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The lobbying activities of Will Stewart

Table of contents

Letters

The Honourable Noël A. Kinsella
Speaker of the Senate
The Senate
Ottawa, Ontario
K1A 0A4

Dear Mr. Speaker:

Pursuant to section 10.5 of the Lobbying Act, I have the honour of presenting to you a Report on Investigation on the lobbying activities of Will Stewart for tabling in the Senate. The investigation was conducted in accordance with the provision of section 10.4 of the Act.

Sincerely yours,

Karen E. Shepherd


The Honourable Peter Milliken, M.P.
Speaker of the House of Commons
Room 316-N, Centre Block
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Mr. Speaker:

Pursuant to section 10.5 of the Lobbying Act, I have the honour of presenting to you a Report on Investigation on the lobbying activities of Will Stewart for tabling in the House of Commons. The investigation was conducted in accordance with the provision of section 10.4 of the Act.

Sincerely yours,

Karen E. Shepherd

Commissioner's comments

As Commissioner of Lobbying, I have the responsibility to investigate allegations of activities that may be in breach of the Lobbying Act and the Lobbyists' Code of Conduct. This case came to my attention as a result of the publication of media reports in the Toronto Star regarding a political event held to raise money for the Honourable Lisa Raitt, who was at the time, the Minister of Natural Resources. On October 2, 2009, the Star reported, among other things, that Michael McSweeney, a registered lobbyist employed as Vice President, Industry Affairs, at the Cement Association of Canada (CAC), had participated in the organization of a fundraising dinner held on September 24, 2009 for the Minister of Natural Resources.

On October 5, 2009, I initiated an administrative review, a fact-finding exercise to help me determine whether to conduct an investigation, into the lobbying activities of Mr. McSweeney. On October 6, 2009, the administrative review was expanded to include a review of the lobbying activities of Mr. Will Stewart, following my receipt of a letter from Arthur Hamilton identifying himself as the "solicitor for the Conservative Party of Canada and its various electoral district associations." In it, Mr. Hamilton informed me that the Halton Electoral District Association had undertaken a fundraiser on behalf of Minister Raitt, and that two registered lobbyists had "participated in certain ticket sales in respect of the fundraiser — Mr. Will Stewart and Mr. Michael McSweeney." He also advised that the Conservative Party of Canada and the Halton Electoral District Association were reviewing potential remedial measures, and that he would correspond further once they were implemented.

On July 29, 2010, based on information obtained during the administrative review, I decided to open an investigation under subsection 10.4(1) of the Lobbying Act.

Issue

Lobbyists have legal and professional obligations to follow when they work on behalf of clients or employers. Individual consultant lobbyists are required to file a return with the Commissioner if, for payment, they undertake to arrange meetings or communicate with public office holders in respect of: the development of any legislative proposal; introduction, passage, defeat or amendment of any Bill or resolution; making or amendment of any regulation; development or amendment of any policy or program; or, the awarding of any grant, contribution or financial benefit. Once registered, they are required to report upon their communications with designated public office holders on a monthly basis.

All lobbyists are required to comply with the Lobbyists' Code of Conduct. The allegations in this case concern the active participation of lobbyists in a political fundraiser on behalf of Minister Raitt during a period of time when registered lobbying activities, including direct lobbying of Minister Raitt, were also taking place. This was alleged to be a breach of Rule 8 of the Lobbyists' Code of Conduct, one of three rules in the Code dealing with conflict of interest.

Investigation

The Lobbyists' Code of Conduct investigation carried out by my Office involved a review and analysis of the facts surrounding the lobbying activities of Mr. Stewart, a series of interviews and the preparation of an investigation report by the Investigations Directorate. Mr. Stewart was provided with an opportunity to present his views upon that Investigation Report. I have considered the views of Mr. Stewart and the arguments of his legal counsel in preparing this Report to Parliament on my findings, conclusions and reasons for those conclusions, as required by subsection 10.5(1) of the Lobbying Act.

Conclusions

In this report, I conclude that Mr. Stewart participated in the organization of a fundraising event for the Halton Conservative Association held on September 24, 2009, by playing an important role in the organization of the event and by selling tickets for the event. His actions advanced the private interest of then Minister of Natural Resources, the Honourable Lisa Raitt, by virtue of the fact that she was the electoral candidate of the Halton Conservative Association at the time of the fundraiser.

During the same period of time, Mr. Stewart was registered to lobby on behalf of various clients in respect of subjects that fell within the purview of Minister Raitt, and he communicated with her directly in respect of registrable subjects.

In view of this, I have concluded that his actions placed the Minister in an apparent conflict of interest and he was, therefore, in breach of Rule 8 of the Lobbyists' Code of Conduct.

However, in fairness to Mr. Stewart, following the decision of the Federal Court of Appeal in Democracy Watch v. Barry Campbell et al.Footnote 1 on March 12, 2009, lobbyists were placed in a position in which their obligations under Rule 8 of the Lobbyists' Code of Conduct had changed. Given the variety of different factual situations that could arise, lobbyists have argued that it was difficult for them to determine the point at which their political activities might have implications upon their lobbying activities. The point at which their lobbying activities would place a public office holder into a conflict of interest had been changed by that Federal Court of Appeal decision, and the result was the creation of some uncertainty for lobbyists.

I trust that this Report will provide further guidance regarding the application of Rule 8 and assistance to lobbyists in reconciling their lobbying activities with political activities that they may be engaged in.

The Lobbyists' Code of Conduct

Lobbying is a legitimate activity. When carried out ethically and transparently, and in conformity with the highest standards of conduct, it can enhance the dialogue between Canadians, businesses and organizations and government.

