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Democracy Watch files court case challenging Ethics Commissioner’s ruling that Morneau didn’t need to sell his family company shares

Third court case filed concerning Ethics Commissioner – already challenging her illegal ethics screens, and her illegal re-appointment by Trudeau Cabinet

Will soon file fourth case challenging Ethics Commissioner’s failure to remove herself from ruling on complaints about Morneau – she is biased due to past advice to him, and given Trudeau Cabinet handed her a renewable contract in June

FOR IMMEDIATE RELEASE:
Tuesday, November 21, 2017

OTTAWA – Today, Democracy Watch released details about the lawsuit it filed last Thursday in the Federal Court of Appeal challenging the Ethics Commissioner’s decision that Finance Minister Bill Morneau did not need to sell the shares he owned in his family’s company, Morneau Shepell Inc.

“As she has many times in the past, Ethics Commissioner Mary Dawson once again allowed a Cabinet minister to violate the federal ethics law, and so as it has many times in the past, Democracy Watch is once again challenging the Ethics Commissioner in court,” said Duff Conacher, Co-founder of Democracy Watch. “All of these court cases would be unnecessary if the Ethics Commissioner would just do her job and enforce federal ethics rules properly and effectively.”

Subsection 27(1) of the Conflict of Interest Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up to hide his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Democracy Watch will also soon file another lawsuit against Ethics Commissioner Mary Dawson because she has refused to recuse herself from investigating complaints filed by Democracy Watch and the NDP MP Nathan Cullen and Conservative MP Pierre Poilievre.  The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that selling his shares was not required, and established a conflict of interest “screen” for him that she believes works, and is essentially serving at the pleasure of the Trudeau Cabinet.

Background on the lawsuit filed last Thursday

On November 4, 2015, the day he was appointed as Minister of Finance, Minister Morneau told CBC TV: “I suspect all my assets will go into a blind trust” and “I’ve already communicated with the Ethics Commissioner in that regard.”  At the time, his assets included 4.7 percent of the stocks of Morneau Shepell Inc., valued at more than $30 million.

On February 2, 2016, the Commissioner provided a letter to Minister Morneau that claimed that he did “not personally hold any assets that are considered controlled under the Act” but that, given Morneau owned millions of dollars of shares in Morneau Shepell Inc., “the Commissioner is of the opinion that the best measure of compliance would be to establish a conflict of interest screen which would be made public.”

The letter was confidential and neither Minister Morneau nor the Commissioner disclosed what exactly Minister Morneau did with the stocks he owned of Morneau Shepell Inc., and specifically neither disclosed whether the Commissioner had required him to sell the stocks or put them in a blind trust, until October 17, 2017.  On that day, the Ethics Commissioner told media in general terms that she had advised Minister Morneau that he “wasn’t required” to set up a blind trust when he was appointed as Minister of Finance.

On October 19, 2017, Minister Morneau disclosed to the media the Commissioner’s February 2, 2016 Decision letter.

Appointment Process and Ethics Rules Must be Strengthened

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s new blind trust for his other holding company assets will, like all blind trusts, be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow Finance Minister Morneau to continue to make decisions that affect his family’s company and his investments, so to actually be ethical he must not take part in any future decisions that affect the company or the investments directly or indirectly,” said Duff Conacher, Co-founder of Democracy Watch. “Minister Morneau’s blind trust will be a sham, as all blind trusts are, because he will know what investments he puts in the trust, will choose the trustee, and can give general instructions to the trustee about the investments.”

“Prime Minister Trudeau and all other Cabinet ministers and senior government officials, should be required to sell their investments in any company and buy term deposits or Canadian governments’ bonds until they leave office.  If they are not required to do this, they must be required not to take part in decisions that directly or indirectly their investments,” said Conacher.

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

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

Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Headhunting firms confirm PMO and Cabinet staff on all good government watchdog selection committees

Proves that Cabinet appointment process is political and partisan – Liberals claim that process is merit-based is clearly false

Last March, Liberals had qualified candidates to replace lapdog Ethics Commissioner Mary Dawson last March but, likely before Trudeau recused himself, decided to reappoint her

10,000+ call on Liberals to make changes to match Ontario’s and Britain’s world-leading appointment processes

FOR IMMEDIATE RELEASE:
Thursday, November 16, 2017

OTTAWA – Today, Democracy Watch revealed that it has confirmed that staff from Prime Minister’s Office (PMO) and responsible ministers sit on the selection committees for all the key good government watchdogs.  The committees, not the firms, do all the screening and interviews of candidates from the long lists sent to them by the firms.  Democracy Watch confirmed that this is the process in conversations with people at the headhunting firms hired by the Trudeau Cabinet to help with the search.

This confirms that despite their claim that their new Cabinet appointment process is merit-based, the Liberals are in fact using a political, partisan process to search for replacements for the following five key good government watchdogs: Chief Electoral Officer (CEO); Conflict of Interest and Ethics Commissioner; Information Commissioner; Lobbying Commissioner; RCMP Commissioner, and also for the Official Languages Commissioner.  Boyden Canada is providing administrative assistance for all the searches except for the search for the CEO which is being handled by Odgers Berndtson.

These watchdog positions are as important as Supreme Court justices in terms of ensuring democratic good government.  In contrast to the completely political process the Liberals are using to come up with the short list of candidates for the watchdog positions, the short list of candidates for justices is developed by a seven-member advisory committee, four of whom are appointed by non-governmental organizations.  Although the other three members of the advisory committee are appointed by the Minister of Justice, and the Trudeau Cabinet is not required to choose from the short list of candidates that the committee proposes, at least the PMO and ministers’ offices don’t have representatives on the committee.

Ideally, as Democracy Watch is calling for in its Stop Bad Government Appointments Campaign, the government would establish two fully independent committees, one for judicial and quasi-judicial appointments, and one for other Cabinet appointments. The members for both committees would come from non-government organizations, and would serve fixed, non-renewable terms.

The committees would conduct public, merit-based searches and develop a short list of qualified candidates for each open position, and then the Cabinet would be required to choose from the short list (even better with opposition party leader approval for some of the key watchdog positions). Ontario has a committee like this to appoint provincial court judges, and Britain has such a committee to appoint judges and administrative tribunal members.

“The Trudeau government has claimed again and again that it has changed the Cabinet appointment process to make it merit-based but, in fact, representatives from the PMO and ministers’ offices are making the decisions which means the process is as political and partisan as in past governments,” said Duff Conacher, Co-founder of Democracy Watch and Part-time Professor of law and political science at the University of Ottawa.  “It is very dangerous to our democracy that the Prime Minister and Cabinet can dictate who will be the government’s transparency and ethics watchdogs, and also the watchdogs for lobbying, elections and overall federal law enforcement, including enforcement of anti-corruption measures.”

“To make Cabinet appointments actually merit-based, the Trudeau Liberals must match what Ontario and Britain have done by changing the law to establish fully independent committees to find a short list of qualified candidates for each watchdog position, and require the Cabinet to choose from the short list,” said Conacher.

The revelation about the PMO and ministers’ office having representatives on the selection committees only adds to the evidence that the Trudeau Cabinet is seeking lapdogs instead of watchdogs for these key democratic good government positions.

As Democracy Watch revealed last week, he Trudeau government’s affidavit responding to one of the court cases Democracy Watch filed in July admits that the Liberals had a “pool of qualified candidates” for the Ethics Commissioner position last winter.  According to the affidavit, instead of consulting with opposition party leaders and nominating one of the qualified candidates for House of Commons approval for a seven-year term (as required under the Parliament of Canada Act), , the Liberals decided “in early April 2017” to reappoint existing Ethics Commissioner Mary Dawson for a third six-month interim term and to keep the search process open for the new Ethics Commissioner.

