Finance Minister reviewing Bank Act right now – 24,000 sign petition calling for creation of financial consumer group, making FCAC and Ombudsman actual watchdogs, audits of profits and lending, and increasing minimum penalties

Financial Consumer Agency of Canada (FCAC) made big mistake tipping off banks that they will be inspected in April – has only prosecuted 2 banks since 2003

Big bank profits up to $10.5 billion already this year – were $37.35 billion in 2016 ($2 billion higher than in 2015, and more than double their 2010 profits) – higher than comparable banks in all other countries

FOR IMMEDIATE RELEASE:
Thursday, March 16, 2017

OTTAWA – Today, in response to CBC’s reports of employees at all of Canada’s big five banks breaking the law, and the Finance Minister Bill Morneau’s current review of the Bank Act and other financial sector laws, Democracy Watch formally launched it’s 2017 Bank Accountability Campaign and Change.org petition that 24,000 people have signed in the past week calling for 10 key changes to stop bank gouging and abuse that would:

1. Require banks, trust and insurance companies to promote in their mailings and emails to customers that they can join a national Financial Consumer Organization (FCO – as recommended by the MacKay Task Force, and the House Finance and Senate Banking committees);
2. Strengthen key consumer protection rules, and require the Financial Consumer Agency of Canada (FCAC) to do unannounced, mystery-shopper audits to find violations, and to identify violators and fine them (the FCAC hasn’t done unannounced audits in a decade, and has just tipped off the banks about their upcoming audit);
3. Require all banks to be covered by the Ombudsman for Banking Services and Investments (the Conservatives let TD and Royal leave OBSI in 2012 and choose their own complaint judges);
4. Require the FCAC or Competition Bureau to conduct regular independent audits of the profits in each banking division, and savings from withdrawal of services, and require banks to lower prices and interest rates wherever excessive profits are found (i.e. profits higher than 15% annually in any division);
5. Require the banks to disclose detailed information annually about their service and lending records (as the U.S. has required banks to do for 30 years), and require corrective action whenever banks discriminate against customers, and;
6. Given the big banks each make billions in profit annually, increase the meaningless maximum fine of $500,000 for violations to $50 million.

According to Finance Canada, Canada’s big banks control 93 per cent of all banking assets, and are more profitable than comparable banks in other countries, small banks in Canada, and Canada’s corporate sector overall. Their control of the market essentially allows them to gouge and abuse customers with excessive fees, high interest rates (especially on credit cards), and government action is the only thing that will stop them.

Canada’s big banks paid their CEOs about $10 million each in 2015, and gave them bonuses that totalled more than $10 million (51% higher than in 2008).

“Will the federal Liberals continue to protect big bank executives and their multi-million salaries or will they make real changes to protect 30 million bank customers from gouging and abuse, especially by requiring banks and insurance companies to promote a national financial consumer group in their mailings and emails to their customers,” said Duff Conacher, Co-founder of Democracy Watch. “At little or no cost to the federal government or the financial services industry, financial consumers across Canada can be given a very easy way to band together to help and protect themselves through joining a national financial consumer organization they fund and run – all the federal government has to do is require the banks and insurance companies to inform their customers about the group.”

The federal government bailed out the banks with $114 billion in mortgage purchases during the financial industry fraud crisis in 2009. It hasn’t required the banks to do anything in return for that bailout, or for the protections from foreign competition that the government gave the banks in 1967, and continues to maintain.

Incredibly, the Financial Consumer Agency of Canada (FCAC) announced yesterday that it will inspect the banks’ selling practices in April. “The FCAC has made a big mistake announcing an inspection a month in advance as they have just tipped off the banks and given them time to cover up and clean up their wrongdoing,” said Conacher. “It’s as bad as the police giving advance notice that they are setting up a speed trap on a highway — you don’t catch anyone violating the law that way.”

The FCAC has a very weak enforcement record since it was created in 2003. It has made only 125 compliance rulings, is prohibited from naming a law-violating bank unless it prosecutes the bank, and it has has only prosecuted 2 banks (neither of them a Big 6 Bank).

