Complaint argues BlackRock executives and staff violated rules in the Conflict of Interest Act by acting as advisers to Cabinet while BlackRock lobbied government

Complaint also argues federal Cabinet gave preferential treatment to BlackRock

Ethics Commissioner must recuse herself as she is serving at the pleasure of Cabinet – appointment process for all government watchdogs must be made merit-based

FOR IMMEDIATE RELEASE:
Wednesday, May 24, 2017

OTTAWA – Democracy Watch released the letter it sent today to federal Conflict of Interest and Ethics Commissioner Mary Dawson concerning the situation revealed in an article in the May 5th edition of the Globe and Mail, and in documents (NOTE: 50 MB PDF) obtained by Ken Rubin and the Globe and Mail through an Access to Information Act request. The letter calls for an investigation and ruling on whether Privy Council Office staff and Infrastructure Minister Amarjeet Sohi and his staff violated the Conflict of Interest Act (COIA) by giving preferential treatment to BlackRock Asset Management Canada Ltd. because Mark Wiseman of BlackRock is serving as a member of the federal government’s Advisory Council on Economic Growth.

Democracy Watch’s letter also calls for an investigation of whether executives and staff at BlackRock Asset Management Canada Ltd. violated the COIA given that they served as ministerial advisers to Minister Sohi and department officials at the same time that BlackRock was registered to lobby the federal government. BlackRock executives and staff organized a meeting last November for Minister Sohi, Prime Minister Trudeau and eight other Cabinet ministers to appeal to BlackRock’s clients to invest in the federal government’s proposed Infrastructure Bank and infrastructure spending. BlackRock’s conflict of interest that violates the COIA is also based on the fact that BlackRock clients were at the meeting, and that BlackRock will benefit from the public money the government will spend on infrastructure through the Infrastructure Bank.

On May 8th, Democracy Watch also filed a complaint with the Ethics Commissioner about similar conflicts of interest and preferential treatment by Finance Minister Morneau and members of his Advisory Council on Economic Growth.

“It’s illegal under the federal ethics law for BlackRock executives and staff to be advisers to the Privy Council Office, Minister Sohi and the Liberal Cabinet at the same time as BlackRock was trying to influence federal government and Finance Minister Morneau’s decisions,” said Duff Conacher, Co-founder of Democracy Watch.

“The ruling on this situation must uphold the rule in the federal ethics law that people lobbying the federal government can’t also work for or with the government,” said Conacher. “If it doesn’t, the law will be gutted and it will become effectively legal for big business executives and lobbyists to be inside government advisers.”

Section 7 of the Conflict of Interest Act prohibits ministers and other public office holders from giving preferential treatment to any organization based on the organization’s representative. “An independent investigation is needed to determine whether Privy Council Office staff, Minister Sohi and his staff, and any other senior government officials, gave BlackRock preferential treatment because BlackRock executive Mark Wiseman was serving as Minister Morneau’s adviser,” said Conacher.

Democracy Watch’s letter also calls on Ethics Commissioner Mary Dawson to recuse herself from ruling on the complaint because the Trudeau Liberal Cabinet gave her the gift of a $100,000, six-month contract in mid-December. Under subsection 82(2) of the Parliament of Canada Act, the Cabinet is not required to consult opposition party leaders before appointing anyone to a six-month term like the one the Ethics Commissioner is currently serving.

Before the Cabinet gave her the contract in December, Democracy Watch filed a complaint calling on the Ethics Commissioner to rule that the Trudeau Cabinet was in a conflict of interest and could not choose its own ethics watchdog.

“It would be outrageous if someone filed a lawsuit against a Trudeau Cabinet minister and Prime Minister Trudeau chose the judge to rule on the lawsuit and handed the judge a six-month contract worth $100,000, and it is equally outrageous for ethics complaints against Trudeau Cabinet ministers to be ruled on by an ethics commissioner Prime Minister Trudeau has chosen,” said Conacher.

The COIA covers anyone who is “ministerial adviser” – defined as anyone, other than a public servant, who “occupies a position in the office of a minister” and provides policy advice to a minister on issues relating to his/her powers and duties, even if they don’t work full time and are not paid or compensated in any way.

Democracy Watch’s opinion is that BlackRock executives and staff were ministerial advisers (the details are in the letter) from mid-August 2016 to November 14, 2016 when the meeting took place, and are therefore covered by the COIA. While they didn’t physically work in the Privy Council Office or the office of Infrastructure Minister Sohi, they were: working with and advising those offices directly; had access to confidential government information, and; were described by the federal government as participating in “working groups” with several government officials.

Section 4 and subsection 6(1) of the COIA together prohibit public office holders, including “ministerial advisers” from making or taking part in decisions when they have an opportunity to further their own, their family’s or their friends’ private interests or to improperly further another person’s interests.