The Lobbyists' Code of Conduct (the Code) came into effect on March 1, 1997, as a complement to the former Lobbyists Registration Act (the LRA). It was instituted to assure Canadians that the lobbying of federal public office holders is carried out in a manner that ensures public confidence and trust in the integrity, objectivity and impartiality of government decision-making. Individuals who engaged in activity deemed registrable under the Lobbying Act (the Act), must also comply with the Lobbyists' Code of Conduct.

During the period covered by this report, individuals paid to communicate, or arrange meetings, with public office holders were required to register in the Registry of Lobbyists. Public office holders are defined as being virtually anyone occupying a position in the Government of Canada; including members of the Senate and the House of Commons and their staff, as well as employees of federal departments and agencies, members of the Canadian Forces and members of the Royal Canadian Mounted Police.

The Lobbyists' Code of Conduct establishes mandatory standards of conduct for individuals who engage in activity deemed registrable under the Act. Like most professional codes, the Lobbyists' Code of Conduct begins with a preamble that states its purpose and places it in a broader context. Next, a body of overriding principles sets out, in positive terms, the goals and objectives to be achieved, without establishing precise standards. The principles of Integrity, Honesty, Openness and Professionalism are set out as goals that should be pursued, and are intended as general guidance.

The principles are followed by a series of eight rules that place specific obligations and requirements on lobbyists. The rules are organized into three categories: Transparency, Confidentiality, and Conflict of Interest. Under the rules of Transparency, lobbyists have an obligation to provide accurate information to public office holders, and to disclose the identity of the persons or organizations on whose behalf their representation is made, as well as the purpose of the representation. They must also disclose to their clients, employers or organizations their obligations under the Lobbying Act and the Lobbyists' Code of Conduct. Under the rules of Confidentiality, lobbyists may not divulge confidential information, nor use insider information to the disadvantage of their clients, employers or organizations. The Conflict of Interest rules prohibit lobbyists from representing conflicting or competing interests without the consent of those whose interests are involved, or placing public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence.

Investigations of alleged breaches of the Lobbyists' Code of Conduct

Lobbyists have a legal obligation to comply with the Lobbyists' Code of Conduct. Under the Lobbying Act, the Commissioner is required to conduct an investigation if the Commissioner has reason to believe that an investigation is necessary to ensure compliance with the Act or the Code, as applicable.

Breaches of the Lobbyists' Code of Conduct do not carry fines or jail sentences, but the Commissioner's report of the investigation — including the findings, conclusions, and reasons for those conclusions — must be tabled before both Houses of Parliament. There is no limitation period for investigating breaches of the Lobbyists' Code of Conduct.

Rule 8 of the Lobbyists' Code of Conduct reads as follows:

Rule 8 — Improper Influence (Conflict of Interest)

Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.

Rule 8 of the Lobbyists' Code of Conduct (the Code) has not changed since the Code first came into effect in 1997. However, the decision of the Federal Court of Appeal in Democracy Watch v. Campbell et al.. had the effect of changing the manner in which Rule 8 of the Code must be interpreted. This decision has led me to provide guidance to lobbyists regarding the interpretation of Rule 8, which I consider to be consistent with the ruling of the Federal Court of Appeal. I provided lobbyists with my Guidance on Conflict of Interest — Rule 8 (Lobbyists' Code of Conduct) in November 2009.Footnote 2 This led to discussion and dialogue with lobbyists regarding the interpretation and application of Rule 8, and I provided a further clarification regarding Political Activities in August 2010.Footnote 3 This Guidance and the Clarifications were provided to lobbyists following the events that this Report addresses. I have considered the fact that Mr. Stewart did not have the benefit of my Guidance to help assist him in evaluating his lobbying activities in consideration of his political activities.

The following Report on Investigation concerns a particular political fundraising event that occurred about six months after the decision of the Federal Court of Appeal in Democracy Watch v. Campbell et al.

Background

History of the case prior to the Lobbyists' Code of Conduct investigation

I initiated an administrative review concerning the lobbying activities of Michael McSweeney on October 5, 2009, following the publication of reports in the Toronto Star regarding a political event held to raise money for the Honourable Lisa Raitt, then the Minister of Natural Resources. On October 2, 2009, the Star's Richard J. Brennan reported, among other things, that Michael McSweeney, a registered lobbyist employed as Vice President, Industry Affairs, at the Cement Association of Canada (CAC), had participated in the organization of a fundraising dinner for Minister Raitt.

On October 6, 2009, I received a letter from Arthur Hamilton identifying himself as the "solicitor for the Conservative Party of Canada and its various electoral district associations." In it, Mr. Hamilton informed me that the Halton Electoral District AssociationFootnote 4 had undertaken a fundraiser on behalf of Minister Raitt, and that two registered lobbyists had "participated in certain ticket sales in respect of the fundraiser — Mr. Will Stewart and Mr. Michael McSweeney." He also advised that the Conservative Party of Canada and the Halton Electoral District Association were reviewing potential remedial measures, and that he would correspond further once they were implemented.

On October 29, 2009, Mr. Hamilton sent me a fax message advising that, as of October 7, 2009, the Halton Electoral District Association "voluntarily began refunding money paid by certain ticket purchasers." He stated that full refunds were provided to ticket purchasers falling into the following three categories.

  1. Tickets sold by "lobbyist Michael McSweeney."
  2. Tickets sold by "lobbyist Will Stewart."
  3. Tickets sold to stakeholders of Natural Resources Canada and their employees including persons registered to lobby the department.

Mr. Hamilton offered to provide confirmation of the ticket purchase and the date on which the money was refunded.

I expanded the administrative review concerning the lobbying activities of Mr. McSweeney to include the lobbying activities of Mr. Stewart on October 6, 2009, following the receipt of the letter from Mr. Hamilton.

