LOBBYING REFORMS LACK TEETH

UNCLAS SECTION 01 OF 02 OTTAWA 000510 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: PGOV CA SUBJECT: LOBBYING REFORMS LACK TEETH ¶1. (SBU) Summary: Canada has broadened and tightened federal regulation of domestic lobbying since 1985, creating an independent Office of the Commissioner of Lobbying in 2008, and building a new Canadian model to enhance transparency and integrity in government. However, the expanded role of the Commissioner remains a work in progress and the Office's enforcement capability lacks teeth. The real test will be the Commissioner's ability to detect, avert, or punish in a future lobbying scandal, whenever that may come. End summary. INDEPENDENT COMMISSIONER OF LOBBYING -------------- ¶2. (U) Prime Minister Stephen Harper confirmed Karen Shepherd as Canada's first federal Commissioner of Lobbying on June 30. Parliament had created the independent Office of the Commissioner of Lobbying in 2008, and Ms. Shepherd had served as interim Commissioner since July 2008. The Commissioner is one of eight independent "agents of Parliament" who report directly to the Speakers of both the House of Commons and the Senate. (The other seven are the Auditor General, the Chief Electoral Officer, the Official Languages Commissioner, the Privacy Commissioner, the Access to Information Commissioner, the Conflict of Interest and Ethics Commissioner, and the Public Sector Integrity Commissioner.) ¶3. (U) The House of Commons and the Senate each formally approved Ms. Shepherd's appointment after holding separate hearings. As a means of minimizing the chances of political interference, only Parliament may dismiss the Commissioner "for cause," unlike many political appointees, who customarily serve "at the pleasure" of the Prime Minister and whom he may dismiss at any time. Ms. Shepherd's term runs for seven years. ¶4. (SBU) In a meeting with PolMinCouns on June 30, Commissioner Shepherd confirmed that her position has no direct counterpart in the United States. She pointed to similar positions in the U.S. Senate and the U.S. House of Representatives that oversee lobbying for each house, but commented that the Canadian Commissioner of Lobbying has a much broader mandate, encompassing senior federal government officials (Director General-level or above),officers of the Canadian Armed Forces and the Royal Canadian Mounted Police (RCMP),as well as parliamentarians and political staff who have contact with lobbyists. ¶5. (SBU) Commissioner Shepherd also noted that each U.S. state and 
many municipalities have their own lobbying legislation, but that only six of Canada's ten provinces and three territories have their own statutes. Among municipalities, only Toronto (Canada's largest city) has its own law. However, in Quebec, provincial lobbying legislation also extends to municipalities. TIGHTENING THE RULES -------------- ¶6. (SBU) Parliament passed legislation requiring mandatory registration of lobbyists in 1985 and has successively tightened regulation. The 2008 Lobbying Act built on significant amendments to enhance public disclosure in 2005 in the wake of a federal "sponsorship scandal" over the awarding of government advertising contracts in Quebec, and on Prime Minister Harper's flagship Federal Accountability Act in December 2006. The Lobbying Act seeks to balance legitimate lobbying activity with transparency and free and open access to government. According to Commissioner Shepherd, these reforms received broad support from all political parties, as well as from the lobbying community itself, which "welcomed" the added legitimacy the system provides. She added that political events (public inquiries or "scandals" over government spending and Qevents (public inquiries or "scandals" over government spending and access) have been significant drivers for reform. MANDATORY REGISTRATION -------------- ¶7. (U) The 2008 Lobbying Act regulates individuals or companies lobbying federal elected members and senior government officials for payment (excluding organizations and individuals who lobby without fee). The Registry of Lobbyists has been in effect since 1989, and a Lobbyists' Code of Conduct since 1996. The law mandates disclosure of the identity of lobbyists and their clients, departments to be lobbied, subject matter, lobbying methods, dates, times and locations of meetings, and identity of officials contacted, as well as the amount and source of all monies received from the federal government. As of June 30, 2009, the Registry had 2,922 registered lobbyists (lobbying for payment),and identified 4,147 active lobbyists overall. ¶8. (U) The Office of the Commissioner posts monthly and quarterly lobbying activity reports online. The Registry receives an average OTTAWA 00000510 002 OF 002 of 2,000 online hits per quarter, mostly from media, but also from public officials and lobbyists themselves. The law does not track lobbying by foreign countries, although Canadian individuals or companies lobbying on behalf of foreign states must identify their clients and report activity. The 2008 Lobbying Act mandates a parliamentary review of the effectiveness of the legislation every five years. TRACKING COMPLIANCE, DOES IT WORK? -------------- ¶9. (SBU) According to Commissioner Shepherd, overall compliance is "good." The Office uses media monitoring and public complaints to track breaches of the Lobbying Act. It employs seven investigators to identify and review potential violations, approximately 94 pct of which involve minor compliance matters (failure to report on time or to register) that the Office attempts to address primarily through written notification and request for compliance. In more serious cases, the Office may refer cases to the RCMP for further examination and, thereafter, if warranted, to the Office of Public Prosecutions for criminal prosecution. The Lobbying Act provides for fines of between C$50,000 and C$200,000 and prison terms of up to two years. However, so far courts have never levied fines or jail sentences under the 2008 Act or preceding legislation. The Commissioner tables investigation reports in Parliament, which then become available to the public. ¶10. (SBU) Since 2004, the Office of the Commissioner and previous agencies have settled approximately 30 serious violations through mediation and referred 4 cases to the RCMP for further review. According to Commissioner Shepherd, RCMP had forwarded only one of these cases to the federal prosecutor, although eventually an alternative dispute settlement resolved the case. Officials in the Commissioner's office underscored to PolMinCouns that violators would have to demonstrate "clear intent" to evade the Act and/or that their actions would have to be "extremely egregious" to warrant prosecution. Federal prosecutors must weigh the "public interest" and limited resources in determining which cases to pursue. British Columbia authorities have laid the most serious charges against an individual who had breached both the British Columbia and federal lobbying Acts; however, the provincial court merely ordered the offender to write an essay. Overall, the Office of the Commissioner sees its role less to punish than to maintain compliance, and that the real penalty lies in "naming and shaming" possible offenders. Officials noted -- and parliamentary officials separately confirmed -- that the system has become self-policed, with Parliament and other covered officials often verifying with the Office's website whether individuals are registered as lobbyists before accepting appointments. COMMENT ¶11. (SBU) Canada's Parliament is creating a new and distinctly Canadian "model" for the regulation of lobbying that, coupled with parallel reforms to political party financing, aims to enhance government accountability. The new mandate of the Commissioner of Lobbying remains a work in progress. The system appears to be working, even in the absence of genuine "teeth" for compliance enforcement, but the real test will be the Commissioner's ability to detect, avert, or punish in a future lobbying scandal, whenever that may come. BREESE