Monday, November 26, 2007

OTTAWA - Today, at a news conference in Ottawa (To see a video of part of the news conference, click here (and then click on VIDEO link on CTV.ca page link takes you to)), Democracy Watch released the request it has filed for rulings from the federal Conflict of Interest and Ethics Commissioner under the Conflict of Interest Act (To see letter to the Commissioner set out below, click here) on the actions taken by Prime Minister Stephen Harper and Justice Minister and Attorney General Rob Nicholson on the Mulroney-Schreiber affair, and on future potential actions and decisions by them and other Cabinet ministers, Cabinet staff, and senior officials.

On Friday, November 9, 2007, Mr. Harper stated that "it's impossible, frankly, for the government to make an impartial judgement on how to proceed" in responding to the situation involving former Prime Minister Brian Mulroney and Karlheinz Schreiber and, indirectly, Prime Minister Harper, showing that he recognized that members of his government are in a conflict of interest with regard to the situation.

However, Mr. Harper then contradicted himself and selected David Johnston to review the situation and give advice to him and his Cabinet ministers, and then they will decide how to proceed with setting terms of reference for a public inquiry, choosing the inquiry commissioner(s), and other steps.  And Mr. Nicholson continues to be active on the issue of the extradition of Mr. Schreiber to Germany.

“When Canadians face allegations about themselves or their associates, they don’t get to decide the limits of the investigation, control witnesses or choose their own judge, and neither should the Prime Minister, Cabinet ministers or any other politician,” said Duff Conacher, Coordinator of Democracy Watch. “Democracy Watch calls on the federal Ethics Commissioner to ensure that Conservative Prime Minister Harper and his Cabinet ministers have complied with the conflict of interest law so far, and are not involved in making any more decisions that affect themselves or their Conservative colleague Brian Mulroney.”

It should be noted that Ethics Commissioner Mary Dawson was appointed Associate Deputy Minister of Justice by then-Prime Minister Mulroney in 1988, and was selected by Prime Minister Harper and his Cabinet to be the Ethics Commissioner in spring 2007.

Democracy Watch also called on all MPs on the House of Commons Access, Privacy and Ethics Committee to ensure that whatever hearings they hold involving Mr. Schreiber or Mr. Mulroney are conducted fairly and impartially.  The best way to do is for all of the MPs on the Committee to agree in advance upon a list of questions, and the order in which the questions will be asked, with the advice of the Parliamentary Counsel, and then to have the Chair of the Committee ask all of the questions.  If they do not agree on questions, the MPs should, at the very least, consult with the Parliamentary Counsel to ensure their questions are similar to the evidence-seeking questions usually asked during court hearings.

Conflict of Interest and Ethics Commissioner Mary Dawson
Office of the Ethics Commissioner
Parliament of Canada
P.O. Box 16, Centre Block
22nd Floor, 66 Slater
Ottawa, Ontario
K1A 0A6
Fax: 613-995-7308

November 26, 2007

RE: Request for an investigation of, and ruling on, decisions and participation in decisions by Prime Minister Stephen Harper and Minister of Justice and Attorney General Robert Nicholson, and for a recusal ruling for all Cabinet ministers, all concerning the Mulroney-Schreiber situation

Dear Ms. Dawson:

Democracy Watch is filing this letter to request, under the provisions of the federal  Conflict of Interest Act, rulings on, and concerning one matter investigation of and ruling on, the actions of Prime Minister Stephen Harper and Minister of Justice and Attorney General Robert Nicholson concerning the Mulroney-Schreiber affair. 

With this letter, Democracy Watch is also requesting a recusal ruling for all federal Cabinet ministers, Cabinet staff, and “at pleasure” senior government officials with regard to discussions, decisions, votes or other actions concerning the Mulroney-Schreiber affair.

In addition, Democracy Watch is also requesting that you issue an Interpretation Bulletin that will govern how the Prime Minister, Cabinet ministers, Cabinet staff, and “at pleasure” senior government officials must act in future situations in which their actions are in question, no government entity independent of Cabinet has jurisdiction over the issues raised by their actions, and therefore a commission of inquiry is requested or considered.

The Facts
Former Prime Minister Brian Mulroney has acted until very recently as an adviser to Prime Minister Stephen Harper, and has met with Mr. Harper, and both are active within the Conservative Party of Canada.

Prime Minister Harper has been named in an affidavit filed in court by Karlheinz Schreiber, as has Mr. Mulroney.

