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Tighter political fundraising rules could push activities ‘underground,’ says Canada’s outgoing chief electoral officer

Chief Electoral Officer Marc Mayrand says with recent examples of Liberal 'cash-for-access' events, he hasn’t seen 'anybody violating the elections law provisions.'

Canada's Chief Electoral Officer Marc Mayrand, pictured in this file photo on the Hill, told The Hill Times, 'The more constraints are starting to be seen as unreasonable, the more people will be inclined to go underground, and that’s the concern I would have. That’s what I mean by striking the right balance.' The Hill Times photograph by Andrew Meade

By LAURA RYCKEWAERT, CHELSEA NASH

PUBLISHED : Monday, Nov. 21, 2016 12:00 AM

Canada’s outgoing chief electoral officer says tightening up rules around so-called “cash-for-access” events or other kinds of fundraising might prompt political operatives to conduct their business less transparently.

In an interview with The Hill Times last week, Chief Electoral Officer Marc Mayrand, who steps down next month, said with recent examples of Liberal “cash-for-access” events, he hasn’t seen “anybody violating the elections law provisions.”

While they may raise issues of ethics or potential conflicts of interest, he also he said he’s “not sure, if it’s by Elections Canada, what could be the regulation there.”

“Money is the life blood in politics. Whether we like it or not, you need money to do politics,” said Mr. Mayrand.

  

Political financing laws are still in their “infancy” in Canada, Mr. Mayrand said, but are likely the “most advanced and constrained and transparent” in the world. Over the last decade, there’s been a “constant revisiting” of the rules to try to find the “right balance,” and the issue of “cash-for-access” fundraisers will continue to draw attention over the coming years, he added.

“Here in Canada, we get all excited because somebody has contributed $1,600 or $1,700. [In the U.S. election], the largest contributor to a single campaign was $63-million—a single individual contributing,” Mr. Mayrand remarked.

“The more constraints are starting to be seen as unreasonable, the more people will be inclined to go underground, and that’s the concern I would have. That’s what I mean by striking the right balance,” he said, pointing to controversies in Quebec.

In September, it came to light that between 2004 and 2011, executives of SNC Lavalin Group Inc. funnelled $118,000 in donations to the federal Liberals and Conservatives—$110,000 and $8,000, respectively—that were disguised as donations from individuals living in Quebec who worked at SNC or their family members.

  

The problem of cash-for-access fundraisers is largely one of perception and the potential for conflicts of interest, but with money essential to politics, University of Lethbridge political science professor Harold Jansen said trying to solve it can be “like a giant game of whack-a-mole.”

“You whack down one thing—we ban corporate, union donations—and the money pops up somewhere else. So we lower the individual donation and it pops up somewhere else. So it’s this constant game of trying to stay ahead,” he said.

“This is not an easy one to deal with,” he said of cash-for-access events. “There is positive kinds of activity that looks very similar to this, so drawing rules that distinguishes between the two is not particularly easy.”

Political parties and candidates are encouraged to connect with constituents, said Prof. Jansen, and that’s long often been done through pay-for-ticket events. On the surface, such events are similar to ones that raise the potential for conflicts of interest.

  

“It is tricky to draw up rules to distinguish between one and the other. We get into questions of intent, we get into who’s invited and how,” he said.

Prof. Jansen said he thought lowering the individual donation limit in 2006 “would have cut out a lot of this,” making it not worth the trouble, but recent examples show that hasn’t been the case.

“This is clearly something we need to talk about, and there is certainly at a minimum, an appearance of impropriety here,” he said.

With union and corporate donations to political parties banned, it can be seen as a back-door way for such money to reach party coffers, with corporate heads, registered lobbyists, union leaders, and other stakeholders often in attendance. Who’s attending on the elected side can also make a difference: whether it’s a government minister, backbench MP from the governing party, or opposition MP—as does the cost of the ticket, and the manner in which the event is promoted.

