations are donating to the responsible Minister, the Minister's riding association, and any related funds maintained on behalf of the Minister at the time of any major policy decision. Donations are one way among many of influencing government decision-making. In order for Canadians to judge whether your Department's decisions on issues such as taxes, takeovers of financial institutions, and changes to financial institutions laws are made "in the public interest and with regard to the merits," as required by the Conflict of Interest and Post-Employment Code for Public Office Holders, they need to know all the details concerning the means by which interested individuals and organizations have tried to influence your decisions.

We trust that, in respect of Canadians right to know to the details of all factors involved in your decisions, you will disclose the identity of the donors and amount of any donations from individuals and organizations involved in issues under your department. We are also requesting that the Liberal Party immediately disclose donations received from people or groups involved in these issues.

We also urge you to ensure that the government closes the undemocratic loopholes in our political finance system that allow secret donations in some cases, and unjustifiable delays in disclosure of donations in other cases. Such loopholes do not exist in many other jurisdictions and should not exist at the federal level in Canada.

We look forward to your response.

Sincerely,
Aaron Freeman, Board member Democracy Watch

The Rt. Hon. Jean Chrétien
Room 311-S, Centre Block
House of Commons
Ottawa, Ontario
K1A 0A6
Fax: 613-941-6900

January 25, 2000

Dear Mr. Chrétien:

We are writing to request that you immediately disclose all donations in 1999 and 2000 to yourself, your riding association, and any related trust fund from any person or organization benefitting from a government grant or contract.

Under current disclosure rules, donations to political parties do not have to be made public until six months after the end of any year; MPs and riding associations do not have to disclose donations received outside of election campaign periods; and donations to trust funds and leadership campaign funds never have to be disclosed. As a result, many donations can remain secret; 1999 donations to the Party will not be made public until this July; and donations to the Party made at any time in 2000 will not be made public until July 2001.

Despite the current rules, Canadians have a right to know whether and how much key interested individuals and organizations are donating to the responsible Minister, the Minister's riding association, and any related funds maintained on behalf of the Minister, especially if the donors are also benefiting from government funds. Donations are one way among many of influencing government decision-making. In order for Canadians to judge whether the government's decisions on grants and contracts are made "in the public interest and with regard to the merits," as required by the Conflict of Interest and Post-Employment Code for Public Office Holders, they need to know all the details concerning the means by which interested individuals and organizations have tried to influence the government's decision.

We trust that, in respect of Canadians' right to know the details of all factors involved in government decisions, you will disclose the identity of the donors and amount of any donations from individuals and organizations that have been recipients of a government grant or contract. We are also requesting that the Liberal Party of Canada immediately disclose donations received from people or groups involved in the same situation.

In addition, we urge you to ensure that the government closes the undemocratic loopholes in our political finance system that allow secret donations in some cases, and unjustifiable delays in donations disclosure in other cases. Specifically, we urge you to close these loopholes in Bill C-2, which amends the Canada Elections Act, before it is enacted this spring. Such loopholes do not exist in many other jurisdictions and should not exist at the federal level in Canada.

We look forward to your response.

Sincerely,
Duff Conacher, Coordinator Democracy Watch

Dear Mr. Conacher:

On behalf of the Right Honourable Jean Chrétien, I would like to thank you for your letter of January 25, 2000, in which you raise a number of concerns related to election financing.

Please be assured that your views are appreciated. As you may know, Bill C-2, the proposed new Canada Elections Act, includes important changes to the election financing system. The proposals in the Bill are the product of careful review, beginning with the Royal Commission on Electoral Reform and Party Financing in 1989, and the Special Committee on Electoral Reform in 1992, two reports of the Chief Electoral Officer and the June 1998 report of the Standing Committee on Procedure and House Affairs.

As your comments may be of interest to the Honourable Don Boudria, Leader of the Government in the House of Commons, I have taken the liberty of forwarding your letter to his attention. I am sure that the Minister will want to give your views evry consideration. That said, you may also wish to direct your inquiry to Elections Canada.

Again, thank you for taking the time to share your views with the Prime Minister and for your interest in Canada's electoral process.

Yours truly,
Keith Hanash - Manager
Correspondence

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

March 20, 2000

Dear Mr. Wilson:

We are filing this letter to request that you investigate what Democracy Watch believes to be violations of the Conflict of Interest and Post-Employment Code for Public Office Holders (the Code).

Ministers of the Crown, Secretaries of State, and ministerial staff are specifically listed under the definition of public office holders covered by the Code. When Ministers and Secretaries of State speak at or help organize fundraising events for a political party, riding association, or other organization, or ministerial staff play a role arranging such events, we believe that these actions violate the following sections of the Code:

• Part I, sub-section 3(2), which requires that public office holders "perform their official duties and arrange their private affairs in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law;"
• Part I, sub-section 3(4), which states, "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."
• Part I, sub-section 3(5), which requires that public office holders "arrange their private affairs in a manner that will prevent real, potential or apparent conflicts of interest from arising;" and
• Part I, sub-section 3(7), which reads, "Public office holders shall not step out of their official roles to assist private entities or persons in their dealings with the government where this would result in preferential treatment to any person."
• Part II, sub-section 23(1) of the Code states, "A public officer holder shall 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."

Political parties, riding associations, and other organizations public office holders may be involved in are clearly private entities. Being involved in the fundraising activities of a private entity clearly assists that entity, and involves the public office holders in a private interest "that would be affected particularly or significantly by government actions in which they participate."

All of the federal political parties deal with the government on an ongoing basis, and specifically in the past several months as Bill C-2, An Act amending the Canada Elections Act, has been progressing through Parliament.

Further, when a Minister or Secretary of State is involved in fundraising activities of a political party or riding association, or ministerial staff help arrange such activities, these public office holders are not avoiding "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." The obligation created by these public office holders being involved in such activities is clearly both to the political party or riding association, and to the people and private entities who make donations at such fundraising events.

In all of the above ways, we believe, when public office holders are involved in fundraising activities of a political party or riding association they are violating provisions of the Code.

We therefore request that you investigate Prime Minister Jean Chrétien, Finance Minister Paul Martin, Health Minister Allan Rock, and their ministerial staff who are covered by the Code concerning whether they have been involved in fundraising activities for a political party, riding association, or other organization and determine whether their involvement is a violation the Code.

The standard for evaluating these activities in the Code is, as noted above, whether "real, potential or apparent conflicts of interest" were created (emphasis added). This standard creates an affirmative obligation on the Prime Minister, all ministers and secretaries of state, and ministerial staff, to avoid even potential or apparent conflicts of interest.

We look forward to your investigation of this matter, and await your reply.

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

Dear Mr. Conacher:

Thank you for your letter of March 20, 2000 requesting my Office to investigate what you believe to be violations of the Conflict of Interest and Post-Employment for Public Office Holders. These concern the involvement of Ministers, Secretaries of State and ministerial staff in political fundraising activities.

I will get back to you after I have had an opportunity to consider the matter.

Yours sincerely,
Howard R. Wilson
Ethics Counsellor