Mr. Schreiber sent a package containing the same information as contained in the court affidavit to both Mr. Harper and Minister of Justice and Attorney General Robert Nicholson several months ago.  Mr. Nicholson was appointed by, and served as a Parliamentary Secretary under, Mr. Mulroney when he was Prime Minister.

The federal government paid Mr. Mulroney $2.1 million in a settlement of a libel lawsuit filed by Mr. Mulroney concerning his relationship with Mr. Schreiber.  Mr. Schreiber’s package of information, and court affidavit, contain new information about that relationship that was not known at the time of the lawsuit settlement.  Two pieces of new information that Mr. Mulroney has admitted to are that he received $300,000 from Mr. Schreiber and met with him a few times.

According to media reports, the Ministry of Justice undertook a review of lawsuit settlement with Mr. Mulroney when the new information became available.

On Friday, November 9, 2007, Mr. Harper stated that "it's impossible, frankly, for the government to make an impartial judgement on how to proceed" in responding to the situation involving former Mr. Mulroney and Mr. Schreiber and, indirectly, Prime Minister Harper, showing that he recognized that members of his government are in a conflict of interest with regard to the situation.

On the same day, Mr. Harper stated that he had decided he would soon appoint an investigator to review the new information (whom he claimed would be independent even though the investigator would be selected by, and would work for, Mr. Harper).

On Monday, November 11, 2007, Mr. Mulroney issued a statement that, among other things, said: “in order to finally put this matter to rest and expose all the facts and the role played by all thge people involved, from public servants to eleected officials, from lobbyists to police authorities, as well as journalists, the only solution is for the government to launch a full-fledged public commission of inquiry.”

On Tuesday, November 13, 2007, Mr. Harper stated that he had made a different decision and would not appoint an investigator, but instead would appoint an advisor (whom he claimed would be independent even though the advisor would be selected by Mr. Harper and serve at his pleasure and only make non-binding recommendations (in other words, could be dismissed at any time for any reason)) who would advise him on the terms of reference for a public commission of inquiry, and also advise him on other possible responses to the new information.

On Wednesday, November 13, 2007, Mr. Harper appointed David Johnston as the advisor, and set out terms of reference that set limitations on Mr. Johnston’s review, and make it clear that Mr. Johnston is serving at Mr. Harper’s pleasure, and will only be making non-binding recommendations to Mr. Harper and his Cabinet concerning terms of reference for a public inquiry, possible prosecutions, and “any additional course of action” to respond to the Mulroney-Schreiber situation (See news release and terms of reference at: http://pm.gc.ca/eng/media.asp?category=1&id=1905).

On Thursday, November 15, 2007, Mr. Schreiber lost his appeal of the order of extradition to Germany to the Ontario Court of Appeal when the court ruled that the order was legal.  Mr. Schreiber filed an application in the Supreme Court of Canada appeal the ruling.

As Minister of Justice and Attorney General of Canada, Mr. Nicholson has extensive powers to expedite or delay the extradition of Mr. Schreiber.
 

The Law
The main purposes of the Conflict of Interest Act (the Act - 2006, c. 9, s. 2) are as follows:
“3.(1) (a) establish clear conflict of interest and post-employment rules for public office holders;
(b) minimize the possibility of conflicts arising between the private interests and public duties of public office holders and provide for the resolution of those conflicts in the public interest should they arise;
(c) provide the Conflict of Interest and Ethics Commissioner with the mandate to determine the measures necessary to avoid conflicts of interest and to determine whether a contravention of this Act has occurred. . . .”

With regard to conflicts of interest and preferential treatment, the Act states that:
“6.(1) No public office holder shall make a decision or participate in making a decision related to the exercise of an official power, duty or function if the public office holder knows or reasonably should know that, in the making of the decision, he or she would be in a conflict of interest.”

“Preferential treatment
7. No public office holder shall, in the exercise of an official power, duty or function, give preferential treatment to any person or organization based on the identity of the person or organization that represents the first-mentioned person or organization.”

and

“Influence
9. No public office holder shall use his or her position as a public office holder to seek to influence a decision of another person so as to further the public office holder’s private interests or those of the public office holder’s relatives or friends or to improperly further another person’s private interests.”

The Act defines key terms in the above cited sections as follows:
“Conflict of interest
4. For the purposes of this Act, a public office holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person’s private interests.”

and

“2.(1) "private interest" does not include an interest in a decision or matter
 (a) that is of general application;
 (b) that affects a public office holder as one of a broad class of persons; or
 (c) that concerns the remuneration or benefits received by virtue of being a public office holder.”

