Procedure and House Affairs Committee on Feb. 10th, 2011

[The Chair, Conservative, Joe Preston]

I call the meeting to order. We are here still on the order of reference of November 29, which is in regard to a question of privilege relating to a premature disclosure of a confidential report on the pre-budget consultations of the finance committee.

Most of our first hour today will be with Ms. Karen Shepherd, the Commissioner of Lobbying. Thank you for coming and seeing us today, and thank you for getting to us this good powerpoint presentation. It gives me a great idea of what your job is and how it works. We may save some time today by having that with us.

Committee, in the second hour we will have with us Louis Bard, the chief information officer. We'll be talking to him about some technological issues. Also, if we can, I'd like to save 15 minutes at the end of the meeting for some committee business. I'm going to suggest that we spend not quite an hour with each group of witnesses and save some time at the end.

Ms. Shepherd, I understand you have an opening statement. If you would make that statement, as briefly as possible, and introduce the guest with you, we'll follow up with a round of questions.

[Karen Shepherd, Commissioner of Lobbying, Office of the Commissioner of Lobbying]

Good morning, Mr. Chair and members of the committee.

I am pleased to be here today to discuss my investigative process. I'm accompanied by Mr. Bruce Bergen, my senior legal counsel.

As Commissioner of Lobbying, my mandate is to maintain a registry to educate and to ensure compliance.

My powers of investigation are set out in the Lobbying Act. I have the authority to investigate when I have reason to believe that an investigation is necessary to ensure compliance with the Act or the Lobbyists' Code of Conduct.

I take all allegations of a breach of either the Lobbying Act or the Lobbyists' Code of Conduct seriously. I may choose to look into a matter as a result of a complaint. In addition, I may look into a matter on my own initiative.

Allegations of breaches of the Lobbying Act are primarily linked to registrations, including failure to register as a lobbyist and failure to register within the time limits. Knowingly making false or misleading statements in a registration is also a contravention of the act.

The Lobbyists' Code of Conduct was instituted in 1997 to assure Canadians that lobbying is done ethically and with the highest standards. Lobbyists may be in contravention of the code by breaching either a principle or a rule.

When I become aware of an alleged breach of the act or the code, I must determine what actually happened. I open an administrative review, which is the fact-gathering portion of the investigative process. This process is intended to provide me with sufficient information to determine whether I should pursue the matter by initiating a formal investigation or if an alternate course of action is preferable.

An administrative review can lead to one of four possible outcomes.

First, I may decide to close the review because the allegation is not well founded. An allegation may not be well founded if the activity was not a registrable communication or was not undertaken for payment. In these cases, I advise the subject and the complainant of the outcome in a letter.

Second, I may decide to close an administrative review even though the allegation is well founded. In these cases, the appropriate measures may be to educate the subject or to request a correction of the Registry of Lobbyists. These files are subject to further monitoring.

Third, I can initiate a formal investigation if I have reason to believe that an investigation is necessary to ensure compliance with the act or the code. Once an investigation is initiated, I can summon witnesses to give evidence and I can compel the production of documents. To date, my experience is that witnesses are cooperating and responding to our inquiries, and I have not had to use these powers. Since July 2008, I have initiated eight investigations.

Finally, if I have reasonable grounds to believe that an offence has been committed under the Lobbying Act or any other act of Parliament, I must refer the matter to a peace officer. Since July 2008, I have referred six files to the RCMP. When I refer a file to the RCMP, the act instructs me to suspend my investigation until the matter has been dealt with.

The Lobbying Act carries sanctions up to $200,000 and jail terms of up to two years. If a person is convicted, I can also prohibit the person from engaging in lobbying activities for up to two years.

However, no charges have been laid to date under the Lobbying Act.

If a file is returned to me by the RCMP, following consultation with the federal prosecutor, I may choose to resume the investigation of a possible breach of the Lobbyists' Code of Conduct if I have sufficient grounds to do so. The act requires that before tabling a report of investigation, I provide subjects of an investigation with an opportunity to present their views. To ensure due process, it is my policy to provide the person under investigation with a copy of the investigation director's report and give the person 30 days to respond.

With the respect to the Lobbyists' Code of Conduct, I would like to point out that it is a non-statutory instrument, and it carries no fines or jail sentences. The act prescribes, however, that I table a report on investigations in both houses of Parliament to disclose my findings, conclusions, and reasons for those conclusions once the investigation into an alleged breach of the code is complete.

I recently indicated that I plan to table a number of reports to Parliament before the end of this fiscal year.

At my December 14 appearance before the Standing Committee on Access to Information, Privacy and Ethics, I stated that I would look into the matter of the five lobbyists who received a confidential document from an MP's staff. I would like to confirm today that I am looking into the matter to see if a breach of the Lobbyists' Code of Conduct has occurred.

The Lobbying Act requires that I conduct investigations in private. I therefore do not comment on matters that are before me.