Democracy Watch’s opinion is that, based on the information in May 5th’s Globe and Mail article and the government’s documents, BlackRock executives took part in decision-making processes in which they had the opportunity to further their own interests given that their positions in BlackRock meant that if BlackRock benefited they would also benefit.

Beyond Ethics Commissioner Dawson’s own conflict of interest, which means she must recuse herself from ruling on Democracy Watch’s complaint, another reason not to have Ethics Commissioner Dawson rule on the complaints is her negligently weak enforcement record since 2007 and lack of accountability (See Backgrounder below for details). Democracy Watch and the nation-wide Government Ethics Coalition continue to call for key changes to strengthen federal political ethics rules and the enforcement system (See Backgrounder for details).

Democracy Watch’s Stop Bad Government Appointments Campaign proposes that the way to ensure the appointment of a fully independent, merit-based Ethics Commissioner is to have a fully independent commission whose members are approved by all federal party leaders along with entities such as the Canadian Judicial Council do a public, non-partisan merit-based search for candidates, and to require the Trudeau Cabinet to choose from a short-list of candidates that the commission nominates, with approval still by the House of Commons.

Ontario uses this kind of independent appointment system to appoint provincial judges (with the advisory committee provides a shortlist of three candidates to the Cabinet). The United Kingdom uses it to appoint judges and judicial tribunal members (like the Ethics Commissioner is) – 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.

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

Democracy Watch’s Government Ethics Campaign

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Backgrounder

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

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

Ethics Commissioner Dawson has greatly undermined various sections of the Conflict of Interest Act (COIA) in past rulings by creating loopholes in the COIA that do not exist – such as:

1. her April 29, 2010 “Cheques Report” ruling claiming that political parties are not “persons” under the COIA and therefore it was fine for Conservative MPs and Cabinet ministers to hand out government cheques with the Conservative Party logo on them;
2. her May 13, 2010 “Raitt Report” ruling that it was fine for two lobbyists who were lobbying Minister Lisa Raitt to help raise thousands of dollars for her riding association because, you claimed, that only helped the association not her;
3. her December 2016 ruling that it was fine for Health Minister Jane Philpott to use the driving service company of one of her former campaign volunteers because it was the only such company Minister Philpott claimed she knew about (a ruling that creates a loophole allowing any Minister or other senior government officlal to use the same invalid excuse Minister Philpott used to give contracts to their friends or other party loyalists);
4. her baseless decision that the COIA only applies to financial interests despite the fact that the COIA’s section 2 definition of “private interest” does not in any way even suggest that the definition of “private interest” is restricted to only financial interests, and;
5. her baseless decision that the COIA only applies to close personal friends (there is no such definition of “friends” in the COIA).

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

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

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

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

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

B.C. parties failed to promise to make most of the changes needed ensure democratic politics – will they still make the changes?

Voter turnout up to about 57%, but voting system and other reforms needed as Liberals and NDP both won about 49% of seats with support of only 23.5% of eligible voters, and many accountability loopholes exist

FOR IMMEDIATE RELEASE:
Wednesday, May 17, 2017

OTTAWA – Today, Democracy Watch called on B.C.’s provincial parties, no matter which party forms the government, to make all the changes needed to ensure democratic politics across the province.

While the final seat totals for each party won’t be known for a couple of weeks after the final count and recounts, and while voter turnout increased to about 57%, voting system and other key democracy and accountability reforms are needed as the Liberals and NDP both won about 48 percent of the seats in the legislature even though they were each supported by only about 40 percent of people who voted (and only 23 percent of total eligible voters).

“The B.C parties promised some key changes but nowhere near enough changes to ensure everyone in B.C. politics will, finally be effectively required to act honestly, ethically, openly, representatively and to prevent waste.” said Conacher. “As with every jurisdiction in Canada, about 100 specific changes are needed in B.C. to ensure democratic good government and democratic politics.”

If the B.C. parties and voters want not just a new but also a democratic government, the top 10 most important changes that need to be made for everyone (politicians, appointees, political staff, public servants) in the provincial and municipal governments, and in every government and government-funded institution across the province, are as follows:

