[Democracy Watch Logo] [Op-ed]

Donations of money, property and services continue to corrupt Canadian politics because of loopholes in laws and lack of effective enforcement and penalties

Set out below is an op-ed by Democracy Watch Coordinator Duff Conacher that was published (in edited form) on the Straightgoods.com website on February 19, 2008, and on February 25, 2008 in the Hill Times and in the Kitchener-Waterloo Record.and on March 14, 2008 in the Sudbury Star.

The federal Liberals’ recent promotion of an illegal fundraising scheme, along with the federal Conservatives’ court battle with Elections Canada over spending during the last federal election, and the widespread ongoing involvement of lobbyists in all political parties, reveals just how much the attitudes of the inside-Ottawa-elite and wannabe-elite are the main barrier to having an honest, ethical, open, representative and, therefore, waste-preventing federal government.

While representatives of parties from across the political spectrum point accusing fingers at each other, none of them have focused on cleaning up the “I’ll scratch your back if you scratch mine” system that has legalized trading favours as the basis for most decisions made in Ottawa (and in provincial and territorial capitals, and in many cities and towns) in the past 140 years since Canada became a country.

It’s as if they have never heard the common-sense sayings “Money talks” and “He who pays the piper calls the tune.”

Four years have passed since the first law limiting annual donations of money, property and services to federal political parties and riding associations was passed by the then-Liberal majority government; three years have passed since ethics rules for MPs and senators came into force, and one-year has passed since the Conservatives’ so-called “Federal Accountability Act” (FAA) banned any donations from corporations, unions or other organizations and lowered the annual limit on individual donations. (To see details about the Conservatives' broken FAA promises, click here)

Yet the Liberals recently advertised an auction offering the highest bidder (whether an individual or corporations) the opportunity to play golf with Liberal MP Paul Martin, attend a hockey game with Liberal MP Ken Dryden, or play tennis with Liberal by-election candidate Bob Rae and his brother John, Executive VP at Power Corporation (which lobbies the federal government).

The Liberals changed their plans when the auction was questioned in media articles, and ended up limiting bids to individuals up to their annual party donation limit of $1,100.  However, the Liberal MPs expressed no concerns about selling access to themselves for cash, a clear violation of ethics rules that prohibits MPs from accepting any such gift or benefit other than the compensation they receive as an MP (in particular gifts that could compromise their integrity) and that require MPs to uphold the highest standards, to maintain and enhance public trust and confidence in their integrity, to avoid real or apparent conflicts of interest, and to act in a manner that bears the closest public scrutiny.

Meanwhile, the Conservatives are arguing in court that it was legal for them to exceed election spending limits by giving dozens of their 2006 election candidates tens of thousands of dollars each so that those candidates could pay the party headquarters for regional TV ads that only mentioned the local candidate at the end of the ad.  Elections Canada refused to reimburse this part of these candidates’ spending, making the very reasonable claim that the ads were mostly national party, not local candidate, spending.

While it is normal for all parties to print campaign materials centrally and then sell them to local candidates, and while it is also normal for parties to give money to many candidates who have trouble raising money locally, the Conservatives’ scheme increased the scope of these activities greatly. 

If the Conservatives’ were putting honesty, ethics and openness first, they would have checked in advance with Elections Canada to determine whether their scheme complied with the rules.  In the end, the court will very likely rule that only about 20 percent of the ad costs can be claimed by the local candidate, and that the party should have claimed the rest of the costs.  As a result, the Conservatives will be found guilty of violating election spending limits.

The other federal parties are not clean either, as in the very recent past lobbyists have worked on their party leadership and election campaigns, they have received huge donations of money (mainly from unions), and questions have also been raised about transfers of funding from party headquarters to local candidates.

And, of course, many, if not most, corporate lobbyists and citizen groups are not clean either, as it takes two to tango (and to scratch each other’s back).  Whether making their donation by working with parties or politicians, or by organizing fundraising events, or by wining and dining politicians, their staff, and government officials, many use favours to increase their chances of receiving favours (including support for their proposals).

These rampant unethical attitudes, and actions, are so widespread that, believe it or not, Democracy Watch itself had the problem in the past of a board member who saw nothing wrong with volunteering for a federal junior Cabinet minister while also lobbying them (the board member’s excuse was that he was just “building a relationship” with the minister whom he claimed was a “good guy” (even after the minister cashed in after leaving office and became a corporate lobbyist)).  Needless to say, that person was soon afterwards no longer a Democracy Watch board member.

