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Democracy Watch calls for key changes to stop conflicts of interest in federal government spending

Changes needed to lower political donation and loan limit; to close loopholes that allow secret lobbying, excessive government secrecy and sole-source spending; to prohibit profiting from decisions, and to strengthen enforcement and impose high fines for violations

Monday, August 10, 2020

OTTAWA – This afternoon, during its appearance before the House of Commons Access to Information, Privacy and Ethics Committee for its study of how to prevent conflicts of interest in government spending, Democracy Watch will call on MPs on the committee not only to recommend several key changes, but also to jointly sponsor a bill to make the changes during this minority government.

Many of the changes Democracy Watch is calling for have been recommended by the Ethics Committee or other House committees unanimously in past reports, and some were promised by the Liberal Party in its 2015 election platform, so there is no reason why MPs on the committee can’t move forward with a bill in the fall to make the changes. By jointly sponsoring the bill, and recruiting their colleagues to vote for it, the bill could easily pass by the end of the year, even if party leaders try to maintain the currently corrupt system by opposing the bill.

“MPs on the ethics committee could easily work together to sponsor a bill that would lower the political donation and loan limit to $100 as in Quebec, and close loopholes that allow secret, unethical lobbying, excessive government secrecy, spending without competitive bidding, and politicians and top government officials to profit from their decisions in secret,” said Duff Conacher, Co-founder of Democracy Watch. “The bill must also strengthen enforcement by establishing an independent commission to choose government watchdogs, and requiring watchdogs to audit everyone regularly and issue public rulings on all questionable situations, and by extending whistleblower protection to everyone in federal politics, and imposing high fines for ethics violations, including dishonesty.”

“If MPs on the ethics committee don’t recommend these changes, and work together to ensure they are made, they will show they aren’t serious about ending the currently corrupt system,” said Conacher.

“Secret, unethical lobbying, excessive government secrecy, unethical big money influence campaigns, and unethical decision-making and spending are all legal in federal politics, and Canadians are more likely to get caught parking their car illegally than politicians are likely to get caught violating key ethics rules, and the penalties for illegal parking are higher than the penalties for serious ethics violations by federal politicians and top government officials,” said Conacher. “This dangerously undemocratic and corrupt system is the scandal, and it must finally be cleaned up by closing all the loopholes, increasing transparency, and strengthening political ethics rules, enforcement and penalties.”

To see the detailed Backgrounder on all these much-needed, key changes, click here, and see a Summary below of the key changes, and the reasons they are needed.

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

Democracy Watch’s Money in Politics Campaign, Government Ethics Campaign, Honesty in Politics Campaign, Open Government Campaign, Stop Fraud Politician Spending Campaign, Stop Bad Government Appointments Campaign and Protect Whistleblowers Campaign

Summary of Key Changes Needed to Ensure Ethical Decision-making in the Federal Government: The System is the Scandal

Stop big money in politics

Stopping big money in politics is key. The current federal donation limit is too high and it allows individuals and organizations and their lobbyists to do favours for parties and candidates by funneling and bundling donations that unethically influence the decisions of Cabinet ministers (Click here for details about how the current donation limit is a façade). Clinical testing by psychologists has shown that even small gifts and favours have influence and are the best way to influence someone’s decisions.

“The only way to stop the unethical influence of big money in politics is to stop big money donations and loans, as Quebec has, and to ban gifts, including sponsored travel, and restrict and require disclosure of all favours including volunteer help on campaigns,” said Duff Conacher, Co-founder of Democracy Watch (Click here to see the 11 key changes needed to stop big money in federal politics).

Stop secret, unethical lobbying

In 2012, the House Ethics Committee unanimously recommended some key changes to the Lobbying Act (no changes were made) but not all the changes needed to close all the loopholes and require that all lobbying be publicly disclosed and in compliance with the Lobbyists’ Code of Conduct (as the Aga Khan’s unethical lobbying of Prime Minister Trudeau showed clearly). The Lobbying Act was supposed to be reviewed by the Ethics Committee in 2017, but the Committee and Parliament have negligently failed to undertake the review.

One of the key changes is to require all politicians, their staff, appointees, and government officials and employees to register in the Registry of Lobbyists every communication with anyone communicating with them in respect of any decision.The only exception to this disclosure requirement should be if someone sends an email letter through a lobby group’s website (as the group would be required to register that mass letter-writing campaign action in its lobbying registration in the Registry).

“If even some of the loopholes that allow for secret lobbying had been closed years ago, everyone at WE Charity would have been prohibited from lobbying the Prime Minister’s and Finance Minister’s offices and department because of their connections,” said Conacher. “The secret, unethical lobbying loopholes in the federal “Some Lobbying Act” must be closed because they are a recipe for corruption and waste of the public’s money, in part because lobbyists who are not required to register their lobbying are not covered by the lobbyists’ ethics code and so are allowed to develop close relationships with politicians and officials they are lobbying, including campaigning or doing favours for them.”

