A top federal aide’s move highlights the need for lobbying law reform

No time like the present to revisit the PM’s pledge to accountability

There’s a rule in the federal Conflict of Interest Act that I looked up after I read in the Toronto Star about how Finance Minister Jim Flaherty’s chief of staff, Kevin McCarthy, is leaving to take a senior job at Scotiabank.

This particular rule, which falls under the section on what former key public office holders are allowed to do when they stop working for the Canadian government, was an early, signature reform introduced by Stephen Harper’s government in 2006:

 “No former reporting public office holder shall enter into a contract of service with, accept an appointment to a board of directors of, or accept an offer of employment with, an entity with which he or she had direct and significant official dealings during the period of one year immediately before his or her last day in office.”

Lucky for McCarthy there’s that one-year timeframe. Because when I searched the online federal Registry of Lobbyists—where lobbyists must disclose their communications with federal officials—I found no record of a meeting between him and Scotiabank in the past 12 months. There was, however, a filing from Scotiabank on its conversation with Flaherty and McCarthy on April 30, 2012. The topics they discussed, according to the communication report, ranged from consumer and financial institutions issues, to the budget and even constitutional issues.

It’s not hard to imagine how, at such a meeting, the trusted advisor sitting beside the powerful finance minister might look to a bank lobbyist like a promising future recruit. Yet if we cast way back to April 11, 2006, when Harper had only been in office a bit more than two months, we find the Prime Minister announcing his landmark Federal Accountability Act, and vowing, among other things, that it would “stop former ministers, ministerial staffers, and senior public officials from using their insider connections to profit from public service.”

There were two key ways the 2006 reforms were meant to prevent the longstanding pattern of easy transitions from public servant to private-sector powerbroker. The first was that prohibition on public servants going to work for companies they’d recently had significant dealing with; the second was a five-year ban on former public servants lobbying the government.

The problem with that ban on subsequent lobbying by ex-political staffers, and other lapsed public servants, is the way lobbying is defined in the current federal laws. Only those for whom lobbying is a “significant part” of their jobs are required to register, and “significant” has been defined as at least 20 per cent of their time. That means top corporate officials lobby up to a day a week without triggering the legal requirement to reveal their contacts with federal officials.

This gaping loophole was addressed head-on by the House ethics committee in May 2012 after they conducted a five-year review of the Lobbying Act.  The MPs on the committee recommended in their report that the “significant part of duties” threshold be removed. Treasury Board President Tony Clement, the minister responsible, said only that he would “study… carefully” that recommendation.

Take that as, at best, a signal of tepid interest. By comparison, Clement’s formal response to various other recommendations from the committee’s report was to say the government “supported” them, or at least was “considering means” to implement them.

Still, a move to change the 20 per cent rule remains a possibility. Clement is waiting for a second, related report from the same House committee on the Conflict of Interest Act before deciding how to proceed with changes. That second, crucial committee report was being drafted when the House broke for the summer, work that should be picked up by the reconstituted committee when Parliament returns for a new session later this fall.

Often the examination of policy conducted by ordinary MPs is dismissed as meaningless in today’s Ottawa. But as the fresh news of McCarthy’s move reminds us, in this instance the advice of the House ethics committee, if presented forcefully and taken seriously, could make a major contribution toward realizing the Prime Minister’s promise in 2006 to usher in an era of a different relationship between government connections and private-sector profit.

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