Initiation of the Lobbyists' Code of Conduct investigation

I initiated an investigation under subsection 10.4(1) of the Act on July 29, 2010, based on information obtained during the administrative review conducted by the Investigations Directorate of my Office. That administrative review was for the purpose of enabling me to determine whether an investigation was necessary to ensure compliance with the Lobbying Act or the Lobbyists' Code of Conduct. Upon completion of the administrative review, I instructed the Investigations Directorate to initiate a Lobbyists' Code of Conduct investigation under the Act.Footnote 5

Objective

The objective of the investigation was to determine whether Will Stewart was in breach of Rule 8 of the Lobbyists' Code of Conduct as a consequence of his involvement in the September 24, 2009 fundraising event by the Halton Conservative Association (HCA) for the benefit of Minister Raitt.

Methodology

The investigation involved a review of the allegations and an assessment of the activities of Mr. Stewart in support of the fundraiser. This involved an assessment of the facts surrounding the allegations and information received from the complainants and those interviewed, as well as a review of information in the media, news releases and information on the Internet. Interviews were conducted with a number of people including:

  • The Honourable Lisa Raitt, Minister of Natural Resources;
  • Janet Macdonald, Executive Assistant, Toronto Port Authority;
  • John Challinor, President, Halton Conservative Association;
  • Michael McSweeney, then Vice-President, Cement Association of Canada (CAC); and
  • Will Stewart, registered consultant lobbyist.

The report of the Investigations Directorate analyzed the information gathered from all of the sources and the case against Mr. Stewart and reached the conclusion that his actions placed Minister Raitt in an apparent conflict of interest and he was, therefore, in breach of Rule 8 of the Lobbyists' Code of Conduct. This report was provided to Mr. Stewart, who provided a response to the report, making a number of arguments based in both fact and law. I have considered all of these arguments carefully in reaching my findings and conclusions.

The subject

Mr. Will Stewart is a consultant lobbyist associated with two firms, Ensight Canada and Navigator Ltd. The Ensight Canada website describes him as a Senior Consultant who previously served as Chief of Staff to a number of Ministerial portfolios in the province of Ontario, including those of Energy, Social Services, Children and Francophone Affairs. After leaving the Government of Ontario, he was employed for a period of time by the Electricity Distributors Association of Ontario as Director of Policy and Communications.

Mr. Stewart was president of the Halton Conservative Association from January 2007 to January 2009. At the time of the fundraising event, Mr. Stewart was no longer the President of the HCA.

The clients

Will Stewart's registration history

Mr. Stewart has been an active lobbyist for a number of years. He filed over 90 consultant lobbyist registrations in respect of undertakings on behalf of 49 different clients since July 2008. Departments that have been identified by Mr. Stewart in his registrations as the object of communication include: Natural Resources Canada; Agriculture and Agri-Food Canada; Environment Canada; Finance Canada; Fisheries and Oceans Canada; Infrastructure Canada; Transport Canada; and, the Prime Minister's Office.

Mr. Stewart registered 52 undertakings during Minister Raitt's tenure at Natural Resources Canada, from October 30, 2008 to January 19, 2010. Eighteen of Mr. Stewart's registrations identified Natural Resources Canada as being the object of his communication activities.

The subject matters of communication listed in Mr. Stewart's registrations include: Agriculture; ecoEnergy; Energy; Environment; Fisheries; Government Procurement; Health; Industry; Infrastructure; International Relations; Mining; Science and Technology; Small Business; Taxation; and, Finance and Transportation.

Mr. Stewart also identified a number of legislative proposal, bills, policies and programs as being the potential subject of lobbying activities, including the following:

  • discussions with government concerning the commitments to wind power in the Throne Speech, and the government's commitment to renewable power;
  • climate change policy [and] promoting the benefits of propane gas as transportation fuel for the federal government's fleet of vehicles;
  • obtaining infrastructure funding for new university facilities; and
  • strengthening awareness and support for the implementation of a progressive oceans policy.

Mr. Stewart reported registrable communications with designated public office holders in the Office of the Minister of Natural Resources on seven occasions, six of them on behalf of the Canadian Wind Energy Association. He communicated directly with Minister Raitt on March 3, 2009 and June 9, 2009, to discuss the ecoEnergy program.

Ensight Canada/Navigator Limited

Ensight Canada is headquartered in Ottawa, and was created out of a partnership between OEB Enterprise Inc. and Navigator, two Toronto-based research, strategic communications and government relations firms.

The Ensight website contains the following description of the firm:

Combining the skills and expertise of both firms, Ensight specializes in government relations and stakeholder management at the strategic level. Our focus is on helping clients make their best case, at the right time and the right place, not on claims of exclusive access. Our team is led by senior practitioners with deep personal relationships with key decision makers. We share our expertise about how governments work, not just a phonebook.

The fundraiser

The September 24, 2009 fundraiser was organized by the Halton Conservative Association in coordination with a member of the Minister's staff, Colin McSweeney, in an effort to prepare for an upcoming election. Colin McSweeney sought the help of his brother Michael McSweeney to help with the event. Three members of the HCA Board of Directors organized the event and sent out the invitations: Pat Whyte; Will Stewart; and, Beth Gregg. Will Stewart was one of the principal organizers. They targeted residents in Halton, including friends and people who had donated in the past. Approximately 30 to 40 people attended the event. The amount of money raised was approximately $8,300. The Minister did not have a pre-fundraiser briefing, and did not know who was attending the event until she arrived.

Process

The Lobbyists' Code of Conduct investigation of Will Stewart covered his lobbying activities during the period surrounding the fundraiser, and involved an examination of those lobbying activities and information and materials regarding the organization of the fundraiser on behalf of the Halton Conservative Association, interviews with a number of public office holders and persons involved in the Halton Conservative Association, an examination of the Registry of Lobbyists and an examination and analysis of information obtained during the administrative review.