Stop excessive government secrecy

Secret lobbying is just one part of excessive federal government secrecy. Like the Harper Conservatives did, the Trudeau Liberals have broken almost all their 2015 open government election promises, including applying the Access to Information Act to ministers’ offices, and making federal government information open by default.

“The many loopholes in the federal ‘Guide to Keeping Information Secret Act’ must be closed to end the culture of excessive secrecy that often hides wrongdoing and wrongdoers in the federal government,” said Conacher.

Stop unethical decision-making

A loophole in the federal Conflict of Interest Act, which also exists in the MPs’ ethics code and the Senate ethics code, allows all federal Cabinet ministers, their staff and appointees, to participate in decisions even when they have a direct interest in the outcome and could profit from their decision, as long as the decision applies generally. Staff of MPs and senators are not even covered by any ethics rules.

“The federal ethics law should be called the ‘Almost Impossible to be in a Conflict of Interest Act’ because it has a huge loophole which means it doesn’t apply to 99 percent of the decisions and actions of Cabinet ministers, their staff and appointees, and allows them to profit from their decisions, and MP and senator ethics codes have the same loophole,” said Conacher. “This loophole must be closed, and everyone in federal politics must be prohibited from participating in any decision-making process when they have even the appearance of a conflict of interest.”

To be clear, the Conflict of Interest Act, and MP and senator codes, already prohibit participating in decision-making processes that only specifically affect one or a few people or entities when in the appearance of a conflict of interest, although this could be clarified by specifying that apparent conflicts of interest are covered. The key change needed is to close the huge loophole that allows ministers, top government officials, MPs and senators, and their staff, to participate in all decisions, including decisions that apply generally, when they have any kind of conflict of interest.

“Because of this huge loophole in the federal ethics law, it would have been legal for Prime Minister Trudeau and Finance Minister Morneau if they had decided themselves to create a youth volunteer service granting fund that many organizations could apply to for funding even if they knew for sure that one of their families’ favourite charities, WE Charity, would receive significant grants from the fund,” said Conacher.

“As well, a rule requiring honesty should be added to the federal ethics law and codes, to ensure politicians and government officials are penalized if they mislead voters about anything, including their own wrongdoing,” said Conacher. See details here.

In truly incredible contrast, the rules and code that Cabinet ministers have imposed on lower level federal government employees, who don’t have much decision-making power, prohibit them from participating in all decisions if they have even a potential or apparent of a conflict of interest (even if the decision applies generally), and require them to provide honest advice, and they can be suspended or fired for violations.

As well, so-called “blind trusts” should be banned (as the 1984 Starr-Sharp Report and 1987 Parker Commission both recommended) because the person knows what investments they put in their trust. Instead, all politicians and officials should be required to sell their investments while in office (as the Parker Commission also recommended).

Conflict of interest “screens” should also be banned because they are smokescreens that hide whether a politician or official is actually recusing themselves from decisions when they have a conflict of interest.

Stop questionable sole-source spending

Loopholes also need to be closed that allow federal government institutions to hand out sole-source contracts for very questionable reasons, and they should be required to do a compliance check with the Auditor General when initiating any significant spending process.

Strengthen enforcement, penalties and whistleblower protection

The watchdogs who enforce these rules (ethics, lobbying, information and integrity commissioners, and auditor general and procurement ombudsman) are handpicked by the Cabinet through secretive, biased processes, as the Federal Court of Appeal recently ruled.

As a result, the watchdogs often act like lapdogs, failing to conduct audits to discover wrongdoing (audits which are needed to supplement FINTRAC’s anti-bribery inspections (that also need to be strengthened)), and letting many people off the hook with very questionable, secret rulings. Very unfortunately, the Federal Court of Appeal has ruled that federal ethics and lobbying watchdogs’ rulings can’t be challenged (To see the ruling, click here).

As well, there are no penalties for politicians who violate key ethics rules, or for politicians government officials who violate key spending rules, other than a public report.

“Canada’s key good government watchdogs must be chosen by an independent commission, not by Cabinet ministers and officials they watch over, and they must be required to conduct audits and issue public rulings on every questionable situation, and empowered to impose high fines on violators, with everyone having the right to challenge their rulings in court,” said Conacher.

Finally, staff of politicians and parties are not protected by the federal whistleblower protection system, weak as it is. A House Committee unanimously recommended in June 2017 most of the key changes to make the system effective. All of these changes need to be implemented.