Federal Lobbying Commissioner investigating August 2015 fundraising event hosted by Apotex chairman for Justin Trudeau and Liberal Party

Federal Lobbying Commissioner investigating August 2015 fundraising event hosted by Apotex chairman for Justin Trudeau and Liberal Party

Lobbyists who assist parties, candidates or politicians with fundraising or campaigning are prohibited from lobbying them or their staff for 5 years – Apotex is now registered to lobby Prime Minister Trudeau’s office

Lobbying Commissioner should recuse herself from ruling on complaint because she received 6-month contract from Liberal Cabinet in December

Federal political parties should close loopholes in Lobbying Act, and change political finance system to stop big money’s unethical influence by matching Quebec’s $100 annual donation limit and other world-leading measures

FOR IMMEDIATE RELEASE:
Wednesday, February 22, 2017

OTTAWA - Today, Democracy Watch revealed that federal Commissioner of Lobbying Karen Shepherd is investigating the complaint it filed last November about an August 26, 2015 fundraising event for the Liberal Party of Canada hosted by Apotex Inc. chairman Barry Sherman at his home and attended by Justin Trudeau and then-candidate, now-Liberal MP Michael Levitt.

Democracy Watch also called on Lobbying Commissioner Karen Shepherd to recuse herself from ruling on issues concerning the Liberal Cabinet because the Cabinet gave her the gift of six-month contract in mid-December worth about $90,000.

According to an article in the National Post, tickets for the August 2015 Sherman-hosted event cost $1,500. At the time of the event, Apotex was registered to lobby the House of Commons (which means it claimed it was lobbying at least some MPs, possibly including Trudeau) and Mr. Sherman was included as a registered lobbyist in that registration. At the time Democracy Watch’s complaint was filed, Apotex itself (including Mr. Sherman), along with several consultant lobbyists it has hired since March 1, 2016, were all registered to lobby the Prime Minister’s Office. The consultant lobbyists registered to lobby the Prime Minister’s Office on behalf of Apotex are Aaron Dobbin, John Duffy, Andrew Steele, Brian Teefy and Danya Vered (all five work at StrategyCorp Inc.), as well as Lester Scheininger.

“Federal lobbying ethics rules say it is illegal for a lobbyist to do anything that puts any federal politician or candidate in even the appearance of a conflict of interest, and a person crosses that line if they help in any way with a fundraising event involving a politician while they or their business or organization is lobbying the politician,” said Duff Conacher, Co-founder of Democracy Watch. “Federal lobbyist ethics rules also say it is illegal for anyone to help a party, candidate or politician with fundraising or campaigning and then be involved in lobbying them any time within the following five years.”

Rule 6 of the Lobbyists’ Code of Conduct states:

A lobbyist shall not propose or undertake any action that would place a public office holder in a real or apparent conflict of interest.

Rule 9 of the Lobbyists’ Code prohibits anyone from assisting a party, candidate or politician (or other public office holder) with fundraising or campaigning or any way that creates a sense of obligation, and then lobbying them afterwards for a period of five years because of the ongoing apparent conflict of interest that person’s assistance has caused for the politician or other type public office holder.

While Rule 9 didn’t come into effect until December 2015, in a public guidance document on Rule 8 published in 2009, and a clarification document published later, and in an updated guidance document on Rule 8 published on June 25, 2015, and in a reminder to lobbyists about Rule 8 and political activities published on June 25, 2015, the Lobbying Commissioner made it clear that lobbyists assisting a party, candidate or politician with campaigning or fundraising violate Rule 8 by creating an apparent conflict of interest for the politician that continues into the future for five years. Therefore, anyone who assists with campaigning or fundraising cannot be involved, and their organization cannot be involved, in lobbying the politicians involved in campaign or fundraising for the following five years.

The Lobbying Commissioner office is already investigating Democracy Watch’s complaint about the situation revealed in an October 25th Globe and Mail article involving Barry Sherman, the chairman of generic drug manufacturer Apotex Inc., assisting with selling tickets for a $500-per-ticket fundraising event to be held in Toronto on November 7, 2016 featuring Finance Minister Bill Morneau while Apotex is registered to lobby, and is lobbying, Finance Canada. The Commissioner’s office confirmed the investigation in a letter dated October 25, 2016.

Democracy Watch advocated through 10 years of campaigns and court cases until 2009 to win the enforcement of Rule 8 of the Lobbyists’ Code (now Rule 6 in a new version of the Code in force since December 1, 2015). In March 2009, the Federal Court of Appeal ruled unanimously in the case Democracy Watch v. Barry Campbell, the Attorney General of Canada and the Office of the Registrar of Lobbyist, rejecting former Registrar Michael Nelson’s “deeply flawed” interpretation of Rule 8 (Commissioner Shepherd was Deputy Registrar at the time) and making it clear that Rule 8 (now Rule 6) prohibits lobbyists from doing anything that puts a public office holder in even an appearance of a conflict of interest. Registrar Nelson had used the same “deeply flawed” interpretation of Rule 8 as former Ethics Counsellor Howard Wilson, both of whom had negligently weak enforcement records that let hundreds of lobbyists get away with violating the Lobbyists’ Code or the Lobbying Act. Commissioner Shepherd has had a similar negligently weak enforcement record over the past nine years.

Because of loopholes in the federal Lobbying Act, and weak enforcement, there are likely many people lobbying who are not registered and who are therefore not covered by the Lobbyists’ Code rules. Even people caught violating the Code face no penalty. A May 2012 House Committee report recommended closing some of the loopholes and giving the Lobbying Commissioner the power to impose penalties on violators.

“Federal parties need to work together to close the loopholes in the lobbying law that allow for secret, unethical lobbying, and to strengthen enforcement and ensure that every lobbyist who violates the rules is penalized with a high fine,” said Conacher.

Democracy Watch also called on federal political parties to stop the unethical influence of big money in federal politics by making the same world-leading changes to the federal political donation system as Quebec made in 2013 when it 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.

While the federal government, Alberta, Manitoba, Ontario and Nova Scotia have banned corporate and union donations, they all still allow undemocratically high donations that only wealthy people can afford.

Donations to parties in Quebec pre-2013, the federal parties in the past few years, and to Toronto city councillors, show clearly that with such high donation limits wealthy interests continue to receive preferential access and to have undue influence, cash-for-access schemes continue, as well as the illegal funneling of donations from corporations and unions through their executives and employees.

Democracy Watch detailed in a January 27th news release how much the federal Liberal’s proposal to make some cash-for-access events more transparent is a charade that won’t stop cash for access or the unethical influence of big money donations.

“The only way to stop the unethical and undemocratic influence of big money in federal politics is to stop big money donations,” said Conacher. “Any political party that refuses to support key changes to the federal political finance system 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.”

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 Government Ethics Campaign and Money in Politics Campaign

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