Foreign “proxies” allowed to spend unlimited funds in secret in nomination and party leadership contests, including on disinformation campaigns, and to hide their funders, and to fundraise and lobby in secret, and high donation limits make it easy to funnel big money amounts into our system

Enforcement entities lack independence from ruling party Cabinet, are slow to act, in effective, secretive and unaccountable

FOR IMMEDIATE RELEASE:
Wednesday, November 13, 2024

OTTAWA – Today, Democracy Watch released the final submission it recently filed with the Hogue Inquiry into Foreign Interference in Canadian politics calling for key changes to close huge loopholes that allow for secret, undemocratic and unethical spending, fundraising, donations, loans, lobbying and disinformation campaigns by foreign “proxies”, and to strengthen enforcement and penalties.

Democracy Watch intervened in the Inquiry and submitted 6 policy papers to the Hogue Inquiry, as well as a report on the loopholes in Bill C-70, which was enacted by Parliament in June.  The final submission contains links to all 6 policy papers, and summarizes the key points and recommendations for key changes set out in the papers. Democracy Watch was represented at the Inquiry by Wade Poziomka and Nick Papageorge of Ross & McBride LLP.

Two of DWatch’s policy papers, one on how to stop funneling of foreign big money donations and loans through “proxies”, and the other on how to stop third-party “proxy” interference by businesses, organizations and individuals, also detail the loopholes in Bill C-65 that is under review by the House Procedure and House Affairs Committee.

DWatch’s policy paper on Canada’s undemocratic, unethical donation and loans calls for the following key changes to stop the secret funneling of foreign big money through “proxies”:

1. Lower the annual donation and loan limit to $75 which is the amount that 75% of donors give, as DWatch’s study of donations from 2016-2022 showed (to match Quebec’s world-leading $100 donation limit);

2. Prohibit financial institutions from making loans (if parties can prove they need more funds than they can raise from voters in $75 donations, establish matching and per-vote public funding and a public loan fund to close the gap);

3. Prohibit giving fake jobs, compensation or other benefits or advantages to anyone who is considering running in a nomination or party leadership contest, and to contestants, election candidates or political party officials;

4. Prohibit donations to nomination contestants, candidates and electoral district associations (EDAs) from outside the electoral district;

5. Require disclosure of all the identity of all donors/lenders and the amount donated/loaned, and spending, before voting begins, and require quarterly disclosure between elections of donations, loans and spending by EDAs and parties, and;

6. Require public disclosure of staff, top-level volunteers, fundraisers (and amounts raised and how) by nomination contestants, candidates, EDAs and parties, and disclosure of all volunteers to Elections Canada.

“The only way to stop foreign big money from flowing into Canada’s political finance system is to stop big money donations and loans,” said Duff Conacher, Co-founder of Democracy Watch.  “As long as big money donations and loans are allowed, it will be easy for foreign governments, businesses and organizations to funnel large amounts of money secretly to nomination and party leadership contestants, election candidates, riding associations and parties.”

Democracy Watch’s two policy papers, one on third parties and one on lobbying and ethics rules, call on the Inquiry to recommend the following key changes to stop foreign governments from funding and using third-party businesses, interest groups and individuals as “proxies” to interfere in and influence Canadian elections and policy-making processes in secret, undemocratic and unethical ways, including through secret, unethical lobbying and unethical interests:

1. Require third parties to register and disclose all their donors and spending if they spend more than $100 during a nomination contest, party leadership contest, or during a pre-election period, election period or policy-making process, including trying to influence political party officials, and prohibit them from colluding with contestants;

2. Only allow a third-party individual to spend a very small amount, and citizen groups to spend an amount based on how many voters support them, and prohibit businesses from spending at all, during contests, elections and policy-making processes;

3. Only allow citizen group third parties to spend money raised from Canadian citizens and permanent residents;

4. Close all the loopholes that currently allow for secret lobbying, and prohibit lobbyists from sponsoring interns in MP offices;

5. Reverse the changes made to the Lobbyists’ Code last year so lobbyists will again be prohibited from fundraising, campaigning and assisting politicians and party leaders, and;

6. Prohibit politicians, their staff, Cabinet appointees and government employees from having outside jobs, secret investments, and from accepting gifts or other benefits, and prohibit them from taking part in decision-making processes when they have even an appearance of a conflict of interest.

