Group raises questions with federal Lobbying Commissioner about August 2014 fundraising event organized by Clearwater Seafoods shareholder and board member for Justin Trudeau and Liberals

Group raises questions with federal Lobbying Commissioner about August 2014 fundraising event organized by Clearwater Seafoods shareholder and board member for Justin Trudeau and Liberals

“It’s a small price to pay right now for the long term benefits that we’ll receive” said event organizer on day of event

People who assist parties, candidates or politicians with fundraising or campaigning are prohibited from lobbying them or their staff for 5 years, and so should their companies – Clearwater 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 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, March 1, 2017

OTTAWA - Today, Democracy Watch released the letter it has sent to federal Commissioner of Lobbying Karen Shepherd concerning an August 25, 2014 fundraising event for the Liberal Party of Canada hosted by Clearwater Seafoods co-founder and board member (and, according to media reports, possible major shareholder) Mickey MacDonald at his home and attended by Justin Trudeau.

According to an article in the Globe and Mail, a ticket for the event cost $1,000 and 75 to 80 people attended (the Chronicle Herald reported the ticket price as $1,200). In a piece on CTV Halifax news on the day of the event Mr. MacDonald is quoted as saying about the event that “It’s a small price to pay right now for the long term benefits that we’ll receive.”

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 Halifax Chronicle Herald, Mickey MacDonald was a major shareholder of Clearwater as of April 2013. According to that article and a February 2011 Globe and Mail article containing several statements from Mr. MacDonald, he was a co-founder of Clearwater along with his brother Colin (who is currently chairman of Clearwater) and John Risley who is also a board member. According to Clearwater’s website, Mr. MacDonald is a member of the company’s board of directors.

At the time of the event, Clearwater was not registered to lobby the federal government. In May 2015, according to the Registry of Lobbyists (which, due to loopholes in the Lobbying Act, does not include all lobbying activities), Clearwater hired consultant lobbyists Phil von Finckenstein and Gordon Quaiatinni of Maple Leaf Strategies to lobby several federal government institutions including the Prime Minister’s Office, and their registrations continue until today. In May 2016, another Maple Leaf Strategies consultant lobbyists registered to lobby the Prime Minister’s Office on behalf of Clearwater, Kellie Major.

“Federal lobbying ethics rules and the Lobbying Commissioner 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 next five years because of the apparent conflict of interest their help creates for the politician,” said Duff Conacher, Co-founder of Democracy Watch. “The question for the Lobbying Commissioner to consider is whether Mr. MacDonald’s fundraising event attended by Justin Trudeau in August 2014 that raised tens of thousands of dollars for the federal Liberal Party created an apparent conflict of interest that means Clearwater Seafoods is prohibited from lobbying the Prime Minister’s Office until 2019.”

“Democracy Watch’s position is a person directly associated with a company or other organization who helps raise money for a politician who then becomes Prime Minister creates an apparent conflict of interest that prohibits the company from lobbying the federal government at all, given that the Prime Minister appoints all Cabinet ministers and takes part in all Cabinet decisions,” said Conacher.

“If the Lobbying Commissioner decides that a co-founder, board member and shareholder of a company who is not registered as a lobbyist can raise money for a political party or politician without creating an apparent conflict of interest that prohibits the company from lobbying the politician for a few years, it will create a huge loophole in the federal lobbying ethics rules that many companies will likely exploit by having non-registered board members or executives help with fundraising and campaign events for politicians and parties while other company representatives register to do the lobbying for the company,” said Conacher.

The Lobbying Commissioner office confirmed in a letter dated October 25, 2016 that it is 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 Lobbying Commissioner office also confirmed in a letter dated November 18, 2016 that it is investigating Democracy Watch’s complaint about 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.

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.

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 Lobbyists, 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 has 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 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.

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, and what changes are actually needed to stop these undemocratic activities.

“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.”

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.

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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

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