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Fundraising events with Finance Minister Bill Morneau, left, Innovation Minister Navdeep Bains, and Natural Resources Minister Jim Carr have all recently come under scrutiny. The Hill Times photographs by Sam Garcia and Jake Wright

Finance Minister Bill Morneau (Toronto Centre, Ont.) came under fire over a $500-per-ticket event on Nov. 7 in Toronto that a senior executive with drug firm Apotex, which is registered to lobby the government, was helping organize.

An Aug. 29 “appreciation” event for Liberal Laurier Club members—that is, anyone who has donated $1,500 to the party (the current annual limit under law is $1,525)—with Natural Resources Minister Jim Carr (Winnipeg South Centre, Man.) and attended by registered lobbyists was also criticized, as was a $400-per-ticket “Vineyards of Ontario” event with Innovation Minister Navdeep Bains (Mississauga-Malton, Ont.).

In an email response to The Hill Times, Liberal Party communications director Braeden Caley provided a list of 60 national and riding-level fundraising events held by Liberals so far in 2016, with the prime minister, cabinet ministers, or MPs in attendance. Ticket prices ranged from $90 to $1,525, with 16 including ticket options that cost $1,500 or more. As well, another 30 “appreciation” events have been held across the country with ministers so far this year. He said more than 7,000 people in all have attended fundraising events so far this year.

Mr. Caley said Mr. Trudeau and Liberals MPs have also held free outreach events attended by thousands so far this year, with 83 government consultations currently open to the public.

On Nov. 4, Liberal Party national director Christina Topp sent a letter to caucus outlining rules in the Open and Accountable Government document stating there should be “no preferential access to government,” and included a list of precautions to take, like vetting event guest lists.

NDP national director Robert Fox said the party doesn’t track events organized by riding associations, but at the national level two have been held so far in 2016, and they both coincided with the party’s convention in Edmonton in April.

During its convention, the NDP put on a $300-per-ticket event described as an “exclusive” an “intimate evening” with a chance to “mingle” with NDP Leader Tom Mulcair (Outremont, Que.) “and other New Democrats.” Another, $250-per-ticket event was held the next night, offering food, drink, and a “special opportunity to meet our caucus and chat with them one-on-one.”

“I don’t think any could be fairly characterized as ‘cash for access’ events. They are certainly not aimed at lobbyists and elites intent on bending the leader’s or members’ ear,” said Mr. Fox in the email.

The Conservative Party did not provide any information about fundraising events held so far in 2016 by filing deadline. However, Conservative Party spokesman Cory Hann said in an interview that the issue is the Liberals violating their own Open and Accountable Government rules.

But there are a number of Conservative examples, including some recently raised by Liberal MPs in the House of Commons, like a $500-per-ticket event with former finance minister Joe Oliver at Toronto’s Albany Club in May 2015, co-chaired by Conservative Sen. Linda Frum (Ontario) and businessman and philanthropist Peter Munk, among others. On Oct. 17 this year, the Conservatives held a cocktail event at Toronto’s York Club to meet leadership candidates, with a “minimum gift” of $1,000 to the Conservative Fund and $500 to candidates (to be divided equally).

In 2014, former Conservative heritage minister Shelly Glover came under fire over a fundraising event organized by her riding association in Winnipeg, attended primarily by members of the city’s cultural community. Following criticism, Ms. Glover ultimately paid back the roughly $1,200 that was raised.

In 2011, events organized by registered lobbyists Michael McSweeney and Will Stewart on behalf of the Halton Conservative riding association in 2009 for then natural resources minister Lisa Raitt, the area MP, became the subject of two reports by the federal lobbying commissioner.

Ultimately, while Mr. McSweeney was not found to have breached the Lobbying Act, Mr. Stewart was, as he was registered to lobby on files under Ms. Raitt’s ministerial portfolio, and was subsequently reprimanded as the event “placed the Minister in an apparent conflict of interest,” according to Lobbying Commissioner Karen Shepherd.