“Loopholes in key laws mean third-party businesses, organizations and individuals are currently allowed to spend an unlimited amount of money in secret supporting or opposing nomination and party leadership contestants, to hide the identity of their funders, and to lobby Cabinet ministers, government officials, politicians and political party officials in secret, unethical ways,” said Duff Conacher, Co-founder of Democracy Watch.  “These loopholes must be closed or third parties will continue to be used as fronts for foreign governments and entities to interfere in and influence Canadian elections and government policy-making processes in secret, unethical and undemocratic ways.”

DWatch’s policy paper on disinformation calls for the following key measures:

1. Prohibit all false claims made by anyone at any time anywhere about elections and other processes in Canada, including false election promises by parties and party leaders;

2. Prohibit anonymous social media accounts and Internet sites;

3. Prohibit media and social media outlets from allowing posts with false claims, including fake videos and audio files;

4. Have complaints about disinformation go to federal agencies, boards, commissions and tribunals (ABCTs) that already have expertise in various issue areas;

5. Empower the ABCTs to order Internet and social media companies to remove false posts and webpages, and to block sites that refuse to remove or prevent false claims from being posted on their site;

6. Empower the ABCTs to penalize misleaders with significant fines;

“The right to freedom of expression does not include the right to mislead voters, and given false claims harm elections and political processes, they should be clearly prohibited in the same way it is illegal to yell fire in a crowded theatre when there is no fire, with strong penalties for misleaders,” said Duff Conacher, Co-founder of Democracy Watch.  “It is very important to establish enforcement entities that are completely independent of the government and all political parties so that they can be trusted to make rulings penalizing false claims.”

Democracy Watch’s policy paper on strengthening enforcement recommends the following key changes:

1. Establish fully independent, merit-based appointment processes for all key watchdogs, and have them all serve for one fixed term of 5-7 years, fully independent from Cabinet with dismissal only for cause;

2. Establish a new, fully independent police force to take over from the RCMP and FINTRAC enforcement of anti-foreign interference, anti-corruption, anti-money laundering and proceeds of crime laws;

3. Require all the watchdogs to issue a public notice summarizing the reasons for every enforcement decision they make;

4. Require all the watchdogs to do regular, random, unannounced audits and inspections;

5. Require all of the watchdogs to investigate and rule on allegations of wrongdoing in a timely manner;

6. Empower all the watchdogs to impose any penalties for violations, and require them to impose a penalty for every violation, and increase the penalties to discourage violations;

7. Allow anyone to challenge in court any decision of any watchdog;

8. Make Elections Canada the auditor for nomination contestants, election candidates, EDAs, parties, party leadership contestants and third parties, and;

9. Establish a strong, best-practice whistleblower protection system for all wrongdoing related to foreign interference.

“Laws don’t enforce themselves, and unfortunately the inquiry is so far largely ignoring that the ruling party Cabinet and opposition politicians choose their own anti-foreign interference watchdogs, and many are Cabinet-controlled as well as underfunded, ineffective, secretive, slow to act and unaccountable,” said Duff Conacher, Co-founder of Democracy Watch.  “Canadians can only hope the inquiry will, in the end, make strong recommendations for key changes to make enforcement of all the key laws fully independent, well-resourced, effective, transparent, timely and accountable, and to establish a new, fully independent anti-corruption and anti-foreign interference police force.”

Click here to see the Backgrounder that summarizes all the loopholes and weak enforcement problems that make foreign interference legal and easy to do across Canada at every level of government.  Click here to see summary list of 17 key changes that need to be made to stop foreign interference.

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

Democracy Watch’s Stop Foreign Interference in Canadian Politics Campaign and Honesty in Politics Campaign and Money in Politics Campaign and Stop Secret Unethical Lobbying Campaign and Government Ethics Campaign and Stop Bad Government Appointments Campaign