With regard to recusal of a public office holder from a decision-making process, the Act states that:
“Duty to recuse
21. A public office holder shall recuse himself or herself from any discussion, decision, debate or vote on any matter in respect of which he or she would be in a conflict of interest.”

The Act also states that:
“Anti-avoidance
18. No public office holder shall take any action that has as its purpose the circumvention of the public office holder’s obligations under this Act.”

“Condition of appointment or employment
19. Compliance with this Act is a condition of a person’s appointment or employment as a public office holder.”

In R. v. Hinchey, [1996] 3 S.C.R. 1128 [To see a summary of the ruling, click here], Supreme Court of Canada Justice L'Heureux-Dube wrote the majority judgment including that:
At paragraph 17:
“For a government, actual integrity is achieved when its employees remain free of any type of corruption. On the other hand, it is not necessary for a corrupt practice to take place in order for the appearance of integrity to be harmed. Protecting these appearances is more than a trivial concern."

And at paragraph 18:
"In my view, given the heavy trust and responsibility taken on by the holding of a public office or employ, it is appropriate that government officials are correspondingly held to codes of conduct which, for an ordinary person, would be quite severe.”

The minority judgment in R v. Hinchey, delivered by Justice Peter Cory, did not dissent on any of the above points. In fact, Justice Cory agreed with the need for an "appearance of integrity" standard for public officials, stating at paragraph 94:
"The magnitude and importance of government business requires not only the complete integrity of government employees and officers conducting government business but also that this integrity and trustworthiness be readily apparent to society as a whole."

The July 9, 2004 ruling by Honourable Justice Frederick E. Gibson in Democracy Watch v. The Attorney General of Canada (Office of the Ethics Counsellor) [2004 FC 969] and [2004] 4 F.C.R. 83 [To see a summary of the case, click here] echoed the Supreme Court of Canada’s ruling in R v. Hinchey.
 

Application of the Law to the Decisions and Actions of Mr. Harper and Mr. Nicholson
Mr. Harper has admitted that he does not believe that he, or anyone in his government, can be impartial concerning the Mulroney-Schreiber situation.

To date, neither Mr. Harper nor Mr. Nicholson have recused themselves from taking part in or making past decisions concerning the situation, and neither have recused themselves from taking part in or making future decisions.

Mr. Harper and Mr. Nicholson have made decisions, and taken part in decisions, concerning the Mulroney-Schreiber situation that are official exercises of their powers and functions.  Both also will, unless they are required by you as Commissioner to recuse themselves, take part in and make decisions in the future concerning the situation (Mr. Harper setting the terms of reference for the public inquiry and choosing the inquiry commissioner or commissioners, and Mr. Nicholson with regard to the extradition of Mr. Schreiber, the review of the settlement of Mr. Mulroney’s libel lawsuit, and possible decisions concerning prosecutions).

Mr. Harper and Mr. Nicholson may have made decisions that, essentially, gave preferential treatment to Mr. Mulroney, and can certainly make decisions in the future that give preferential treatment to Mr. Mulroney.

Mr. Harper and Mr. Nicholson may have used their positions as two of the most powerful public office holders to influence the decisions of other people in a way that improperly furthered the interests of Mr. Mulroney.

Mr. Harper has a private, personal interest in the situation (an interest that is not shared with anyone else except Mr. Nicholson), namely protecting his personal reputation and position as Prime Minister, given that Mr. Mulroney has advised him, and that he is named in Mr. Schreiber’s court affidavit, and that there are questions about what he knew about the situation, and the new information sent by Mr. Schreiber to him several months ago, and when he knew about it, and what he did when he became informed about it.

Mr. Nicholson has a private, personal interest in the situation (an interest that is not shared with anyone else except Mr. Harper), namely protecting his personal reputation and position as a Cabinet minister, given that Mr. Harper appointed him to Cabinet and could dismiss him from Cabinet at any time for any reason, and that there are questions about his role in the review of the settlement of Mr. Mulroney’s libel lawsuit, and his role in possible prosecution decisions, and about what he knew about the new information sent by Mr. Schreiber to him several months ago, and when he knew about it, and what he did when he became informed about it.

None of the provisions of the Conflict of Interest Act (the Act) limit the application of the Act to matters in which a public office holder has a financial interest.  The only exemptions that could possibly apply to the handling of the Mulroney-Schreiber situation are if the situation was a matter of general application or affected a broad class of the public, which the situation clearly does not (as it involves the actions of only a few people at most).

