Friday, November 10, 2000

OTTAWA - Today, Democracy Watch released an open letter to federal Ethics Counsellor Howard Wilson calling for an investigation of whether Cabinet ministers violated ethics rules, and others violated lobbying rules, through the Liberal's review process for Transitional Jobs Fund grants in Quebec (See below for text of Letter to Wilson detailing complaint).

Media reports of November 7, 2000 reveal some of the details of Wilson's report concerning an until-now-secret investigation he conducted in 1997 into the approval process for grants made in Quebec under the federal Transitional Jobs Fund (TJF) program. The media reports make it clear that Wilson concluded in his 1997 report that Cabinet ministers consulted with Liberal MPs, Liberal party officials and party members concerning the approval of several TJF grants in Quebec; and that these consultations were a clear violation of the TJF grant approval process guidelines.

Federal ethics rules prohibit ministers from stepping 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." Federal lobbying rules require anyone who is paid to communicate with government to influence the awarding of any grant to register as a lobbyist, and to avoid conflicts of interest, especially in situations with Ministers. The Liberals' TJF grant approval process raises serious questions about whether the ministers involved have broken the ethics rules, and the Liberal party officials and party members, and others involved have broken the lobbying rules.

"By keeping the report secret for years, the Ethics Counsellor has revealed once again how much he is a lapdog of the Prime Minister," said Duff Conacher, Coordinator of Democracy Watch. "This situation needs to be re-investigated to determine if ethics and lobbying rules have been broken."

Democracy Watch also released its election Agenda for a Democratic Government, supported by many citizen groups across Canada, including the Sierra Club, the Canadian Auto Workers, Citizens for Public Justice, and the International Fund for Animal Welfare (IFAW). The Agenda contains 20 key democratic reform measures, including setting up an independent ethics watchdog to ensure federal ethics and lobbying rules are effectively enforced (See below for copy of the Agenda for a Democratic Government: 20 Key Steps Toward a Citizen-Driven Federal Government).

Democracy Watch, along with the supporting groups, will be reviewing the party platforms and assigning grades based on how the platforms address the Agenda for a Democratic Government. A Report Card on the parties' platforms will be released later in the election campaign period.

Howard Wilson
Ethics Counsellor
66 Slater St., 22nd Floor
Ottawa, Canada
K1A 0C9

November 9, 2000

Dear Mr. Wilson: We are filing this letter to request that you investigate and rule on a situation that Democracy Watch believes raises serious questions concerning violations of the federal Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders' Code) and the Lobbyists' Code of Conduct (the Lobbyists' Code). The Public Office Holders' Code covers all ministers of the Crown, and appointees such as deputy ministers and associate deputy ministers. The Lobbyists' Code covers all lobbyists required to register under the federal Lobbyists Registration Act, CHAPTER L-12.4 (R.S., 1985, c. 44 (4th Supp.).

Media reports of November 7, 2000 reveal some of the details of your report concerning an until-now-secret investigation you conducted in 1997 into the approval process for grants made in Quebec under the federal Transitional Jobs Fund (TJF) program. All of the details of your report have not been made public, as specific information was withheld when the report was released in response to a request under the Access to Information Act. However, the media reports make it clear that you concluded in your 1997 report that Cabinet ministers consulted with Liberal MPs, Liberal party officials and Liberal members concerning the approval of several TJF grants in Quebec; and that these consultations were a clear violation of the TJF grant approval process guidelines. We believe that these actions raise serious questions about whether the ministers in question violated the following rules in the Public Office Holders' Code, and possibly other rules as well:

• Sub-section 3(1), which highlights the need to maintain "public confidence and trust in the integrity, objectivity and impartiality of government."
• Sub-section.3(2), which requires public office holders "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."
• Sub-section 3(7), which states "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."

We also believe that the situation raises serious questions about whether the Liberal party officials and Liberal members and any other non-elected people involved in reviewing grant applications violated the following rules in the Lobbyists' Code, and possibly other rules as well:

• Principle on Professionalism: Lobbyists should observe the highest professional and ethical standards. In particular, lobbyists should confrm fully with not only the letter but the spirit of the Lobbyists' Code of Conduct as well as the relevant laws, including the Lobbyists Registration Act and its regulations.
• Rule 3: Lobbyists shall indicate to their client, employer or organization their obligations under the Lobbyists Registration Act, and their obligation to adhere to the Lobbyists' Code of Conduct.
• Rule 8: Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would consitute an improper influence on a public office holder.