Following the investigation, a copy of the Investigations Directorate's report was sent to Mr. Stewart to give him an opportunity to present his views, as required by subsection 10.4(5) of the Lobbying Act, and in accordance with the principles of administrative fairness. He provided his response in three letters from his legal counsel dated September 15 and 16, 2010 and December 6, 2010.

I considered both the report of the Investigations Directorate and Mr. Stewart's views in making my findings and reaching my conclusion, which are set out in this Report on Investigation.

Lobbyists' Code of Conduct

Rule 8 reads as follows:

Rule 8 — Improper Influence (Conflict of Interest)

Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.

Interpretation of Rule 8

Guidance has been provided to lobbyists regarding Rule 8 since 2002. The former Ethics Counsellor examined the application of the Lobbyists' Code of Conduct, in particular Rule 8, to a situation that had been referred to him: allegations that registered lobbyists had breached the Lobbyists' Code of Conduct by lobbying a federal department at the same time they were involved in assisting the Minister responsible for that department on a potential bid for the leadership of a political party. The Ethics Counsellor issued guidelines entitled "Rule 8 — Improper Influence — Lobbyists and Leadership Campaigns" (the "2002 Guidelines")Footnote 6.

The 2002 Guidelines were the subject of the March 2009 decision of the Federal Court of Appeal in Democracy Watch v. Campbell and Attorney General of Canada (Registrar of Lobbyists) 2009 FCA 79.Footnote 7 In that decision, the Federal Court of Appeal held that the interpretation of Rule 8 based upon those 2002 Guidelines by my predecessor, the Registrar of Lobbyists was unreasonable.

In my Guidance on Conflict of Interest — Rule 8 (Lobbyists' Code of Conduct) published November 6, 2009, I provided guidance to lobbyists regarding the interpretation and application of Rule 8, based upon the Court's direction in that decision. In the Annex to that GuidanceFootnote 8, I expanded upon my reasoning, explaining that:

The following consideration factored into the Commissioner's guidance regarding Rule 8 of the Lobbyists' Code of Conduct:

Conflict of interest may exist because of a "reasonable apprehension" of an apparent conflict of interest, rather than a demonstration of interference with the public duties of a public office holder.

The determination of what constitutes an improper influence upon a public office holder must remain a question of fact in each case. Depending on the specific circumstances, a competing obligation or private interest could arise from factors such as, but not limited to:

  • the provision of a gift, an amount of money, a service, or property without an obligation to repay;
  • the use of property or money that is provided without charge or at less than its commercial value; and
  • political activities.

Lobbyists should endeavour to conduct themselves in the highest ethical manner thus avoiding situations which could create a real or apparent conflict of interest for a public office holder.

I also interpreted "real or apparent conflict of interest" as follows:

A conflict of interest can be created by the presence of a tension between the public office holder's duty to serve the public interest and his or her private interest or obligation created or facilitated by the lobbyist.

I take the view that this interpretation flows directly from the manner in which the Federal Court of Appeal summarized the concept of improper influence in its decision:

"Improper influence has to be assessed in the context of conflict of interest, where the issue is divided loyalties. Since a public office holder has, by definition, a public duty, one can only place a public office holder in a conflict of interest by creating a competing private interest. That private interest, which claims or could claim the public office holder's loyalty, is the improper influence to which the Rule refers."Footnote 9

From my perspective, the risk of creating the appearance of a conflict of interest is proportionate to the degree to which a lobbyist's actions advance the private interest of a public office holder and the degree to which that lobbyist may interact with the public office holder as a consequence of their employment or undertaking.

In conducting this investigation, I asked the Investigations Directorate to examine whether Mr. Stewart placed Minister Raitt in a conflict of interest, including the appearance of a conflict of interest.

Findings

Report of the investigations directorate

The Investigations Directorate (the Directorate) examined whether Mr. Stewart was in breach of Rule 8 when he participated in the organization of the September 24, 2009 fundraising event for the Halton Conservative Association (HCA). The Directorate's Report analyzed the degree to which Mr. Stewart advanced the private interest of Minister Raitt.

The fundraising event was organized by the HCA to raise money for Minister Raitt's next election campaign. The previous election campaign had cost the HCA approximately $106,000. The Directorate concluded that the efforts of the HCA and various volunteers to raise sufficient funds to run a campaign for re-election are actions which advanced the private interest of Minister Raitt. Those actions could potentially create a tension between her private interest and her duty to serve the public interest.

Mr. Stewart moved to Halton in 2004, became involved in the 2006 election campaign with the Halton Conservative Association and was elected to the HCA Board of Directors in 2006. He became Vice President of the Board and was elected President in January 2007. He was re-elected in January 2008 and served until the end of his term in January 2009. As a result, Mr. Stewart was involved in a number of HCA activities, including over 10 fundraisers. In January 2009, he stepped down from his position as President of the HCA, but retained his membership on the Board of Directors.

Mr. Stewart indicated that he had been involved in a number of fundraisers since he joined the HCA, and that while the Board of Directors looked to him for fundraising assistance, he was not officially in charge. Mr. Stewart's role with respect to the September 24th fundraiser was to provide reports to the board of the HCA, as the other people involved in the fundraiser (Michael McSweeney, Justine Deluce and Janet MacDonald) were not members of the HCA.

Mr. Stewart became involved in the September, 24, 2009 fundraiser upon receiving a phone call from Colin McSweeney, who was employed in Minister Raitt's office. He is the brother of Michael McSweeney. Colin McSweeney advised Mr. Stewart of the date and location of the planned event. Several people contributed to the organization of the event, but there was no single person in charge of the event. The registration form sent by Janet Macdonald was designed by one of Mr. Stewart's colleagues at Navigator, and Michael McSweeney's name appeared on the document as the contact person for responses.