These decisions in April precede Trudeau’s move in mid-May to recuse himself from the appointment process for the new Ethics Commissioner.  This raises the question of whether Trudeau took part in these decisions.  Given that Ethics Commissioner Mary Dawon is currently investigating not only Trudeau but also Finance Minister Bill Morneau, it is also important to know whether Morneau participated in the decision to reappoint her.

“The Trudeau Cabinet’s decision last spring to rehire lapdog Ethics Commissioner Mary Dawson while she was investigating Trudeau smells as unethically bad as Trump’s decision to fire watchdog FBI head James Comey while he was investigating Trump,” said Duff Conacher, Co-founder of Democracy Watch.  “The Trudeau Cabinet handed a $100,000 contract to the person judging whether Trudeau and other ministers violated a federal law, and that is clearly unethical and also puts the Ethics Commissioner in a conflict of interest that makes her biased in favour of Trudeau and his ministers.”

Democracy Watch’s position is also that the Ethics Commissioner and Lobbying Commissioner are both currently in a conflict of interest when investigating anything concerning the Trudeau Cabinet, given that they essentially serving at the pleasure of the Cabinet on six-month renewable contracts.  Democracy Watch has repeatedly requested that the Ethics Commissioner recuse herself and that the Lobbying Commissioner recuse herself from ruling on complaints about Cabinet ministers and other Liberals, but they have refused to do so.

Most recently, Democracy Watch requested that the Ethics Commissioner recuse herself from investigating complaints concerning Finance Minister Morneau but the Ethics Commissioner has refused and so Democracy Watch will soon file a court case challenging her bias and incorrect rulings concerning ministers’ investments.  Democracy Watch is also challenging the Ethics Commissioner’s illegal ethics screens in court because they cover up whether ministers are stepping aside because of conflicts of interest.

Democracy Watch also called on the Trudeau Cabinet to end their conflict-ridden charade and ensure that Ethics Commissioner Mary Dawson and Lobbying Commissioner Karen Shepherd are replaced before January when their current six-month contracts end.  “In the past decade, the Ethics Commissioner and Lobbying Commissioner have been negligently weak lapdogs whose bad rulings have let many politicians off the hook for clear violations, and the sooner they are gone the better,” said Conacher.

In past news releases, Conacher has revealed that, to test the integrity of the Trudeau Cabinet’s appointment process, he has applied for both the positions of Lobbying Commissioner and Information Commissioner.  Despite being fully qualified for both positions, he has not been contacted by the selection committees for either position.  As was revealed by the fiasco that occurred last spring with the government’s attempted appointment of a new Languages Commissioner, Democracy Watch believes that many qualified people have applied for all the watchdog positions but are being ignored by the Trudeau Cabinet because they would actually be watchdogs, not the lapdogs that the Cabinet wants.

More than 10,000 Canadians have signed Democracy Watch’s Stop Political Lapdog Appointments petition on Change.org. The petition calls on the federal Liberals to make the Cabinet appointment process actually independent and merit-based (as Britain has) for appointments of all judges, officers of parliament, and members of agencies, boards, commissions and tribunals. The petition was launched as part of Democracy Watch’s Stop Bad Government Appointments Campaign.

The Liberals haven’t changed the federal Cabinet appointment process at all from what the Conservatives used (other than adding the goal of diversity). In the answer to the third question in the “Frequently Asked Questions” document describing the Liberals’ Cabinet appointment process (which was updated on April 28th), it says Cabinet ministers “manage” all appointment processes.

That means Cabinet appointments are still partisan, political processes, not merit-based as the Liberals claim (as the recent appointment of former Ontario Liberal Cabinet minister Madeleine Meilleur as the federal Languages Commissioner has revealed so clearly). And the government’s website listing openings and qualifications for Cabinet appointments that the Liberals claim makes the appointment process more open and transparent has existed for several years.

As well, the Liberals have made the very questionable claim that they can’t find anyone qualified to be the next Lobbying Commissioner or next Ethics Commissioner.

“The Liberals’ false claims smell very fishy and are clearly an attempt to cover up the fact that their Cabinet appointment system is essentially the same as the Harper Conservatives used, and that it’s still political and partisan, not merit-based, and allows Trudeau Cabinet ministers to choose their own Liberal Party cronies as government and law enforcement lapdogs,” said Conacher.

“The Trudeau Cabinet is in a conflict of interest when choosing any government or law enforcement watchdog because those watchdogs enforce laws that apply to Cabinet ministers or their departments,” said Conacher. “The only way to stop this dangerously undemocratic and unethical appointment process for judges and watchdogs is to establish a fully independent public appointment commission, as Ontario and Britain have, to conduct public, merit-based searches for nominees and send a short list to Cabinet, with Cabinet required to choose from the list.”

The independent commission, whose members are approved by all federal party leaders (and entities such as the Canadian Judicial Council) should be mandated to do a public, non-partisan merit-based search for candidates, and the Trudeau Cabinet should be required to choose appointees from a short-list of one to three candidates that the commission nominates.

Ontario uses this kind of independent appointment system to appoint provincial judges (the advisory committee provides a shortlist of three candidates to the Cabinet). Britain uses it to appoint judges and judicial tribunal members (like the Ethics Commissioner and Lobbying Commissioner are) – its advisory committee provides only one candidate to the Cabinet, and the Cabinet has to accept the candidate or reject the candidate and provide written reasons. Both of their systems are considered to be world leading.

The new appointment process, and prohibition on being reappointed, should apply to the judicial advisory committees and appointments of all 1,123 federal and provincial superior court judicial appointments listed here, and to the new public appointments commission that must be established to ensure a merit-based selection process for a short list of candidates for appointment to the 32 federal administrative tribunals and 108 agencies/boards listed here.

Democracy Watch also called on the Liberals, and all governments, to change the law to ensure all Cabinet appointees who watch over the government or oversee key democracy laws and processes (especially every Officer of Parliament) serve only one term.

“Like judges, all government and democracy watchdogs must only serve one term, with no possibility that the government can reappoint them, to ensure watchdogs don’t try to please the government in order to keep their job,” said Conacher. “To safeguard our democracy the ruling party must not be allowed to reappoint any government watchdog.”

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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 Stop Bad Government Appointments Campaign and Government Ethics Campaign

How to untie the unethical knots revealed by Minister Morneau’s scandal

The following op-ed by Duff Conacher, Co-founder of Democracy Watch, was published in edited form by the Hill Times on November 6, 2017, and by CBC.ca on November 7, 2017.


In all the spin and the counter-spin concerning Finance Minister Bill Morneau’s conflicts of interest scandal, what are the real problems, and how can the unethical knots that the scandal reveals be untied to ensure ethical government decision-making in the future?

Let’s begin at the beginning.  Canada’s federal ethics law, called the Conflict of Interest Act, says its purpose is to “minimize the possibility of conflicts” and “provide for the resolution of those conflicts in the public interest” while encouraging “experienced and competent persons to seek and accept public office” as politicians or public officials.

Those kind of public office holders may, like Minister Morneau, have been successful in the business world, and like him have lots of relatives and friends involved in businesses, and lots of investments and houses and properties.  They may have been successful in another field, such as working with unions, and have relatives and friends involved in unions, and also have saved and invested in companies, and maybe even a cottage or vacation property.

Most everyone, including international standard-setters like the UN and the OECD, the Supreme Court of Canada in its rulings, and experts worldwide, say that in order to have a democratic good government, it is key to ensure that politicians and government officials are prohibited from making decisions and spending money helping themselves, their relatives and their friends, or protecting their investments or properties.

Why? Because while a politician or official may claim that they made a decision to help the public, and while they and others may claim that they are completely ethical, no one can tell whether that is true.  Despite the claims of 1-800 TV psychics, no one can do a Vulcan mind-meld to determine the actual reasons why anyone makes a decision.

