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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.”

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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

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).

– 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 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).

– 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

Democracy Watch in B.C. Court of Appeal challenging ruling that Conflict of Interest Commissioner’s decision to excuse B.C. Premier Christy Clark’s $50,000 salary and “cash-for-access” events can’t be challenged in court

Ruling meant complaints to Conflicts Commissioner by members of the public about MLAs are ineffective, and Commissioner’s rulings are not binding

FOR IMMEDIATE RELEASE:
Wednesday, October 18, 2017

OTTAWA – Today, Democracy Watch is in the B.C. Court of Appeal challenging B.C. Supreme Court Justice Affleck’s ruling last January that no court challenges are allowed of B.C. Conflict of Interest Commissioner Paul Fraser’s decisions because they are unreviewable opinions with no direct legal effect limiting the Premier’s conflicts of interest. The notice of appeal to the B.C. Court of Appeal can be seen here.

The decision under appeal means that members of the public who make a complaint to the Commissioner about the Premier’s conflicts of interest are not entitled to a remedy, and are not even entitled to any assurance that the Commissioner himself has not been compromised by his own conflict of interest.

The ruling also stopped Democracy Watch’s court case filed last October challenging the Commissioner’s decisions last May and August that Premier Christy Clark’s high-priced, exclusive fundraising events don’t create conflicts of interest for her, and that the donations made at the events do not benefit her personally. Democracy Watch also challenged the Commissioner’s own conflict of interest in ruling on the situation given his son works for Premier Clark’s Cabinet.

“The court unfortunately decided that no one can challenge Commissioner Fraser’s unethical decision that it is legal and ethical for Premier Clark and Liberal Cabinet ministers to sell access to themselves at high-priced, invite-only secretive fundraising events, and that the events don’t create any conflicts of interest,” said Duff Conacher, Co-founder of Democracy Watch. “Commissioner Fraser stepped aside from ruling on a situation involving Premier Clark in 2012 because of his son’s work with the B.C. Liberals, and he should have stepped aside again this time, and the court did not even consider this issue. For all these reasons, Democracy Watch is appealing the ruling.”

Jason Gratl of the law firm Gratl and Company, who is counsel for the case and is representing Democracy Watch in the B.C. Court of Appeal today, said: “We say simply that it is an error to find that conflicts of members of the Executive Council, including the Premier, are not always and not in this case protected by legislative privilege”.

Commissioner Fraser will have until late May to file his response to Democracy Watch’s appeal.

According to media reports, Premier Clark has hosted or attended several small, invitation-only fundraising events for the B.C. Liberals with ticket prices ranging from $2,000 to $20,000, and also attended an event in her riding association sponsored for $2,500 each by four sponsors. Premier Clark received an annual salary from the B.C. Liberals for, in part, fundraising activities over the past few years, and that is part of the reason she is in a conflict of interest.

The B.C. Members’ Conflict of Interest Act prohibits the Premier and all MLAs from exercising their official powers or performing any official duties or functions if they have an opportunity to further their private interest or if there is a reasonable perception that their private interest affects their actions or decisions (sections 2 and 3). It also prohibits them from receiving any gift or personal benefit directly or indirectly connected to their position (section 7).

Democracy Watch, which filed a complaint with Commissioner Fraser about the Premier’s fundraising events last March, takes the position that Premier Clark benefited personally and was in a conflict of interest when attending the events because she receives some of the money raised as her salary from the B.C. Liberal Party. Democracy Watch’s position is also that the events created ongoing conflicts of interest for Premier Clark that prohibit her from making decisions that affect any company or organization that had a representative at any of the events.

Commissioner Fraser ruled on May 4 and August 9, 2016 that the donations made at the events did not benefit Premier Clark personally, and did not amount to a private interest that put her in a conflict of interest. He essentially refused to rule on whether the donations created ongoing conflicts of interest for Premier Clark when she is making policy decisions that affect the donors – he didn’t even investigate to find out who attended the events.