Mr. Stewart indicated that he sent between 25 and 50 invitations to people on a list made of people interested in government, including lawyers and some clients of Ensight, such as the Canadian Wind Energy Association (CWEA), Clean Air Foundation, Ontario Power Generation, Bell, Rogers and SkyPower. Mr. Stewart initially indicated that he sold approximately 35 tickets. That number was subsequently revised to an estimate of about 25 tickets, based upon a review of the entire number of tickets sold.

Mr. Stewart indicated that he was not aware exactly how many people attended or exactly how much money was raised as he missed the board meetings that took place after the event, and that it can be difficult to know exactly how many people attended, as attendees are able to pay at the door or afterwards, while others may fail to show up. He estimated that the fundraiser raised between $5,000 and $10,000, and incurred $1,800 in expenses.

The Directorate concluded that Mr. Stewart's involvement in the fundraising event advanced the private interest of Minister Raitt to a high degree. These conclusions were based upon an analysis of the information obtained by the Directorate and the decision of the Federal Court of Appeal in Democracy Watch v. Campbell et al. The framework for analysis that was developed by my Office has been set out in my Guidance and the Clarifications about political activities in the context of Rule 8 that I issued in August 2010Footnote 10.

The Investigations Directorate examined the degree to which Mr. Stewart interacted with Minister Raitt as a consequence of his activities as a consultant lobbyist and the degree to which the subject matter of his lobbying activities fell within the purview of the Minister.

Minister Raitt was first elected to the House of Commons on October 14, 2008. She was appointed as Minister of Natural Resources on October 30, 2008 and remained in that portfolio until January 19, 2010. At the time of the events under examination, she was a member of the Cabinet Committee on Economic Growth and Long-term Prosperity and the Cabinet Committee on Environment and Energy Security.

At the time that he participated in the organization of the HCA fundraiser, Mr. Stewart was registered as a consultant lobbyist. Mr. Stewart registered 52 consultant lobbyist undertakings during the time that Minister Raitt was the Minister of Natural Resources. Eighteen of those registrations, submitted on behalf of 12 different clients, identified Natural Resources Canada as being the object of communication.

Mr. Stewart was registered to lobby federal public office holders in respect of various subjects, including: agriculture; energy; environment; fisheries; infrastructure; and, transportation. Minister Raitt, as the Minister of Natural Resources and a member of two Cabinet Committees, had a mandate to consider all of the aforementioned subjects at the time that the fundraiser was being organized and afterwards.

Mr. Stewart communicated directly with Minister Raitt on behalf of the Canadian Wind Energy Association on March 3, 2009 and June 9, 2009. Those communications with the Minister were properly declared in monthly returns filed in the Registry of Lobbyists, in accordance with the Lobbying Act. The subject matter of each communication was declared as being the ecoEnergy program.

Mr. Stewart also filed five monthly communication returns in respect of registrable communications with members of Minister Raitt's staff. Four of the communications were on behalf of CWEA in respect of ecoEnergy. The fifth return, related to an undertaking on behalf of the Canadian Green Building Council, identified energy, financial institutions and environment as the subject matters of the communications.

In view of the above, the Investigations Directorate concluded that Mr. Stewart interacted with Minister Raitt to a high degree as a consequence of his employment as a consultant lobbyist for various clients and that the subject matter of Mr. Stewart's lobbying efforts fell within the purview of the Minister.

The report of the Investigations Directorate contained the following conclusions. Mr. Stewart participated in the organization of a fundraising event for the HCA to raise money for Minister Raitt's re-election campaign. As a consequence, his actions advanced her private interest to a high degree. In addition, he interacted with the Minister to a high degree as a consequence of his employment as a consultant lobbyist acting on behalf of various clients. He was registered to lobby in respect of subjects within the Minister's purview and communicated directly with the Minister or her staff on seven occasions. The intersection of the above-mentioned activities placed the Minister in an apparent conflict of interest and, as a consequence, Mr. Stewart's actions breached Rule 8 of the Lobbyists' Code of Conduct.

The report of the Investigations Directorate containing those conclusions was provided to Mr. Stewart for his comment.

Mr. Stewart's views and my perspective on those views

Issues

Mr. Stewart's perspective on the report of the Investigations Directorate that was provided to him pursuant to subsection 10.4(5) of the Lobbying Act was provided to me in three letters from his legal counsel, Neil Finkelstein of McCarthy Tétrault, dated September 15 and 16, 2010 and December 6, 2010.

1. Procedural fairness

Mr. Finkelstein raised a number of points regarding procedural fairness in his letter of September 15th. The process used by my Office to carry out administrative reviews and investigations in relation to the investigation of allegations under the Lobbyists' Code of Conduct under section 10.4 of the Lobbying Act is described earlier in this Report. I clarified the process in my reply to Mr. Finkelstein of December 2, 2010.

Mr. Finkelstein made an argument on behalf of Mr. Stewart emphasizing that the investigation carried out on my behalf and my decision are subject to the duty of fairness. I agree with Mr. Stewart that a high degree of fairness must be accorded to those involved in an investigation under the Lobbying Act, just as in a Commission of Inquiry or other administrative processes. I am of the view that damages to individual reputations caused by unfounded allegations can be quite severe. I believe that the procedures followed during the administrative review and investigation processes in my Office have been demonstrably fair to Mr. Stewart.

2. Questions of fact

Mr. Finkelstein raised a number of questions of fact regarding the involvement of Mr. Stewart in the Halton Conservative Association (HCA) fundraiser held on September 24, 2009, and in relation to Mr. Stewart's activities as a lobbyist. I have taken notice of the discrepancies between the investigation report and Mr. Stewart's view of the events surrounding the fundraiser and regarding Mr. Stewart's communications with Minister Raitt in his capacity as a consultant lobbyist.

