February 25, 2004

Paul Martin, Ethics and Democracy

An Interview with Democracy Watch's Duff Conacher

by Dru Oja Jay

The Dominion - http://www.dominionpaper.ca

Duff Conacher is the Coordinator of Democracy Watch, an Ottawa-based group that has advocated for “democratic reform, government accountability and corporate responsibility” for a decade.

This interview took place on January 28, 2004. A full transcript of the exchange is available here.

Duff Conacher: Martin has broken rules, lied, and surrounded himself with corporate lobbyists. Tooker Gomberg/Greenspiration.org

That Martin has lied about maintaining high ethical standards, that he has broken ethics rules, and that he surrounds himself with corporate lobbyists, all of whom are representing corporations that have specific private interests that are not the public interest. And so he is tied directly to the private interests of several corporations in Canada.

Is there any reason to believe that he's going to do things differently now that he is Prime Minister?

He hasn't really promised to do anything different in the area of ethical behaviour except to pass a bill that Chrétien introduced last year that will--if it is passed--create a more independent--not fully independent, but more independent--ethics watchdog system to enforce federal ethics rules. All of the other promises that Martin has made are simply to empower Liberal MPs.

The reason he has tried to define the democratic deficit in Canada as only involving the powers of MPs, is because he knows that he can increase the powers of Liberal MPs, but that they will not use those powers. They will all toe the line, wanting to move up the hierarchy of the Liberal Party, and get into cabinet. They know that the only way you get to do that is if you're loyal to Martin.

You've said that Martin failed to deliver on similar promises addressing the Democratic deficit that were made back in 1993 by the Chrétien government. Is there anything different about the promises that he's making now?

No. He's making the same promises that were made in '93. One could say 'well, he wasn't Prime Minister from that time--1993 to 2003--and so it's not his fault that those promises weren't kept.' But he kept his mouth shut, and didn't say anything about those promises being broken in the eight and a half years that he sat around the Cabinet table.

If he was principled at all and believed that these things should be done, he would have spoken out. If these are improvements that Canadians support, it would have been helpful for Martin to say something at that time. He didn't say a word.

So that shows that he really lacks any principled basis to how he acts as a politician. And then he's gone on from that to say--in May of 2002--that he's always practiced full transparency in politics and that Canadians deserve full transparency. At that time, he was hiding hundreds of thousands of dollars in contributions that had been made by corporations to his leadership campaign, and refusing to disclose them.

So he lied. He hasn't always practiced full transparency. He was hiding donations and keeping them secret.

When there has been pressure put on him on ethical issues concerning the shipping company that he owned, and that he's now transferred--we don't know how cleanly and completely--but transferred somewhat to his sons... when those allegations first came up in the spring of 2003, who did Martin turn to? He turned to the ethics counsellor lapdog Howard Wilson, who is completely controlled by the Liberal cabinet, and asked Wilson to clear him of any conflicts to do with shipping. And Howard Wilson did it.

You have also talked about how Martin voted against 24 out of 27 private members' bills in Parliament. What is the significance of that?

One of the promises that was made back in '93 in the Red Book was to allow more private members' bills to come to the House of Commons for full debate and voting, and to not have them stopped by a Liberal committee that's controlled by the Cabinet.

But again, if you look at his record, with 27 private members' bills that affected the finance department, Paul Martin voted against 24 of them. Again, it shows his record that he doesn't like private members' bills. That record also contradicts his pledge to have more free votes and his promise that most things will be free votes in the house of commons in the future.

But if you as a minister are rejecting all sorts of private members' bills put through, and participated in insuring that those bills were rejected by other Liberal MPs... it just doesn't add up to a principled record where he's shown that he actually believes that MPs should be able to freely vote.

So does this go back to the loyalty aspect you mentioned before-- are you saying that if Paul Martin consistently votes against private members' bills, then other MPs who want to move up in the party will see the writing on the wall and also vote against those bills?

Very much so. Between 1997 and 2000--between those two elections--the Liberals only had a six-seat majority. Not even six Liberals would stand up to the Prime Minister in that three and a half year period and say "we've broken all sorts of promises we made in '93, fundamental promises such as having an independent ethics watchdog, and we're going to cross the floor and force you to call an election unless you introduce bills that keep these promises and pass them."

Martin watched that. At the time, there were 155 Liberal MPs, and not even six of them would stand up to the Prime Minister. Why not? Because they were all hoping to get into Cabinet. So Martin knows that they'll line up behind him, and behind the other Cabinet ministers as things move forward. They know: if you stick your neck out, the Cabinet will chop it off, and you will not move up into the Cabinet hierarchy or even the committee hierarchy at all... unless you are loyal to what the Cabinet wants to do.

So it's safe for him to make a bunch of promises about empowering Liberal MPs, because he knows that Liberal MPs will not use those powers.

You have said that Martin's ethics and democratic deficit proposals are basically just vague rhetoric. There's a long list of things on the Prime Minister's web sites; can you characterize what Martin's plan of action is, and what that excludes?

[...]

