Federal Liberal’s proposal to make some cash-for-access fundraising events more transparent a charade – won’t stop cash-for-access or the unethical influence of big money donations

MPs still allowed to do secret cash-for-access events – and in 2015 federal Liberals received almost 23% of their donations from just over 4% of wealthy donors who gave $1,100 or more, and gave them special access to Cabinet ministers

Nation-wide coalition representing 3.5 million voters calls for real changes to democratize federal political finance system by matching Quebec’s $100 annual donation limit and other world-leading measures

FOR IMMEDIATE RELEASE:
Friday, January 27, 2017

OTTAWA – Today, responding to the federal Liberal’s proposed plan to make Cabinet ministers’s and party leaders’ cash-for-access fundraising events more transparent, which is a charade that won’t stop cash for access or the unethical influence of big money donations, Democracy Watch and the nation-wide Money in Politics Coalition (made up of 50 groups with a total membership of 3.5 million Canadians), and joined by the thousands of voters who have signed an online Change.org petition, called on the federal political parties to make real changes that will actually democratize the federal political finance system by matching Quebec’s world-leading measures:

  1. lowering the annual individual donation limit from $3,100 to $100 (as in Quebec, with donations routed through the election agency to prevent funnelling);
  2. also lowering the limit of what candidates can give to their own campaign to $100;
  3. prohibiting loans to parties except from a public fund;
  4. if the parties can prove they need it, implement maximum $1 per-vote annual public funding (with part of funding shared with riding associations, as Ontario has done), and;
  5. if the parties can prove they need it, also implement donation-matching public funding for parties and candidates (including independent candidates).

The current federal annual donation limit to each party is undemocratically high, and donations to parties in Quebec, the federal parties in the past few years, and
to Toronto city councillors, show clearly that cash-for-access will continue at the federal level as long as the donation limit is high. In 2013, the Quebec government lowered provincial individual donation limit to $100 annually to each party, ($200 during an election year), with an additional $100 allowed to be donated to an independent candidate, and also required donations to be verified by Elections Quebec before being transferred to parties and candidates.

Even if the Liberals’ proposed changes are made, cash-for-access will still be allowed at the now public events, and also:

  1. the federal Liberals’ special events will still be allowed at which donors who donate $1,500 or more annually (they become members of the exclusive Laurier Club) get special access to the Prime Minister and Cabinet ministers. As the Globe and Mail reported in the fall, based on Elections Canada figures only 790 people (0.85% of all donors to the Liberals) donated $1,500 or more in 2015, and in 2014 only 522 people (0.68% out of 77,064 total donors) donated $1,200 or more (the amount needed in 2014 to qualify to attend a Laurier Club event).
  2. Prime Minister Trudeau, Cabinet ministers, opposition leaders and MPs, and their staff, will also still be allowed to solicit donations by phone and email from people who want to meet with them, and they will likely meet and communicate with top donors more than with people who don’t donate.

The results of Democracy Watch’s research show that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised). These figures are based on donations disclosed and listed in Elections Canada’s Registered Party Financial Transactions Return database which has some problems and inaccuracies in it.

“The federal Liberals’ proposal to make Cabinet minister and party leaders cash-for-access fundraising events more transparent is a charade that won’t stop cash-for-access fundraising, it will just hide it as they will still be allowed to hold thank-you events for top donors and meet with them more than other voters, as well as ask people lobbying them for thousands of dollars in donations by phone and email,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “Unless other key changes are made, the new federal political finance system will continue to facilitate illegal funneling of donations from corporations and other organizations through their executives and families, as happened in Quebec.”

“As Quebec and federal donation scandals show clearly, the only way to stop the unethical, undemocratic influence of big money in politics is to stop big money donations by lowering the donation limit to $100-$200 as Quebec did in 2013,” said Conacher.

Few have been charged in Quebec’s corruption scandal even though an Elections Quebec audit found $12.8 million in likely illegally funneled donations from 2006-2011. To stop the corruption, in 2013 Quebec lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate), and required donations to be verified by Elections Quebec before being transferred to parties and candidates. Ontario should make the same democratic changes.

At the federal level, SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011. And former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees.

There are likely many more examples of illegally funneling of donations at the federal level, as it seems Elections Canada has not yet done the full audit it promised to do in 2013. As in Quebec, when Elections Alberta did an audit in 2012 it found dozens of illegal donations.

As well, the Liberals have been recently caught in a cash-for-access scandal as Prime Minister Trudeau and several Cabinet ministers have attended about 90 high-priced, exclusive events since January 1, 2016. And, as the Globe and Mail reported on October 25th, one of the events was a fundraising event to be attended by the Finance Minister that a drug company executive helped to organize while his company is lobbying the Finance department.

Democracy Watch filed a complaint about the event with the federal Lobbying Commissioner who is investigating, and also a complaint about another event the same drug company executive organized for Justin Trudeau in August 2015, and a complaint about another event top Liberal donors were invited to in September 2016, as well as a complaint about the Trudeau Cabinet selecting their own ethics and lobbying watchdogs.

Toronto’s experience is another example of how high donation limits allow donors to get around bans of corporate and union donations. Such donations were banned in Toronto elections in 2009, and individual donations limited to $750 annually, but a 2016 analysis by the Toronto Star found that big business and other special interest group executives and their families continue to give large amounts to city councillors.

“Any political party that refuses to support these changes is essentially admitting they are up for sale and that they approve of the unethical and undemocratic best-government-money-can-buy approach to politics,” said Conacher. “The only way to stop the unethical and undemocratic influence of big money in federal politics is to stop big money donations.”

The key real changes that must be made to democratize the federal political finance system are as follows:

  1. limit annual combined total donations of money, property and services by individuals to $100-200 to each party (Quebec’s limit is $100), and establish the same limit on candidates donating to their own campaign, with all donations routed through the election watchdog agency (as in Quebec);
  2. prohibit loans to political parties, riding associations and candidates, except from a public fund (with loans limited to the average annual amount of donations received during the previous two years);
  3. limit spending leading up to, and during election campaigns by parties, nomination race and election candidates, third party interest groups, and also candidates in party leadership races;
  4. require disclosure of all donations and gifts of money, property, services and volunteer labour given to any party, riding association, politician, nomination race, election or party leadership candidate, including the identity of the donor’s employer, and board and executive affiliations (and the identity of anyone who assists with any fundraising or fundraising event);
  5. give annual public funding for parties based on each vote received during the last election (no more than $1 per vote, with a portion required to be shared with riding associations);
  6. give annual public funding matching up to $1 million that each political party raises (Quebec matches up to $200,000);
  7. give public funding matching up to $25,000 that each nomination race and election candidate (including independent candidate) raises (similar to Quebec’s matching funding system), and public funding matching up to $200,000 that each party leadership campaign candidate raises, and;
  8. require election, donation and ethics watchdogs to conduct annual random audits to ensure all the rules are being followed by everyone;
  9. Elections Canada, or the Auditor General, must be empowered to review all government advertising and to stop or change any ad that is partisan or misleading (the federal Liberals have proposed doing this but haven’t done it yet);
  10. all penalties for violating donation and spending rules must be increased to minimum $100,000 fine and a multi-year jail term, and loss of any severance payment, and a partial clawback of any pension payments;
  11. Elections Canada and the Commissioner of Canada Elections must be required to disclose the rulings they make on all complaints they receive as soon as they make the ruling, and to disclose the rulings they make on all investigations they initiate themselves.

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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
info@democracywatch.ca

Democracy Watch’s Money in Politics Campaign