“The fact that the media revealed the latest wrongdoing by the banks instead of the Financial Consumer Agency of Canada shows that the agency is a lapdog not an effective watchdog, and the banks are not even required to be covered by the Ombudsman for Banking Services and Investments,” said Conacher. “The FCAC must be required to conduct unannounced mystery-shopper audits regularly, and all banks must be covered by the OBSI, and both agencies must be required to identify and penalize banks that violate the law with multi-million dollar fines”.

According to the Bank of Canada, the banks currently have about $1.3 trillion in business loans. That makes the recently announced, so-called Canadian Business Growth Fund of (eventually) $1 billion a sad joke as it will amount to only 0.1% of total bank lending. Given that the fund is a joint initiative of Finance Minister Morneau and the big banks, it is clear that the federal Liberals are trying to fool Canadians into applauding the banks for this largely meaningless initiative.

“Instead of helping the banks promote a very small loan fund to help grow entrepreneurial businesses, the federal government should do what the U.S. government did 30 years ago and pass a community reinvestment law requiring the banks to disclose detailed information that will allow the public to judge whether they are discriminating against borrowers such as women entrepreneurs, and requiring the banks to take corrective action whenever discrimination is found,” said Conacher.

“Every dollar of excessive profit for the banks, and every person and business the banks unjustifiably cut off from credit, costs the Canadian economy because it means that the banks are overcharging for their essential services and loans, and choking off spending and job creation,” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

See more details about the federal government’s negligence in ensuring banks serve
everyone fairly and well at fair prices and interest rates in this 2012 news release

Democracy Watch’s Bank Accountability Campaign

Elections Quebec audit found $12.8 million in likely illegally funneled donations, and Elections Alberta 2010-2011 audit found dozens of illegal donations

B.C. political parties should also democratize province’s political finance system to match Quebec’s $100 annual donation limit and other world-leading measures

FOR IMMEDIATE RELEASE:
Wednesday, March 15, 2017

OTTAWA – Today, Democracy Watch called for a special prosecutor to be appointed to help prevent political interference in the cases where lobbyists made donations and were reimbursed by their clients. All violators identified in the Globe and Mail’s March 10th article, and any others who can be proven to have violated the donations law, must be prosecuted before election day.

Democracy Watch also called on Elections B.C. to issue a special public report before election day on all large individual donations that were likely funnelled from businesses or unions through their executives (or their family members), employees or lobbyists since the 2013 election. This report can easily be done, and should have been done every year in the past by Elections B.C., by comparing the donation database with the lobbyists registry database, and with the business registry database, and with the list of executives of B.C.’s unions. The audit should examine donations to parties and candidates.

Elections Quebec did a similar audit in 2011 and found $12.8 million in likely illegally funnelled donations from businesses through their executives and employees since 2006. When Elections Alberta did an audit in 2012 it found dozens of illegal donations.

While Elections B.C. has referred the cases to the RCMP for investigation, under B.C.’s provincial Elections Act section 252, the Chief Electoral Officer (CEO) of Elections B.C. must approve all prosecutions of violations. Because so few such cases have been in the courts in the past, the policy of the CEO must be to request prosecution of all of the individuals involved and let the courts decide whether they violated the law.

“A special prosecutor must be appointed to help prevent political interference in these cases, and before election day Elections B.C. and the prosecutor must prosecute everyone they can clearly prove made an illegal donation,” said Duff Conacher, Co-founder of Democracy Watch. “Elections B.C. must finally enforce the law effectively by auditing donation lists to find all likely illegally funneled donations since the 2013 election, and issuing a public report before election day.”

“It would not only be negligent for Elections B.C. to let anyone who has violated the rules off the hook with just a warning, instead of requesting that they be prosecuted, it will also encourage more violations in the future,” said Conacher. “It would be also negligent for Elections B.C. to fail to audit donations back to 2013 to determine how many illegally funnelled donations have been made to parties and candidates.”

Elections B.C. should then follow up on that report by investigating and requesting a prosecution of everyone who has been involved in an illegally concealed donation scheme in the past four years.

