Annual Report 2016-2017 (Page 6 of 6)
Ensuring compliance with the Act and the Code
Knowledge and understanding of the Lobbying Act (the Act) and the Lobbyists’ Code of Conduct (the Code), supported by an effective education and outreach program, provide the necessary groundwork for fostering compliance. In order to effectively ensure compliance, these efforts to educate must be complemented by a program of monitoring and enforcement. It is important that there be consequences for those who are found to be in breach of either the Act or the Code.
My compliance and enforcement program is focused on three main types of activities:
- reviews and investigations into alleged breaches of the Act or the Code;
- compliance verifications; and
- reviews of applications for exemption from the five-year, post-employment prohibition on lobbying for former designated public office holders.
Reviews and investigations into alleged breaches of the Act or the Code
When an alleged breach of the Act or the Code is brought to my attention, the Investigations Directorate undertakes a preliminary assessment to determine whether the subject matter falls within my mandate. When the potential breach falls within my jurisdiction, the next step is to initiate an informal fact-finding exercise, referred to as an administrative review. In 2016-17, my Office completed 26 preliminary assessments and initiated 13 administrative reviews.
When administrative reviews are completed, the facts and analysis are presented to me so that I may conclude whether or not the allegation is founded. If the allegation is founded I decide on a suitable means of ensuring compliance. In some cases, education and monitoring is the best course of action. In other instances, I conduct a formal investigation under the Lobbying Act. In 2016-17, I initiated two investigations, as I had reason to believe that was the appropriate action necessary to ensure compliance with the Act or Code.
Table 10 provides information about the administrative reviews I completed in 2016-17.
|Administrative Reviews Closed, by Outcome||Number Closed|
|Total number of administrative reviews closed in 2016–17||28|
|Unfounded – no registrable communication||5|
|Unfounded – no reportable communication||1|
|Unfounded – no meetings arranged||2|
|Unfounded – no improper influence||5|
|Unfounded – activity not performed for payment||3|
|Well-founded – education and monitoring||10|
|Well-founded – Lobbyists’ Code of Conduct investigation opened||2|
The time required to complete an administrative review or an investigation varies depending on factors such as the complexity of the allegation, the availability of evidence, the number of people involved, and whether interviews are required.
The Act provides me with some degree of discretion in deciding whether to pursue or cease a review or investigation. For instance, I may choose to cease an administrative review if the subject under review enters into compliance. I consider a number of factors in making my decisions. The Guiding principles and criteria for recommending compliance measures explains the application of my discretion in this regard.
If I have reasonable grounds to believe that a person has committed an offence under the Lobbying Act or any other Act, I am required to suspend my investigation and refer the matter to the police. After a file is referred to the Royal Canadian Mounted Police (RCMP), they must conduct their own investigation before deciding whether to recommend charges. If charges are laid, I must wait for the matter to be resolved by the courts before determining whether to impose additional sanctions under the Act. If the police decide not to pursue the matter, I determine if I have sufficient grounds to continue with an investigation under the Code. In either case, a referral to the RCMP will impact my timelines for completing an investigation. My Office did not refer any files to the RCMP in 2016-17.
Administrative review case studies
The following case studies illustrate different outcomes of administrative reviews that were completed in 2016-17.
Lobbying While Prohibited – Allegation Unfounded
Allegation: A former designated public office holder arranged a meeting between a federal public office holder and the owner of a local business during a period they were subject to the five-year prohibition.
Conclusion: The individual had communicated with a federal public office holder and had discussed the subject of the local business, but those activities were not performed for payment.
The allegation was deemed to be unfounded as the individual was not paid to perform the activities.
Lessons learned: Lobbying activities that are not performed for payment do not trigger the requirement to register.
Gifts and Alleged Improper Influence – Various Findings
Allegation: A number of lobbyists employed by organizations allegedly breached the 1997 Lobbyists’ Code of Conduct by donating to a fund. The allegation came to the Office’s attention following media reports that a public office holder had publicly disclosed gifts of $500 and more. A search of the Registry revealed that some of the organizations were registered to lobby the federal government.
Conclusion: In one case, the organization did not engage in registrable lobbying activity, and therefore was not subject to the Lobbyists’ Code of Conduct. In two cases, the donations did not create a real or apparent conflict of interest as the lobbyists did not lobby that public office holder.
The three allegations were deemed to be unfounded.
In the remaining cases, the donation and the degree of interaction with the public office holder were such that the activities created an apparent conflict of interest.
These two allegations were deemed to be well-founded. Taking into consideration the previous compliance history of the organizations, whether the donation had been returned, and the subsequent degree of involvement in lobbying of the individuals who made the donations, education and monitoring was deemed a suitable means of ensuring future compliance.
Lessons learned: Individuals, organizations, and corporations who lobby federal public office holders should be mindful that gifts in the form of donations risk creating the appearance of a conflict of interest. The best way to avoid the perception of a conflict of interest is to avoid giving gifts to any public office holder one may lobby. The 2015 Lobbyists’ Code of Conduct and the Commissioner’s Guidance for lobbyists regarding the application of Rule 10 of the Lobbyists’ Code of Conduct – Gifts clarify the expectations for lobbyists with respect to gifts.