I accept Mr. Stewart's description of the events surrounding the fundraiser. In my view, there is a difference in degree from the description of Mr. Stewart's activities set out in the report of the Investigations Directorate and Mr. Stewart's description. Mr. Stewart has revised his estimate of the number of tickets that he sold downward from about 35 to "…closer to 20-25". I have accepted that revised estimate.

Mr. Stewart has emphasized that his lobbying activities on behalf of the Canadian Wind Energy Association (CWEA) were ultimately unsuccessful. In my view, this distinction does not have a bearing upon the lobbying activities that he conducted on behalf of the CWEA.

I take the view that Mr. Stewart, by his involvement in the organization and sale of tickets for the fundraiser, did advance the private interest of Minister Raitt in her re-election. This involvement in the organization of the fundraiser and selling tickets to the event was a greater degree of involvement than simply buying a ticket and attending the event would have been. I do not consider that I have applied the principles of the Court's decision incorrectly.

3. Legal issues

Mr. Finkelstein raised a number of points regarding legal issues in relation to the application of Rule 8 in this case. These representations were very important elements of Mr. Stewart's position. I have considered each of the arguments and wish to address them in a substantive manner in this Report on Investigation.

i. Retroactive application of the Rule 8 guidance

Mr. Stewart argues that my Guidance on Conflict of Interest — Rule 8 (Lobbyists' Code of Conduct) has a retroactive effect, as there was no guidance at all between March 12, 2009 and the date of issuance of the Guidance in November 2009. This alleged retroactive application of the Guidance is contrasted with my predecessor's statement that "It would be unfair to retroactively impose my approach to the enforcement of the Lobbyists' Code of Conduct upon lobbyists who operated under the previous approach to enforcing the Code." Footnote 11 This statement was made by the former Registrar of Lobbyists in relation to his decision to enforce the Principles of the Lobbyists' Code of Conduct, along with the Rules of the Code.

In my view, this is not what I have done in this case. Rather, I take the view that the decision of the Federal Court of Appeal on March 12, 2009 had the effect of changing the manner in which Rule 8 of the Lobbyists' Code of Conduct must be interpreted, effective on that date. The Court, in striking down the previous Guidance, clearly intended that its decision should apply to events prior to that date, as it struck down the Registrar's ruling of October 10, 2006. In addition, the Court, in declaring the previous interpretation of Rule 8 to be "unreasonable" and setting aside the Registrar's decision, stated clearly that "…Democracy Watch has achieved its objective of clarifying the interpretation of the Code." Footnote 12 As a result, in my view, the Federal Court of Appeal intended that its clarified interpretation of Rule 8 be effective on the date of the decision.

The decision of the Federal Court of Appeal on the interpretation of Rule 8 has guided lobbyists since March 12, 2009. My Guidance was developed to assist lobbyists in making judgments regarding their lobbying activities and their political activities and as a tool for the purposes of analyzing the activities of lobbyists in the Rule 8 context. There is no obligation on me to issue guidance respecting Rule 8, nor regarding the Code in general. I have done so in order to provide guidance about a potentially difficult area of the law. My view is that there was no gap in the law after March 12, 2009 — the Federal Court of Appeal decision established a revised interpretation of Rule 8. Finally, I do not agree that my Guidance has retroactive effect — and in my view, the same is true of the Clarifications about Political Activities of August 2010 Footnote 13.

ii. Mr. Stewart argues that he did not place Minister Raitt in a Conflict of Interest

Mr. Stewart argues that there is no basis to conclude that he breached Rule 8 by placing Minister Raitt in a conflict of interest, on the basis that the Conflict of Interest and Ethics Commissioner has determined that Minister Raitt was not in a conflict of interest in The Raitt Report. Footnote 14 He makes the argument that Rule 8 does not establish a higher duty for lobbyists than exists for public office holders and argues that he did not create a private interest that competes with the public office holders' public duty. Mr. Stewart relies upon the Federal Court of Appeal's judgment in making the argument that he did not cultivate a sense of personal obligation, or create a private interest, by his actions in relation to the fundraiser on behalf of Minister Raitt.

However, in my view, this is a restricted or limited interpretation of the Court's decision. It is clear to me that the Federal Court of Appeal considered that "facilitating" or "advancing" a public office holder's private interest is equivalent to "creating" such a private interest. In addition, it is also clear that the Court considered that "… Any conflict of interest impairs public confidence in government decision-making." Footnote 15  The Court also stated that "… Where the lobbyist's effectiveness depends upon the decision maker's personal sense of obligation to the lobbyist, or on some other private interest created or facilitated by the lobbyist, the line between legitimate and illegitimate lobbying has been crossed." Footnote 16

My perspective is that Mr. Stewart's legal argument is too narrow and restrictive an interpretation of the Federal Court of Appeal's decision. Such a narrow and restrictive approach is the type of approach that the Federal Court of Appeal overturned in concluding that the Registrar's interpretation of Rule 8 was unreasonable. I have considered Mr. Stewart's argument that the facts surrounding his involvement in the fundraiser fall short of having the effect of advancing the private interest of Minister Raitt to a high degree. I take the view that Mr. Stewart, by his involvement in the organization and sale of tickets for the fundraiser, did advance the private interest of Minister Raitt in her re-election. This involvement in the organization of the fundraiser and selling tickets to the event was a greater degree of involvement than simply buying a ticket and attending the event would have been. I do not consider that I have applied the principles of the Court's decision incorrectly.

iii. Mr. Stewart argues that my approach cannot be reconciled with reports issued by the Conflict of Interest and Ethics Commissioner

Mr. Stewart has argued that the Investigation Report he received is irreconcilable with the reports regarding Minister RaittFootnote 17 issued by the Conflict of Interest and Ethics Commissioner, Mary Dawson. I have read Commissioner Dawson's reports. In her report entitled The Raitt Report (made under the Conflict of Interest Act), Commissioner Dawson concluded that Minister Raitt had not breached the Conflict of Interest Act because "…the political contribution, volunteer time and resources provided by the lobbyists in connection with the fundraiser were given to the organizer of the event, the Halton Conservative Association." As a result, Commissioner Dawson found no breach by the Minister of the prohibition against accepting a gift or other advantage under the Conflict of Interest Act. The Commissioner made a similar finding in her other report under the Conflict of Interest Code for Members of the House of Commons, that Minister Raitt had not accepted a gift or other benefit in contravention of that Code.