If you add it all up, it doesn't even empower MPs that much. But empowering MPs does not empower citizens. For example, in free votes, even if a Liberal member did vote how they wanted on a particular bill, is that what we want? Or do we want them to vote how the people who voted them into power want?

So having an MP allowed to vote according to their whim on an issue does not in any way empower the voters that put that MP into office. What Martin should be doing, if he was serious, is requiring MPs to prove that the will of their constituents is in a certain direction--either for a bill or against a bill--and then to vote according to the will of the voters who put the MP in power.

So how would he do that?

Well, he would have to give them resources to do in-depth polling on each issue, and ensure that the polling is done in an ethical and sound way, so that the actual will of the voters in every riding could be determined. And then the MPs would be bound to vote the way that the people who put them in office want them to vote. He won't go that far. He doesn't want that much democracy in the House of Commons. He wants the Cabinet to be able to continue to control things and to essentially force the MPs to vote the way that Cabinet wants them to vote.

So you look at that, and then also in terms of lobbyists--he's been surrounded by corporate lobbyists through his whole campaign; they've been advising him, they've been donating millions of dollars to his campaign--you add it all up, and you see that Martin is corporate-driven, not citizen-driven.

He believes it's completely ethical to take hundreds of thousands of dollars from corporations that lobby the federal government, and to have all of his advisors representing corporate interests--they were working for him on his leadership campaign while also working for these corporations.

Has there been much media coverage of these aspects of Paul Martin's proposed ethics reforms or his attempts to address the democratic deficit?

Oh yes. But they are process issues, and they are relatively abstract for most Canadians, unlike health care or the environment. These are not issues that Canadians demonstrate on Parliament Hill about.

But they should be. If anyone believes that they're going to get a health care system that upholds the public interest or environmental protection or consumer protection that upholds the public interest, or government spending that actually takes into account the social welfare of Canadians, or corporate regulations that protect consumers and ensure that corporations are serving the public interest as opposed to just trying to make the most money possible... If anyone believes that they're going to get any of those public interest measures through Parliament when Parliament is corporate-driven--driven by corporate donations, corporate lobbyists, when there are no ethics rules that are enforced--they're just being naive.

Over the past decade since we started up Democracy Watch, we've been trying to convince many groups that work on social justice, environmental issues, health care issues that they should be spending part of their energy pushing for democratic reforms. I'm sad to say that while we've had groups join our coalitions, very few of them put in the time necessary. And they keep beating their head against the walls of an undemocratic, corporate-driven government, and losing repeatedly. And yet, they do nothing to change the system that is set up so that they will lose, so that the public interest will be ignored.

You mentioned that Martin's campaign team is made up of a lot of corporate lobbyists and that a lot of corporate types are in his inner circle. What effect does that have on his policies; are there any other groups that have similar kinds of access? Is there any way we can evaluate that, or is it largely behind closed doors?

It is largely behind closed doors. Martin is very strategically smart--somewhat; he's made some huge errors by having so much corporate money flow into his campaign. The Liberals, for their leadership campaign, had a spending limit of $4.5 million, and Martin raised over $12 million--I mean, just a grotesque amount, most of it from large corporations.

But he's strategically smart in that he will meet with everyone who is concerned about an issue, and I'm sure he's going to tell other ministers to do this as well. Then he can always say "well, I have met with everyone and listened to everyone's point of view before I made my decision." It becomes a bit more difficult to criticize his decision, because he has met with everybody.

In the past, ministers we've dealt with only met with industry--when making a decision on banking law, for example. It was pretty easy to criticize their decisions, because their decisions didn't do anything for consumers, and their record of who they had met with was all industry people.

What happens when you have these corporate lobbyists on the inside, as they have been on Martin's campaign, and with corporate money--all of these lobbyists are legally required by their contracts to advance and advocate the interests of their clients, which are large corporations. Martin, as a politician, is legally required to uphold the public interest.

When you tie the two together, the public interest will always suffer and be ignored, because the private interests have the inside line. If you gain access to a politician, you automatically gain influence over that politician. Especially when you're doing favours for that politician, which all of these corporate lobbyists have been doing. They've been volunteering on his campaign, helping him raise money.

You've mentioned that Martin put billions of taxpayer dollars--apparently--into some mysterious foundations. What do we know about these foundations?

Well, they're set up to do supposedly very specific things in terms of policies in different areas and funding research in different areas. The problem is, the goverment gave the money to the foundations before it even created the foundations. Some of them have still not really done anything with the money, because they've been trying to start up and get running. They're also not subject to the Access to Information Act, to ethics rules, to the Auditor General... $7 billion in total has been shifted to these foundations as endowments.

What they'll be doing is handing out grants based on the interest that they make on the endowed funds. But we have $7 billion of the public's money that has totally been taken out of the accountability systems that would insure that that money is well spent. And of course, the foundation boards are all patronage appointments made by Prime Minister Chr_tien.