Democracy Watch and the PIPE UP Network are currently challenging in court the B.C. Liberal Cabinet’s approval of the Kinder Morgan Trans Mountain pipeline because of the appearance of conflict of interest caused by more than $550,000 in donations to the B.C. Liberals from pipeline related companies in the past few years.

Democracy Watch is also challenging in court the B.C. Conflict of Interest Commissioner’s ruling that no conflicts of interest were caused by B.C. Premier Christy Clark’s high-priced, exclusive fundraising events.

Democracy Watch and the nation-wide Money in Politics Coalition also called on the B.C. political parties to make the same world-leading changes to the province’s political donation system (including at the municipal level) as Quebec made in 2013 when it lowered its individual donation limit to $100 annually, and required donations to be verified by Elections Quebec before being transferred to parties and candidates.

Democracy Watch detailed in a March 13th news release how inadequate the B.C. Liberals proposed changes are, and what key changes are needed stop cash for access and the unethical influence of big money donations in B.C. politics. More than 6,000 B.C. voters have called for these changes through Democracy Watch’s Change.org petition.

“The only way to stop the unethical and undemocratic influence of big money in B.C. politics is to stop big money donations and loans,” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign and Money in Politics Campaign

50-group coalition, and more than 6,000 B.C. voters, call for immediately annual donation and loan limit for individuals (including candidates) of $100 (as in Quebec), stronger enforcement and penalties for violations, and annual per-vote and donation-matching public funding only if parties can prove it’s needed

Unethical influence of big money in B.C. politics can be stopped right now with low donation limit, as federal, Quebec and Alberta political donations scandals show

High donation limit will mean ongoing illegal funneling of donations by businesses and unions – as happened in Quebec and at the federal level – and ongoing unethical influence by wealthy donors (in 2015, federal Liberals received almost 23% of their donations from just over 4% of wealthy donors who gave $1,100 or more)

Same changes should be made to municipal political finance system across B.C.

FOR IMMEDIATE RELEASE:
Monday, March 13, 2017

OTTAWA – Today, the B.C. Liberals introduce a bill that will only, if enacted, increase the frequency of disclosure of political donations and establish a commission to study how to stop the unethical influence of big money donations in B.C. politics. In response, Democracy Watch and the Money in Politics Coalition (made up of 50 groups with a total of more than 3 million members), joined by more than 6,000 B.C. voters who have signed a petition on Change.org, called on B.C.’s political parties to make the following changes before the legislature breaks for the upcoming provincial election:

1. ban corporate and union donations, and set an individual donation limit of $100 per year (as in Quebec);
2. set a limit of what candidates can give to their own campaign of $100 per year;
3. prohibit loans to parties except from a public fund;
4. only establish per-vote annual public funding to of at most $1 per vote, and annual donation-matching public funding, if the parties can prove they need it, and;
5. strengthen enforcement and penalties for violations.

“The B.C. Liberals’ donation disclosure bill is too little, too late and, even if it is enacted before the election, no one should believe Premier Clark’s likely false claim that future changes are possible,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “If the B.C. Liberals were serious about changing the province’s unethical, undemocratic political donation system, they wouldn’t have spent the past year dishonestly claiming that the current system is fine and rejecting changes proposed by the opposition parties and many others.”

Years of experience and scandals in Quebec before 2013, at the federal level since 2007, and in Toronto since 2009, show clearly that setting a donation limit that allows individuals to donate thousands of dollars each year will allow the unethical influence of big money donations, and cash-for-access fundraising schemes, to continue in B.C.

“As Quebec, federal and Alberta donation scandals show clearly, the only way to stop the unethical, undemocratic influence of money in B.C. politics is to stop big money donations by allowing only individuals to donate only $100 a year, and if the B.C. Liberals really wanted to they could make this change before election day,” said Conacher.

Enforcement also needs to be strengthened as Elections B.C. has been revealed recently to be failing to catch violations that the media has exposed with simple audits, including appointing a special prosecutor to ensure all violators are prosecution in the recent lobbyist-donation scandal.

Democracy Watch and the PIPE UP Network are currently challenging in court the B.C. Liberal Cabinet’s approval of the Kinder Morgan Trans Mountain pipeline because of the appearance of conflict of interest caused by more than $550,000 in donations to the B.C. Liberals from pipeline related companies in the past few years.

