Thursday, September 6, 2001

OTTAWA - Today Democracy Watch released an open letter to federal Ethics Counsellor Howard Wilson calling for an investigation of a possible violation of the Lobbyists' Code of Conduct (the Lobbyists' Code) by Bell Canada Enterprises Inc. (BCE Inc.) because of its gift to Prime Minister Jean Chrétien of an invitation to participate in the Bell Canadian Open Pro-Am tournament with top professional golfer Tiger Woods (Please see text of letter set out below). The gift has a value of at least $13,000 (the cost of participating in the tournament), but likely has a far greater market value because of BCE Inc. guaranteeing that the Prime Minister would play with Woods.

Principles set out in the Lobbyists' Code require, among other things, that all lobbyists to conduct all their relations with "honesty and integrity", and Rule 8 of the Code prohibits lobbyists from undertaking any action that would put a public office holder in a conflict of interest. The Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code) only allows such a gift if it arises in connection with the official responsibilities of the public office holder, and is normal courtesy, protocol or hospitality, and would not bring suspicion on the office holder's objectivity and impartiality, and would not compromise the integrity of the Government. Other general provisions of the Public Office Holders Code further limit the acceptance of such a gift.

BCE Inc. and its subsidiary Bell Canada alone currently have 16 lobbyists registered to lobby the federal government, 11 of whom are lobbying the federal Cabinet's Privy Council Office (PCO) among other departments or agencies.

"Whenever a corporation that actively lobbies the federal Cabinet gives a gift worth a lot of money to the Prime Minister, the issue of a serious conflict of interest arises" said Duff Conacher, Coordinator of Democracy Watch.

Democracy Watch has filed four other requests for investigations with the Ethics Counsellor since April 2000 that involve both a lobbyist potentially violating the Lobbyists' Code and a Minister or senior public officials potentially violating the Public Office Holders Code. The Ethics Counsellor has not issued a ruling for any of those investigations.

The Ethics Counsellor holds two legally separate positions, both called "Ethics Counsellor". Under the Lobbyists Registration Act, the Ethics Counsellor is required to investigate where he has a reasonable grounds that a violation of the Lobbyists' Code has occurred. He has the full powers of a judge in his investigation, and is required to report his ruling to Parliament. However, under the Public Office Holders Code the Ethics Counsellor's investigations of ministers and senior public officials can be in secret and are fully controlled by the Prime Minister. As a result, Democracy Watch questions whether Wilson can fairly and impartially uphold the Lobbyists Code.

On August 29, 2001, in his role as Ethics Counsellor under the Public Office Holders Code, Wilson released a memo setting out his interpretation of the application of the rules in that Code concerning such invitations. However, in his memo Wilson did not even mention many of the relevant provisions in the Code, and did not mention the Lobbyists Code at all.

"The golf game event shows clearly that the Ethics Counsellor is in a constant conflict of interest when deciding whether lobbyists and ministers who are involved in a situation together are violating ethics rules," said Conacher, "The Prime Minister's control of the Ethics Counsellor's decisions concerning ministers taints all the Ethics Counsellor's rulings."

In its June 2001 report, the House of Commons Industry Committee agreed with Democracy Watch and recommended that Wilson be replaced in his role as enforcer of the Lobbyists' Code by a new office that would report only to Parliament. The nation-wide Government Ethics Coalition, organized and coordinated by Democracy Watch, also recommends the replacement of the Ethics Counsellor in his role as enforcer of the Public Office Holders Code with an independent commission that reports only to Parliament and has full powers to investigate allegations of all ethics violations (as in most provinces and territories, and as the Liberals promised in their 1993 election platform). The Government Ethics Coalition also calls on the federal government to make the following key changes, among other things, to lobbying and ethics laws:

1. enact ethics rules for all MPs and Senators (every province and territory already has ethics rules that cover every member of the legislature) and also rules for their staff;
2. enact a law that protects "whistleblowers" who report a violation of ethics rules or other wrongdoing by public officials or the government from retaliation;
3. prohibit Ministers from becoming lobbyists for 5 years after they leave government;
4. require Ministers and other senior public officials to disclose who they meet or communicate with, to ensure that the activities of powerful lobbyists are tracked;
5. prohibit lobbyists from having any business connections with anyone who does work with government; and
6. require lobbyists to disclose how much they and their clients are spending on their campaigns (as required in 33 U.S. states).

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

September 6, 2001

Dear Mr. Wilson:

We are filing this letter to request that you investigate a situation that Democracy Watch believes raise serious questions concerning violations of the federal Lobbyists' Code of Conduct (the Lobbyists' Code) and the Conflict of Interest and Post-Employment Code for Public Office Holders (the Public Office Holders Code).

The Lobbyists' Code covers all lobbyists and lobbying entities required to register under the federal Lobbyists Registration Act, CHAPTER L-12.4 (R.S., 1985, c. 44 (4th Supp.)) (the Act). The Public Office Holders Code covers all ministers of the Crown, ministerial staff and appointees such as deputy ministers and associate deputy ministers.