Gifts and Alleged Improper Influence – Various Findings
Allegation: A number of lobbyists allegedly breached the 1997 version of the Lobbyists’ Code of Conduct by offering a public office holder tickets to various dinners and receptions. Administrative reviews were undertaken to determine whether the lobbyists had created a sense of obligation on the part of the public office holder by providing the gifts, and the degree that they interacted with the public office holder in the context of their lobbying activities.
Conclusion: In three cases, the value of the tickets and the degree of interaction with the public office holder was such that the lobbyists’ activities created an apparent conflict of interest as all three organizations were registered to lobby the government institution that employed the public office holder.
The three allegations were deemed to be well-founded. Taking into consideration the compliance history of the organizations, efforts taken by the lobbyists to verify that the public office holder was in compliance with their applicable values and ethics regulations, and the general level of awareness about the propriety of gift-giving at the time, education and monitoring was deemed a suitable means of ensuring future compliance.
Lessons learned: A gift includes anything of value, given for free or at a reduced rate, when there is no obligation to repay. Lobbyists are cautioned against providing public office holders whom they are lobbying or will lobby with tickets to charitable or other events, when these tickets are at a reduced cost or no cost. The provision of such a ticket may reasonably be viewed as creating a sense of obligation on the part of a public office holder, and therefore risks creating a conflict of interest for the public office holder. The 2015 Lobbyists’ Code of Conduct and the Commissioner’s Guidance for lobbyists regarding the application of Rule 10 of the Lobbyists’ Code of Conduct – Gifts clarify the expectations for lobbyists with respect to gifts.
The Compliance Advisory Team brings together employees from across the organization and integrates education, registration, investigation, policy and IT expertise. The Team reviews existing compliance verification activities, recommends ways to make the activities more effective, and proposed new activities designed to increase compliance. Analysis of factors that may influence federal lobbying helps to determine how to improve the effectiveness of monitoring and compliance verification activities.
There are five types of compliance verification activities performed by my Office:
- monthly communication report verifications;
- compliance assessments;
- compliance analyses;
- compliance audits; and
- media monitoring.
Monthly communication report verifications
My Office conducts verifications to confirm the accuracy of monthly communication reports submitted by lobbyists. Every month, a 5% sample of reports submitted during the previous month is selected. Designated public office holders identified in those reports are asked to validate the information. In addition to measuring the accuracy of communications reports, this process is effective in reminding designated public office holders that they are the object of reportable lobbying activities.
In 2016-17, my Office completed 136 verifications with designated public office holders, covering 867 monthly communication reports. Those verifications confirmed that 809 (93%) of the sampled reports were accurate. Of those that were found to be inaccurate, two-thirds had only minor clerical or over-reporting errors.
One year after a registrant has been advised of a breach, an assessment is conducted to determine if the registrant became compliant with the Act. The purpose is to determine whether there were repeated instances of the same type of non-compliance. Where additional kinds of non-compliance are uncovered, suitable measures are applied.
In 2016-17, my Office conducted 33 compliance assessments and found no instances of repeat non-compliance or additional non-compliance different from the original type being monitored.
My Office analyzes compliance by conducting research, reviewing and comparing lobbyists’ information in the Registry. This analysis may focus on specific sectors of the economy or on particular issues of interest to uncover potential non-compliance. As a result, my Office identifies where knowledge of the Act may be improved and where outreach and compliance efforts may be targeted to foster compliance. This year, my staff conducted five compliance analyses and sent 38 advisory letters to ensure individuals are aware of the requirements of the Act.
The integrity of the Registry requires that the information it contains is complete, accurate and up-to-date. This is important to assure Canadians that lobbying is being done in a transparent manner.
Compliance audits of registrations validate the information submitted by registrants and ensure it is accurate and up-to-date. This year, my Office undertook a compliance audit that compared information about government funding in selected registrations with the amounts reported in the Government of Canada’s Public Accounts. This audit did not uncover any material inaccuracies.
My Office monitors media reports to identify individuals, organizations, and corporations that may be lobbying. This information is then used to verify their registration status.
When necessary, advisory letters are sent to individuals, organizations, and corporations which may be engaging in registrable lobbying activity to ensure they are aware of the requirements of the Act and the Code. In 2016-17, following media monitoring, 76 individuals, organizations, and corporations were verified. As a result, a total of 28 advisory letters were sent to confirm compliance.
Compliance with the five-year prohibition – applications for exemption
Under the Lobbying Act, former designated public office holders are subject to a five-year prohibition on lobbying. These individuals cannot:
- work as consultant lobbyists;
- work for an organization and carry out lobbying activities on behalf of that organization; or
- work for a corporation if lobbying constitutes a significant part of their work on behalf of the corporation.
The Lobbying Act gives me the authority to grant an exemption from the five-year prohibition if I determine that an exemption would not be contrary to the purposes of the Act.
In 2016-17, my Office completed 15 exemption reviews. Based on the results of those reviews, I granted nine exemptions and denied six. As required by the Act, exemptions, and the reasons for granting them, are published on the OCL’s website.
I believe that timely decisions about exemption requests lead to greater compliance with the five-year prohibition. This year, I issued all letters of intent within my 60-day service standard.