Democracy Watch is also challenging in court the B.C. Conflict of Interest Commissioner’s ruling that no conflicts of interest were caused by B.C. Premier Christy Clark’s high-priced, exclusive fundraising events.

The many donation scandals across the country show that low donation limits are the only way to stop the influence of big money. Few have been charged in Quebec’s corruption scandal even though an Elections Quebec audit found $12.8 million in likely illegally funneled donations donations from 2006-2011. To stop the corruption, in 2013 Quebec lowered its individual donation limit to $100 annually to each party, with an additional $100 allowed to be donated to an independent candidate), and required donations to be verified by Elections Quebec before being transferred to parties and candidates. B.C. should make the same democratic changes.

At the federal level, SNC-Lavalin illegally funneled almost $118,000 to the Liberal and Conservative parties, riding associations and candidates through its executives and employees from 2004 to 2011. And former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees. There are likely many more examples of illegally funneling of donations at the federal level, as it seems Elections Canada has not yet done the full audit it promised to do in 2013.

As in Quebec, when Elections Canada has not yet done the full audit it promised to do in 2013 it found dozens of illegal donations. As well, in a 2013 scandal in Alberta, a coalition of construction companies made it clear that Elections Alberta did an audit in 2012
their big money donations were conditional on the Alberta government changing the labour law.

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

Democracy Watch filed a complaint about the event with the federal Lobbying Commissioner who is investigating, and also a complaint about another event the same drug company executive organized for Justin Trudeau in August 2015, and a complaint about another event top Liberal donors were invited to in September 2016, as well as a complaint about the Trudeau Cabinet selecting their own ethics and lobbying watchdogs. Most recently, Democracy Watch filed a complaint about a big money fundraising event held by a corporate board member for the Liberals in August 2014.

The results of Democracy Watch’s research also show that top federal Liberal Party donors (to the Party only, not its riding associations) who gave $1,100 or more in 2015 were only 4.37% of total donors (4,084 donors out of 93,426 donors total) but they gave the Party 22.87% of total donations raised ($4,866,373.76 out of the $21,276,897.57 total raised.

In addition, the federal Liberals hold special events for donors who donate $1,500 or more annually (they become members of the exclusive Laurier Club). As the Globe and Mail reported recently, based on Elections Canada figures only 790 people (0.85% of all donors to the Liberals) donated $1,500 or more in 2015, and in 2014 only 522 people (0.68% out of 77,064 total donors) donated $1,200 or more (the amount needed then to attend a Laurier Club event).

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

Loans from financial institutions must also be limited to ensure financial institutions, businesses and unions can’t use loans as a means of unethical influence. Loans should only come from a public fund and be limited to the average total amount donated during the previous two years.

If the parties can prove that they need public funding, annual per-vote funding should be no more than $1 per vote, and the parties should implement a similar annual public funding matching system as Quebec ($2.50 for the first $20,000 raised annually by each party, and $1 for the first $200,000 raised annually). Elections Quebec has analyzed the results of Quebec’s changes and found that the parties are still adequately funded.

“To match Quebec’s world-leading democratic system, B.C. must limit individual donations to about $100 annually and, if the parties can prove they need it, use per-vote and donation-matching public funding to give parties and candidates funding based on their actual level of voter support,” said Conacher. “Similar changes should be made to B.C.’s municipal law, taking into account that there are no parties in most municipalities, to ensure every city and town across the province has the same democratic rules.”

The key changes that must be made in B.C. to democratize its political finance system are as follows (and similar changes should be made province-wide to the municipal political finance system, taking into account that many municipalities do not have political parties):

1. ban donations by corporations, unions and other organizations (Quebec enacted such a ban in the late 1970s);
2. 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 donations routed through the election watchdog agency (as in Quebec);
3. 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);
4. 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;
5. 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);
6. 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);
7. give annual public funding for parties matching up to the first $500,000 raised (as in Quebec where the first $200,000 raised is matched);
8. give public funding matching up to $25,000 that each nomination race and election candidate (including an independent candidate) raises (similar to Quebec’s matching funding system), and public funding matching up to $100,000 that each party leadership campaign candidate raises, and;
9. require election, donation and ethics watchdogs to conduct annual random audits to ensure all the rules are being followed by everyone;
10. Elections B.C., or the Auditor General, must be empowered to review all government advertising and to stop or change any ad that is partisan or misleading;
11. 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, and;
12. Elections B.C. 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.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Money in Politics Campaign

