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The System is the Scandal

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Section: Opinion Geography: Canada Topics: democracy, media

April 16, 2005

The System is the Scandal

Stronger rules, enforcement and penalties, not an election, needed to prevent future scandals

by Duff Conacher

"If government is to play a positive role in society, as it must, honesty and integrity in our political institutions must be restored."
--from "Governing with Integrity", Chapter 6 of the federal Liberal Party's 1993 election platform
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Opposition parties and the press are taking advantage of the sponsorship scandal to trash the Liberals, but Duff Conacher wants to know why they aren't pushing for real anti-corruption reforms. Photo: Rob Maguire
The Jean Chrétien Liberals were correct when they pointed out that lack of honesty and integrity fundamentally undermines everything a government tries to do to solve societal problems. The deep irony is that Chrétien did little until very late in his reign as Prime Minister to ensure that his government operated with integrity (as the Gomery Commission inquiry into the Adscam sponsorship scandal (and many other recent inquiries) have revealed).

Chrétien record of broken promises, excessive secrecy and ineffective half-measures in the area of government ethics and accountability undermined his government, his legacy, and now the Liberals overall.

Several federal politicians, and media commentators, claim that this is the worst government scandal Canada has ever seen (ignoring the much larger sums of money involved in the Canadian Pacific Railway scandal in the 1870s, as well as many other past scandals that had just as serious implications for the government of the day).

More importantly, the parties and commentators are ignoring that the actual worst scandal is that all of these scandals have occurred and still, almost 138 years since Canada was established, the federal government's accountability system is not strong enough to prevent such secrecy, corruption and waste.

The federal Liberals have failed in 11 years of governing to clean-up the system, despite promising to "govern with integrity" and to slay Canada's "democratic deficit." But so has every other government of every political stripe right back to Confederation. When all is said and done, much more has been said than done.

Why? As in past scandals, opposition parties and media are hot on the trail of the ruling party, loudly pointing to the evidence of scandal. As in the past, their favourite solution is an election to punish the ruling party. But history proves that elections are a very ineffective way to clean up a government, as having a different party in power has done little to ensure that they use that power honestly, ethically, openly, efficiently and responsibly.

The opposition parties' and media's criticisms of the Liberals would have a stronger ring of sincere concern if, in the past, they pushed just as loudly for changes to ensure integrity in the annual flow of tens of millions of dollars through the bank accounts of federal political parties and politicians, and the annual flow of tens of billions of dollars in government spending, and in government policy-making processes generally.

But the opposition parties and the media did not focus on serious flaws in political donations, government ethics, openness, spending and hiring laws between 1994 and 1999, the first five years the federal Liberals were in power, and I believe this lack of attention in part encouraged the Liberals to launch the sponsorship program in secret.

For example, look at the headlines of almost all TV, radio and print media coverage of the federal ethics enforcement system during this time period. The media almost always called federal Ethics Counsellor Howard Wilson the "ethics watchdog" or "ethics czar" even though it was clear from the day the structure of his new office was made public in June 1994 that he had no independence from Prime Minister Chrétien, had no investigative powers, and that Chrétien was the final decision-maker about whether he or any other Cabinet minister broke the ethics code. In other words, the so-called ethics watchdog was clearly always a lapdog.

In 18 of the 20 cases in which a Liberal Cabinet minister was alleged to have broken the code, Chrétien would trot out the Ethics Counsellor to issue a statement (almost always not backed up by any investigation report) and the media headline was always "Ethics watchdog clears minister" when, to be accurate, it should have read "Prime Minister clears his own minister".

The media also generally maintained its traditional attitude through this time period that Canadian politicians would not hand out favours in return for the relatively small donations (compared to the U.S.) made in the Canadian political system.

The opposition parties' election platforms in the 1997 and 2000 elections were not much better at acknowledging systemic problems, at best making vague promises to strengthen rules, enforcement and penalties in a few areas (in 2000 no party promised to strengthen the access-to-information law). Even their 2004 election platforms still had major gaps in the areas of requiring honesty in politics and ensuring disclosure of, and restrictions on, the activities of all lobbyists (not that the Liberals made any stronger promises in any of these three elections).

And almost all federal parties have run leadership campaigns in the past few years that were not exactly hallmarks of ethics, openness, and strict rules enforcement (for example, Paul Martin became Prime Minister by spending $9 million to win the Liberal Party leadership, twice the amount allowed by the Liberals for leadership campaigns, including more than $2.5 million donated from 60 corporations that lobby the federal government).

True, finally in 2003-04 the Liberals made significant, democratizing changes to the federal political donations law and federal ethics rules. However, several huge loopholes remain that, essentially, legalize corrupt activities, and the opposition parties and the media have also been almost completely silent about them.

First, if you can believe it, secret donations of unlimited amounts of money are still allowed to candidates in federal elections. As long as the candidate does not use the money for political purposes such as their election campaign, they never have to disclose that they received it, nor who donated it. One Liberal MP (who is now a Cabinet minister), admitted a few years ago that he had a personal bank account with more than $200,000 in it, but he refused (and he is not required) to disclose who gave him the money.

Second, parties and candidates are still not required to disclose who bankrolled their election campaigns before election day, and some election costs still do not have to be disclosed. As a result, voters have to cast their ballot without knowing who may have some ownership or undue influence over a candidate or party.

