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Federal Court rules Lobbying Commissioner was wrong to let Aga Khan off the hook for Bahamas trip gift to PM Trudeau

Court orders Commissioner re-examine Aga Khan Foundation’s CEO for failing to stop the gift, and Aga Khan for not registering as a lobbyist

Court also broadens scope of Lobbying Act to cover all board members of businesses and other organizations who receive any benefits, not just pay

Tuesday, April 16, 2019

OTTAWA – Today, Democracy Watch released the ruling it has received from the Federal Court in its case filed in January 2018. The case challenged the ruling in September 2017 by former Commissioner of Lobbying Karen Shepherd that the Aga Khan’s Bahamas trip gift to Prime Minister Trudeau was legal. The ruling was issued on March 29, 2019. Democracy Watch was represented by Ottawa-based lawyer Sebastian Spano.

Commissioner Shepherd’s ruling was that even though the Aga Khan was lobbying the PM, and is chair of the Aga Khan Foundation, which is registered to lobby the PM, because someone at the Foundation claimed the Aga Khan wasn’t paid to lobby for it, the Aga Khan was not covered by the Lobbying Act nor the Lobbyists’ Code of Conduct and so his gift was legal.

Democracy Watch argued before the court that Commissioner Shepherd failed to investigate whether the Aga Khan was compensated in any way, and also failed to determine whether the Foundation’s senior officer Khalil Shariff had violated the Code’s principles requiring him to ensure everyone at the Foundation upholds the highest ethical standards and the spirit of the Act and Code.

The court agreed with Democracy Watch, calling Commissioner’s Shepherd’s ruling “unreasonable” because it was a narrow, technical, and targeted analysis that is lacking in transparency, justification, and intelligibility when considered in the context the Commissioner’s duties and functions (para. 146). As a result, the court ordered the Commissioner of Lobbying (now Nancy Bélanger) to re-examine the actions of everyone at the Aga Khan Foundation with “a broad view of the circumstances.”

A key part of the ruling is it requires the Lobbying Commissioner to investigate and issue a public ruling whenever there are “potential compliance questions” (para. 133) concerning the actions of anyone, or any business or organization that relate to the requirements of the Lobbying Act or Lobbyists’ Code (paras. 127-134). In the past, the Lobbying Commissioner has regularly ignored situations that raised such questions.

Another key part of the ruling greatly broadens the scope of the Lobbying Act to cover board members of businesses and other organizations who are compensated in any way or receive “anything of value” – including even the value of being given a position as a member of board (paras. 134-143). Up to now, the Commissioner of Lobbying interpreted the Act as requiring board members to disclose their lobbying in the Registry of Lobbyists only if they were paid more than their expenses. The court rejected that narrow interpretation.

There are 394 businesses and 581 organizations currently registered in the Registry, and so board members who lobby for any of these businesses or organizations are now required to disclose their lobbying in the Registry.

Democracy Watch filed its own complaint in December 2018 with the Commissioner of Lobbying about the Aga Khan’s Bahamas trip gifts to Prime Minister Trudeau in 2014 and 2016, and Liberal Cabinet minister Seamus O’Regan in 2016, and now calls on the Commissioner of Lobbying to ensure that complaint is fully, and independently investigated and ruled on publicly.

Democracy Watch has requested that new Commissioner Nancy Bélanger delegate all investigations to someone who is independent of her and all political parties, given that she was handpicked by Prime Minister Trudeau through a secretive, dishonest process. Democracy Watch is currently challenging her appointment in Federal Court.

“The Federal Court ruling confirms that former federal Lobbying Commissioner Karen Shepherd was a lapdog whose enforcement of the lobbying law and code was negligently weak,” said Duff Conacher, Co-founder of Democracy Watch. “Thankfully, the ruling not only closes secret, unethical lobbying loopholes that Commissioner Shepherd negligently created, it also essentially orders the new Commissioner to enforce the lobbying law and code much more broadly and strongly.”

“Given the Federal Court ruling, Democracy Watch calls on the Lobbying Commissioner to ensure a full, independent investigation into the Aga Khan’s Bahamas trip gifts to Prime Minister Trudeau and Liberal MP Seamus O’Regan,” said Conacher. “Democracy Watch’s opinion is, based on the facts and the law and the ruling, it is very likely that the senior officer of the Aga Khan Foundation violated the lobbying code by allowing the Aga Khan to give the trip gifts.”

Given Lobbying Commissioner Karen Shepherd’s overall weak record of enforcement, Democracy Watch has also requested that the Auditor General conduct a performance audit of her time in office.

“Lobbying Commissioner Shepherd issued only one public ruling in the two years after the Liberals were elected, and she also let almost everyone off since 2008, so the Auditor General should audit her negligently weak record,” 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 Unfair Law Enforcement Campaign and Stop Bad Government Appointments Campaign