As you know, you hold two legally separate positions under these codes, both called "Ethics Counsellor". Under the Public Office Holders Code subsection 5(1), your June 16, 1994 appointment meant that you are "charged with the administration of" the Code and "the application of the conflict of interest compliance measures . . ." Under the Lobbyists Registration Act, your July 25, 1995 appointment mandated you to develop the Lobbyists' Code, and then enforce it following the steps in section 10.4 of the Act. The Lobbyists' Code has been in force since March 1, 1997.

Yesterday, Prime Minister Jean Chrétien joined, at the invitation of and paid for by Bell Canada Enterprises Inc. (BCE Inc.), Tiger Woods, BCE Inc. CEO Jean Monty and Jean-Pierre Ouellet of RBC Dominion Securities in a round of golf at the Bell Canadian Open Pro-Am event. On August 29, 2001, in your role as Ethics Counsellor under the Public Office Holders Code, you released a memo setting out your interpretation of the application of the rules in that Code concerning such invitations.

In the memo, you acknowledged that the invitation to participate has no charitable element and has a price "well beyond $200" which is the annual limit in that Code for undisclosed gifts from any one source. Media have reported the price for participating in the Pro-Am as $13,000, but this price does not guarantee that the participant will play with Tiger Woods. Given the status of Tiger Woods as the world's top golf player, the actual market value of this gift to the Prime Minister is very likely much greater than $13,000.

Your memo continues by stating that "The critical condition here is that the gift or benefit must be connected to the official responsibilities of the public office holder." In fact, the critical conditions in the Public Office Holders Code for accepting such gifts are far more numerous, and all limit the acceptance of gifts even if the gift arises in connection with the official responsibilities of the public office holder. These conditions are set out in the Code, and only allow such gifts if they:

"21(2)
(a) are within the bounds of propriety, a normal expression of courtesy or protocol or within the normal standards of hospitality;
(b) are not such as to bring suspicion on the office holder's objectivity and impartiality; and
(c) would not compromise the integrity of the Government."

In addition, acceptance of such gifts is limited by the following general provisions of the Public Office Holders Code, which require public office holders to meet the following conditions:

• under Part I, subsection 3(1), "to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved and maintained."
• under Part I, subsection.3(2), "to perform their official duties and arrange their private affaries in a manner that will bear the closest public scrutiny, an obligation that is not fully discharged by simply acting within the law."
• under Part I, subsection 3(5), to "arrange their private affairs in a manner that will prevent real, potential or apparent conflicts of interest from arising . . ."
• under Part I, subsection 3(6) to "not solicit or accept transfers of economic benefit, other than incidental gifts, customary hospitality, or other benefits of nominal value, unless the transfer is pursuant to an enforceable contract or property right of the public office holder."
• under Part II, subsection 23(1), to "take care to avid 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."

We believe that the gift from BCE Inc. to the Prime Minister of the invitation to participate in the Bell Canadian Pro-Am with Tiger Woods does not meet the critical conditions of acceptability set out in subsection 21(2) of the Public Office Holders Code, and also violates the general provisions set out above.

As a result of the above, we also believe that the gift of this invitation to the Prime Minister and waiving of the $13,000 payment by BCE Inc. raises serious questions about whether BCE Inc. has violated the principles of the Lobbyists' Code that require all lobbyists to to conduct all their relations with "honesty and integrity" and specifically violated rule 8 of the Lobbyists' Code which states the following:

"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."

BCE Inc. currently has one in-house lobbyist registered under the Lobbyists Registration Act to lobby various federal departments (including the Privy Council Office (PCO)) on behalf of the corporation. BCE Inc.'s subsidiary, Bell Canada, currently has 6 in-house lobbyists registered under the Act to lobby various federal departments (including the PCO), as well as one consultant lobbyist registered to lobby the PCO among other departments, 5 consultant lobbyists registered to lobby various federal departments, and 3 consultant lobbyists registered to lobby various federal departments (including the PCO) on behalf of a coalition of corporations that includes Bell Canada.

As the Ethics Counsellor, you are required under the Lobbyists Registration Act to investigate if you have reasonable grounds that a violation of the Lobbyists' Code has occurred. You have the full powers of a judge in your investigation, and you are required to report your ruling to Parliament.

We believe that the above evidence presents reasonable grounds warranting an investigation to determine whether the Lobbyists' Code provisions, specifically rule 8, were broken in this golf game situation.

We therefore request that you use your full powers under the Lobbyists Registration Act to investigate this situation and report your ruling on BCE Inc.'s activities to Parliament, as you are legally required to do. Given your August 29, 2001 memo, we expect your ruling very soon.

The standard for evaluating whether a public office holder is in a conflict of interest under the Public Office Holders Code is whether "real, potential or apparent conflicts of interest" were created (emphasis added). This standard creates an affirmative obligation on all public office holders to avoid even potential or apparent conflicts of interest.

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

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