Third, individuals are still allowed to donate up to $5,000 annually to each party, and to each nomination candidate or party leadership candidate, and the employer and other affiliations of donors are not disclosed. Ad company executives have testified at Gomery Commission that they hid large donations by splitting them up and funnelling them through employees. To prevent this in the future, donations must be limited to no more than $1,000 annually, full identity of donors must be clearly disclosed, and limits must be placed on total donations from any business, industry or organizational sector.

Fourth, federal ethics rules for political parties, politicians, government employees, and lobbyists are still filled with many other loopholes, are still not effectively enforced, have weak penalties, and don't protect people who blow the whistle on wrongdoing. Access-to-information, hiring and spending rules for parties, politicians and government employees are similarly loophole-filled and weakly enforced (allowing the government to hide, among many other things, the size of the federal surplus).

To give just two examples of ongoing weak enforcement, the Registrar for Lobbyists, who is the new enforcer of the Lobbyists Code of Conduct, is still under the control of a Cabinet minister (even though he enforces rules that apply to the relationships between lobbyists and Cabinet ministers, ministerial staff, and MPs).

And the new Ethics Commissioner does not have enough staff to enforce ethics rules for politicians, and so he hired law firm Borden, Ladner Gervais (BLG) to investigate whether Cabinet minister Judy Sgro broke the rules. BLG donated more than $160,000 to the Liberals between 2000 and 2003 (2004 donations have not yet been disclosed), more than $25,000 to Paul Martin's leadership campaign, and has three lawyers representing Liberals before the Gomery Commission inquiry. In other words, a law firm with several significant ties to the federal Liberal Party is investigating a federal Liberal Cabinet minister. Does anyone believe this will be an effective investigation?

Fifth, incredibly many government organizations and organizations that receive significant government funding are not even covered by the key accountability measures of the access-to-information law, ethics rules, hiring and spending rules, and auditor general oversight. Organizations operating without legal accountability in one or more of these areas include the Senate, Crown corporations such as NavCan (responsible for ensuring planes don't crash into each other) and Export Development Canada (responsible for handing out loans and grants to Canadian businesses' export and overseas ventures), and several foundations created by the Liberals in the past several years that are responsible for handing out $7 billion in grants.

Parties and candidates raise tens of millions of dollars each year, and during each election campaign, and politicians, their staff, and government employees are constantly wined and dined by corporate lobbyists and special interest groups wanting changes to laws, policies and programs, or wanting tax breaks, subsidies, contracts or grants.

There are two old sayings -- "money talks" and "he who pays the piper calls the tune" -- that have been proven true again and again throughout history. And yet Canadian politicians and the Canadian media continue to pretend that somehow things are different in Canada, that somehow these millions of dollars have no influence, that somehow Canadian politicians and government employees are immune from corruption.

This naive and overly generous attitude, especially by Canada's mainstream media, continues despite the fact that unethical activities similar to the sponsorship scandal have occurred all the way back to Confederation.

The Gomery Commission inquiry and the upcoming trials are easy and sexy for the media to cover. But when the inquiry and trials are over, the flaws in Canada's political donations, government ethics, and government spending systems will remain, open to being exploited by another political party, politician, government employee, corporation or special interest group.

As the Supreme Court of Canada recognized in a 1996 ruling finding a federal bureaucrat guilty of corruption (the R. v. Hinchey ruling), if politicians and government employees are not held to very high and strict ethical standards, Canada will not have democratic governments.

To their credit, several surveys have revealed that Canadians generally are not so naive about government corruption. Canadians have even tried to use the imperfect tool of elections to send a clear message about their feelings about scandalous activities, reducing the federal Conservatives to two seats in Parliament in 1993, almost reducing the Liberals to a minority in 1997, and doing just that in 2004 (voters have also used elections to try to send the same message to provincial and territorial governments).

Despite such election results, the federal political parties have coasted along, largely ignoring the many flaws in key government accountability measures. As long as none of them make titanium-clad promises to clean things up, they all continue to protect each other from effective accountability.

The failure of all of the parties to make serious pledges to strengthen all the key rules, enforcement agencies, and penalties means that an election now, or anytime, will not prevent another scandal from happening. No matter what party is in power, the system will still allow for, even encourage, corrupt activities.

Two things now, finally, have to happen or no one should be surprised to see more money and ethics scandals in the future.

The media must, much more than it has in the past, keep the spotlight shining brightly on all the systemic flaws in the federal government's honesty, ethics, openness, waste prevention, and general accountability enforcement measures. TV and radio stations are spending dozens of hours, and newspapers and magazines are filling dozens of pages, with tales of the Gomery inquiry. They must devote just as much time and space to highlighting the systemic flaws that the inquiry is revealing.

And the media must just as clearly and repeatedly highlight the systemic flaws in federal political parties' election platforms until they are all embarrassed into pledging, and acting, to close every loophole and ensure strict enforcement and high penalties for rule violators (the same approach must be taken with provincial and city governments).

Canadians have just as much of a right to know about systemic problems with their government as they do to know all of the testimony and evidence presented to the Gomery inquiry.

We can only hope the media will take this responsibility seriously, and do their job well.

Duff Conacher is the Coordinator of Democracy Watch, a citizen group that advocates for democratic reform, government accountability and corporate responsibility.

(Read a letter from an EDC spokesperson in response this article.)

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The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.

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