Mr. Chair, this concludes my remarks. I look forward to answering any questions you or the committee members may have.

[The Chair, Conservative, Joe Preston]

Thank you very much.

Let's start with five-minute rounds and see if we can do two rounds in the period of time we have.

Mr. Proulx, you're up first, if you would.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Thank you, Mr. Chair.

Good morning, and thank you, Ms. Shepherd.

We're looking into this problem of an MP's assistant leaking a report, a draft report of the finance committee, to a lobbyist, of course. Former Conservative Hill staffer--and now lobbyist--Andy Gibbons testified that after receiving the leaked copy of the finance committee draft report, he shared relevant portions of it with his client, Merck Frosst. His e-mail to his client actually states, and I quote: Below is language from the confidential draft report which summarizes what witnesses said about vaccines.

Would this, in your opinion, be a prima facie breach of the Lobbyists' Code of Conduct?

[Karen Shepherd]

Mr. Chair, as I indicated, I am currently looking at the matter. I would also like to state that I've been involved with this office and its predecessor since June 2004, and this is the first time that this particular issue of confidentiality has arisen. I'm taking this matter quite seriously.

I'm currently...actually, I think I indicated on the fourteenth that I would look into it. On the fifteenth, I opened my administrative review, which is my fact-finding stage. Part of that is to verify all of the information that has come out and to gather evidence that we have heard so that my investigative team will then assess all of the elements and look at all of the code's.... As I indicated in my opening remarks, it's not just a breach of one of the rules that I will be looking at, but also whether a breach of one of the principles has occurred.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Okay. So I understand from you--you've said it in your opening statement--that you are conducting an investigation.

[Karen Shepherd]

I am conducting the first stage, which is my administrative review process.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Okay.

In regard to another Conservative staffer lobbyist, Lynne Hamilton's communications log shows that in spite of her being listed as one of Ottawa's top 100 lobbyists for the last three years and having a substantial list of recognizable high-profile clients for the year 2010, she shows only one communication with a designated public office holder. In 2009, she only had four contacts, and in 2008, three.

Do you, Commissioner, take any steps to monitor whether or not the monthly communications reports are in any way consistent with the reports of other lobbyists?

[Karen Shepherd]

In terms of verifying the monthly reports, we verify roughly 5% a month. You can imagine now that MPs have been included...the last in October, I think it was reported that it was around 1,600.

[A voice]

A month.

[Karen Shepherd]

Yes: a month. Thank you.

So we are verifying with the designated public office holders in terms of the verifications of what has actually been reported.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Okay.

Mr. Ullyatt indicated in evidence that he was seeking an exemption from his five-year prohibition from lobbying and was expecting a letter from your office in this regard, Mrs. Shepherd. Did you receive such a request from Mr. Ullyatt? And if so, what response was he given or will he be given?

[Karen Shepherd]

There are two ways that an individual can be subject to a five-year prohibition. I've been asked this question in a previous committee in terms of privacy of information, but maybe I can answer the question another way.

For individuals who are subject to the five-year prohibition, if they were designated under the conflict of interest and post-employment code—if they were exempt staff in a minister's office—and if they left prior to the Lobbying Act coming into force, they were subject to this five-year prohibition, to which there was no possibility of being granted an exemption. So depending on when an individual would have left, they could not have requested an exemption. What that means is that they would be prohibited from lobbying from the date they left office in terms of acting as a consultant lobbyist, an in-house organization lobbyist, or an in-house corporation lobbyist.

When the Lobbying Act came into force in July 2008, it designated a number of individuals, and that would be those who worked in ministers' offices and their staff appointed under section 128 of the Public Service Employment Act. Those individuals may apply for an exemption, and as I said previously, I have taken a very strict view on that. I have only granted four, and the act requires that without undue delay I post the reasons for the four on the website. So if you were to check, the individual in question you're asking about is not on the website.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Okay.

Communications—

[The Chair, Conservative, Joe Preston]

Okay, Mr. Proulx--

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Am I done already?

[The Chair, Conservative, Joe Preston]

You are.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

I had seven minutes--

[The Chair, Conservative, Joe Preston]

I know, and it was exciting. I went five on this one, I'm sorry.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

We're at five. I see.

[The Chair, Conservative, Joe Preston]

I'm very sorry.

Well, not truly, but....

[Voices]

Oh, oh!

[The Chair, Conservative, Joe Preston]

Mr. Lukiwski.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you, Ms. Shepherd, for being here.

I understand completely the fact that because you have ongoing investigations, there is certain information on the particular lobbyist in question that you can't answer. I appreciate that, so I'll try to keep my comments general in terms and hopefully you can answer the generalities.

If a lobbyist were to receive a piece of confidential information, under the part where lobbyists have to register their contact with public office holders, is there any obligation on the part of the lobbyist to report receiving such confidential information? In other words, I know that lobbyists, when they initiate a contact with a public office holder, have to register it.

[Karen Shepherd]

Right.