Canada’s Criminal Code prohibits politicians and government officials from directing government contracts or spending to themselves, their relatives, friends and associates, and from taking bribes or kickbacks for doing so, with time in prison as the penalty.

Many people assume that Canada has stopped this kind of thing happening, at least for big contracts and spending decisions.  However, the corruption scandal that continues to unfold in Quebec, and other scandals across the country like the GTH land deal in Saskatchewan, and the fact that the RCMP only launched a federal anti-corruption team a few years ago, a clear signs that no one should make this assumption.

Italy’s police force warned in 2012 that the Mafia was just as strong in Ontario as Quebec, and involved in corruption among other crimes, and that Canada has weak laws and enforcement.  And when he retired from his position as RCMP Commissioner in June 2017, Bob Paulson warned the organized crime was the greatest threat to Canada, including its involvement in corrupting politicians and government institutions.

To find a politician or government official guilty of violating the Criminal Code’s anti-corruption measures, prosecutors have to prove they did it beyond a shadow of a doubt.  That’s not easy to do in many situations, so experts agree that the old “ounce of prevention” approach helps ensure government integrity.

That means having laws, like Canada’s federal ethics law, that prohibit public office holders from even taking part in discussions or decisions where they could help themselves, their relatives or friends.  But what lines should that prohibition draw?

Usually, ethics laws prohibit Cabinet ministers and top government officials from having the direct conflict of interest of owning a business or investments in businesses, as Canada’s federal ethics law does.  However, Ethics Commissioner Mary Dawson interpreted the law in a legally incorrect way to create a loophole, and has allowed Minister Morneau and other Cabinet ministers to own investments and other assets indirectly.  Many people are calling for the loophole to be closed – but there is no loophole which is why Democracy Watch is filing a court case challenging the Ethics Commissioner’s decision.

Canada’s federal ethics law also allows ministers and top officials to own mutual fund investments without even disclosing them publicly, and to put other assets and investments in a so-called “blind trust.”  These investments should be prohibited, and (as the Parker Commission recommended in 1987) blind trusts should be abolished because ministers and officials can easily know what they own, especially since they choose their own trustee.

The only way to prevent these conflicts is to require Cabinet ministers and top government officials to sell all their investments in businesses (as the Parker Commission also recommended in 1987).  They can take the money from selling them and buy term deposits or government bonds that pay a set interest rate until they leave office.

They are already paid a salary in the top five per cent – they don’t need to make more money while in office, especially by making decisions that help themselves instead of helping as many Canadians as possible.

If a minister or top official owns some asset or investment which is not possible to sell, they should be required to disclose it publicly (as the Parker Commission also recommended).

What about businesses or investments owned by the relatives or friends of Cabinet ministers and top officials?  Canada’s federal ethics law requires their spouses and dependent children to disclose their investments only to the Ethics Commissioner – they are not required to sell anything.  Spouses should be required to disclose their investments publicly (as the Parker Commission also recommended), as should all children whether or not they live at home.

To avoid disrupting the lives of other relatives and friends of a person who enters politics or government, another approach is usually used to prevent conflicts with their interests.  The minister or official is prohibited from taking part in discussions or decisions that affect their own interests, and the interests of their relatives or friends, directly or indirectly.

Political ethics laws across Canada don’t do this, however.  They all have a huge loophole that actually allows ministers and top officials, and all politicians and their staff, to participate in and make all decisions that apply generally, even if they have a direct financial conflict of interest.  Yes, that’s right, the powerful people in politics in Canada are allowed to profit from their decisions.  This loophole must be closed, and the rule must be that they are prohibited from taking part in any decision if they have even the appearance of a conflict of interest.

The federal Ethics Commissioner has made things even worse by creating so-called ethics “screens” that hide whether ministers and officials are actually stepping aside when they have a conflict of interest.  The federal ethics law requires disclosure every time a minister steps aside and, as a result,  Democracy Watch believes the screens are illegal “smokescreens” and is challenging them in court.

What about ethics rules for MPs and senators, and their staff, and lower-level government employees?  A general principle is that the more decision-making power a politician or official has, the stronger the ethics rules should be.  Canada’s federal ethics rules violate this principle.  The rules for Cabinet ministers, MPs and their senators all have the same huge loopholes.

In contrast, even federal government employees with little decision-making power are prohibited from having interests that are affected by “government actions in which they participate” and from taking part in decisions when they have even the appearance of a conflict of interest.  The Prime Minister has the same rules in his code for ministers and their staff (which has existed in one form or another since 1985).  However, those rules are only in the PM’s code, not in the federal ethics law, and no prime minister has ever enforced these key rules in their code.

The simple solution is to take the rules in the PM’s code (or the government employees’ code) and put them into the federal ethics law (and every government across Canada should make the same change to its ethics law).

What about enforcement?  The first problem is that the federal Ethics Commissioner is chosen by the Cabinet, with opposition party leaders only consulted on the choice.  Politicians choosing their own watchdog is a bad idea.  Instead, a fully independent commission should be established, with commission members appointed by non-governmental organizations like the Canadian Judicial Council.  The appointments commission should be empowered to conduct a public, merit-based search to come up with a short list of candidates for all watchdog positions (including judges).  The Cabinet should then have to choose from the commission’s short list.

In fact, the federal Ethics Commissioner is currently on her third six-month contract with the Trudeau Cabinet, essentially serving at the Cabinet’s pleasure.  Democracy Watch believes this contract is illegal and undermines the independence of commissioner, and is challenging it in court.

Another problem is that Canada’s Ethics Commissioner trusts everyone to do the right thing, and has refused to use her legal power to do audits of financial statements and activities of ministers and officials.  This must change – audits are essential to the enforcement of any law, and so the Ethics Commissioner must be required to do random, regular audits.

The Ethics Commissioner can refuse to investigate a complaint, and is not required to investigate and rule on complaints filed by members of the public even though we pay the salaries of all politicians, political staff and government officials and employees.  The Ethics Commissioner must be required to investigate and rule publicly on all complaints.

If someone believes the Ethics Commissioner’s ruling on a complaint has ignored facts or the law, they can’t challenge her in court.  She is an unaccountable czar.  This must be changed to ensure that the Ethics Commissioner can be held accountable if her rulings are clearly wrong in any way.

Finally, the penalty for violating the federal ethics law, one of the key laws that protects our democracy, is a maximum $500 fine, and only for failing to file accurate documents with the commissioner.  Mandatory high fines of at least one year’s salary should be the penalty for all violations.

Overall, a federal Cabinet minister or top government official has less chance of getting caught, and will pay a smaller penalty, for violating the ethics law than you will for parking illegally wherever you live.

It’s long past time for federal political parties to close the unethical loopholes, and ensure a fully independent, fully empowered, accountable and strong Ethics Commissioner is appointed to enforce the rules, and to penalize all violators.  Canadians deserve no less, especially from the Trudeau Liberal government that promised real change, and open and honest government.

Duff Conacher is Co-founder of Democracy Watch, Canada’s leading democratic reform organization

Democracy Watch calls for changes to stop fake online election ads

More than 4,500 Canadians have already signed online petition supporting changes to election laws to ensure social media companies don’t publish false election ads

FOR IMMEDIATE RELEASE:
Tuesday, November 14, 2017

OTTAWA – Today, Democracy Watch formally launched its campaign calling for changes to election laws across Canada to stop fake online election ads.  Already more than 4,500 Canadians have signed its online petition on Change.org aimed at federal party leaders, and Democracy Watch also has an online letter-writing campaign calling on all governments across Canada to make the same changes.

The campaign calls for changes to ensure that all election advertising, in media and social media, complies with election laws that:

The problem is mainly with social media sites, like Facebook, through which ads can be targeted directly and only to a specific individual’s page.  Unlike an ad in a newspaper or on radio or TV, election watchdog agencies, the media and the public can’t track these targeted online social media ads because only the targeted individual sees the ad.  As a result, they can’t ensure the ads comply with the law.