Democracy Watch’s case also asked the court to rule that Commissioner Fraser should not have ruled on the complaints filed about the events because he was in a conflict of interest given that his son works as a deputy minister for the B.C. Liberal Cabinet. In 2012, Commissioner Fraser stepped aside and didn’t rule on a complaint filed about Premier Clark because of his son’s connection to the B.C. Liberals. Democracy Watch wanted the court to order a reexamination of the complaints by another person who is fully independent of all B.C. political parties. Justice Affleck did not consider this issue in his ruling.

“Democracy Watch’s position is that big donations made at private fundraising events where the politician is essentially selling access to themselves are a clear violation of the conflict-of-interest law, and we hope the B.C. Court of Appeal will agree and overrule Commissioner Fraser’s decision that the donations didn’t benefit Premier Clark or put her in a conflict of interest,” said Conacher. “Commissioner Fraser stepped aside from ruling on a situation involving Premier Clark in 2012 because of his son’s work with the B.C. Liberals, and he should have stepped aside again this time. Commissioner Fraser’s apparent conflict of interest and the legal errors in his ruling give the appeal court many reasons to reject his ruling on Premier Clark’s fundraising events.”

Democracy Watch and the nation-wide Government Ethics Coalition also called on B.C.’s political parties to change the provincial Conflict of Interest Act to make the Commissioner’s rulings clearly binding on politicians, and also to allow anyone to appeal to the courts for a review of any decision by the Commissioner, including about the Commissioner’s conflicts of interest.

“It is dangerously undemocratic for B.C. to have an ethics law that politicians can ignore, and an ethics commissioner who is an unaccountable czar, and so B.C.’s political ethics law must be changed to ensure the commissioner’s rulings are binding and that court challenges of the commissioner’s rulings and the commissioner’s conflicts of interest are allowed,” said Conacher.

Democracy Watch and the nation-wide Money in Politics Coalition also called on the B.C. government 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 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 September 18th news release how inadequate the B.C. NDP’s proposed changes in Bill 3 are, and what key changes are needed to 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,” said Conacher. “Any political party that refuses to support key changes to the B.C. 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.”

– 30 –

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

Jason Gratl, Gratl and Company, Tel: 604-694-1919

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

Ethics Commissioner allowing federal Liberal Finance Minister Morneau to violate federal ethics law

Loopholes in the Act allow Trudeau, Morneau and other ministers and officials to profit from their decisions – and blind trusts are a sham as they all know what they put in their trusts, and they are allowed to choose and instruct the trustee

Democracy Watch’s court case challenges Ethics Commissioner’s “smokescreens” such as the one she set up for Morneau as illegal under the Conflict of Interest Act – also challenging Trudeau Cabinet re-appointing Ethics Commissioner last June

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:
Tuesday, October 17, 2017

OTTAWA – Based on the article published yesterday in the Globe and Mail, Democracy Watch has concluded that federal Conflict of Interest and Ethics Commissioner Mary Dawson made decisions that allowed Liberal Finance Minister Bill Morneau to violate the Conflict of Interest Act by not either setting up a blind trust or selling his shares 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. They are all required under subsection 26(1) to disclose a summary public statement within 120 days after they are elected that states whether they have sold or set up a blind trust for these investments, among other key details.

According to the Globe article, which quotes officials from Mr. Morneau’s office, Commissioner Dawson did not require him to set up a blind trust. According to Mr. Morneau’s February 14, 2017 public Summary Statement, he did not sell any of his investments. That means he owns investments which he controls, investments which are not in a blind trust, and that is a violation of subsection 27(1) of the Act.

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.

Even if Minister Morneau put the shares in a blind trust, it would be a sham because he would still know that he owns the shares, 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.

“As she has many times in the past, Ethics Commissioner Mary Dawson has once again allowed a Cabinet minister to violate the federal ethics law,” said Duff Conacher, Co-founder of Democracy Watch. “The federal ethics law allows Finance Minister Morneau to set up a blind trust but that would be a sham because he would still know he owns the shares in Morneau Shepell, and the law also allows him to make decisions that he can profit from but to be ethical Minister Morneau must either sell the shares or not take part in any future decisions that affect the company directly or indirectly.”

“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).