1. Enact an honesty-in-politics law that allows for complaints to the provincial Ethics Commissioner about broken promises, and about dishonest statements made anywhere (including in the legislature) by anyone involved in politics, with mandatory high fines as the penalty;
2. Require all provincially regulated industry and service sectors (property and auto insurance, financial and investment services, health care institutions, energy and water) to include a notice in their mailings and emails to customers inviting them to join and fund citizen watchdog groups for each industry and sector, and increase royalties for all resource development sectors and put part of the increase into a fund that citizen watchdog groups jointly oversee and use for jointly decided initiatives;
3. Establish a Public Appointments Commission whose members are approved of by the leaders of parties that receive more than 5 percent of the popular vote in the election, and require the Commission to conduct public, merit-based searches and choose a short list of a maximum of 3 candidates for all Cabinet appointments, with the Cabinet required to choose from the short list;
4. Enact a meaningful public consultation law that requires broad, in-depth public consultation with voters (including legislature committee hearings) before any government or government institution makes a significant decision, and free and empower MLAs to represent voters and hold the government accountable by restricting the powers of the Premier and party leaders;
5. Ban political donations and gifts from businesses, unions and other organizations, and (as in Quebec) limit individual donations to $100 annually and establish per-vote and donation-matching public funding, and limit election spending by parties and candidates to about $1 per voter, and advertising spending by third parties to $50,000;
6. Prohibit everyone in politics from participating in any way in any decision-making process if they have even the appearance of a conflict of interest (even if the decision applies generally), including banning anyone who leaves politics from communicating with anyone involved in politics about their decisions for 3-5 years;
7. Require everyone in politics to disclose through an online registry any communication they have with anyone with regard to decisions they are making (to close the secret lobbying loopholes that now exist) and prohibit lobbyists from helping with political campaigns or fundraising;
8. Change the voting system to ensure a more accurate representation of the popular vote results of each election in the seats held by each party in the legislature (and in city councilors elected) while ensuring that all elected officials are supported by, and are accountable to, voters in each riding/constituency (with a safeguard to ensure that a party with a low-level, narrow-base of support does not have a disproportionately high level of power in the legislature) – and actually fix election dates (as Britain has);
9. Strengthen the access-to-information law by reducing loopholes, applying it to all government and government-funded institutions, requiring that records of all decisions and actions be disclosed regularly, and giving the Information Commissioner the power and mandate to order disclosure (as in B.C., Ontario and Quebec) and changes to government institutions’ information systems (as in Britain), and to penalize violators, and ensure whistleblower protection by strengthening the rules and empowering the Public Interest Commissioner to protect all whistleblowers in the public and private sectors; and
10. Reduce waste by prohibiting omnibus budget bills, and empowering the Auditor General to: audit all government and government-funded institutions; audit projected spending to ensure truth-in-budgetting; prohibit government advertising if it is misleading or partisan; order changes to clean up the financial management of any institution, and; penalize violators of spending or procurement rules.

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

Democracy Watch’s Campaigns page

Ontario and United Kingdom judicial appointment processes are world-leading models, and Liberals could easily make changes to match them by the end of June

Liberals haven’t changed appointment process at all — Cabinet ministers still choose all advisory committee members, and choose all appointees from long lists

Trudeau’s recusal now from choosing next Ethics Commissioner too little, too late – is a charade as he has likely already approved short list of candidates

FOR IMMEDIATE RELEASE:
Wednesday, May 17, 2017

OTTAWA – Today, Democracy Watch called on the federal Liberals to suspend the appointment of the next Conflict of Interest and Ethics Commissioner, Commissioner of Lobbying, Information Commissioner and RCMP Commissioner, and all other judicial and watchdog appointments, until they make the appointment process actually independent and merit-based.

Democracy Watch filed complaints with the Ethics Commissioner in mid-December and at the end of January asking for a ruling that it is violation of the Conflict of Interest Act for the Trudeau Cabinet to appoint or reappoint those and other watchdogs, especially when the watchdogs are investigating the Prime Minister (as the Ethics Commissioner was in December and is now, and as the Lobbying Commissioner is now). The Ethics Commissioner essentially refused to rule on the complaints in a ruling she finally sent to Democracy Watch at the end of March.

Democracy Watch also filed a complaint at the end of April about former Conservative Minister of Justice Peter MacKay appointing some of his friends as judges, including his former Cabinet colleague Vic Toews (Toews was finally found guilty in April by the Ethics Commissioner of violating the federal ethics law (two years after the complaint was filed).

Democracy Watch’s Stop Bad Government Appointments Campaign proposes that the way to ensure the appointment of fully independent, merit-based judges and watchdogs is to have a fully independent commission whose members are approved by all federal party leaders (along with entities such as the Canadian Judicial Council) do a public, non-partisan merit-based search for candidates, and to require the Trudeau Cabinet to choose from a short-list of 1-3 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). The United Kingdom 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 Liberals haven’t changed the appointment process at all from what the Conservatives used for 10 years (after they broke their 2006 election promise to establish an independent Public Appointments Commission). Liberal Cabinet ministers still choose all advisory committee members, and are given long lists of candidates for all appointments (which allows them to choose essentially whomever they want) – even for the appointment of federal and provincial superior court judges.

The Liberals claim there is a “new” general Cabinet appointments process – but it is essentially the same process the Conservatives used to appoint whomever they wanted (the only change is that “diversity” is now a goal). In the answers in the “Frequently Asked Questions” document describing the Liberals’ Cabinet appointment process (which was just updated on April 28th), it is clear that Cabinet ministers control everything about all appointment processes. The answer to one of the questions says that even if an appointment advisory committee is used for any appointment process, the members of the committee “will be chosen by a Cabinet minister — and any committee is only advisory — the minister’s power to appoint whomever they want is not restricted in any way.” That is a recipe for patronage and crony appointments, and the appointment of lapdogs.