“Canadians have fought many battles in the past to protect our democracy, and our democracy now faces the new threat of fake and foreign online election ads, and we need to fight back with changes to elections laws to stop these ads in their tracks,” said Duff Conacher, Co-founder of Democracy Watch.  “Social media companies cannot be trusted to stop fake or foreign ads on their own as they lobby governments and are in a conflict of interest as they may support one political party more than others.”

Democracy Watch’s Stop Fake Online Election Ads campaign calls for the following six key changes:

  1. prohibit media and social media companies from publishing election-related ads during the six months leading up to an election if the ad is paid for with foreign currency (such as Russian rubles);
  2. require media and social media companies to report every election-related ad to the election law enforcement agency during the six months leading up to an election so the ad can be reviewed to determine if it makes a clearly false claim about a party or candidate;
  3. require media and social media companies to report to the election law enforcement agency who placed and paid for each ad, and how much was spent on the ad, so agency can determine if the amount spent on the ad violates the legal limit (including the amount spent on having employees or contractors or bots share, like or retweet the ad);
  4. require the government to establish an independent commission (whose members are appointed by non-governmental bodies like the Canadian Judicial Council) to conduct a public, merit-based search for the next Chief Electoral Officer (CEO) of Elections Canada (and for the next head of the election law enforcement agency in each province), and to give a shortlist of nominees to the party leaders from which they all choose together one person as the head of the agency;
  5. give the head of the election law enforcement agency (at the federal level, the Commissioner of Canada Elections) the power, during the six months leading up to an election, to order clearly false, illegal ads be deleted from media and social media sites, and require the head to issue these orders within a few days of receiving the information about each ad, and;
  6. give the head of the election law enforcement agency (at the federal level, the Commissioner of Canada Elections) the power to impose significant fines on social media companies and advertisers who violate the rules (the fines must be large enough to discourage attempts to violate the rules).

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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 Stop Fake Online Election Ads Campaign

Trudeau Liberals admit in court case document they had “pool of qualified candidates” for Ethics Commissioner position last winter

Liberals decided not to nominate any of the qualified candidates before Trudeau recused himself from Ethics Commissioner appointment process – did Minister Morneau also participate in the Commissioner’s reappointment?

Court cases allege Trudeau Cabinet reappointments last June of federal Lobbying Commissioner and Ethics Commissioner for third six-month terms were illegal – both are clearly lapdogs who must be replaced by January

Despite their false claims, Liberals’ appointment process still Cabinet-controlled not merit-based – 10,000+ call on Liberals to make changes to match Ontario’s and Britain’s world-leading appointment processes

FOR IMMEDIATE RELEASE:
Wednesday, November 8, 2017

OTTAWA – Today, Democracy Watch released the Trudeau government’s affidavit that responds to one of the court cases Democracy Watch filed in July challenging the Trudeau Cabinet’s reappointment last June of both federal Lobbying Commissioner Karen Shepherd and Ethics Commissioner Mary Dawson to their third six-month terms since their multi-year term in office expired in July 2016.

In paragraph 16 of the affidavit, the Liberals admit that they had a “pool of qualified candidates” for the Ethics Commissioner position last winter. According to the same paragraph in the affidavit, instead of consulting with opposition party leaders and nominating one of the qualified candidates for House of Commons approval for a seven-year term (as required under the Parliament of Canada Act), the Liberals decided “in early April 2017” to reappoint existing Ethics Commissioner Mary Dawson for a third six-month interim term and to keep the search process open for the new Ethics Commissioner.

These decisions in April precede Trudeau’s move in mid-May to recuse himself from the appointment process for the new Ethics Commissioner. This raises the question of whether Trudeau took part in these decisions. Trudeau did not issue a public declaration that he recused himself from these decisions, which is required under subsection 25(1) of the Conflict of Interest Act.

Given that the Ethics Commissioner is currently investigating Finance Minister Bill Morneau for participating in the development of Bill C-27 that, if enacted, would help his family’s company, it is also important to know whether Morneau participated in any discussions or the decision-making process that led to reappointing the Ethics Commissioner for her third six-month term, and if he is taking part in decisions now about reappointing her for another six-month term.

Most recently, Democracy Watch requested that the Ethics Commissioner recuse herself from investigating complaints concerning Finance Minister Morneau but the Ethics Commissioner has refused and so Democracy Watch will soon file a court case challenging her bias and incorrect rulings concerning ministers’ investments. Democracy Watch is also challenging the Ethics Commissioner’s illegal ethics screens in court because they cover up whether ministers are stepping aside because of conflicts of interest.

Democracy Watch’s position is that Trudeau violated sections 4 and 6 of the Act if he took part in the decision to hand the Ethics Commissioner the six-month contract because those sections of the Act prohibit taking part in decisions when you have an opportunity to further your own interests. Taking part in handing a contract to the person who is investigating and ruling on whether you violated a federal law definitely presents an opportunity to further your own interests. The contract is likely worth about $100,000 given the Ethics Commissioner’s annual salary of about $200,000.

Democracy Watch’s position is also that the Ethics Commissioner is currently in a conflict of interest when investigating anything concerning the Trudeau Cabinet, given that she is essentially serving at the pleasure of the Cabinet on six-month renewable contracts. Democracy Watch has repeatedly requested that the Ethics Commissioner recuse herself from ruling on complaints about Cabinet ministers and other Liberals, but she has refused to do so.

“The Trudeau Cabinet’s decision last spring to rehire lapdog Ethics Commissioner Mary Dawson while she was investigating Trudeau smells as unethically bad as Trump’s decision to fire watchdog FBI head James Comey while he was investigating Trump,” said Duff Conacher, Co-founder of Democracy Watch. “The Trudeau Cabinet handed a $100,000 contract to the person judging whether Trudeau and other ministers violated a federal law, and that is clearly unethical and also puts the Ethics Commissioner in a conflict of interest that makes her biased in favour of Trudeau and his ministers.”

Democracy Watch also called on the Trudeau Cabinet to end their conflict-ridden charade and ensure that Ethics Commissioner Mary Dawson and Lobbying Commissioner Karen Shepherd are replaced before January when their current six-month contracts end. “In the past decade, the Ethics Commissioner and Lobbying Commissioner have been negligently weak lapdogs whose bad rulings have let many politicians off the hook for clear violations, and the sooner they are gone the better,” said Conacher.

There have been many reasons since 2010 to remove Ethics Commissioner Mary Dawson, as she has made many very questionable rulings (and made up many loopholes in federal ethics rules) since she was appointed in 2007. Up to June 2015, Commissioner Dawson’s public rulings had let off the hook 75 of 80 (94%) of politicians and other government officials who had clearly violated federal ethics rules (and she possibly let many off the hook in the 149 secret rulings she made from 2007-2014). Since then, Commissioner Dawson has continued at the same high rate to let people off the hook for clear violations, including the following public cases:

There have also been many reasons since 2012 to remove Lobbying Commissioner Karen Shepherd, as up to June 2015 she had let off the hook more than 80% of the people she has caught violating the Lobbying Act or Lobbyists’ Code and since 2012 she hasn’t issued any public rulings finding anyone in violation of the Code, despite receiving five complaints of clear violations from Democracy Watch alone since late May 2016. She has continued to let people off the hook in rulings that disclose only minimal information, and these rulings fail to disclose the facts of each situation and the identity of the lobbyist involved.

Democracy Watch’s court cases are based on the claim that the commissioners’ reappointments for their current third six-month terms are illegal. Clause 4.1(4) of the Lobbying Act says that any qualified person can only be appointed as Lobbying Commissioner for an interim term of no longer than six months, and that such interim appointments are only allowed when there is no commissioner or the commissioner is incapacitated (which was not the situation when the Cabinet made the reappointment).