Unfortunately, loopholes in federal laws and rules and weak enforcement and penalties, along with lack of interest by some in the media, continue to encourage these kinds of unethical actions.  Because the Conservatives’ broke their election promise to limit donations to all candidates through the FAA, it is still legal for anyone to make an unlimited donation of money, property or services to a nomination race or party leadership candidate, and the donation never has to be publicly disclosed (as long as the candidate uses the donation for personal reasons as opposed to for their campaign).

As well, federal MPs only have to disclose to the federal Ethics Commissioner (and, in part, the public) things they own worth $10,000 or more, making it easy for a lobbyist to give them a gift worth up to $9,999.  Senators and most government officials don’t even have to disclose anything publicly about what they own or owe.

And while the FAA finally banned MPs from having their own secret trust fund, MPs can still maintain a secret trust fund for someone else, and riding associations and political parties can also maintain secret funds.

In addition, anyone (including corporations and other organizations) can still loan an unlimited amount of money to anyone in the federal government.  Current Bill C-29, if it passes, won’t set limits on loans, but instead bans loans from anyone except a federal financial institution.  As a result, many federal politicians may have a large loan from one of Canada’s big banks, trust companies or insurance companies in the future, putting them in a conflict of interest given that the federal government regulates these financial institutions.

Many of the federal parties have been in the past beholden to the big banks because of such loans, and the federal Liberals continue to depend on the banks.

Another huge loophole is the lack of a requirement to disclose who is volunteering for parties, riding associations and candidates.  While it is illegal for a corporation or other organization to pay employees to volunteer, and illegal for an individual to donate their services above the donation limit, without disclosure there is no way Elections Canada can ensure these rules are being followed.

And even though donations of money are required to be disclosed, Elections Canada lacks the needed legal powers, and mandate, to audit parties, riding associations and candidates annually to confirm that their disclosure statements are complete, accurate and comply with donation limits.  Low fines for violators do little to encourage compliance.

Concerning the role of lobbyists in the favour-trading system, while their ethics rules prohibit them from using improper means of influence such as doing favours for politicians and government officials, the federal Registrar of Lobbyists is still a lapdog controlled by a federal Cabinet minister and continues to refuse to enforce these rules.

On the other side, federal party leaders are still giving special access to people who donate the most to their parties, including meeting with them personally and at special events, in part because the federal Ethics Commissioner continues to fail to enforce rules banning such access-for-cash activities.

All party leaders keep their MPs’ supporting this corrupt system by rewarding those who take part with cherished appointments (including being appointed the candidate in a riding) and (as detailed above) with donations from party headquarters for their election campaigns.  If Prime Minister Stephen Harper hadn’t broken his election promise, the federal Conservatives would have at least proposed a law stopping party leaders from interfering with nomination races, but a further law is also needed limiting donations from parties to candidates. (To see details about the Conservatives' broken promises, click here)

Combined with ethics rules that allow federal politicians to take part in, and make, decisions in which they have a financial interest (as long as the decision applies broadly), loophole-filled rules that still allow still allow secret lobbying and allow politicians and government officials to lobby the day after they leave office, and whistleblower protection that doesn’t even apply to all government officials (let alone political staff and members of the public), all of these loophole-filled, poorly enforced rules essentially legalize unethical, undemocratic ways of influencing everyone in the federal government. (To see details about the 90 loopholes that still exist in the federal government's accountability system, click here)

An overall symbol of the closed-eyes-and-ears, hold-your-nose attitude of many people in federal politics is Bill C-25 which was passed very quickly with no comment from any federal party or media in December 2006.  The bill fulfills one part of the United Nations Convention Against Corruption (which Canada signed in May 2004) by requiring Canadian financial institutions to track the bank accounts of foreign politicians and decision-making government officials (including judges and the heads of Crown corporations) and their family members for suspicious deposits. 

To comply with the Convention, this law should also have applied to Canadian politicians and government officials -- it doesn’t simply because the inside-Ottawa elite in Ottawa continues to pretend that government corruption only occurs in other countries (or, at least, only in other parties, not in the party they each support). (To see details about the UN Convention Against Corruption and Bill C-25, click here), 

If such a law had been passed years ago, we probably would know who has the more than $40 million still missing from the federal Liberals’ Adscam sponsorship scandal, and who has the $10 million Karlheinz Schreiber had to hand out to bribe Canadian politicians for various government contracts in the 1990s, and who has many other missing millions from similar past federal government scams.

Until this enforcement loophole, and all the other loopholes set out above, are closed, everyone should expect that people in the federal government (and provincial, territorial and municipal governments) will continue to scratch the backs of private interests instead of acting in the public interest.

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


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