Thursday, May 15, 2003

OTTAWA - Today, Democracy Watch raised serious concerns about how the lack of independence of the federal Ethics Counsellor Howard Wilson undermines the enforcement of federal conflict-of-interest rules, particularly concerning donations to Liberal leadership candidates.  The Ethics Counsellor is controlled by the Prime Minister, and as a result is biased when examining allegations of violations of politicians' or lobbyists' ethics rules.

"No one should believe the Ethics Counsellor if he rules that a Liberal minister or MP has acted ethically in taking large donations from corporations and organizations that lobby the government," said Duff Conacher, Coordinator of Democracy Watch and chairperson of the nation-wide Government Ethics Coalition. "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 all situations involving possible ethics rule violations."

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.  In addition, the Ethics Counsellor has not commented on donations to John Manley and Paul Martin of $25,000 to $50,000 from corporations that are registered to lobby the federal government.

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 considered by Parliament) to ban donations to political parties from corporations and other organizations, and to limit their donations to candidates to $1,000.

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.

"Big-money political donations, especially from lobbyists, are an undue means of influence that place politicians in a conflict of interest," said Aaron Freeman, Board member of Democracy Watch and Chairperson of the nation-wide Money in Politics Coalition.

There is no specific law that applies to donations to political party leadership candidates, so parties currently set their own rules.  However, Democracy Watch believes that the following rules of the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code -- which covers Cabinet ministers) apply to and strictly limit such donations:

• under subsection 23(1), Cabinet ministers are required 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.";
• section 20 prohibits all donations and gifts "that could influence public office holders in their judgment and performance of official duties and responsibilities" while under subsection 3(6) ministers are not allowed to "solicit or accept transfers of economic benefit, other than incidental gifts";
• section 21 prohibits donations and gifts 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 22 requires ministers, when they "directly or indirectly" receive a donation of "$200 or more" to "notify the Ethics Counsellor and make a Public Declaration"; and
• general principles in the Code require ministers: "to arrange their private affairs in a manner that will prevent real, potential or apparent conflicts from arising" (subsection 3(5));"to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and maintained" (subsection 3(1)); and "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" (subsection 3(2)).

"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."