The Parliament of Canada Act subsection 82(2) says the same things about appointments of anyone as interim Ethics Commissioner. Lobbying Commissioner Shepherd began her third six-month term on June 30th, and Ethics Commissioner began her third six-month term on July 9th.

“The federal lobbying and ethics laws clearly intend that the commissioners who enforce those laws be appointed for seven-year terms to ensure their independence as watchdogs who rule on situations involving Cabinet ministers and their political party supporters. The Trudeau Cabinet is abusing those laws and undermining the independence of those watchdogs by repeatedly handing six-month contracts to the Lobbying Commissioner and Ethics Commissioner,” said Duff Conacher, Co-founder of Democracy Watch.

The cases are also based on the concern that when Cabinet hands out repeated six-month contracts to government watchdogs who judge and issue rulings about situations involving Cabinet ministers, the contracts create conflicts of interest for those watchdogs as they have an incentive to issue rulings that favour Cabinet, MPs and supporters of their political party (and an incentive to fail to issue rulings on situations in which the evidence clearly shows that a minister or ruling party supporter violated the law).

Both the Ethics Commissioner and the Lobbying Commissioner are currently investigating (or refusing to investigate) situations involving Prime Minister Trudeau and other Cabinet ministers. The Ethics Commissioner is investigating complaints filed by Conservative MP Blaine Calkins and Conservative Party leader Andrew Scheer about the Aga Khan’s December 2016 trip gift to Trudeau. The Ethics Commissioner has also refused to investigate complaints other situations involving Trudeau and other Liberals.

As far as Democracy Watch knows (it is difficult to tell because the Lobbying Commissioner’s 2016-2017 annual report fails to provide details), the Lobbying Commissioner’s office: 1. is investigating Democracy Watch’s complaint about an August 26, 2015 fundraising event attended by Justin Trudeau and hosted by Apotex Inc. chairman Barry Sherman (Apotex lobbies the PMO); 2. is investigating Democracy Watch’s complaint about an August 25, 2014 fundraising event attended by Justin Trudeau hosted by a Clearwater Seafoods co-founder and board member (Clearwater lobbies the PMO), and; 3. is investigating Democracy Watch’s complaint about the situation revealed in an October 25th Globe and Mail article involving Apotex Inc. chairman Barry Sherman who assisted with selling tickets for a fundraising event that Finance Minister Bill Morneau attended (Apotex lobbies Finance Canada).

However, the Lobbying Commissioner seems to be failing to investigate Democracy Watch’s complaint filed in May 2016 about travel junket gifts given by 16 businesses and lobby organizations to federal MPs (including several Liberal MPs) from 2009 to 2016. There is no mention of the complaint in the compliance section of the Lobbying Commissioner’s 2016-2017 annual report.

That section of the report also states that the Lobbying Commissioner let 10 lobbyists off the hook for clear violations during the 2016-2017 fiscal year (while only finding two guilty). As well the compliance section of the Commissioner’s 2015-2016 annual report states that the Commissioner let seven lobbyists off the hook for clear violations (while only finding two guilty). How many of the lobbyists who broke the Lobbying Act or Lobbyists’ Code since the 2015 election and are Liberal Party supporters is not known because the Commissioner does not disclose the identity of lobbyists she let off the hook (nor the reasons why she let each lobbyist off the hook).

In all of the complaints it has filed in the past year, because they have been essentially serving at the pleasure of the Trudeau Cabinet on six-month contracts, Democracy Watch has requested that the Lobbying Commissioner and Ethics Commissioner recuse themselves from investigating and ruling on the complaints and instead have someone independent of the Trudeau Cabinet rule on the complaint.

“Prime Minister Trudeau finally acknowledged in May that the Ethics Commissioner investigating him causes a conflict of interest that prohibits him from taking part in decisions about the Ethics Commissioner position. The Ethics Commissioner and the Lobbying Commissioner have both failed to acknowledge that they are in a conflict of interest because they have been handed six-month contracts by the Trudeau Cabinet while investigating Trudeau and other Cabinet ministers,” said Conacher.

The case against the Ethics Commissioner’s reappointment replaces an earlier case that Democracy Watch had filed in the Federal Court of Appeal that has been discontinued.

More than 10,000 Canadians have signed Democracy Watch’s Stop Political Lapdog Appointments petition on Change.org in the past few weeks. The petition calls on the federal Liberals to make the Cabinet appointment process actually independent and merit-based (as Britain has) for appointments of all judges, officers of parliament, and members of agencies, boards, commissions and tribunals. The petition was launched as part of Democracy Watch’s Stop Bad Government Appointments Campaign.

The Liberals haven’t changed the federal Cabinet appointment process at all from what the Conservatives used (other than adding the goal of diversity). In the answer to the third question in the “Frequently Asked Questions” document describing the Liberals’ Cabinet appointment process (which was updated on April 28th), it says Cabinet ministers “manage” all appointment processes.

That means Cabinet appointments are still partisan, political processes, not merit-based as the Liberals claim (as the recent appointment of former Ontario Liberal Cabinet minister Madeleine Meilleur as the federal Languages Commissioner has revealed so clearly). And the government’s website listing openings and qualifications for Cabinet appointments that the Liberals claim makes the appointment process more open and transparent has existed for several years.

As well, the Liberals have made the very questionable claim that they can’t find anyone qualified to be the next Lobbying Commissioner or next Ethics Commissioner.

“The Liberals’ false claims smell very fishy and are clearly an attempt to cover up the fact that their Cabinet appointment system is essentially the same as the Harper Conservatives used, and that it’s still political and partisan, not merit-based, and allows Trudeau Cabinet ministers to choose their own Liberal Party cronies as government and law enforcement lapdogs,” said Conacher.

“The Trudeau Cabinet is in a conflict of interest when choosing any government or law enforcement watchdog because those watchdogs enforce laws that apply to Cabinet ministers or their departments,” said Conacher. “The only way to stop this dangerously undemocratic and unethical appointment process for judges and watchdogs is to establish a fully independent public appointment commission, as Ontario and Britain have, to conduct public, merit-based searches for nominees and send a short list to Cabinet, with Cabinet required to choose from the list.”

The independent commission, whose members are approved by all federal party leaders (and entities such as the Canadian Judicial Council) should be mandated to do a public, non-partisan merit-based search for candidates, and the Trudeau Cabinet should be required to choose appointees from a short-list of one to three candidates that the commission nominates.

Ontario uses this kind of independent appointment system to appoint provincial judges (the advisory committee provides a shortlist of three candidates to the Cabinet). Britain uses it to appoint judges and judicial tribunal members (like the Ethics Commissioner and Lobbying Commissioner are) – its advisory committee provides only one candidate to the Cabinet, and the Cabinet has to accept the candidate or reject the candidate and provide written reasons. Both of their systems are considered to be world leading.

The new appointment process, and prohibition on being reappointed, should apply to the judicial advisory committees and appointments of all 1,123 federal and provincial superior court judicial appointments listed here, and to the new public appointments commission that must be established to ensure a merit-based selection process for a short list of candidates for appointment to the 32 federal administrative tribunals and 108 agencies/boards listed here.

Democracy Watch also called on the Liberals, and all governments, to change the law to ensure all Cabinet appointees who watch over the government or oversee key democracy laws and processes (especially every Officer of Parliament) serve only one term.

“Like judges, all government and democracy watchdogs must only serve one term, with no possibility that the government can reappoint them, to ensure watchdogs don’t try to please the government in order to keep their job,” said Conacher. “To safeguard our democracy the ruling party must not be allowed to reappoint any government watchdog.”