The purpose of the Act, and all provisions in it, and Supreme Court of Canada rulings, make it clear that the application of the Act must always be directed to ensuring that public office holders do not take part in or make a decision if there is any possibility that their private interest could be affected by their decision.  The private interests of both Mr. Harper and Mr. Nicholson are directly affected by decisions they have taken part in or made concerning the Mulroney-Schreiber situations, and will be directly affected by decisions they may take part in or make in the future.
 

Request for rulings, and further investigation in one case
Under the Conflict of Interest Act (the Act) you as Commissioner have the power to initiate an examination of a matter if you have reason to believe that a public office holder has contravened the Act.

Democracy Watch believes that the information set out above and below give you much more than adequate evidence upon which to form the reasonable belief that a contravention has occurred.
“Examination on own initiative
45. (1) If the Commissioner has reason to believe that a public office holder or former public office holder has contravened this Act, the Commissioner may examine the matter on his or her own initiative.”

 You also have under the Act the power to make orders as follows:
“Compliance order
30. In addition to the specific compliance measures provided for in this Part, the Commissioner may order a public office holder, in respect of any matter, to take any compliance measure, including divestment or recusal, that the Commissioner determines is necessary to comply with this Act.”

Based on the facts of the Mulroney-Schreiber situation and what is known about Mr. Harper’s and Mr. Nicholson’s private interests in the situation, and actions to date with regard to the situation, and based on the provisions of the Conflict of Interest Act (the Act) and Supreme Court of Canada and Federal Court of Canada rulings, Democracy Watch’s position is that the following serious questions arise that warrant rulings and, in one case, a further investigation: 

• Mr. Harper has taken part in and made decisions about the situation which raise serious questions about violations of the Act, and in order to have avoided violating the Act, it seems clear that Mr. Harper should have, in terms of appointing either an investigator or an advisor, delegated his decision-making power to the Public Service Commission or similar federal government entity or at least formally shared his decision-making power with the leaders of all the other recognized parties in the House of Commons, and, in terms of possible prosecution decisions, he should have delegated his decision-making power the Director of Public Prosecutions;
• from all available evidence (unless he has a secret recusal arrangement), Mr. Nicholson may have taken part in and made decisions in violation of the Act, and as a result an investigation is warranted into Mr. Nicholson’s actions to date concerning the situation;
• from all available evidence, Mr. Harper and Mr. Nicholson may have made decisions that gave preferential treatment to Mr. Mulroney, or may have used their positions as two of the most powerful public office holders to influence the decisions of other people in a way that improperly furthers the interests of Mr. Mulroney, and as a result an investigation is warranted into their actions;
• given loopholes in the federal political donations law (the Elections Act) that existed in the past and allowed for secret donations, it is also possible that Mr. Harper and/or Mr. Nicholson received donations from Mr. Mulroney and/or Mr. Schreiber for their election campaigns, or to Mr. Harper’s party leadership campaigns for the Canadian Alliance Party and the Conservative Party, and so to be complete an investigation of whether such donations were received must be included in your examination of possible conflicts of interest in this situation;
• Mr. Harper must recuse himself from taking part in and making decisions about the situation in the future or, at the very least, Mr. Harper must, in setting the terms of reference for the public inquiry and choosing an inquiry commissioner or commissioners, delegate his decision-making power to the Public Service Commission or similar federal government entity and/or share his decision-making power with the leaders of all the other recognized parties in the House of Commons;
• Mr. Nicholson must recuse himself from taking part in and making decisions about the situation in the future, and delegate his decision-making power to the Director of Public Prosecutions.

Recusal of All Cabinet Ministers, Cabinet Staff, and “At-Pleasure” Senior Government Officials, from Decision-making About Mulroney-Schreiber Situation
Again,  Mr. Harper has admitted that he does not believe that he, or anyone in his government, can be impartial concerning the Mulroney-Schreiber situation.

Given that Mr. Harper selected all Cabinet ministers, some Cabinet staff, and some “at pleasure” senior government officials, and that Mr. Harper can dismiss all of these people without cause at any time, Democracy Watch believes that they are also all in a conflict of interest by extension of the conflict of interest Mr. Harper is in with regard to the Mulroney-Schreiber situation. 

Democracy Watch therefore also requests that you review the connections between Mr. Mulroney and Mr. Schreiber and all federal Cabinet ministers, their staff, and “at pleasure” senior government officials who are covered by the Conflict of Interest Act (the Act), and whether they have taken part in or made decisions with regard to the Mulroney-Schreiber situation, to determine whether they have violated the Act.

Democracy Watch also requests that you issue a recusal rulings that apply to all federal Cabinet ministers, their staff, and “at pleasure” senior government officials who are covered by the Act stating that they are prohibited from taking part in or making future decisions concerning the Mulroney-Schreiber situation.