“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.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign and Money in Politics Campaign

Group launches letter-writing campaign to push government, and House Government Operations Committee reviewing federal whistleblower protection law right now – strong recommendations needed to push government

FOR IMMEDIATE RELEASE:
Thursday, February 23, 2017

OTTAWA – Today, as the House of Commons Government Operations Committee reviews the federal public sector whistleblower protection law, Democracy Watch formally launched its ProtectWhistleblowers.ca letter-writing campaign and national petition drive on Change.org, calling for 17 key changes by the federal government, and governments across Canada, to protect people who blow the whistle on government and big business abuse, waste and law-breaking.

The 17 key changes include: ensuring everyone is covered by the protection law and system, including political staff; allowing everyone to file their complaint directly and anonymously with the protection commissioner or agency; ensuring the protection commissioner is fully independently appointed and empowered to impose penalties (as Ontario appoints and empowers judges); requiring the protection commissioner/agency to conduct audits and rule on all complaints publicly in a timely manner (with the identity of all wrongdoers made public); compensating whistleblowers for legal advice, and rewarding them adequately if their claims are proven; allowing them to appeal to court if they disagree with the protection commissioner’s ruling, and, ensuring an independent audit of the protection system at least every three years.

“The federal Liberals claimed in their 2015 election platform that greater openness and transparency are fundamental to restoring trust in Canada’s democracy but if they don’t strengthen whistleblower protection they will break their open government promise,” said Duff Conacher, Co-founder of Democracy Watch.

People have tried to protect Canadians by blowing the whistle on governments wasting billions of dollars, approving dangerous drugs, and covering up scandals, and on big businesses gouging you, selling you hazardous products, and covering up pollution and oil spills.

These whistleblowers have been harassed, fired from their jobs, sued, silenced and hurt by governments and big businesses – all because Canadian whistleblower protection laws are weak and enforcement is negligently bad.

The federal Liberals failed to include any promises to strengthen whistleblower protection in their 2015 election platform. The federal Conservatives did little to strengthen whistleblower protection from 2006 to 2015, and actually covered up scandals involving the Public Sector Integrity Commissioner (who enforces the federal law). Other federal parties have done little to push for key changes.

Provincial governments across Canada have also failed to protect government and business whistleblowers fully and effectively, although the Ontario Securities Commission took a big step forward in protecting securities law whistleblowers with a new program launched in July 2016 which offers up to $5 million as a reward for whistleblowers whose claims are proven (which has led to calls to reward securities law whistleblowers in other provinces and to reward Competition Act whistleblowers).

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Protect Whistleblowers Who Protect You Campaign

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
[email protected]

Democracy Watch’s Government Ethics Campaign and Money in Politics Campaign

Ethics Commissioner’s 2011 gifts guideline says gifts from friends to Cabinet ministers prohibited if friend has dealings with the federal government, as Aga Khan does, and MPs Code says no gifts that might influence, even from friends

Conservative Party Interim Leader Rona Ambrose broke same rule as O’Regan by accepting gift of yacht trip from registered lobbyist Murray Edwards

Cabinet gave gift of $100,000 contract to Ethics Commissioner Dawson in December, so she is in a financial conflict of interest and must delegate ruling on all complaints about Trudeau Cabinet to a provincial ethics commissioner, even though she has, finally, disclosed that she is not applying for another seven-year term

FOR IMMEDIATE RELEASE:
Wednesday, February 8th, 2017

OTTAWA –Democracy Watch sent a letter last week to federal Conflict of Interest and Ethics Commissioner Mary Dawson calling for a ruling that Prime Minister Trudeau violated the Conflict of Interest Act (COIA), and he and Liberal MP Seamus O’Regan violated the Conflict of Interest Code for MPs (MP Code), when they accepted the gifts of a holiday trip and helicopter ride from the Aga Khan because he is lobbying the government through his foundation.