The Liberal party officials involved are likely paid by the Liberal Party or a riding association, and possibly some of the Liberal Party members involved were also paid for the time they spent reviewing grant applications. Given that the names of officials and members and others have not been made public, it is difficult to determine who may have been paid for providing this service. The officials and members and others involved in reviewing the grant applications were communicating with a public office holder in an attempt to influence the awarding of grants.

Under the Lobbyists Registration Act and the Lobbyists Code of Conduct, anyone paid by an organization to communicate with public office holders to influence the awarding of any grant must register as a lobbyist, except under a few conditions, including subsection 4(2)(c) which does not require registration if the person has received a written request to make a submission to the public office holder. We believe that this situation presents reasonable grounds to believe that someone has violated the registration requirement, and has therefore has violated the Lobbyists' Code.

We therefore request that you immediately investigate the situation described above and rule on whether there have been violations of any provision in either or both codes, and potentially the Lobbyists Registration Act itself; and whether written requests to make submissions about the grants were made to the Liberal Party officials, members and/or others.

We believe that the conflict of interest standard for evaluating the situation is, as set out in the Public Office Holders' Code, whether "real, potential or apparent conflicts of interest" were caused by this situation (emphasis added). This standard creates an affirmative obligation on all public office holders covered by the Public Office Holders' Code to avoid even potential or apparent conflicts of interest, and on all lobbyists to avoid placing a public office holder in even a potential or apparent conflict 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

Democratic Voting System
1. Change the current voting system to a proportional representation system to provide more accurate representation in Parliament of the actual support for each political party; and
2. Abolish the Senate or reform the Senate to render it more directly accountable to the electorate.

Democratic Political Finance System
3. Establish public financing for political parties based upon the actual popular support parties have in terms of number of party members and votes in most recent election and other factors (as in Quebec);
4. Prohibit corporations, unions, and other organizations that do not vote from donating to political parties, candidates and riding associations (as in Quebec and Manitoba);
5. Allow donations from individuals to supplement public financing, but limit donations to a level that is affordable for the average Canadian (as in Quebec and Manitoba);
6. Require political parties to disclose donations quarterly, as in the U.S.;
7. Require constituency associations and MPs to register and disclose all their donors annually between elections, as in several provinces; and
8. Limit spending and require disclosure of donors in political party leadership contests.

Strong, Effectively Enforced Ethics Rules
9. Enact an ethics code for all MPs and Senators (as promised by the Liberals in 1993, and as exists for all legislators in very province and territory in Canada);
10. Establish an independent and impartial ethics watchdog agency that: has the purpose of investigating all alleged violations of ethics rules that involve politicians, civil servants and lobbyists; has full investigative powers to do so; and reports directly and only to Parliament (as promised by the Liberals in 1993, and as exists in every province and territory in Canada);
11. Require all people covered by ethics rules to report any violations of the rules, and require the ethics watchdog to protect anyone who reports a violation of ethics rules (so-called "whistleblowers") from retaliation.

Openness and Honesty in Politics
12. Amend the access to information law to strengthen the right to disclosure of information and to strengthen enforcement of the law (as in B.C. and Ontario);
13. Require all government departments to use consultation processes that provide meaningful opportunities for citizen participation, especially concerning decisions that affect the lives of all Canadians;
14. Restrict government advertising leading up to and during elections, except for emergency or administrative reasons (as in Manitoba and Saskatchewan); and
15. Enact a right to complain to Elections Canada about false advertising by a government, political party or candidate for public office, with fines and other sanctions as penalties (as in B.C.).

Lobbyists Tracked and Restricted
16. Require Ministers and senior public officials to disclose their contacts with all lobbyists;
17. Require lobbyists to disclose all their government relations activities, whether paid or volunteer, involving gathering inside information or trying to influence policy-makers (as in the U.S.);
18. Require lobbyists to disclose the amount spent on campaigns (as in 33 U.S. states);
19. Prohibit lobbyists from working for government departments, and from having business connections with anyone who does; and
20. Prohibit lobbyists from serving in senior positions for political parties (as in New Mexico and Maryland).