In particular, Senator Marjorie LeBreton has acknowledged publicly that she is a close friend of Mr. Mulroney, and Minister of Foreign Affairs Peter Mackay worked for Mr. Schreiber’s company in the past and his father was a Cabinet minister in Mr. Mulroney’s government and a friend of Mr. Schreiber. 

As well, given loopholes in the federal political donations law (the Elections Act) that existed in the past and allowed for secret donations, it is also possible that Mr. Mackay or other Cabinet ministers received donations from Mr. Mulroney and/or Mr. Schreiber for their election campaigns, and in particular it is possible that Mr. Mackay received donations from Mr. Mulroney and/or Mr Schreiber for his party leadership campaign for the Progressive Conservative Party (or to pay off the debt he had after the campaign), and so to be complete an investigation of whether such donations were received must be included in your examination of possible conflicts of interest in this situation.
 

Interpretation Bulletin Concerning Conflicts of Interest and Inquiries Act
Democracy Watch also requests, and suggests, that you issue an Interpretation Bulletin setting out clearly that in similar situations in the future, when there are questions about the actions of the Prime Minister, Cabinet ministers, Cabinet staff or senior government officials, that none of these people can take part in or make decisions concerning either inquiries under the Inquiries Act or prosecutions or extraditions (although, obviously, the question of an extradition will not likely be involved in many future such situations).

Such an Interpretation Bulletin would be consistent with the rules that prohibit, because of their inherent conflict of interest, the Prime Minister, Cabinet ministers, Cabinet staff and senior government officials from participating (except to provide evidence) in or making decisions about the review processes that occur when complaints are filed about their actions in all of the following situations:

• alleged violations of the federal Access to Information Act (the federal Information Commissioner has legal and institutional independence from the Cabinet, and full investigation powers, and the Commissioner or a requester have full powers to apply to the Federal Court of Canada for a ruling concerning violations);
• alleged violations of the federal Financial Administration Act (the Auditor General, the RCMP and the Director of Public Prosecutions have legal and institutional independence from the Cabinet, full investigative powers, and powers to pursue prosecutions concerning violations);
• alleged violations of the federal Privacy Act (the Privacy Commissioner has legal and institutional independence from the Cabinet, and full investigative powers, and the power to make rulings concerning violations);
• alleged violations of federal hiring rules (the Public Service Commission has legal and institutional independence from the Cabinet, and full investigative powers, and the power to make rulings concerning violations);
• alleged violations of the federal Elections Act (the Commissioner of Elections and the Director of Public Prosecutions have legal and institutional independence from the Cabinet, and full investigative powers, and the power to pursue prosecutions concerning violations), and;
• alleged violations of any other federal law, regulation, code, policy or guideline by federal politicians or government officials (the Director of Public Prosecutions has legal and institutional independence from the Cabinet, and full investigative powers, and the power to make rulings concerning violations);
• alleged retaliations against public servants who report violations of any federal law, regulations, codes, policies, guidelines by federal politicians or government officials (the Public Sector Integrity Commissioner has legal and institutional independence from the Cabinet, and full investigative powers, and the power to make rulings concerning violations).

Consideration of Your Own Position With Regard To The Mulroney-Schreiber Situation
As you of course know, in 1988, then-Prime Minister Mulroney appointed you as Associate Deputy Minister of Justice.  In spring 2007, Mr. Harper and his Cabinet selected you as Conflict of Interest and Ethics Commissioner (and it is has not been publicly disclosed what selection process was used).

As a result, Democracy Watch’s position is that you must seriously consider your own capacity to be impartial concerning decisions with regard to the Mulroney-Schreiber situation.
 

In any case, time is clearly of the essence in this situation, especially with regard to pending decisions by Prime Minister Harper and Justice Minister and Attorney General Nicholson, and so Democracy Watch urges you to make your rulings concerning recusals especially very quickly.

Overall, Democracy Watch’s position is that the federal ethics rules not only are very necessary, but also that the law requires that the rules be fairly, impartially, competently and strictly enforced.  Democracy Watch bases its position on the rulings of the Supreme Court of Canada in R. v. Hinchey, [1996] 3 S.C.R. 1128 [To see a summary of the ruling, click here], and the Federal Court in Democracy Watch v. Canada (Office of the Ethics Counsellor) (F.C.), [2004] 4 F.C.R. 83 [To see a summary of the case, click here].

Democracy Watch looks forward to your prompt response to the above information and requests.

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