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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

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.

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

Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign