Despite Federal Accountability Act, many of the alleged questionable actions in the Mulroney-Schreiber affair are still legal

by Duff Conacher
Federal Conservatives and some political commentators have been claiming recently that everything has changed in Ottawa, and that the alleged scandalous actions of the Mulroney-Schreiber affair couldn’t happen now (or, at least, are now illegal) because of the Conservatives’ so-called "Federal Accountability Act" (FAA).  

 

Other politicians and commentators (such as former Prime Minister Jean Chrétien, former Opposition Party Leader Preston Manning, journalist Jeffrey Simpson, university professor Janice MacKinnon, and the Public Policy Forum,) are claiming that the FAA went too far, and has slowed down the federal government with new regulations that also discourage good people from working for the government.

 

In fact, because the Conservatives only included 30 of their more than 50 promised measures in the FAA (and have only implemented 24 of the 30), and because the FAA did not address dozens of other loopholes, it is still legal (or effectively legal because of lack of enforcement): to make unlimited donations to some political candidates; to give large gifts to federal politicians, to lobby in secret; to become a lobbyist soon after leaving office; to make patronage appointments; to hand out large contracts without a bidding competition, and; for politicians to make decisions in which they have a financial interest. (To see details about the Conservatives' broken FAA promises, click here -- To see details about the 85 loopholes that still exist in the federal government's accountability system, click here)

Unfortunately, the same highly questionable, undemocratic activities are also still legal in most provincial, territorial and municipal governments across Canada.

And while the FAA did make more changes than any similar law in Canadian history, it only requires a few public servants to do a couple of things more transparently (which doesn’t slow them down at all), and did nothing that would drive any good person away from working in the government.

Given that the devil is in the details of any law, let alone the 214-page FAA, it is somewhat understandable that the assessments of so many politicians and political commentators are so inaccurate.  At the same time, one would think that these people and organizations (at least the journalists) would feel some responsibility to stick to the facts.

So what are the devils in the details?  Concerning money in politics, the FAA banned any donations of money, property or services from corporations, unions and other organizations, and limited annual donations by individuals to $1,100 to each party, and another $1,100 combined total to each party’s riding associations.

The FAA also limited individual donations to each party’s election candidates to a combined total of $1,100 during each election, whether or not the candidate uses the donation for their campaign.  

However, it is still legal to donate an unlimited amount of money, property or services in secret to a nomination race or party leadership candidate (as long as the candidate doesn’t use the donation for their campaign).  Such a donation would not be a bribe or a violation of federal ethics rules because the Criminal Code only covers bribes to elected politicians, as do the ethics rules.

And while federal ethics rules prohibit gifts that could influence a politician or government official, they are only required to disclose to the Ethics Commissioner things they own worth more than $10,000, and the Commissioner does not audit the disclosure statements.  As a result, it is very easy for an federal politician or official to hide a gift worth up to $9,999.

It is also very easy to get around the rules on secret, unlimited donations because the federal government has not yet implemented the United Nations Convention Against Corruption measures that would ensure monitoring of the bank accounts of politicians and other government decision-makers for suspicious transactions.

But, you may be saying, at least we can track who is lobbying these people so we can keep an eye on their relationships.  Unfortunately no -- secret lobbying is still legal.  If you work at a for-profit corporation, you don’t have to register as a lobbyist if you spend less than 35 days actively lobbying every six months.  You also don’t have to register if you do unpaid lobbying (for example, as a retired executive or as a favour for a friend).  And, like the Ethics Commissioner, the Registrar of Lobbyists (who is a lapdog controlled by a Cabinet minister) doesn’t do regular audits to prevent undisclosed lobbying.

As well, lobbyists are still not required to disclose details of exactly whom they are lobbying, nor how often, so it isn’t even possible to determine whether a registered lobbyist has a close relationship with a particular politician, staff person, or official.

Well, you may be thinking, at least the revolving door has been shut down so that former politicians and government officials are not lobbying their former colleagues in government.  Sorry, but no.  While the FAA bans former Cabinet ministers and top government officials from becoming a lobbyist for five years, ministers can exempt their staff from the ban, most government officials can start lobbying after one year, and all other federal politicians and their staff can start lobbying the day after they leave office.

In addition, the ban is only on becoming a lobbyist (ie. a person who is paid to contact or arrange meetings with politicians, their staff and government officials to try to influence their decisions).  Everyone in the federal government can still, the day after they leave government, be paid to give advice in secret to anyone about how to influence the government’s decisions (or do any other job in Canada).

OK, you may claim, but at least Cabinet ministers can’t stack the boards of Crown corporations, agencies, boards, commissions and tribunals with unqualified party loyalists, former staff, or friends.  Sad to say, but such patronage and cronyism is still legal because the federal Conservatives broke their promise to establish an independent Public Appointments Commission (which would have advertised positions and used a merit-based process to select appointees).

Alright, you may think, but at least federal politicians and officials can’t be involved in decisions if they have an interest in the outcome, especially if they have a financial interest.  If only it were so, but in fact the FAA cut the rule that prohibited Cabinet ministers and top officials having even the appearance of a conflict of interest (and, as a result, everyone in the government can take part in any discussion or vote on general matters or matters that affect a lot of Canadians).

Yes, that’s right.  A finance minister could own $1 million of one bank’s stock and still be responsible for changes to the Bank Act (because the Act affects all banks); an environment minister could own $1 million of one polluting company’s stock and still be responsible for changes to the Environmental Protection Act (because the Act affects all polluting companies), etc.

Really?  So ministers can make policies that help themselves, but at least the government can’t hand out contracts without a bidding competition, right?  Well, generally no, but one big exemption to this rule allows government officials to designate one company as the only company that can provide a specific product or service (and, since the Conservatives were elected, this exemption has been used to hand out billions in military hardware contracts without any competitive bidding process).

OK, one last try, you say, at the very least federal politicians and government officials can be penalized if they lie about or hide such activities.  Sorry to disappoint you even further, but the FAA actually cut the rule that require Cabinet ministers, their staff and senior government officials to be honest, and the FAA didn’t contain the eight promised measures that would have made the federal government much more transparent.

In other words, the federal government’s accountability system still allows many highly questionable, even scandalous, activities, and another, stronger Accountability Act is needed to give Canadians the honest, ethical, open, representative and waste-preventing federal government they want and deserve (and every provincial, territorial and municipal government needs to enact similar measures).

So, if you want such a government, get in touch with your local politician while most of them are home for a holiday, and tell them you know they can’t be held accountable in many ways, and that you won’t vote for them next time around unless they fully and completely clean up their government.

 

 

 

[The following editorial was] submitted to the Globe and Mail in response to op-eds by Preston Manning and Norman Spector published in the newspaper in December, and an even shorter, letter-length version of the op-ed was also submitted to the Globe and Mail, but the newspaper refused to publish either the op-ed or the letter even though they both corrected factual errors in Mr. Manning's op-ed.

 

 

Preston Manning's fixes would weaken political ethics enforcement and, similar to Norman Spector's fixes, would leave loopholes open Preston Manning’s proposed priority three steps for fixing the political ethics deficit have all been tried for the past few decades, with little measurable effect (“How do we fix the ethics deficit” - Globe and Mail, December 3, 2007).  In contrast, Norman Spector proposes two key anti-corruption measures to stop "I scratch your back, you scratch mine" relationships between lobbyists and public officials ("Government of the people who buy the people" - Globe and Mail, December 10, 2007).

However, both of their proposed plans would leave open many loopholes that allow dishonest, unethical, secret, unrepresentative (and, as a result, often wasteful) political activities.

The fact that an experienced ex-politician like Manning proposes the steps he has proposed reveals clearly that the attitude of elite political insiders, and former insiders, is a key part of the Canada’s ongoing government ethics problems.  