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) be only allowed to serve one term.

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.

“The Trudeau Liberals’ Cabinet appointment system is essentially the same as the Harper Conservatives used, and it allows Cabinet ministers to choose their own Liberal party cronies as judges and lapdogs as supposed watchdogs,” said Duff Conacher, Co-founder of Democracy Watch. “To stop this dangerously undemocratic and unethical appointment process for judges and watchdogs, as in the UK and Ontario a fully independent public appointment commission must be created to conduct public, merit-based searches for nominees and send a short list to Cabinet, with Cabinet required to choose from the list.”

“Like judges, all government and law-enforcement 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 and law-enforcement watchdogs.”

The past 9 years cannot be repeated if Canada wants to claim it is a democracy, as the federal Ethics Commissioner Mary Dawson’s very weak enforcement record and Commissioner of Lobbying Karen Shepherd’s very weak enforcement record have done as much to undermine democracy in Canada as the dishonest, unethical and secretive actions of various politicians (See Part 1 of the Backgrounder below for details).

Democracy Watch and the nation-wide Government Ethics Coalition continue to call for key changes to strengthen federal political ethics rules and the enforcement system (See Part 2 of the Backgrounder below for details).

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

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

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Backgrounder

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

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

Ethics Commissioner Dawson has greatly undermined various sections of the Conflict of Interest Act (COIA) in past rulings by creating loopholes in the COIA that do not exist – such as:

1. her April 29, 2010 “Cheques Report” ruling claiming that political parties are not “persons” under the COIA and therefore it was fine for Conservative MPs and Cabinet ministers to hand out government cheques with the Conservative Party logo on them;
2. her May 13, 2010 “Raitt Report” ruling that it was fine for two lobbyists who were lobbying Minister Lisa Raitt to help raise thousands of dollars for her riding association because, you claimed, that only helped the association not her;
3. her December 2016 ruling that it was fine for Health Minister Jane Philpott to use the driving service company of one of her former campaign volunteers because it was the only such company Minister Philpott claimed she knew about (a ruling that creates a loophole allowing any Minister or other senior government officlal to use the same invalid excuse Minister Philpott used to give contracts to their friends or other party loyalists);
4. her baseless decision that the COIA only applies to financial interests despite the fact that the COIA’s section 2 definition of “private interest” does not in any way even suggest that the definition of “private interest” is restricted to only financial interests, and;
5. her baseless decision that the COIA only applies to close personal friends (there is no such definition of “friends” in the COIA).

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

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

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

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

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

Rules should make clear which party will try governing first, when the legislature will open, what a vote of non-confidence is, what will trigger next election etc.

Should issue public statement of agreement on the rules, and then first bill passed by legislature should make the rules law

FOR IMMEDIATE RELEASE:
Thursday, May 11, 2017

OTTAWA – Today, Democracy Watch called on B.C. party leaders and the Lieutenant Governor to agree on eight public, written rules for a minority government, as more than 80% of Canadians want. While B.C. may not have a minority government after the recounts in some ridings and the official provincial vote count is finalized in a couple of weeks, agreeing on the rules now will help ensure the legislature runs fairly and democratically through to the next election.

The rules should make clear: which party will get to try governing first; when the legislature will open; when it can be closed; what a vote of non-confidence is; when and how the opposition parties may get a chance to govern and; when and how the next election can be called before the fixed election date. (See Backgrounder below for the eight rules)

The current rules are unclear because they are unwritten constitutional conventions – even constitutional scholars disagree what lines they draw. The vagueness in the rules effectively allows the elected Premier and ruling party to abuse their powers and violate the rules, as the only way to stop violations is for the unelected, unaccountable Lieutenant Governor to decide that a violation has occurred and to try to stop the elected Premier from doing what they want.

Lieutenant governors in B.C. and other provinces have almost never stopped a premier from doing whatever they want, and have allowed premiers to abuse their powers by not opening the legislature after an election, shutting it down arbitrarily for months, and calling snap elections in violation of fixed-election-date laws. The Governor General allowed Prime Minister Harper to call a snap election in 2008 in violation of the (too vague) fixed-election-date law, to prorogue Parliament in a very questionable minority government situation, and to declare many votes in Parliament as confidence votes even though they were clearly not confidence votes.

In England, Australia and New Zealand, political party leaders and MPs agreed years ago to clear, public rules so what happens after an election is fair for all the parties, and for voters. Most countries in the world also have clear, public post-election rules.

As well, a survey of more than 2,000 Canadians by Harris-Decima in November-December 2012 showed that 84% of adult Canadians want enforceable rules to restrict key powers of the Prime Minister and provincial premiers.