The legislation that Commissioner Dawson administers provides a definition of conflict of interest, set out in section 4 of the Conflict of Interest Act, as follows:

4. For the purposes of this Act, a public office holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person's private interests.

In my opinion, this is a definition of an actual conflict of interest, similar to that used by the Ethics Counsellor in his original Guidance regarding Rule 8, and applied by the Registrar of Lobbyists in the case of Democracy Watch v. Campbell et al. This is the approach to conflict of interest that the Federal Court of Appeal did not consider to be reasonable for the Registrar to apply in the case of the conduct of lobbyists. Mr. Stewart argues that a finding of no conflict of interest by the Conflict of Interest and Ethics Commissioner cannot be reconciled with a finding that a conflict of interest was created by his actions. I take the view that this is not the correct interpretation of Commissioner Dawson's conclusions. However, I believe that such a seemingly irreconcilable conclusion can be reconciled. In my view, this is because the two standards of conflict of interest are different. For public office holders, the definition in the Conflict of Interest Act clearly sets out the standard for conflict of interest. For lobbyists, a standard of conflict of interest that incorporates the concept of apparent conflict of interest arises as a result of a decision of the Federal Court of Appeal.

I am required to examine the activities of a lobbyist in light of the new standard of conflict of interest established by the Federal Court of Appeal. I believe that this situation is indeed reflected in Commissioner Dawson's decision, as she recognized the possibility that Minister Raitt could be placed into a position of an appearance of a conflict of interest by asking her to enter into "…an agreed compliance measure establishing an interim conflict of interest screen to prevent any potential conflicts of interest, more particularly, any potential for preferential treatment." Commissioner Dawson states in her report: "… I was concerned that, should a situation arise where Minister Raitt had to make an official decision involving the Cement Association of Canada, she could be subject to allegations of preferential treatment because of the help that Mr. McSweeney had provided for the fundraiser." Footnote 18 From my perspective, this could create the appearance that a lobbyist had placed a public office holder into a position of conflict of interest.

iv. Argument that my Guidance is unconstitutional

Mr. Finkelstein makes the argument on behalf of Mr. Stewart that the Rule 8 Guidance is unconstitutional because it is in breach of section 2(b) of the Canadian Charter of Rights and Freedoms — that is, that the Guidance is an undue restriction upon freedom of expression. He argues that the August 2010 Clarifications about Political Activities "…casts the net too broadly … and will have a chilling effect on the ability of lobbyists to participate in the political process…".

In my view, this argument has been addressed in the development of the Rule 8 Guidance and the Clarifications about Political Activities. Any restrictions upon the freedom of expression of registered lobbyists are found in the Lobbying Act — for example, the requirement to register, to disclose certain oral and arranged communications in monthly reports, and the five year prohibition on lobbying activity — and in the Lobbyists' Code of Conduct — the obligations not to mislead anyone, not to divulge confidential information and to reveal the identity of clients.

My Guidance was not intended to be prescriptive in limiting the political activities of lobbyists — rather, it is a guide for lobbyists in interpreting Rule 8 of the Code. It builds upon the Federal Court of Appeal's decision and is intended to aid lobbyists in understanding their responsibilities under the Code. The same is true of the Clarifications about Political Activities. I have considered this argument, but I do not agree that my Guidance to lobbyists is contrary to the Charter.

v. Alleged errors in the application of the Guidance

Mr. Finkelstein also makes the argument on behalf of Mr. Stewart that a finding that Mr. Stewart was in breach of Rule 8 would be in error because Mr. Stewart did not interact with Minister Raitt to a high degree, by meeting with her twice in 2009, both times prior to the fundraiser on September 24, 2009. In addition, he argues that the fact that the funds raised by the fundraiser were the property of the Halton Conservative Association necessarily means that Minister Raitt could not have an interest in those funds. He argues that the Halton Conservative Association was responsible for the fundraiser and in charge of the spending of those funds. This means that Minister Raitt did not have a private interest in those funds. In addition, Mr. Stewart did not engage in lobbying activities involving Minister Raitt following the fundraiser.

The report of the Investigations Directorate indicates that Mr. Stewart had been involved in two oral and arranged meetings with Minister Raitt on behalf of the Canadian Wind Energy Association (CWEA) in March and June 2009, and had also filed five monthly communication returns in respect of communications with members of the Minister's staff. Although these lobbying activities did not take place following the fundraiser, it appears to me that the same reasoning that Commissioner Dawson applied in asking Minister Raitt to agree to a compliance measure establishing an interim conflict of interest screen would apply in this case: "… should a situation arise where Ms. Raitt had to make an official decision involving the (CWEA), she could be subject to allegations of preferential treatment because of the help that Mr. (Stewart) had provided for the fundraiser."