– 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

Democracy Watch and Fair Vote Canada call on Ethics Commissioner to rule Prime Minister Trudeau violated ethics codes by dishonestly rejecting electoral reform to protect Liberal Party interests

FOR IMMEDIATE RELEASE:
October 12, 2017

OTTAWA – Today, Fair Vote Canada and Democracy Watch jointly released the letter they sent yesterday to federal Conflict of Interest and Ethics Commissioner Mary Dawson. The letter requests investigations and public rulings concerning Prime Minister Trudeau’s dishonest and improper actions on electoral reform.

Set out in the letter to Ethics Commissioner, Mary Dawson, is the evidence that makes it reasonable to conclude that Prime Minister Trudeau’s statements and actions violate rules in the Conflict of Interest Code for Members of the House of Commons (the “MPs Code”) and in the Conflict of Interest Act.

In the lead-up to the 2015 election and beyond, Prime Minister Trudeau promised unequivocally to end the first-past-the-post voting system and replace it with a system that would “Make Every Vote Count.”

The promise to change the voting system was repeated more than 2,000 times and was a key plank in the Liberal election platform.

For five months, the MPs on the Special Committee on Electoral Reform (ERRE) heard overwhelming evidence and heartfelt pleas from Canadians to change the voting system to one that would reflect proportional representation.

Thousands took their time to participate in good faith.

After hearing months of testimony from academics, experts and citizens, the Special Parliamentary Committee on Electoral Reform (ERRE) submitted a majority report that reflected the recommendations of experts invited to testify. The ERRE heard 180 experts in total and, of these, 107 expressed themselves on the choice between keeping our current system or adopting a proportional system. Fully 88% of these expert witnesses called for a proportional system, according to a detailed compilation undertaken by Fair Vote Canada.

This consultative process was the fifteenth of its kind in Canada. Every one of these recommended to make the system fairer and more representative by moving to a proportional voting system, including the federal process initiated by the Prime Minister.

Yet, our Prime Minister ignored all of the evidence and decided arbitrarily that “all forms of proportional representation would be bad for Canada.” (CITE)

This abrupt reversal of the promise made on electoral reform, and the complete rewriting of the facts show a lack of integrity. It suggests that Mr. Trudeau made his promise of electoral reform solely to attract voters in the first place and never intended to honour this promise. This becomes even clearer considering that both his election promise and the original mandate letter for the Minister of Democratic Institutions explicitly referred to proportional representation as an option, yet the Prime Minister now states he always thought proportional representation would be bad for Canada (see below).

Fair Vote Canada’s Executive Director, Kelly Carmichael stated: “Canadians need to feel confident that those we elect are honest and act with integrity and put the needs and desire of the citizens of this country before their partisan self-interest. In fact, in the Speech from the Throne, Prime Minister Trudeau appeared to agree with this sentiment as he he continued to laud his plan to unequivocally end first-past-the-post voting system when he stated “’The trust Canadians have in public institutions — including Parliament — has, at times, been compromised.’”

“If the Ethics Commissioner fails to investigate our complaint or finds Prime Minister Trudeau didn’t violate any rules with his dishonest statements and actions, it will show clearly that the rules need to be changed to prohibit politicians from blatantly misleading Canadian voters with false election promises and claims in-between elections,” said Duff a Conacher, Co-founder of Democracy Watch.

Both Fair Vote Canada and Democracy Watch want to see honesty and integrity in politics and both work to strengthen our democracy through better policy. The broken promise on electoral reform is a stellar example of why we feel it necessary to request investigations and public rulings concerning Prime Minister Trudeau’s actions on electoral reform. The policies are in place to protect citizens against dishonesty but they are only effective if they are strongly enforced, and we hope Ethics Commissioner Mary Dawson will use the tools at her disposal to restore integrity to Canadian politics.

– 30 –

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

Kelly Carmichael
Executive Director, Fair Vote Canada
kelly.carmichael@fairvote.ca
705-559-9657

Democracy Watch’s Democratic Voting System Campaign and Honesty in Politics Campaign

Trudeau Liberals’ political finance bill a charade that doesn’t stop cash-for-access – too-high federal donation limit of $3,100 a year means wealthy still have unethical influence, funneling of donations continues

Sports referees can’t take gifts from players – why should payoffs be allowed to politicians?