The Governor General also said last August in an an interview with the Hill Times that he thought these unwritten constitutional conventions should be written down.

“There are no legal or other justifiable reasons for B.C.’s political party leaders and Lieutenant Governor to fail to approve eight key rules for a minority government,” said Duff Conacher, Co-founder of Democracy Watch. “It is clearly in the public interest that the rules be approved to stop unfair abuses of power by the ruling party that violate the rights of the legislature and the democratic will of the majority of voters.”

After the eight rules are enacted into law, the B.C. legislature should, as the legislatures in England, Australia and New Zealand have, examine and enact other fairness rules to ensure the legislature and MLAs can hold the government accountable. The rules should cover the following key areas: what can be included in omnibus bills; the freedom and powers of individual politicians to vote how they want on resolutions and bills; how members of legislature committees are chosen, and; what a Cabinet can do during an election campaign period until the next Cabinet is chosen.

“As long as the rules for the legislature are unwritten and unclear in B.C., the premier and ruling party will be able to abuse their powers and the legislature’s ability to hold the government accountable will be undemocratically restricted,” said Conacher.

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

Democracy Watch’s Stop PM/Premier Power Abuses Campaign

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BACKGROUNDER

8 Key Rules for Minority Government

1. Until the Lieutenant Governor has communicated directly with all the party leaders, the Lieutenant Governor will not make a decision about which party or parties (through either a formal coalition or legislative agreement) will be given the opportunity to govern first (i.e. to appoint a Cabinet and introduce a Speech from the Throne in the legislature);
2. The party that wins the most seats in the election will be given the first opportunity to govern, including in partnership or coalition with another party, unless the leaders of other parties representing a majority of members of the legislature indicate clearly to the Lieutenant Governor that they will not support that party and that they have agreed to form a coalition government or have agreed on a common legislative agenda;
3. Within 30 days after the Lieutenant Governor decides which party or parties will be given the first opportunity to govern, the Lieutenant Governor and the governing party/parties will open the legislature with a Speech from the Throne;
4. Even if the leaders of parties that represent a majority of members of the legislature do not indicate lack of support for the party that wins the most seats before that party’s Speech from the Throne, if they subsequently indicate lack of support for the Speech, the Lieutenant Governor will not allow the Premier-designate to prorogue the legislature before the Speech from the Throne is voted on by members of the legislature;
5. If a majority of members in the legislature vote against the Speech from the Throne, the Lieutenant Governor will give the opposition parties an opportunity to govern (through either a formal coalition or legislative agreement) before calling an election;
6. After the vote on the Speech from the Throne, the only vote in the legislature that shall be a vote of non-confidence is a vote on a motion that states: “The legislature does not have confidence in the government.”
7. If opposition parties introduce a motion of non-confidence in the governing party at any time after election day, the Lieutenant Governor will not allow the Premier to prorogue the legislature before the motion is voted on by the legislature, and;
8. If a majority in the legislature votes to approve a motion of non-confidence in the governing party before the next fixed-election date, the Lieutenant Governor will give the opposition parties an opportunity to govern (through either a formal coalition or legislative agenda agreement) before agreeing to any request by the Premier that the Lieutenant Governor call an election.

The following op-ed by Democracy Watch Co-founder Duff Conacher was published in shorter form by Maclean’s magazine on May 10, 2017

After an election in which democracy issues were a major focus, a vote split between the B.C. Liberal, NDP and Green parties could lead to the first minority government in the province in 52 years, a development that would open the door to major democratic reforms. Recounts in some ridings, and absentee ballots that still need to be counted, mean the official results won’t be known for two weeks.

In any case, at best, the Liberals will likely have a one-seat majority, giving the opposition parties significant power. With the Liberals winning only about 41 per cent of the popular vote, and with only approximately 57 per cent voter turnout, the Liberals will also be hampered by the fact that only 23 per cent of eligible voters actually supported them.

A first order of business for all the party leaders should be to issue a public statement of agreement, along with the Lieutenant Governor, on a set of rules to prepare for a minority government. The rules should make clear: which party will get to try governing first; when the legislature will open; when it can be closed; what a vote of non-confidence is; when and how the opposition parties may get a chance to govern and; when and how the next election can be called.

Even if the final vote count gives one party a majority, these rules will help the legislature run fairly and democratically until the next election. England, Australia and New Zealand all enacted these rules, and others, years ago, and more than 80 per cent of Canadian voters want similarly clear rules to stop abuses.

Other priorities include: cleaning up the ethics rules and enforcement system; democratizing the political finance system; changing the voting system so that parties receive the same percentage of seats in the legislature as votes (and also freeing and empowering MLAs to represent voters and hold the government accountable); and other key transparency and accountability measures.