In this respect, the reasoning used under heading ii above Footnote 19 applies: Mr. Stewart's approach amounts to reliance upon a definition of a "real" conflict of interest, similar to that used by the Ethics Counsellor in his original Guidance regarding Rule 8. This is the approach to conflict of interest that the Federal Court of Appeal did not consider to be reasonable when applied in the case of the conduct of lobbyists by the Registrar. The argument that a finding of no conflict of interest by the Conflict of Interest and Ethics Commissioner cannot be reconciled with a finding that a conflict of interest was created by the actions of Mr. Stewart, while seemingly irreconcilable, can in my view be reconciled. This can be done because the two standards of conflict of interest are different. One arises from a definition of conflict of interest in the Conflict of Interest Act and the other arises as a result of a decision of the Federal Court of Appeal that includes both real and apparent conflicts of interest in the definition of "conflict of interest" in the Lobbyists' Code of Conduct.

Conclusions

I have taken both the report of the Investigations Directorate and the representations of Mr. Stewart into consideration in reaching my conclusions. I have concluded that Mr. Stewart participated in the fundraising event for the Halton Conservative Association (HCA) held on September 24, 2009. He was not the only organizer, but he was one of the organizers of the event and he played a major role by selling tickets for the event. His actions advanced the interests of the Halton Conservative Association in raising funds to ensure adequate financial resources to contest the next election. The funds raised were not the property of Minister Raitt, nor were they to be used to directly provide a financial benefit to the sitting Member of Parliament and presumptive candidate in the next election. However, at the time of the fundraiser, the funds were intended to be used by the HCA to the benefit of Minister Raitt in her re-election. This, in my opinion, advances the private interest of Minister Raitt, who remains the presumptive candidate at the time of the writing of this report.

During the same period of time, Mr. Stewart was registered to lobby on behalf of a number of clients in respect of subjects that fell within Minister Raitt's responsibilities, as a Minister and as a member of Cabinet Committees. Mr. Stewart communicated with her directly in respect of subject matter for which he registered as a lobbyist. His registrable lobbying activities involving Minister Raitt, while not extensive, were significant. I would agree with the conclusion that Commissioner Dawson reached when looking at Minister Raitt's circumstances in relation to the fundraiser: should a situation arise in which where Minister Raitt may be required to make an official decision involving a client of Mr. Stewart's, she could be subject to allegations of preferential treatment because of the help that Mr. Stewart had provided for the fundraiser. In that respect, the actions of Mr. Stewart have created a reasonable apprehension that the Minister has been placed into a situation of an apparent conflict of interest. This is the situation that Rule 8 is meant to address.

It is my wish that the circumstances outlined in this report will provide additional guidance for lobbyists who wish to engage in political activities and lobbying activities in the future. I take the view, however, that the "general deterrence" of tabling in Parliament a Report on Investigation can also be effective if the Report recognizes the unusual aspects of the specific case. In fairness to Mr. Stewart, I must say that, following the decision of the Federal Court of Appeal on March 12, 2009, lobbyists were placed in a position in which their obligations under Rule 8 of the Lobbyists' Code of Conduct had changed. Therefore, given the variety of different factual situations which could arise, it might have been difficult for them to determine the point at which their political activities may have implications for their lobbying activities. This includes the point at which they would risk placing a public office holder into a conflict of interest. Mr. Stewart was clearly in such a situation.

I trust that this Report will provide assistance to lobbyists in reconciling their lobbying activities with political activities that they may be engaged in.

Appendix A — Lobbyists' Code of Conduct

Preamble

The Lobbyists' Code of Conduct is founded on four concepts stated in the Lobbying Act:

  • Free and open access to government is an important matter of public interest;
  • Lobbying public office holders is a legitimate activity;
  • It is desirable that public office holders and the public be able to know who is engages in lobbying activities; and,
  • A system for the registration of paid lobbyists should not impede free and open access to government.

The Lobbyists' Code of Conduct is an important initiative for promoting public trust in the integrity of government decision-making. The trust that Canadians place in public office holders to make decisions in the public interest is vital to a free and democratic society.

To this end, public office holders, when they deal with the public and with lobbyists, are required to honour the standards set out for them in their own codes of conduct. For their part, lobbyists communicating with public office holders must also abide by standards of conduct, which are set out below.

Together, these codes play an important role in safeguarding the public interest in the integrity of government decision-making.

Principles

Integrity and Honesty

Lobbyists should conduct with integrity and honesty all relations with public office holders, clients, employers, the public and other lobbyists.

Openness

Lobbyists should, at all times, be open and frank about their lobbying activities, while respecting confidentiality.

Professionalism

Lobbyists should observe the highest professional and ethical standards. In particular, lobbyists should conform fully with not only the letter but the spirit of the Lobbyists' Code of Conduct as well as all the relevant laws, including the Lobbying Act and its regulations.

Rules

Transparency

1. Identity and purpose

Lobbyists shall, when making a representation to a public office holder, disclose the identity of the person or organization on whose behalf the representation is made, as well as the reasons for the approach.

2. Accurate information

Lobbyists shall provide information that is accurate and factual to public office holders. Moreover, lobbyists shall not knowingly mislead anyone and shall use proper care to avoid doing so inadvertently.

3. Disclosure of obligations

Lobbyists shall indicate to their client, employer or organization their obligations under the Lobbying Act, and their obligation to adhere to the Lobbyists' Code of Conduct.

Confidentiality

4. Confidential information

Lobbyists shall not divulge confidential information unless they have obtained the informed consent of their client, employer or organization, or disclosure is required by law.

5. Insider information

Lobbyists shall not use any confidential or other insider information obtained in the course of their lobbying activities to the disadvantage of their client, employer or organization.

Conflict of interest

6. Competing interests

Lobbyists shall not represent conflicting or competing interests without the informed consent of those whose interests are involved.

7. Disclosure

Consultant lobbyists shall advise public office holders that they have informed their clients of any actual, potential or apparent conflict of interest, and obtained the informed consent of each client concerned before proceeding or continuing with the undertaking.

8. Improper influence

Lobbyists shall not place public office holders in a conflict of interest by proposing or undertaking any action that would constitute an improper influence on a public office holder.

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