– 30 –

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 Stop Bad Government Appointments Campaign and Government Ethics Campaign

Former Ethics Commissioner Shapiro recommended disclosure of all recusals because screens cover up conflicts of interest

Conservatives changed law to require disclosure – Ethics Commissioner ignored the law and set up ethics “smokescreens” for many ministers and others

Democracy Watch is challenging Ethics Commissioner’s illegal screens in the Federal Court of Appeal – has one other court case underway and another planned

FOR IMMEDIATE RELEASE:
Wednesday, November 1, 2017

OTTAWA – Today, Democracy Watch revealed that the first federal Ethics Commissioner, Bernard Shapiro, recommended in 2005 and 2006 that public disclosure be required of the details every time a Cabinet minister or other government official recuses themselves from a discussion or decision when they have a conflict of interest. With the 2006 Federal Accountability Act, the Conservatives changed the federal ethics law to require public disclosure.

The Ethics Commissioner has ignored the law and instead set up what she calls conflict of interest “screens.” The screens are actually “smokescreens” that hide whether a minister or official is actually recusing from decisions when they have a conflict, as the Ethics Commissioner claims they don’t have to make any public declarations.

There is nothing in the federal ethics law, the Conflict of Interest Act, that allows the Ethics Commissioner to use the screens. Subsection 25(1) of the Act requires a public declaration detailing every recusal.

Democracy Watch has submitted this information to the Federal Court of Appeal as part of its court case challenging the Ethics Commissioner’s illegal ethics screens. Ministers Morneau, LeBlanc, Wilson-Raybould and 21 other top government officials currently have screen schemes set up by Ethics Commissioner Mary Dawson.

“The federal Ethics Commissioner is violating the federal ethics law by allowing Cabinet ministers and others to use smokescreens to hide whether they are taking part in decisions when they have a conflict of interest,” said Duff Conacher, Co-founder of Democracy Watch. “The Ethics Commissioner screen schemes ignore that the law was changed in 2006 to require public disclosure every time a minister or government official doesn’t participate in a discussion or decision because of a conflict of interest, as recommended the previous ethics commissioner in 2005 and 2006.”

Democracy Watch will also soon file a new court case against federal Ethics Commissioner Mary Dawson because she has failed to recuse herself from investigating complaints about Finance Minister Bill Morneau, and because she made a legally incorrect decision to allow Morneau and other ministers to keep owning investments while they are in Cabinet.

Last July, Democracy Watch also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Ethics Commissioner Shapiro was the Officer of Parliament from May 2004 to April 2007 who enforced the predecessor to the Act which was entitled the Conflict of Interest and Post-Employment Code for Public Office Holders (the “Code”). Shapiro used conflict of interest screens but only because the Recusals section in the Schedule of the Code did not require detailed public declarations of each recusal by an office holder (in fact, the Code required the Ethics Commissioner to maintain a confidential record of recusals).

In the “Recusal” section of his annual report for fiscal year 2004-2005, Ethics Commissioner Shapiro recommended requiring public disclosure of the details of each recusal.

In the “Recusal” section and in Recommendation 2 of his Issues and Challenges 2005 special report, Commissioner Shapiro repeated this recommendation that public disclosure of the details of each recusal be required because “Full disclosure of the details of instances of recusal involving all public office holders would further enhance the public’s confidence in this regard.”

In addition, in the “Recusals” section of his annual reports for 2004-2005 and 2005-2006, Commissioner Shapiro’s discloses some details of the specific situations which then-Prime Minister Martin, and some other public office holders, had been required to recuse themselves.

Commissioner Shapiro’s annual report for the 2005-2006 also mentions under the “Challenges Ahead” part, under section “A. Impact of Bill C-2” that one of the challenges if the 2006 Federal Accountability Act was enacted would be that the bill included, among other changes to federal laws and regulations, the new Conflict of Interest Act (which incorporated in subsection 25(1) Commissioner Shapiro’s recommendation that details be disclosed concerning every recusal by any public office holder). The enactment of the Act, therefore, would require the Commissioner’s office would have to maintain “an expanded public registry to include recusal information that would not otherwise breach Cabinet confidences or harm national security.”

Finally, in the “Recusals” section of Ethics Commissioner Shapiro’s annual report for 2006-2007, he makes it clear that in every case that public office holders recuse themselves from a decision-making process as required under the Act, they must “sign a Public Declaration of Recusal” as required by the Act.

– 30 –

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 Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Democracy Watch filing court case against Ethics Commissioner challenging bias and rulings on ministers’ investments

Democracy Watch already has two court cases against the Ethics Commissioner – one challenging her illegal ethics screens, and the other challenging the six-month, renewable contract handed to her by the Trudeau Cabinet in June

FOR IMMEDIATE RELEASE:
Tuesday, October 31, 2017

OTTAWA – Today, Democracy Watch confirmed that it will file a new court case against federal Ethics Commissioner Mary Dawson because she has failed to recuse herself from investigating complaints about Finance Minister Bill Morneau, and because she made a legally incorrect decision to allow Morneau and other ministers to keep owning investments while they are in Cabinet.

In an open letter sent last Wednesday, Democracy Watch called for an investigation by an independent person of Minister Morneau’s failure to issue public statements (as required under subsection 25(1) of the Act) containing details about at least two recusals that the Minister himself admitted to recently.

The NDP has also filed a complaint requesting that the Ethics Commissioner investigate whether Minister Morneau violated the Conflict of Interest Act by participating in the development of Bill C-27, a bill that, if enacted, would help his family company and benefit the company’s shares that he owns and is finally planning to sell.

In its letter, Democracy Watch requested that the Ethics Commissioner recuse herself from ruling on the Morneau situation and delegate the complaints to an independent person.  The Ethics Commissioner has continued to address the Morneau situation, including meeting with Minister Morneau last Thursday.

The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that a blind trust was not needed, and established a conflict of interest “screen” for him, and is essentially serving at the pleasure of the Trudeau Cabinet on a six-month, renewable contract.  All that Democracy Watch has to prove in court is that a reasonable, informed person would conclude that it is likely that the Ethics Commissioner, consciously or unconsciously, will not investigate and rule on the Morneau complaints fairly.

The Alberta Ethics Commissioner recused herself last year from investigating a case in which she had a bias and assigned the case to the B.C. ethics commissioner.

“The Ethics Commissioner is refusing to admit she is biased even though the Trudeau Cabinet handed her a six-month contract worth $100,000 last June, so Democracy Watch hopes its court case will finally stop her from making biased, incorrect bad rulings that allow Cabinet ministers to act unethically,” said Duff Conacher, Co-founder of Democracy Watch.

Democracy Watch court case will also challenge the Ethics Commissioner’s decision that Morneau and other ministers did not need to set up a blind trust or sell the shares he owned in his family’s company, Morneau Shepell.  Subsection 27(1) of the Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up for his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s blind trust, like all blind trusts, will be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow ministers and other senior government officials to own investments they know about, and to make decisions that make them money,” said Duff Conacher, Co-founder of Democracy Watch.  “To be ethical, Prime Minister Trudeau and all other Cabinet ministers and senior government officials should be required to sell their investments and buy term deposits or government bonds until they leave office, and to not to take part in any discussions or decisions that directly or indirectly affect their relatives’ or friends’ businesses or investments.” 

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

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 Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Democracy Watch will take Ethics Commissioner to court if she doesn’t recuse herself from Morneau meeting and decisions – she is biased due to past advice on blind trust, setting up ethics “smokescreen” for him, and serving on six-month renewable contract from Trudeau Cabinet

Democracy Watch calls for investigation of Morneau for failure to issue required public statements about at least two admitted recusals – Ethics Commissioner must delegate investigations to an independent person

Democracy Watch also preparing court challenge of Ethics Commissioner’s decision that Morneau didn’t need a blind trust — already challenging her illegal ethics screens, and her re-appointment by Trudeau Cabinet, in court

FOR IMMEDIATE RELEASE:
Wednesday, October 25, 2017

OTTAWA – Today, in an open letter, Democracy Watch called on federal Conflict of Interest and Ethics Commissioner Mary Dawson to recuse herself from making any further decisions concerning Finance Minister Bill Morneau, and other Liberals. The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that a blind trust was not needed, and established a conflict of interest “screen” for him, and is essentially serving at the pleasure of the Trudeau Cabinet. The Ethics Commissioner even admitted recently to the Toronto Star that a blind trust doesn’t work in a case like Morneau’s or when any office holder knows what they own.

