Ethics boss cracks down on conflicts

Rules to bar leadership backers from dealing with departments

Joan Bryden
The Ottawa Citizen Friday, March 22, 2002

Federal ethics watchdog Howard Wilson is drawing up new guidelines to prevent cabinet ministers from being caught in potential conflicts of interest involving leadership supporters lobbying or receiving contracts from their departments.

The guidelines could advise ministers to sever ties between any of their leadership supporters and their departments, as Mr. Wilson recently advised Finance Minister Paul Martin to do in the case of prominent Calgary lawyer Jim Palmer.

Mr. Palmer, chief fundraiser for the Liberals in Alberta, was simultaneously raising money for Mr. Martin's campaign and providing legal advice on resource sector tax policy to the Finance Department. He ended his work for the department late last week after Mr. Wilson advised Mr. Martin that the situation gave rise to the appearance of a potential conflict of interest.

Yesterday, Canadian Alliance MP Monte Solberg said Mr. Wilson should also be looking into the cosy relationship between Mr. Martin's department and the Earnscliffe Group, an Ottawa-based lobbying and consulting firm that employs a host of Martin supporters, including three of his most senior advisers.

According to information gleaned from Access to Information and the government's contract Web site last summer, Earnscliffe's research and communications division has won contracts worth $1.8 million with the Finance Department since the Liberals took power in 1993.

Headed by former CBC producer Elly Alboim and David Herle, one of Mr. Martin's inner circle of leadership advisers, the division is the sole supplier of the department's communications needs, devising communications strategies for Mr. Martin's annual economic updates and budgets.

Asked yesterday whether he's looking into Earnscliffe's relationship with Finance, Mr. Wilson declined to be specific. But he said he has been scrutinizing in general the relationship between ministers with leadership aspirations and their supporters and will be shortly proposing new guidelines.

"I'm expecting to put some recommendations on the issue to the prime minister in the next couple of weeks, and I will want to cover off all of these sorts of things," Mr. Wilson said in an interview.

"So that is, in a sense, an answer to your question."

Mr. Wilson noted that Mr. Martin's relationship with Earnscliffe has been going on for years, long before the undeclared race to succeed Prime Minister Jean Chrétien heated up.

With the race now on in earnest, however, Mr. Solberg said the relationship has to be reassessed.

"On the face of it, there seems to be a level of involvement between Earnscliffe and Martin's campaign that should make everyone nervous," Mr. Solberg said, adding that the firm appears to have "almost a monopoly" on consulting work with Finance.

While he wouldn't say the company should be banned from doing work for the department, Mr. Solberg said that's "definitely one of the options" Mr. Wilson should consider. He said there's little difference between the situation with Earnscliffe and that involving Mr. Palmer.

Unlike Mr. Palmer, Mr. Martin's supporters at Earnscliffe are not known to have been raising money for the minister's leadership campaign. But Mr. Solberg said it could be argued that the contracts given to Earnscliffe help to pay people who then offer their campaign services to Mr. Martin for free.

"It is almost the same thing, whether you actually go and raise money or you simply work for free in order not to have to expend money for positions that they would otherwise have to pay for. In a way, it is the same sort of thing."

Mr. Alboim has argued in the past that Earnscliffe has won all its federal contracts fair and square through the competitive bidding process. But Mr. Solberg said that's not necessarily significant because the government can effectively rig the process by requiring that certain contract criteria be met that only its preferred companies can meet.

Concerns about conflict of interest have arisen with at least one other prospective leadership candidate, Heritage Minister Sheila Copps. Ottawa lobbyist Isabel Metcalfe is registered as a lobbyist with the Heritage Department and is also working on the minister's unofficial campaign. At Ms. Metcalfe's request, Mr. Wilson is looking into the matter.

Industry Minister Allan Rock was asked yesterday whether any of his leadership supporters have contracts with his department. He replied that "the way I run my department is totally in keeping with the highest principles of public policy, and I intend to keep it that way."