‘Secret Lobbying is Legal’ if You Know Which Loopholes to Exploit, Says Democracy Watchdog

Enough isn’t being done to ensure companies are following Canada’s weak lobbying and disclosure rules, according to democracy expert Duff Conacher.

Conacher, founder and long-time coordinator of Democracy Watch, told DeSmog Canada there are numerous ways to evade lobby rules.

“Overall, secret lobbying is legal,” he says. “You just have to exploit the loopholes.”

Conacher says the Lobbying Act is rife with loopholes, making it very difficult for citizens to keep track of when and with whom corporations and organizations are meeting.

For one, if a meeting concerns the “enforcement, interpretation or application” of a law or regulation that applies to a company, they don’t have to log it. The Lobbying Act also only requires paid personnel to log lobbying efforts, which can lead to a “hired gun” billing a company for “strategic advice” and the conducting the lobbying for ‘free.’

Also, only the “responsible officer” of a company or organization — usually the president or CEO — is required to list themselves in a lobbying effort. As a result, it’s impossible to know who actually lobbied the government in a meeting.

For instance, on January 11 (improperly listed as January 12 in the registry), the Petroleum Services Association of Canada met with international trade minister Chrystia Freeland about the Trans-Pacific Partnership (TPP).

Mark Salkeld, the president and CEO of the association, is the only person listed in the communication. But seven other people involved in the oil and gas industry also participated in the meeting (as well as two chiefs of staff and a deputy minister from the government of Alberta.)

On paper, it looks like it was a meeting between Freeland and Salkeld. But it actually included a dozen people.

How Secret Lobbying Occurs

But perhaps the biggest loophole of them all is that only “oral, prearranged” communications need to be logged.

That means that any lobbying that occurs via writing doesn’t qualify. Nor does “accidentally” bumping into someone at a fundraiser or in a hallway.

Conacher says such tactics could be used for “any emails or any meeting where both the minister or their staff or any government official and Lone Pine themselves want to get around a disclosure they communicated. And if the person inside government was also wanting that not to be registered, what they would do is have the person call them at a non-prearranged time.”

In 2008, the Conservatives introduced the revamped Lobbying Act, requiring the monthly logging of communications between lobbyists and “designated public officer holders.” In 2010, MPs and senators were added to the list of designated public office holders, meaning a company or organizations would have to log a report if they made a communication with them.

But the aforementioned loopholes were never closed.

Lone Pine Lobbied Without Registering Report

On January 15, Jeff Smith — a lobbyist representing Lone Pine Resources, the company suing Canada for $118.9 million over the Quebec fracking ban — met with Brian Clow, the chief of staff for the ministry of international trade.

We know this because Lone Pine, like with any company or organization that participates in lobbying of high-ranking public officials including MPs, senators, ministers and staff, must register such a communication in the federal lobbying registry.

You can see the report of Smith’s meeting with Clow here.

The nature of the communication was peculiar for a few reasons: If the company is attempting to negotiate a settlement, it’s safe to assume that such conversations would happen between lawyers, not politicians and civil servants (although Lone Pine may be attempting to put internal pressure on the government to settle.)

But stranger still were the results of an access to information and privacy (ATIP) request that DeSmog Canada made in regards to the meeting.

As it turns out, the meeting on January 15 wasn’t the first time that Lone Pine had lobbied Clow: an email exchange from four days earlier referenced a “discussion they had before Christmas.”

According to another email, Nadia Theodore — then a director of trade negotiations with the foreign affairs department — attended the January 15 meeting with Clow (an email noted that her “policy perspective would be appreciated.”)

Neither of these occurrences were logged in the lobbying registry.

Milos Barutciski, partner and co-chair of international trade and investment at Bennett Jones LLP (the firm that’s serving as counsel for Lone Pine in the suit against Canada), replied to a request made to Lone Pine’s CEO: “I can confirm that our client's government relations advisors understand and comply with their Lobbying Act registration obligations.”

“Note that only oral communications described in the regulations are required to be disclosed in monthly filings. The communications you reference are not within the scope of the regulations.”

The “discussion” prior to Christmas could have occurred via email, meaning it would not have to be logged in the database. And while Theodore’s presence at previous meetings with other lobbyists had been logged 22 times, she didn’t occupy a high-ranking enough position to legally require it.

This reality is a very major problem, and one that points to fundamental flaws in the way that lobbying is tracked and publicized.

‘Secret Lobbying is Legal’ if You Know Which Loopholes to Exploit, Says Democracy Watchdog https://t.co/dGh5LKGbWr pic.twitter.com/J8y1VO2CeO

— DeSmog Canada (@DeSmogCanada) July 8, 2016

Only Two Lobbyists Found Guilty of Breaking Rules Since 1988

The Liberals didn’t mention lobbying in their 2015 platform, although the party pledged to “amend the Access to Information Act so that all government data and information is made open by default in machine-readable, digital formats,” as well as extending the reach of the act to the Prime Minister’s Office.

Conacher says the government has shown no interest in increasing the responsibilities and scope of the lobbying commissioner, meaning many infractions are likely going unnoticed and unpunished.

The current commissioner, Karen Shepherd, doesn’t audit government departments. Since 2004, only 67 lobbyists have been caught violating the Lobbying Act. Almost all have been let off the hook without punishment or public scrutiny.

Only two lobbyists have been found guilty of illegal lobbying since 1988.

Bruce Carson, a former top aide to Stephen Harper, will be receiving a ruling on his alleged prohibited lobbying in the next few months.

Estimated 1,600 Lobbyists Broke Rules Over Past Two Decades

Conacher says there are some 5,000 active lobbyists working at any given time, and that around 25,000 that have registered since 1988. The number of lobbyists over the course of a year — many will deregister as soon as they’ve finished work for a company or organization — has increased in recent years as well.

In 2014-15, Shepherd only conducted 20 administrative reviews, finding one worthy of referring to the RCMP. The identities of lobbyists who violate the code, but aren’t charged, are kept hidden.

“The percentages are so small that our conclusion is only five per cent have been caught,” Conacher says. “And that 1,600 lobbyists have likely violated the code or the act since 2007. But only three have been charged.”

Conacher suggests the lobbying commissioner should be conducting random samples of every government institution: for example, obtaining all communications with ten companies for the last three months, including phone logs for the minister and staff.

Feds Not Interested in Changing Rules

Shepherd’s seven-year term just finished. She’s expressed interest in being reappointed, something that Conacher says “would be a tragedy and continue to undermine transparency in lobbying.”

There’s also talk about merging the responsibilities of the ethics commissioner and lobbying commissioner into one, which could potentially impact the overall effectiveness of the role.

Prime Minister Justin Trudeau has already been accused of getting too cozy with lobbyists (during the campaign, the party’s co-chair had to step down for providing recommendations to TransCanada on how to lobby a Liberal government.)

All up, there’s clearly plenty of work to be done in improving the communication and monitoring of lobbying activities. What’s less obvious if anyone’s going to take such opportunities seriously.

Image: Danny Huizinga/Flickr