In its letter to the Ethics Commissioner, Democracy Watch also called for an investigation by an independent person of Minister Morneau’s failure to issue public statements (as required under subsection 25(1) of the Act) containing details about at least two recusals that the Minister himself admitted to recently.

The NDP has also filed a complaint requesting that the Ethics Commissioner investigate whether Minister Morneau violated the Conflict of Interest Act by participating in the development of Bill C-27, a bill that, if enacted, would help his family company and benefit the company’s shares that he owns and is finally planning to sell in the company.

Because of her past advice and decisions concerning Minister Morneau, the Ethics Commissioner has pre-judged at least part of both of these investigations. She is therefore biased and must recuse herself and delegate the investigations and rulings to an independent person (such as a provincial ethics commissioner). The Alberta Ethics Commissioner recused herself last year from investigating a case in which she had a bias and assigned the case to the B.C. ethics commissioner.

“The Ethics Commissioner must recuse herself because she decided last year that what she advised Minister Morneau to do was all legal, and now she is being asked in part to judge that her past decisions were wrong, all while serving at the pleasure of the Trudeau Cabinet on a six-month, renewable contract,” said Duff Conacher, Co-founder of Democracy Watch. “The Ethics Commissioner is clearly in a conflict of interest herself, and has been since at least last December when the Trudeau Cabinet handed her the second six-month contract, and it is time for her recuse herself from making any more decisions concerning actions by Liberals.”

Democracy Watch is also exploring a court challenge of the Ethics Commissioner’s decision that Morneau did not need to set up a blind trust or sell the shares he owned in his family’s company, Morneau Shepell. Subsection 27(1) of the Act requires Cabinet ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up for his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s blind trust, like all blind trusts, will be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow Finance Minister Morneau to continue to make decisions that affect his family’s company and his investments, so to actually be ethical he must not take part in any future decisions that affect the company or the investments directly or indirectly,” said Duff Conacher, Co-founder of Democracy Watch. “Minister Morneau’s blind trust will be a sham, as all blind trusts are, because he will know what investments he puts in the trust, will choose the trustee, and can give general instructions to the trustee about the investments.”

“Prime Minister Trudeau and all other Cabinet ministers and senior government officials, should be required to sell their investments in any company and buy term deposits or Canadian governments’ bonds until they leave office. If they are not required to do this, they must be required not to take part in decisions that directly or indirectly their investments,” said Conacher.

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed. “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

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 Government Ethics Campaign and Stop Bad Government Appointments Campaign

Democracy Watch and Open Government Coalition call on federal Liberals to make many key open government changes to Bill C-58

Given past consultations, committee reports and private member bills all calling for the same key changes, federal parties can and should make the changes now

Democracy Watch co-founder applied to be Information Commissioner to test federal Cabinet appointment system – despite almost 30 years’ experience in open government, he has still not been contacted by headhunting firm Liberals hired (and likely other well-qualified people have also not been contacted)

FOR IMMEDIATE RELEASE:
Monday, October 23, 2017

OTTAWA – Today, testifying before the House of Commons Access, Privacy and Ethics Committee, Democracy Watch and the Open Government Coalition it coordinates called on the MPs on the Committee to make many key changes to Bill C-58 to strengthen the federal Access to Information Act and open government system (SEE the changes listed further below). The Liberals have a majority on the Committee so if all the changes are not made it will clearly be their fault.

The Trudeau Liberals promised several changes not included in Bill C-58 in the Open Government section of their 2015 election platform, and in the specific Access to Information section of the platform. Bill C-58 also includes changes that were not promised in the Liberals’ platform, changes that are big steps backwards in access rights. The Liberals have also failed to keep their international Open Government Partnership commitments, weak as those commitments were. Bill C-58 also ignores many of the recommendations made in the unanimous June 2016 report of the House of Commons Access, Privacy and Ethics Committee.

Tens of thousands of voters have sent messages through Democracy Watch’s Open Government Campaign page calling on federal parties to make these key changes. Democracy Watch also signed the open letter issued recently by a global coalition of organizations and individuals calling for similar changes.

“To be credible, the Liberals on the House committee must agree to key open government changes to Bill C-58 that many groups, and past committees and reports, have called for over the past 15 years,” said Duff Conacher, Co-founder of Democracy Watch and Part-time Professor of law and politics at the University of Ottawa. “Given that the federal Access to Information Act and open government system have been reviewed several times in the past 15 years, and that there is a consensus on key changes that must be made, there is no justifiable reason for any further delay in making the changes.”

“If these key changes are finally made, the current federal ‘Guide to Keeping Secrets Act’ will finally become a real access to information act,” said Conacher.

The public was consulted on changes to the Act and system in 2000, and again in 2009 when a House Committee issued a unanimous report calling for changes, and again in 2011 and in 2013 (twice) through the international Open Government Partnership (OGP) process. The Information Commissioner issued a report in late March 2015 recommending many key changes. And, then, as mentioned above, the Liberals have consulted on their weak international Open Government Partnership 2016-2018 plan. Every consultation has resulted in a broad, strong call from the public and citizen groups to make the key changes listed below.

In addition to the changes the Liberals promised in their 2015, election campaign, the Conservatives promised several key changes in their 2006 election platform and federal Conservative Treasury Board minister Tony Clement agreed in 2014 that the Access to Information Act needs to be changed (as did Rob Nicholson in 2009). Also, the NDP and Liberals both introduced private member bills aimed at changing the Act when the Conservatives were in power.

Democracy Watch’s Co-founder Conacher also disclosed that, to test the Liberals’ Cabinet appointment process, he applied last July to be the federal Information Commissioner. He first worked in the Ontario Information and Privacy Commissioner’s office in 1988, and has almost 30 years’ experience addressing open government issues, including teaching law and politics university courses on the issues for the past six years, and meets all the requirements for the positon. He has not even been contacted by the headhunting firm the Liberals have hired to conduct the search for nominees.

The Trudeau Liberals have falsely claimed that they have changed the Cabinet appointment process to make it merit-based and independent of Cabinet. In fact, as in past governments, Cabinet ministers still control the whole process so it is still political and partisan (as several of the Liberals appointments have made clear).

Tens of thousands of voters have sent a letter through Democracy Watch’s Stop Bad Government Appointments Campaign or signed a petition on Change.org calling for key changes to make Cabinet appointments actually merit-based.

Conacher believes that, as with the fiasco that resulted from the Liberals’ attempt to appoint Madeleine Meilleur as Official Languages Commissioner, there are very likely many other well-qualified candidates who have applied that are not even being considered because the Trudeau Cabinet doesn’t want them in the position of Information Commissioner.

“Is the Trudeau Liberal Cabinet’s appointment process really merit-based, and are they really looking to appoint a qualified, fair watchdog to enforce the federal open government law, if they don’t even contact an applicant who has spent as much time as anyone in Canada over the past 20 years focused on strong, non-partisan enforcement of the federal and provincial open government laws?” asked Conacher. “The Trudeau Cabinet is also in a conflict of interest that prohibits it from choosing the next Information Commissioner as the Commissioner regularly investigates the departments of Trudeau Cabinet ministers.”

