After nine years of negligence, Ethics Commissioner Mary Dawson finally somewhat defines the size of the huge loophole in the Conflict of Interest Act
Loopholes in the Act allow Trudeau, LeBlanc and other ministers to profit from their decisions – must be closed to have democratic, ethical government
FOR IMMEDIATE RELEASE:
Friday, July 15, 2016
OTTAWA - Today, Democracy Watch revealed that the loopholes in the new, so-called “conflict of interest screen” set up by Ethics Commissioner Mary Dawson for federal Liberal Fisheries Minister Dominic LeBlanc allow LeBlanc to participate in and make decisions that affect the interests of his friend J.D. Irving, as well as J.D. Irving Ltd. and its subsidiaries. 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.
“The federal Ethics Commissioner’s so-called conflict of interest screen is a charade that obscures the fact that a cabinet minister or other senior government official will make decisions even when they have a conflict of interest involving their own interests or the interests of their family or friends,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Government Ethics Coalition.
Some media outlets have mistakenly reported that conflict of interest screens set up by the Ethics Commissioner for LeBlanc and various other federal public office holders require them to abstain from participating in all decision-making processes in which they have a conflict of interest. In fact, because of a huge loophole in the Conflict of Interest Act, they 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 only have to abstain from participating in a very few decision-making processes even when they have a direct conflict of interest.
Ethics Commissioner Dawson has 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 LeBlanc’s 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 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.
“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 federal public servants are required to do.”
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:
- Prime Minister Justin Trudeau – so-called “blind” trust for 7664699 Canada Inc.;
- Finance Minister Bill Morneau – so-called conflict of interest “screen” for Morneau Shepell Inc. or its subsidiaries, affiliates and associates;
- 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).
“Democracy Watch’s position is that the Ethics Commissioners screens are illegal because they allow ministers and other public officials to avoid the clear legal requirement that they issue a detailed public declaration each time they remove themselves from a decision-making process because of a conflict of interest,” said Conacher. Subsection 25(1) of the Conflict of Interest Act requires public office holders to issue a detailed public declaration each time they recuse themselves from a decision-making process.
FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Democracy Watch’s Government Ethics Campaign