B.C.’s provincial political ethics law prohibits politicians from having even the appearance of a conflict of interest when making decisions that affect specific companies or individuals – a higher standard than other jurisdictions in Canada. What can cause an apparent conflict of interest is the key issue in a lawsuit Democracy Watch and the PIPE UP Network have filed challenging the B.C. Liberals’ approval of the Kinder Morgan Trans Mountain pipeline. The lawsuit asks the court to declare that Liberal Premier Christy Clark and her Cabinet ministers were in a conflict of interest that prohibited them from approving the pipeline because Kinder Morgan and pipeline-connected companies donated more than $630,000 to the B.C. Liberals over the past five years.

Several other businesses and business sectors that seek B.C. government contracts, or other favourable decisions, have donated hundreds of thousands of dollars to the Liberals over the past decade. In some cases, lobbyists for the companies made the donations and were reimbursed by the companies, and the NDP has also returned some donations that seem to have been made improperly. These donations are being probed by a special prosecutor and the RCMP.

As well, business lobbyists routinely work on B.C. Liberal campaigns, and union representatives routinely work on NDP campaigns. The details about who helped with the Green Party’s campaign are not known, and as a result it may escape the charge.

As a result, even if the B.C. legislature finally bans corporate and union donations, and limits individual donations, as both the NDP and Greens promised to do in their election platforms, key ethical questions will remain for party leaders.

In a landmark ruling in 1993, then-B.C. Conflict of Interest Commissioner Ted Hughes ruled that Minister Robin Blencoe violated the provincial political ethics law because he made a decision that affected the private business interests of two people who had helped him win election as an MLA a few years before. In 2009, the Federal Court of Appeal unanimously ruled on a situation involving a lobbyist raising tens of thousands of dollars for a Cabinet minister he was lobbying, writing that: “Where the lobbyist’s effectiveness depends upon the decision maker’s personal sense of obligation to the lobbyist…the line between legitimate lobbying and illegitimate lobbying has been crossed.”

These rulings have been largely ignored in recent years in B.C. The question now is what will the courts do with the lawsuit concerning the Kinder Morgan pipeline approval? And what will the courts, and B.C.’s Conflict of Interest Commissioner, do when faced with future challenges of the Premier, Cabinet ministers, and possibly opposition party leaders making decisions that help their party’s big money donors, and lobbyists who helped on their campaigns?

Depending on how the courts rule, the Kinder Morgan lawsuit may end up disclosing details about how much pipeline-connected companies helped the Liberals fundraise in recent years. However, some of the ways in which lobbyists have helped B.C.’s parties and politicians in the past will likely remain hidden forever.

Another democratizing step that B.C.’s parties could take is to require disclosure of everyone who helps with fundraising, campaigns and other activities that support candidates and parties every year, and before every election day so voters know.

Closing loopholes that allow lobbyists to hide their lobbying activities and communications, and strengthening the access-to-information law so that politicians can’t hide details about their decisions, would also help untangle the web of undue influence that currently affects B.C. politics.

No law enforces itself, especially laws that require powerful people to be honest, ethical and open about their actions and decisions. B.C. election, ethics, lobbying and transparency watchdog commissioners play a key role in ensuring good government laws are followed.

However, the commissioners all lack independence from the government, especially Conflict of Interest Commissioner Paul Fraser whose son works for Premier Clark’s Cabinet. It would help to change the appointment process for these watchdogs by having an independent commission conduct a public, merit-based search process to come up with shortlist of two or three candidates for each commissioner post from which the legislature would have to choose. The Ontario government and the United Kingdom use this process to appoint its provincial judges, and their systems are considered to be world leading.

The good government watchdogs must also all be required to conduct random, unannounced audits to ensure everyone knows there is a high chance of being caught if they violate any of the rules. As well, to ensure that all good government watchdogs enforce rules properly and effectively, anyone who questions any of the watchdogs’ rulings must have a right to appeal to the courts.

One would think that this right would already exist, but Democracy Watch is currently appealing a B.C. Supreme Court judge’s ruling that no one can challenge rulings by B.C.’s Conflict of Interest Commissioner (or other commissioners), even if the Commissioner ignored the facts and the law in his ruling.

Finally, key transparency and enforcement tools that B.C. parties should enact are changes to strengthen the Auditor General’s powers and to establish a Parliamentary Budget Officer, and a whistleblower protection law that ensures anyone who reports wrongdoing by anyone in politics is protected from retaliation, and compensated if their allegations are proven true (as in the U.S. and many other countries).

While making these key changes won’t resolve the conflicts of interest that haunt B.C. politics, the sooner the changes are made the sooner B.C. will be able to move forward into a modern era of honest, ethical, open and democratic politics.

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

Democracy Watch’s Campaigns page

The following letter-to-the-editor by Duff Conacher, Co-founder of Democracy Watch, was published in shorter form in the May 8, 2017 edition of the Globe and Mail

The Globe and Mail’s editorial “Is the Senate finally accountable?” (May 4) states that the Senate established a code of ethics in June 2016 with new rules that require senators to uphold “the highest standards of dignity” and not act in a way that could reflect “adversely” on the senator or the senate.