50-group coalition, and more than 11,000 voters, call for 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

High donation limit allows for ongoing funneling of donations by businesses and unions – as happened in Quebec until it was stopped – 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)

Lobbying Commissioner taking too long to investigate Liberal fundraising events, and is biased because Trudeau Cabinet gave her six-month renewable term contract in July

FOR IMMEDIATE RELEASE:
Thursday, October 5, 2017

OTTAWA – Today, testifying before the House of Commons Committee reviewing the Trudeau Liberals’ political finance Bill C-50, 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 11,000 voters who have signed a petition on Change.org, called on the Committee to make the following changes before sending the bill back to the House:

  1. set an individual donation limit of $100 per year (as in Quebec) and require all donations of money, property and services to be disclosed (including volunteer services);
  2. set a limit of what candidates can give to their own campaign of $100 per year;
  3. prohibit loans to parties and candidates except from a public fund (to stop allowing federally regulated banks to buy influence with their loans);
  4. only re-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 Trudeau Liberals’ proposed bill is a charade that doesn’t stop cash-for-access to Cabinet ministers, MPs or their staff or the unethical influence of big money in federal politics, and the only way to stop it is to lower the federal donation limit to $100 as in Quebec,” said Duff Conacher, Co-founder of Democracy Watch and Chairperson of the Money in Politics Coalition. “The too-high federal donation limit of $3,100 not only continues to allow wealthy people to use money as an unethical way to influence politicians and parties, it also encourages funneling of donations from businesses and unions through their executives and employees and their families, as has happened in Quebec, at the federal level, and in Toronto.”

“Politicians are supposed to be the referees who decide what is in the public interest – so why do federal political party leaders continue to allow wealthy people to buy them off with huge donations, including secret donations? In hockey, baseball, soccer, basketball and other sports, referees are not allowed to accept even small gifts from players,” said Conacher.

Years of experience and scandals in Quebec before 2013, at the federal level since 2007, and in Toronto since 2009, show clearly that a donation limit that allows individuals to donate more than $1,000 each year allows for the unethical influence of big money donations, and cash-for-access fundraising schemes.

“As Quebec, federal and Alberta donation scandals show clearly, the only way to stop the unethical, undemocratic influence of money in federal politics is to stop big money donations by allowing only individuals to donate only $100 a year,” said Conacher.

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 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.

Enforcement also needs to be strengthened, as there are likely many more examples of illegally funneling of donations at the federal level than just the case where 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. Former-Conservative MP Dean Del Mastro’s cousin was charged in 2014 with illegally funneling donations through his business’ employees.

It seems Elections Canada has not yet done the full audit it promised to do in 2013 – it must be required to do such donation audits every year.

As in Quebec, when Elections Alberta did an audit in 2012 it found dozens of illegal donations. As well, in a 2013 scandal in Alberta, a coalition of construction companies made it clear that their big money donations were conditional on the Alberta government changing the labour law.

The federal Liberals were caught last fall 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 25, 2016, 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 federal Lobbying Commissioner Karen Shepherd who is investigating, and also a complaint last November about another event the same drug company executive organized for Justin Trudeau in August 2015 (which is also being investigated), and also a complaint last March about a big money fundraising event held by a corporate board member for the Liberals in August 2014 (which Commissioner Shepherd is also investigating). Commissioner Shepherd’s office is taking much too long investigating the complaints (possibly because she is essentially serving at the pleasure of the Trudeau Cabinet in her current six-month renewable term as commissioner).

In addition, Democracy Watch filed with the federal Ethics Commissioner Mary Dawson a complaint another event top Liberal donors were invited to in September 2016as well as a complaint about the Trudeau Cabinet selecting their own ethics and lobbying watchdogs. Commissioner Dawson has failed to investigate both complaints.

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, 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, the federal Liberals 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.

The key 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;
  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 Money in Politics Campaign