Democracy Watch also called for a ruling that Conservative Party Interim Leader Rona Ambrose violated the same rule in the MP Code as O’Regan by accepting the gift of a trip from Murray Edwards who is registered to lobby the federal government.

Democracy Watch’s letter also calls on Ethics Commissioner Mary Dawson to recuse herself from ruling on issues concerning the Liberal Cabinet because the Cabinet gave her the gift of a $100,000, six-month contract in mid-December.

The letter also calls for a ruling (that the Ethics Commissioner obviously can’t make) that Prime Minister Trudeau and his Cabinet violated sections 4 and 6 of the Conflict of Interest Act when they gave the contract to the Ethics Commissioner, and a similar contract to the Commissioner of Lobbying, in December at the same time both commissioner offices were investigating complaints that the Prime Minister and/or ministers have violated the Conflict of Interest Act or had a relationship with a lobbyist that violates the Lobbyists’ Code of Conduct.

Ethics Commissioner Dawson’s office has claimed that the contract does not create a conflict of interest for her because under subsection 81(1) of the Parliament of Canada Act, opposition party leaders are consulted on the appointment of the Ethics Commissioner. However, under subsection 82(2) of that Act, the Cabinet is not required to consult opposition party leaders before appointing anyone to a six-month term like the one the Ethics Commissioner is currently serving, and in any case Cabinet makes the final appointment decision.

“It would be outrageous if someone filed a lawsuit against Prime Minister Trudeau and he chose the judge to rule on the lawsuit and handed the judge a six-month contract worth $100,000, and it is equally outrageous that people have filed ethics complaints against the Prime Minister and he chose and handed a six-month, $100,000 contract to the Ethics Commissioner who will judge and rule on those complaints,” said Duff Conacher, Co-founder of Democracy Watch.

“It’s a conflict of interest and violation of the federal ethics law for Prime Minister Trudeau and his Cabinet to choose their own ethics and lobbying watchdogs, especially when they are being investigated by those watchdogs, and receiving a valuable contract from the Cabinet puts those watchdogs in a conflict of interest that undermines their investigations,” said Conacher.

Another reason not to have Ethics Commissioner Dawson rule on the complaints is her negligently weak enforcement record since 2007 since 2007 and lack of accountability (See Backgrounder below for details). Democracy Watch and the nation-wide Government Ethics Coalition continue to call for key changes to strengthen federal political ethics rules and the enforcement system (See Backgrounder below for details).

Concerning the trip gifts, the Ethics Commissioner stated in her July 2011 Guideline on Gifts that under section 11 of the COIA that Cabinet ministers and senior government officials are prohibited from accepting even a small gift if it can possibly be reasonably viewed as given to influence the minister or official (see section 2 of the Guideline), and that gifts from friends are prohibited if the friend has dealings with the government (see section 3 of the Guideline).

In several guidelines on gifts to MPs, the Ethics Commissioner has also made it clear that MPs are prohibited under section 14 of the MP Code from accepting even a small gift if it can possibly be reasonably viewed as given to influence the MP. There is no exemption in section 14 for gifts from friends.

The Aga Khan’s foundation Aga Khan Foundation Canada (AKFC) is registered to lobby the federal government, and as of October 14, 2016 Murray Edwards was a registered lobbyist for Canadian Natural Resources Limited (CNRL). Both the AKFC and CNRL are registered to lobby the Prime Minister’s Office and the House of Commons.

Even if the Aga Khan and AKFC and Murray Edwards and CNRL have not actually lobbied the Prime Minister, MP O’Regan or MP Ambrose, the ruling should still be that the gifts can possibly be reasonably viewed as given to influence the politicians because AKFC and CNRL are lobbying the government and the House of Commons and are, therefore, seeking to influence politicians’ decisions.

