Wednesday, June 11, 2003

OTTAWA - Today, Democracy Watch raised serious concerns about federal Ethics Counsellor Howard Wilson's ruling made public today on leadership campaign donations received by Deputy Prime Minister and Finance Minister John Manley.  As he has several times in the past, the Ethics Counsellor ignored clear ethics rules in his June 10th ruling that allows Manley to keep large donations from corporations that lobby the federal government, and from corporate lobby firms.

"Not only is the Ethics Counsellor ignoring clear ethics rules that prohibit ministers from taking large donations from corporations and organizations that lobby the government, he is also contradicting himself because last year he required Manley and other ministers to return similar donations to the donors," said Duff Conacher, Coordinator of Democracy Watch.

In a completely unworkable and unethical scheme that no one should trust, the Ethics Counsellor has instead ruled that between now and the November Liberal leadership convention Manley must not deal with "issues directly affecting" Bell Canada Enterprises, Bombardier, CNR, Encana Corp, Equity Management International Ltd., Magna International, Profac Facilities Management Services, and Telus.  In addition to ignoring clear ethics rules, the Ethics Counsellor has also ignored other large donors to Manley's campaign that are registered to lobby the federal government on a wide range of issues.

"Federal ethics rules clearly require that Manley must either return the money or resign from Cabinet because there is no way he can separate himself from all decisions that will affect the corporations and corporate lobbying firms who are supporting him," said Conacher.

Among other applicable rules, the Conflict of Interest and Post-Employment Code for Public Office Holders prohibits donations and gifts to ministers not "within the bounds of propriety, a normal expression of courtesy or protocol or . . . hospitality" or donations that would "bring suspicion on the public office holder's objectivity and impartiality" or would "compromise the integrity of the Government" (section 21).  The Code also prohibits ministers from "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" (section 23(1)).

In addition , Democracy Watch believes Rule 8 of the Lobbyists' Code of Conduct, which prohibits lobbyists from doing anything that constitutes improper influence and puts a minister in a conflict of interest, applies to such donations.

The Ethics Counsellor did not mention any of these ethics rules in his ruling on Manley's leadership campaign donations.  While it is very unfortunate, it is not surprising that Ethics Counsellor Wilson is protecting Manley and allowing him to keep the donations, as Wilson is controlled by the Prime Minister, and as a result is biased when examining allegations of violations of politicians' or lobbyists' ethics rules.

"The Ethics Counsellor has no independence or investigative powers, and only acts as a frontman for the Prime Minister giving his stamp of approval to highly questionable behaviour of Liberals.  An independent investigation is needed into Manley's donations and all other situations involving ethics rule violations," said Conacher.

Several companies that have made large donations to Manley's campaign are registered to lobby the government on a wide range of issues.  The corporate lobby firm Capital Hill Group, for example, contributed $20,000 in cash and another $30,000 in kind, covering staff salaries.  Other lobby firms on the list include Global Public Affairs ($1,500) and Hill and Knowlton ($1,500), as well as industry lobby associations, such as Canada's Research-Based Pharmaceuticals Companies ($9,000), the Canadian Advanced Technology Alliance ($1,500), the Brewers Association of Canada ($3,000), Railway Association of Canada ($1,500), and Association of Canadian Distillers ($1,500).

Several companies registered to lobby the government, including Bell Canada Enterprises (BCE Inc.), CanWest Media, Canadian National Railway, Telus, Magna International, Davies Ward Phillips & Vineberg, and Torys LLP each contributed $25,000 to his campaign.

Major government contractors, such as Bombardier ($25,000), PriceWaterhouseCoopers ($10,000), Fujitsu Consulting ($1,500) and Veritaaq Technology House ($1,500), also appear on the list.

In July 2002, the Ethics Counsellor required Deputy Prime Minister John Manley, Heritage Minister Sheila Copps, and Industry Minister Allan Rock to return donations they had received to their leadership campaigns if the donations were greater than $5,000 and caused a conflict of interest.  Each minister was required to return donations totalling at least $50,000.  Recently, the Ethics Counsellor required Sheila Copps to return $18,000 in donations for the same reasons.

However, the Ethics Counsellor has not disclosed the identities of the donors whose donations were returned, and so it remains a secret what types of donors cause conflicts of interests for which politicians. Democracy Watch filed a complaint with the Ethics Counsellor in October 2002 about the secret donations to the ministers, and has appealed to Federal Court to review the Ethics Counsellor's recent ruling that the donations did not break ethics rules (even though the Ethics Counsellor required the donations to be returned because they caused conflicts of interest).  Democracy Watch believes the Ethics Counsellor's inconsistent and secretive actions reveal just how biased he is in favour of Liberals.

Democracy Watch believes that a reasonable interpretation of the ethics rules for politicians and lobbyists would conclude that a donation of $1,000 or more from anyone who lobbies the federal government would put any politician in a conflict of interest.  Consistent with this interpretation, the Liberals have proposed in Bill C-24 (currently being voted on by Parliament) to ban donations to political parties from corporations and other organizations, and to limit their donations to candidates to $1,000.