The key changes that Democracy Watch and the Open Government Coalition have been advocating for more than 15 years are as follows:

  1. any type of record created by any entity that receives significant funding from or is connected to the government, or was created by the government and fulfills public interest functions, should be automatically covered by the access to information law and system (as in the United Kingdom);
  2. all exemptions under the access to information law should be discretionary, and limited by a proof of harm test and a public interest override (as in B.C. and Alberta);
  3. the access to information law and system should require every entity covered (as in the United Kingdom, U.S., Australia and New Zealand): to create detailed records for all decisions and actions and factual and policy research; to routinely disclose records that are required to be disclosed; to assign responsibility to individuals for the creation and maintenance of each record, and; to maintain each record so that it remains easily accessible;
  4. the access to information law and system should allow anyone who does factual or policy research for the government to speak to the media and publicly about the topic, findings and conclusions of their research without being required to seek approval first from anyone (including their superior, the Privy Council, the Prime Minister, a Cabinet minister, or any ministerial staff person);
  5. severe penalties should be created for not creating records, for not maintaining records properly, and for unjustifiable delays in responses to requests;
  6. the Information Commissioner should be given explicit powers under access to information: to order the release of a record (as in the United Kingdom, Ontario, B.C. and Quebec); to penalize violators of the law with high fines, jail terms, loss of any severance payment, and partial clawback of any pension payments, and; to require systemic changes in government departments to improve compliance (as in the United Kingdom);
  7. funding to the access to information system and enforcement should be increased to solve backlog problems instead of increasing administrative barriers such as limiting requests in any way, and fees for access should be lower overall and standardized for every entity covered by the access to information law and system; and
  8. Parliament must be required to review the ATI Act every 5 years to ensure that problem areas are corrected, and;
  9. establish a fully independent, non-partisan appointments commission (with members, appointed by non-governmental organizations like the Canadian Judicial Council, serving fixed terms of office) to conduct a merit-based search for nominees for Information Commissioner and all other officers of Parliament, and to present a short list to the Cabinet that the Cabinet has to choose from after at least consulting with all federal party leaders (even better, require that a majority of party leaders approve of the Cabinet’s choice).

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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 Open Government Campaign and Stop Bad Government Appointments Campaign

Liberal Finance Minister Morneau will still have conflicts of interest, and still make decisions that affect his family’s company and his investments

Real scandal is that loopholes in the Conflict of Interest Act allow Trudeau, Morneau and other ministers and senior government officials to make decisions they, their relatives and friends can profit from – and that sham blind trusts are legal (they all know what they put in their trusts, and they are allowed to choose and instruct their trustees)

Democracy Watch exploring court challenge of Ethics Commissioner’s decision that Morneau didn’t need a blind trust — already challenging her illegal conflict-of-interest screens, and her re-appointment by Trudeau Cabinet, in court

Loopholes must be closed to require selling investments or not taking part in any decision that directly or indirectly affects investments (as all federal public servants are required to do)

FOR IMMEDIATE RELEASE:
Thursday, October 19, 2017

OTTAWA – Today, Democracy Watch responded to Finance Minister Bill Morneau’s decision to sell his shares in Morneau Shepell, and have some members of his family (he didn’t say who exactly) sell their shares. Even if his spouse and children sell shares they may own, if his parents or siblings or friends still own shares in the company it will unethical for him to make decisions that affect the company.

No one should trust that Morneau’s blind trust will actually be blind as he knows what he will put in the trust, and he will choose the trustee and is allowed to give the trustee general instructions, so he will very likely continue to know what exact investments he owns.

Democracy Watch is also exploring a court challenge of the Ethics Commissioner’s decision that Morneau did not need to set up a blind trust. Subsection 27(1) of the Act requires Cabinet ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up for his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Minister Morneau’s blind trust, like all blind trusts, will be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow Finance Minister Morneau to continue to make decisions that affect his family’s company and his investments, so to actually be ethical he must not take part in any future decisions that affect the company or the investments directly or indirectly,” said Duff Conacher, Co-founder of Democracy Watch. “Minister Morneau’s blind trust will be a sham, as all blind trusts are, because he will know what investments he puts in the trust, will choose the trustee, and can give general instructions to the trustee about the investments.”

“Prime Minister Trudeau and all other Cabinet ministers and senior government officials, should be required to sell their investments in any company and buy term deposits or Canadian governments’ bonds until they leave office. If they are not required to do this, they must be required not to take part in decisions that directly or indirectly their investments,” said Conacher.

“Democracy Watch believes the federal Ethics Commissioner’s so-called conflict of interest screens are illegal because they allow cabinet ministers, ministerial staff and senior government officials to avoid the clear legal requirement in the federal ethics law that says they must disclose details each time they remove themselves from any decision-making process due to their conflict of interest, and because the screens also allow them to keep secret whether they have actually removed themselves from any decision-making process,” said Conacher.

“The federal ethics law really should be called the ‘Almost Impossible to be in a Conflict of Interest Act’ because it allows the Prime Minister, Cabinet ministers, their staff and senior government officials to make decisions that affect the interests of their families, family businesses, friends and friends’ businesses, and also to profit from their own decisions,” said Conacher. “To have a democratic, ethical federal government, the law must be changed to require ministers, ministerial staff and senior government officials to avoid even the appearance of a conflict of interest, and to sell their investments that cause apparent conflicts, as all federal government employees are required to do.”

Because of a huge loophole in the Conflict of Interest Act, Cabinet ministers and other senior government officials are all allowed to participate in or make any decision that applies generally. Almost all decisions made by ministers, their staff, and appointed senior government officials (all of whom are covered by the Act) apply generally – so in fact they likely don’t have to abstain from participating in very many decision-making processes even when they have a direct conflict of interest.

Ethics Commissioner Dawson negligently refused since she was appointed in July 2007 to define the loophole — what is, and is not, a decision that applies generally? She finally did so somewhat in Minister Dominic LeBlanc’s July 2016 screen statement, writing that a general application decision is not “narrowly focused” but instead “affects the interests of a broad class of persons or entities” not just “a small group” and/or not with only one person or entity with a “dominant interest” in the matter being decided. Very unfortunately, she did not define “narrowly focused” or “small group” or “dominant interest” which means the loophole is still vague.

As well, loopholes in the Act allow ministers, their staff and appointed senior government officials to have investments in mutual funds that invest in businesses they deal with and make decisions that make the businesses money, and make themselves money. They are not required to sell these investments or put them in a so-called “blind trust” or even disclose publicly that they own them (NOTE: the loophole is in the Act’s section 20 definition of “exempt assets” that don’t have to be sold, including “(h) investments in open-ended mutual funds” that can include shares in businesses (only “controlled assets” have to be sold)). Putting an investment in a blind trust is also a charade because the public office holder still knows that they own whatever they put in the trust.

In stark contrast, all federal public servants, even those without any decision-making power, are required by Appendix B of the Treasury Board’s Policy on Conflict of Interest and Post-Employment to take “all possible steps to recognize, prevent, report, and resolve any real, apparent or potential conflicts of interest” and to sell assets that create even the appearance of a conflict of interest or make another arrangement to resolve the conflict created by the asset.

In addition to Dominic LeBlanc, the Ethics Commissioner has established either a blind trust or a conflict of interest screen for the following Cabinet ministers – all of whom are allowed to make “general application” decisions that directly affect the assets or interests listed in their trust or screen:

  1. Prime Minister Justin Trudeau – so-called “blind” trust for 7664699 Canada Inc.;
  2. Finance Minister Bill Morneau – so-called conflict of interest “screen” for Morneau Shepell Inc. or its subsidiaries, affiliates and associates;
  3. Justice Minister Jody Wilson-Raybould – so-called conflict of interest “screen” for KaLoNa Group.

along with about 45 other federal Cabinet staff, advisors and appointed senior government officials, whose screen statements can been seen here, including Mary Jean McFall, Chief of Staff for Agriculture Minister Lawrence MacAulay (see article about her “screen” here).

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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 Government Ethics Campaign