In fact, the code was passed in May 2005, and those rules were added in June 2014. The code rules were also changed in April 2014 to free the Senate Ethics Officer from the control of a committee of senators and allow the Officer, finally, to investigate and rule publicly on any situation. Not surprisingly, the Ethics Officer first issued a public ruling after April 2014 — we will likely never know how many violations the committee covered up in past years.

The Ethics Officer recently ruled on Senator Don Meredith’s actions, and a committee of senators ruled that he should be expelled from the Senate. Your editorial argues that senators voting on the penalty Senator Meredith should face is “a reasonable solution.”

However, politicians are in a blatant conflict of interest when judging another politician, especially concerning the penalty for violating a code that also applies to them. Their bias problem is compounded by the fact that there is no specific penalty for Senator Meredith’s actions set out in the Senate’s code of ethics or in any law.

And what if only a very slim majority of senators vote in favour of expelling Senator Meredith? In every way, the Senate voting on Senator Meredith’s penalty is essentially a kangaroo court.

A much more reasonable solution, one that respects the rules of natural justice and the rule of law, would be for the Senate to add a sliding scale of penalties for violations of their code (to supplement the provisions set out in the Constitution), and to empower the Ethics Officer to impose the penalty for any violation.

Senator Meredith’s scandal, and the way the Senate is dealing with the scandal, provide yet more reasons why the Senate should be shut down.

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

Democracy Watch’s Government Ethics Campaign and Shut Down the Senate Campaign

Complaint argues some members not only violated ethics rules in their contract with the Finance Canada but also rules in the Conflict of Interest Act by taking part in Advisory Council decisions while their businesses were seeking favourable decisions from Finance Minister Morneau

Complaint also argues Minister Morneau is giving preferential treatment to the Quebec Caisse because its President Michael Sabia is on Morneau’s Council

Ethics Commissioner must recuse herself as she is serving at the pleasure of Cabinet

FOR IMMEDIATE RELEASE:
Monday, May 8, 2017

OTTAWA – Democracy Watch released the letter it sent today to federal Conflict of Interest and Ethics Commissioner Mary Dawson concerning the situation revealed in an article in last Friday’s Globe and Mail. The letter calling for an investigation and ruling on whether Finance Minister Bill Morneau violated the Conflict of Interest Act (COIA) by giving preferential treatment to the Caisse de dépôt et placement du Québec because the Caisse’s president, Michael Sabia, is serving as a member of Morneau’s Advisory Council on Economic Growth.

Democracy Watch’s letter also calls for an investigation of whether Mr. Sabia and other members of the Advisory Council, including Mark Wiseman of BlackRock Asset Management Canada Ltd., violated the COIA given that, as ministerial advisers to Morneau, they failed to remove themselves from decision-making processes when they were in an conflict of interest, as required by the COIA and their contract as a Council member.

In Democracy Watch’s opinion, based on the information in Friday’s Globe and Mail article and other research it has conducted, Mr. Sabia and Mr. Wiseman were in a conflict of interest when they took part in decisions concerning the Council’s recommendations for the creation of an Infrastructure Bank, given that the Caisse and BlackRock would benefit from the public funding provided to the bank. Mr. Sabia also had a conflict of interest because the Caisse is seeking federal government funding for its public transportation initiative in Montreal. Mr. Wiseman also had a conflict of interest because BlackRock was registered to lobby Finance Canada through to December 21, 2016. An investigation is needed to determine whether other members of the Council also work with organizations that would benefit from the Infrastructure Bank.

“It’s illegal under the federal ethics law for members of Finance Minister Morneau’s economic advisory council to be his advisers at the same time as the businesses and organizations they work for are trying to influence Minister Morneau’s decisions of Finance Canada and the federal government,” said Duff Conacher, Co-founder of Democracy Watch. “An independent investigation is needed to determine how many members of the council crossed this line.”

“The ruling on this situation must uphold the rule in the federal ethics law that people lobbying the federal government can’t also work for or with the government,” said Conacher. “If it doesn’t, the law will be gutted and it will become effectively legal for big business executives and lobbyists to be senior government officials.”

Also according to Friday’s Globe and Mail article, the federal government has hired a Toronto investment bank, Blair Franklin Capital Partners, under a special process to speed up the government’s review of the Caisse’s request for federal funding. Democracy Watch’s opinion is that it seems the Caisse is receiving preferential treatment from Minister Morneau because it is represented by Mr. Sabia who is on Minister Morneau’s Advisory Council.

Section 7 of the Conflict of Interest Act prohibits ministers and other public office holders from giving preferential treatment to any organization based on the organization’s representative. “An independent investigation is needed to determine whether Minister Morneau has given the Caisse preferential treatment because the Caisse’s president Michael Sabia is serving as his adviser,” said Conacher.

