Information & Ethics Committee on March 4th, 2013

[Scott Andrews, Liberal, Avalon, NL]

Thank you very much, and welcome back, Commissioner Shepherd. It's good to see you again.

Our last witnesses who were here and some others have talked about streamlining the two acts, streamlining the conflict of interest and lobbying acts, making sure the situation is the same under both acts so there's less confusion. I noticed you also talked about which public office holders it applies to and determining that.

Is that the only streamlining we need to do? Do you agree with streamlining the two and maybe just having one commissioner responsible?

[Karen Shepherd]

When I look at the history of the legislation, there was an individual at one point who was responsible for both the Lobbyists' Code of Conduct and the code for members under the Conflict of Interest Act. There was a court case on a few cases, and the issue was about whether or not there was bias, because no one was found to be guilty, in breach, on either the public office holder side or the lobbyist side.

So I think there is a reason to have the two sides separate. That said, and I said this in my opening remarks, if there's something to looking at putting the post-employment prohibitions under the Commissioner Dawson or the lobbying side, it would be that certain things do need to be harmonized because for the officers covered—the reporting officer and a designated public office holder—the definitions don't categorize the same number of people.

The post-employment times are different and so are the activities covered under post-employment.

[Scott Andrews, Liberal, Avalon, NL]

And so are the fines.

[Karen Shepherd]

Yes.

[Scott Andrews, Liberal, Avalon, NL]

That was my next question, because there is no fine structure under the conflict of interest side but you do have some power to fine.

[Karen Shepherd]

Actually, no, but I think Commissioner Dawson has the ability to fine under certain situations.

Under the Lobbying Act, if I have reasonable grounds to believe that the act has been breached, then I have to refer it to the Royal Canadian Mounted Police. It's only at that point with the prosecutor's office that fines or jail terms can be issued. What's at my disposal is tabling a report to Parliament.

[Scott Andrews, Liberal, Avalon, NL]

Should those be harmonized as well?

[Karen Shepherd]

I guess, Mr. Chair, it's a good question. It's very much whether...I think that if you're putting them under something together, then there might be some rationale, but what is Parliament trying to achieve? When I was before the committee under the Lobbying Act review and I talked about receiving administrative monetary penalties, it was to look at having them as a detriment to other lobbyists or as more of a corrective action. I think that would be the consideration as to why you would be giving fines to either commissioner, let alone harmonizing them.

[Scott Andrews, Liberal, Avalon, NL]

That leads me to my next question. We have the case of Loyola Sullivan. He has been found guilty under the Conflict of Interest Act, with no retribution, nothing. He's just been written up. Where is that in your office now with his lobbying activities?

[Karen Shepherd]

Well, as you know, I do conduct my reviews in private, but as this is in the public domain, as I've done previously with the committee I will confirm that I am looking into the matter. It is a priority for my office in terms of timing. I can't give any further details at this point.

[Scott Andrews, Liberal, Avalon, NL]

Okay.

We've also heard about the 20% rule and how it's sort of self-administered. How do you test that? How do you test whether someone's being truthful with the 20% rule? Do you think there are a lot of people hiding behind the 20% rule?

[Karen Shepherd]

My experience is that lobbyists do want to comply with the act. I think the calls we receive in the office about trying to understand things such as the significant part of duties and the 20% threshold would indicate that they are. There are more than 5,000 lobbyists registered.

In terms of how we go about checking, the onus is on the lobbyist. If I have reason to believe that somebody is not complying with the legislation, then I will conduct an administrative review, which is my fact-finding exercise. That will allow me to determine whether I need to open an investigation.

As for looking at the percentage, there is an interpretation bulletin out there that I look at. I look at how much time they actually spend in preparing for the meetings, and in the bulletin I—

[Scott Andrews, Liberal, Avalon, NL]

Can you make that judgment if you're doing an investigation, in that they provide the information to you, and you will decide that they're above the 20%?

[Karen Shepherd]

Actually, in the report that I tabled to Parliament on the Green Power Generation Corporation—an in-house corporation—I determined that they had passed the significant amount of duties test and should have registered.

[Scott Andrews, Liberal, Avalon, NL]

Okay.

We've heard about a sliding scale for the different public office holders. Is that something we should look at for both conflict of interest and the lobbying?

[Karen Shepherd]

When I look at why there was a post-employment provision put in for the Lobbying Act, it was to prohibit designated public office holders from using any contacts or knowledge in their decision-making authority for the benefit of lobbying, for five years.

That said, my experience in being a public office holder and the exemption review requests that I have received I think clearly show that there are different decision-making authorities. The contacts are different based on the different positions and the length that the individuals were actually sitting in the positions. I think there is something that Parliament may want to look at. Interns and students are a perfect example of that.

[Scott Andrews, Liberal, Avalon, NL]

That sort of falls into the sliding scale.

Thank you very much.

[Karen Shepherd]

You're welcome.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Andrews.

Mr. Dreeshen, you have the floor for seven minutes.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Thank you, commissioner, for being here today.

I have a couple of things, and Scott had mentioned them before. First, there are the difficulties you have in trying to match the two codes. Many of us are taking a look at the conflict of interest commissioner's role as well as your own.

One of the things we heard in the last session from the folks from GRIC is that they had talked about such a situation. I'll go through part of it, and maybe you can then comment on it.

They stated that in February 2011 the Commissioner of Lobbying tabled a report in Parliament finding that a lobbyist had breached rule 8 of the Lobbyists' Code of Conduct and therefore placed a public office holder in a conflict of interest. This ruling pertained to actions that took place in 2004, five years before the current rules were put in place. They speak of that. Then they said that the Conflict of Interest and Ethics Commissioner had already concluded, based on the exact same set of facts, that the actions and questions did not constitute a conflict of interest on the part of the public office holder.

Therein lies the dilemma. People are looking at these two different sets of rules and they are trying to determine how each one of you is looking at those facts, if, indeed, they were the same set of facts.

Could you enlighten us somewhat on that so we can get a picture of what they were trying to say from your perspective?

[Karen Shepherd]

First, I would like to correct, for the record, that there were no activities in the case that, I believe, they were referring to in March 2004.

[Earl Dreeshen, Conservative, Red Deer, AB]

Okay.

[Karen Shepherd]

The activities actually occurred in September 2009, which was after the court ruling dealing with the issue of fundraising came out in March 2009. That's where the issue of conflict of interest came in. As I've mentioned, it brought in that whole tension or the obligation being created between the private interest and the public office holder's duty to serve the public good. It also provided me with a clear direction in looking at conflict of interest, that it should include not only the real conflict of interest but also the apparent conflict of interest.

As I indicated in my opening remarks, as I understand it, when Commissioner Dawson looked at the same situation vis-à-vis the minister, she was looking at whether the minister had received a gift, I believe. She determined the minister had not received a gift. But as I indicated in my reports both on Michael McSweeney and Will Stewart, as was mentioned earlier in the committee, they had actively worked on a fundraising campaign by selling tickets at the same time they were lobbying the minister and her department.

So that decision actually is quite consistent with the direction the court case had provided me.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much.

You also talked about the OECD in the context of conflict of interest in your earlier comments.

[Karen Shepherd]

When they define private interest, it's a broader definition of private interests than strictly looking at it as the individual receiving a direct financial benefit. It includes a much broader range, which I think is consistent with looking at an apparent conflict of interest not just a real conflict.

If the committee would like, monsieur le président, that's something I could send the definition of to the committee after my appearance here.