The lobbying commissioner consequently issued a “guidance,” stating “political activities” in support of a candidate or party are “one way that a lobbyist could create a sense of obligation on the part of a public office holder,” and thereby a conflict of interest.

The Nov. 7 event with Mr. Morneau raised a similar issue. Apotex chairman Barry Sherman had been helping organize and sell tickets to the event, as reported by The Globe and Mail. Apotex has previously lobbied Finance Canada, along with other ministers, and is currently suing the federal government for $500-million and Mr. Morneau is a member of the cabinet committee on litigation management.

Mr. Sherman pulled out following media scrutiny, but the event ultimately went ahead. It’s now under investigation by the federal lobbying commissioner.

Speaking with The Hill Times last week, Mr. Stewart highlighted that the commissioner’s report on him notes the “rules were unclear at the time,” but he said he hasn’t gone to any fundraisers since then.

“I just don’t think you can and be a registered lobbyist,” said Mr. Stewart.

“On the face of it, there’s actually nothing illegal about what the Liberals or even the Conservatives are doing on these fundraisers, as long as the ticket price or the donation does not exceed someone’s personal donation limit for the year,” he said.

“The challenge of course is the perception. … The perception is that cabinet ministers, regardless of political stripe, are holding expensive fundraisers that the average person can’t afford to go to, that then could have the potential for relationships to be developed, lobbying to take place, casual conversations about a particular issue. And it develops that relationship that is only possible by going to the fundraiser.”

While it’s something Conservatives did as well in government, Mr. Stewart said the Liberals were elected, in part, on the premise of doing things differently, and he thinks ministers and the Liberal Party needs to decide “whether it’s worth taking money from those individuals, given the headaches that it causes.”

Though backbenchers and opposition MPs hold similar pay-for-ticket events, the same ethical questions aren’t raised, as “they don’t have the ability to affect change as directly as a cabinet minister does,” he said.

Mr. Stewart said rather than changing elections laws, as “people will just find another way, like they have this time” after corporate and union donations were banned, the issue is one of ethics for the federal lobbying or conflict of interest and ethics commissioner to address, along with political parties themselves.

On Nov. 3, the Conservatives used their opposition day to target the issue and Conservative MP Blaine Calkins (Red Deer-Lacombe, Alta.) introduced a motion to grant the federal conflict of interest and ethics commissioner authority to oversee and enforce ministerial directives listed under the Liberals’ Open and Accountable Government document. But it was defeated on Nov. 17, with Liberals voting against it 173 to 134. The Prime Minister’s Office did not respond to questions by publication deadline about why Liberals had voted it down.

Environics Communications senior vice-president Greg MacEachern, a former Liberal staffer and longtime party supporter, said he disagrees with the “tone of some of the media coverage” of “so-called cash-for-access” events, and said,“we have a good system in Canada,” particularly compared to the United States. As well, he said such fundraising events aren’t a good way to effectively lobby.

Still, he said the “onus” is on lobbyists to be aware of the rules and understand what they can and cannot do to avoid putting elected officials in conflicts of interest.

“Opposition parties might need to think long and hard about what they call for because in Ontario, where the [donation] limits were much higher, the government responded and the pendulum swung pretty far back,” with the government there poised to ban politicians from attending fundraisers. “[Now] they’re in a big hurry in Ontario to raise as much money as they can as quickly as they can,” said Mr. MacEachern.

He suggested a return of the per vote subsidy to parties, eliminated under the Conservatives, may be a solution, as “fundraising is part of politics.”

Mr. Stewart said the rules being introduced in Ontario are “a bit heavy-handed” and he’s noticed a final fundraising scramble.

While information on donors and lobbyists is out there, it can be hard to connect the dots. Prof. Jansen suggested “strengthening disclosure” could be a solution, with more “timely disclosure” under a “special category of disclosure for events like this.” He said the onus should be on the parties to connect donations from individuals to attendance at particular events.

lryckewaert@hilltimes.com

cnash@hilltimes.com
The Hill Times