Thankfully, the federal government has taken a few different steps toward ensuring effective ethics enforcement since 2004, but unfortunately they have also weakened rules, and also left dozens of loopholes open, and enforcement agencies hindered by lack of powers, and so the system still essentially allows everyone in the federal government to be dishonest, unethical, secretive, non-representative, and even wasteful.

Some provincial and territorial governments have also taken steps in different directions than those proposed by Mr. Manning, but loopholes in rules and weak enforcement agencies still undermine their accountability systems.

Mr. Manning’s top priority is “political education” through programs that, he lets us all know, the Centre he heads up just happens to be developing right now (sign-up quickly classes are filling up!).  In making this proposal, did Mr. Manning at all think that readers might view it as ironic, possibly even unethical, for him to promote his own organization in his column about preventing conflicts of interest?

Is he aware that the federal government, and provincial and territorial governments, and their ethics enforcement agencies, and political parties at all levels, all have internal education programs that have included courses about government ethics rules (including, of course, election rules) for decades?

Given the little effect past training has had in improving compliance with expected ethics standards, it is highly questionable that further training would be helpful, especially if it is paid for by governments but delivered at the usual high-cost consulting rate by non-governmental organizations like Mr. Manning’s Centre whose specific aim is to “inculcating the values and principles of democratic conservatism” in all Canadians through programs like seminars on “’Navigating the Faith/Political Interface’ designed to assist [only?] faith-oriented citizens.”

Mr. Manning’s second proposal is that the federal Justice Department and provincial attorneys-general (ie. politicians) and deputy-attorneys-general should enforce their own government’s and political system’s ethics standards, not independent agencies such as, at the federal government level, Elections Canada, the Conflict of Interest and Ethics Commissioner, the Auditor General, the Public Sector Integrity Commissioner, the Director of Public Prosecutions, the Information Commissioner, the Privacy Commissioner and the federal Conservatives’ promised Commissioner of Lobbying.

Is Mr. Manning completely unaware that the few, loophole-filled ethics laws and rules that existed between 1867 and 2004 were enforced by politicians and their hand-picked deputy ministers (who could be fired or shuffled for any reason at any time).  Given the many political ethics scandals throughout that time period, scandals which he admits are an ongoing problem, how can he believe that such self-enforcement has been effective in any way?
Mr. Manning views fully independent, fully empowered enforcement agencies as an unnecessary “add-on” to government when in fact they are independent of politicians, as opposed to controlled by them, and therefore when more immune to political pressure to cover up wrongdoing.

Mr. Manning also claims that in the early 1990s it became popular to draft “new codes of conduct for politicians and public servants” and to appoint “ethics commissioners or watchdogs to enforce them” but they “did nothing to prevent the sponsorship scandal or the ethical laxity that permitted it.”

With all due respect, Mr. Manning must have been in a different Ottawa than the real one during the 1990s, and must be unaware that the sponsorship scandal activities occurred from 1996 to 1999.  

In fact, only one code of conduct was created in the early 1990s, for federal public servants, and no watchdog who had independence from Cabinet was established to enforce it until 2007 (as a result, there was no place for sponsorship scandal whistleblower Allan Cutler to file a complaint about broken rules in 1996).

The ethics rules for Cabinet ministers, their staff, Cabinet appointees, and senior government officials were created by then-Prime Minister Brian Mulroney in 1985, but were enforced by prime ministers until spring 2004.  

Does Mr. Manning not remember that more than 20 Cabinet ministers and/or their staff violated ethics rules between 1994 and 2004, and in all but two cases the lapdog Ethics Counsellor (who only advised the prime minister and was completely under his control) rubber-stamped the activities as ethical?

And the ethics rules for MPs were not in effect until October 2004, and for senators were not in effect until spring 2005 (and the Senate Ethics Officer is still completely under the control of a committee of senators (he cannot even investigate a complaint without the committee’s approval, and reports back in secret to the committee)).