“Based on the standards set out in guidelines the Ethics Commissioner’s has issued, Prime Minister Trudeau violated the federal ethics law by accepting the trip gift from the Aga Khan, even if they are friends, because the Aga Khan is lobbying the federal government through his foundation,” said Duff Conacher, Co-founder of Democracy Watch. “MPs are not also allowed to accept a gift, even a gift from friends, if it could possibly be reasonably viewed as given to influence them, and based on this standard Liberal MP Seamus O’Regan violated the MP Code by accepting the gift of the trip from the Aga Khan, as did Prime Minister Trudeau when he was an MP in December 2014, and Conservative MP Rona Ambrose also violated the MP Code by accepting the gift of the trip from Murray Edwards who is registered to lobby the federal government for Canadian Natural Resources Limited.”

Democracy Watch proposes that the solution is to have a fully independent commission whose members are approved by all federal party leaders do a public, non-partisan merit-based search for the next Ethics Commissioner and Commissioner of Lobbying, and to require the Trudeau Cabinet to choose from a short-list of candidates that the commission nominates, with approval still by the House of Commons.

To stop patronage and cronyism, and the appointment of weak government watchdogs and law enforcement officers, Democracy Watch has called for this change to the process for all Cabinet appointments in its Stop Bad Government Appointments Campaign. Ontario uses this appointment system to appoint provincial judges, and it is considered to be a world-leading process.

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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign

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BACKGROUNDER

1. Federal Ethics Commissioner Mary Dawson’s weak enforcement record

Federal Ethics Commissioner Mary Dawson has had a very weak enforcement record since 2007, including (as of June 2015) making 149 secret rulings, issuing only 25 public rulings, and letting 75 (94%) of people who clearly violated ethics rules off the hook.

In addition to refusing to investigate and rule on many situations involving clear violations of federal ethics rules and/or letting people off with a warning (as detailed in the above paragraph), Ethics Commissioner Dawson has also greatly undermined various sections of the Conflict of Interest Act (COIA) in past rulings by creating loopholes in the COIA that do not exist – such as:

1. her April 29, 2010 “Cheques Report” ruling claiming that political parties are not “persons” under the COIA and therefore it was fine for Conservative MPs and Cabinet ministers to hand out government cheques with the Conservative Party logo on them;
2. her May 13, 2010 “Raitt Report” ruling that it was fine for two lobbyists who were lobbying Minister Lisa Raitt to help raise thousands of dollars for her riding association because, she claimed, that only helped the association not her, and;
3. her baseless decision that the COIA only applies to financial interests despite the fact that the COIA’s section 2 definition of “private interest” does not in any way even suggest that the definition of “private interest” is restricted to only financial interests.
4. her December 2016 ruling that it was fine for Health Minister Jane Philpott to use the driving service company of one of her former campaign volunteers because it was the only such company Minister Philpott claimed she knew about (a ruling that creates a loophole allowing any Minister or other senior government officlal to use the same invalid excuse Minister Philpott used to give contracts to their friends or other party loyalists).

Because of section 66 added to the then-new Conflict of Interest Act by the Conservatives in 2006, the Ethics Commissioner’s rulings cannot be challenged in court if she has factual or legal errors in her rulings. If this section had not been added to the Act, Democracy Watch would have challenged several of Commissioner Dawson’s rulings since 2007 in court.

Democracy Watch is currently challenging Ethics Commissioner Dawson’s use of conflict-of-interest screens in court on the basis that the screens are unlawful.

2. Federal ethics law and codes missing key rules and accountability measures

The Conservatives broke a 2006 election promise (one of their many broken accountability promises) to include key ethics rules in the new Conflict of Interest Act prohibiting dishonesty and being in even an appearance of a conflict of interest. Prime Minister Harper instead put those rules in his Accountable Government code for ministers and other senior officials so he could ignore the rules (as he did until the Conservatives were defeated in the 2015 election – see especially rules in Annex A, Part 1 of the code).

The Liberals made no promises in their 2015 election platform to close the huge loopholes in the huge loopholes in the Conflict of Interest Act (and they also made no promises to close the huge loopholes in the Lobbying Act or the Public Servants Disclosure Protection Act). Instead, Prime Minister Trudeau re-named and re-issued the Accountability Government code as his Open and Accountable Government code. He has ignored the rules in his code just like Prime Minister Harper did.