Democracy Watch’s letter also calls on Ethics Commissioner Mary Dawson to recuse herself from ruling on the complaint because the Trudeau Liberal Cabinet gave her the gift of a $100,000, six-month contract in mid-December. Under subsection 82(2) of the Parliament of Canada Act, the Cabinet is not required to consult opposition party leaders before appointing anyone to a six-month term like the one the Ethics Commissioner is currently serving.

“It would be outrageous if someone filed a lawsuit against a Trudeau Cabinet minister and Prime Minister Trudeau chose the judge to rule on the lawsuit and handed the judge a six-month contract worth $100,000, and it is equally outrageous for ethics complaints against Trudeau Cabinet ministers to be ruled on by an ethics commissioner Prime Minister Trudeau has chosen,” said Conacher.

Under the Annex 2 “Conflict of Interest Guidelines” in the Letter of Agreement each member of Morneau’s Advisory Council was required to sign with the Finance Canada, members were required to disclose any apparent conflicts of interest and to remove themselves from discussions that affected their or their business’ interests. According to Friday’s Globe and Mail article, no disclosures were made, and no recusals happened.

Beyond violating those guidelines, the COIA covers anyone who is “ministerial adviser” – defined as anyone, other than a public servant, who “occupies a position in the office of a minister” and provides policy advice to a minister on issues relating to his/her powers and duties, even if they don’t work full time and are not paid or compensated in any way.

Democracy Watch’s opinion is that the members of Minister Morneau’s Advisory Council are ministerial advisers (the details are in the letter) and are therefore covered by the COIA. While they don’t physically work in the office of Finance Minister Morneau, they are: working with and advising him directly; have access to confidential government information, and; have been described by Finance Canada as “working with the Government.”

Section 4 and subsection 6(1) of the COIA together prohibit public office holders, including “ministerial advisers” from making or taking part in decisions when they have an opportunity to further their own, their family’s or their friends’ private interests or to improperly further another person’s interests.

Democracy Watch’s opinion is that, based on the information in Friday’s Globe and Mail article, Michael Sabia and Mark Wiseman (and possibly also other members of the council) took part in Advisory Council decision-making processes in which they had the opportunity to further their own interests given their positions in their organizations meant that if their organizations benefited they would also benefit. They also violated the guidelines in their Letter of Agreement by taking part in those decisions, and as a result also improperly furthered the interests of their organizations.

Beyond Ethics Commissioner Dawson’s own conflict of interest, which means she must recuse herself from ruling on Democracy Watch’s complaint, another reason not to have Ethics Commissioner Dawson rule on the complaints is her negligently weak enforcement record since 2007 and lack of accountability (See Backgrounder below for details). Democracy Watch and the nation-wide Government Ethics Coalition continue to call for key changes to strengthen federal political ethics rules and the enforcement system (See Backgrounder for details).

Democracy Watch’s Stop Bad Government Appointments Campaign proposes that the way to ensure the appointment of a fully independent, merit-based Ethics Commissioner is to have a fully independent commission whose members are approved by all federal party leaders along with entities such as the Canadian Judicial Council do a public, non-partisan merit-based search for candidates, and to require the Trudeau Cabinet to choose from a short-list of candidates that the commission nominates, with approval still by the House of Commons.

Ontario uses this kind of independent appointment system to appoint provincial judges (with the advisory committee provides a shortlist of three candidates to the Cabinet). The The United Kingdom uses it to appoint judges and judicial tribunal members (like the Ethics Commissioner is) – 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.

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

Democracy Watch’s Government Ethics Campaign

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Backgrounder

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

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

Ethics Commissioner Dawson has greatly undermined various sections of the Conflict of Interest Act (COIA) in past rulings by creating loopholes in the COIA that do not exist – such as:

1. her April 29, 2010 “Cheques Report” ruling claiming that political parties are not “persons” under the COIA and therefore it was fine for Conservative MPs and Cabinet ministers to hand out government cheques with the Conservative Party logo on them;
2. her May 13, 2010 “Raitt Report” ruling that it was fine for two lobbyists who were lobbying Minister Lisa Raitt to help raise thousands of dollars for her riding association because, you claimed, that only helped the association not her;
3. her December 2016 ruling that it was fine for Health Minister Jane Philpott to use the driving service company of one of her former campaign volunteers because it was the only such company Minister Philpott claimed she knew about (a ruling that creates a loophole allowing any Minister or other senior government officlal to use the same invalid excuse Minister Philpott used to give contracts to their friends or other party loyalists);
4. her baseless decision that the COIA only applies to financial interests despite the fact that the COIA’s section 2 definition of “private interest” does not in any way even suggest that the definition of “private interest” is restricted to only financial interests, and;
5. her baseless decision that the COIA only applies to close personal friends (there is no such definition of “friends” in the COIA).

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

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

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

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

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