Meanwhile, at the provincial and territorial level, little changed from the early 1990s until now in terms of government ethics rules, with only four provinces only creating ineffective lobbying disclosure registries in the late 1990s (the new territorial government of Nunavut being the exception, as its creation included enacting government ethics rules).

As his third priority step, Mr. Manning uses the classic political tactic of blaming the victim.  Despite overwhelming support by Canadians for effective, loophole-free government ethics rules and strong enforcement, as shown in every survey conducted in the past two decades, according to Mr. Manning the public is to blame for the lack of ethics in politics.

True, as Mr. Manning points out, some Canadians do lie to each other, and some cheat and steal.  But it is quite a leap of logic, and evidence, to claim that therefore Canadians deserve it when politicians and government officials lie, cheat or steal (especially given that Canadians are required by law to pay taxes that pay the salaries of people most of whom they did not even vote into office).

So how do we actually fix the political ethics deficit?  How about doing what has proven to be most effective throughout the history of trying to regulate the behaviour of humans in large organizations.

Norman Spector proposes the key steps of banning political activity by lobbyists, and banning donations by lobbyists to any public official, including after the official leaves office.  

However, both he and Mr. Manning fail to address other loopholes in all Canadian governments that history has shown will be exploited and that allow: dishonesty in politics; secret unlimited donations to all types of political candidates; secret trust funds by politicians, riding associations and parties; secret lobbying; excessive secrecy overall; patronage appointments; party-switching by politicians, and; that allow politicians, their staff and government officials to be involved in policy-making processes in which they have a direct financial interest, and to become lobbyists soon after they leave office? (To see details about the 85 loopholes that still exist in the federal government's accountability system, click here)

To give just one example to show how loophole-filled the system still is, despite the measures in the FAA, Karlheinz Schreiber and Brian Mulroney would still not be required to be publicly listed as in-house corporate lobbyists (as long as they lobbied less than 36 days every 6 months), and Schreiber could still give $300,000 in secret to some federal candidates, and to all federal politicians, political staff and public servants right after they leave office, either as a donation or as payment for lobbying services (and could give the same amount in secret to trust funds maintained by every federal political party and their riding associations).  

In addition, neither Mr. Manning nor Mr. Spector mention strengthening enforcement and penalties.  In the area of dishonesty, for example, if Canadians lie on their taxes, or welfare applications, or if corporate executives lie in their financial statements or company advertising, others can use special hotlines to report the dishonesty, independent enforcement agencies will very likely investigate, and the penalties are quite severe (including high fines and the possibility of time in jail).

In complete contrast, not only is dishonesty in politics legal: there are no definite penalties for federal MPs, senators or public servants who violate any of their ethics rules (or for anyone who violates the federal open government law); the Registrar of Lobbyists is under the control of a Cabinet minister who is lobbied (and will continue to be as long as the Conservatives continue to break their promise to establish an independent Commissioner of Lobbying); the Ethics Commissioner doesn’t audit the financial statements of federal politicians and government officials (even though the statements are the basis for determining if they are in a conflict of interest); the Information Commissioner and Auditor General can only make recommendations not binding orders, and; if the Prime Minister violated the most fundamental ethics rule the maximum possible penalty is $500

As well, the federal Conservatives broke their promise to establish an independent Public Appointments Commission, and as a result patronage and cronyism continues, and Cabinet ministers continue to have the power to appoint inquiry commissioners even when the inquiry is about their own actions?

And again, almost all provincial, territorial and municipal governments have similarly weak ethics enforcement systems.

In other words, in complete contrast to Mr. Manning’s prescription, it is the attitude of politicians, their staff, and government officials that needs to be changed, because for the past 140 years, they have been resisting the measures, enforcement systems, and penalties needed to have ethical politics and governments in Canada.  

These people know all the loopholes in the rules; they know what enforcement system and penalties would effectively discourage them from breaking the rules, and; they are the ones who have the power to make the changes to give Canadians the honest, ethical, open, representative and waste-preventing politics, and governments, they clearly deserve.




For more details, go to Democracy Watch's Clean Up the System page