So, as we've seen in many areas, when you have an institution set up and the board is patronage hacks who have ties to the ruling party, you don't get good actions, ethical actions, or actions in the public interest. They're hacks, tied to the Liberal Party and they're going to favour members of the Liberal Party in the decisions they make, who they hire, and all actions that they undertake.

The Auditor-General has called very strongly on Martin to bring these foundations back under the Auditor General's Act, the Access to Information Act, and all of the other ethics rules that apply to federal public officials.

We'll see what he does. It'll be another sign as to whether he's really interested in cleaning up waste in goverment, and making government more ethical and honest.

It recently came out--or at least it recently gained mainstream attention--that Canada Steamship Lines was able to exploit a loophole left open by the government to pay less than two per cent in corporate income taxes. What kind of ethical system needs to be in place before politicians will not be able to implement this kind of blatant exceptionalism in their own interests and in the interests of their friends?

In the US, politicians and members of the administration appointed by the President--they have to divest the interests that they have in any companies. In the US, Paul Martin would not have been able to be Finance Minister while still owning Canada Steamship Lines. That would not be allowed.

It is allowed in Canada. And not only that, but he had a venetian blind management agreement (as Joe Clark put it), where he was getting updates about the company while he was Finance Minister. And that's because we have a lapdog ethics counselor who would bend over backwards to insure that no Liberal is ever found guilty of breaking the ethics rule. So [Howard Wilson] approved all this, and didn't require Martin in any way to step aside from any decision-making process that affected his company. In the US, you have to cut your ties completely with your company.

We believe the [Federal] rules [in Canada] say that quite clearly, and we're challenging the Ethics Counselor in court, because he just ignores the rules when he makes decisions.

There is a rule in the Lobbyists Code, which applies to all organizations and people registered as lobbyists, that says that a lobbyist can't put a politician in a conflict of interest. The federal Ethics Counsillor has interpreted that rule, saying that in order to break that rule, they would have to interfere with the decision of a politician, and overpower the free will of the politician and force them to do something that they wouldn't do if they had a free will.

In other words [to place a politician in a conflict of interest], the lobbyist has to enslave the politician. That standard has never been articulated anywhere in the world, even in the most corrupt countries in the world. No one who is an ethics watchdog has ever said "oh, the only way a lobbyist could put a politician in a conflict of interest is to enslave them." But that's the standard that currently exists at the federal level, and that's the standard that we are challenging in court.

So things are so lax at the federal level that politicians can own companies and vote on things that affect those companies. That's how bad it is.

What about the case of Paul Martin's sons, who now own CSL--is it not a conflict of interest to vote on things or make decisions on things that affect the interests of immediate family members or "close personal friends" (as Martin has characterized several corporate CEOs)?

We believe it is.

And what kind of ethics rules would have to be in place in order for that to be the case?

That selling to your sons is not enough, and that you have to divest fully--outside the family. Now, when you say 'friends,' you can't prevent someone from having friends. But that's where we all have to be...

But can't you prevent them from voting on issues that affect their close personal friends?

Yes, you could have that as a rule. Usually those friends will be registered to lobby the federal government, and that's where you would be able to get at that situation. But that's where we all need to be much more vigilant and watching much more closely, and the media as well has to be investigating much more, and ensuring that when a decision is made, all of the factors that might have gone into the decision are exposed. This way, we can track whether there are any ethical violations; or if there aren't, at least we'll know the why of the decision, and all the details of it.

It's difficult, because there are so many obscure decisions that the federal government makes. But everyone should remember that the elite establishment in Canada is a a relatively small group of people. We may be a country of 30 million, but we have a relatively small elite establishment, and they do protect each other. And they have politicians that are friends.

What the politicians do is often affected by these friendships and relationships that go back decades. These people can get access to politicians and say "you know, if you just change this regulation--these few words--it would save us $10 million; can you do it?" And the politicians do it. Because it's very obscure and nobody is watching closely enough to discover these little tiny changes that are made all the time by government.

That's a very dangerous situation when you have a small elite establishment like we have in Canada.

So let's say that there's an MP--with the Liberals or even in oppositions--what if they, despite the status quo wanted to become more democratic. How would they go about doing that?

Well, Democracy Watch has won a new donations law, so that there are now limits on donations, and they're all forced to be more democratic. Although there's one big gap in those limits--and that's that unlimited secret donations are allowed, as long as you make them directly to the politician.

That loophole is supposed to be closed by ethics rules that will be passed when Bill C-34 (which I mentioned earlier) is passed. They have pledged to put in a rule that says that you won't be able to receive any economic gift of any kind without disclosing it, and that gifts above a certain level will create a conflict of interest for MPs and Senators.

So we're going to be pushing to make sure that loophole is closed, but right now, it's still open. But if an MP or Senator wants to be more democratic, don't take large donations from anyone, disclose them all, set up consultations with your citizens--though it's much too expensive to do in-depth consultations on all issues--set up a meaningful consultation process. Not just a one-off meeting where if you don't show up you won't get heard. Make it much more open, and ensure that everyone has an easily accessible way to make their voice heard on the issue, and that you want to hear them. Do a news conference in your riding and say "I want to hear your viewpoints."