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Watchdog urges Ontario to review act governing conflict of interest

Charles Sousa addresses the media in Ottawa on Dec. 21, 2015.

BLAIR GABLE/REUTERS

Ontario's Integrity Commissioner is calling on the legislature to review the act that governs conflict of interest because he said it left him no choice but to clear two senior cabinet ministers who attended a $7,500-a-ticket fundraising event with banks involved in the privatization of Hydro One.

In a report released on Tuesday, J. David Wake asked the legislature to review the Member's Integrity Act to clarify "whether it should apply to the appearance of conflicts of interest."

Finance Minister Charles Sousa and Bob Chiarelli, then energy minister, attended the intimate, two-hour cocktail reception and dinner on Dec. 7, 2015, at the Four Seasons Hotel in Toronto's tony Yorkville area.

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Related: An inside look at cash-for-access Ontario Liberal fundraisers

"It is conceivable that a reasonably well-informed person could have reasonable concerns about a $7,500 per person fundraising event, held one month after the conclusion of a significant transaction, chaired and attended largely by individuals affiliated with organizations that benefited from that transaction," the commissioner wrote.

Jagmeet Singh, the NDP MPP who lodged the complaint that prompted the report, said the ministers "were saved by a loophole."

"But it's clear that their actions would lead a 'well-informed person' to have 'reasonable concerns,'" he added.

The 18-page report contains the commissioner's findings on the event, for which the Liberal Party asked John Sherrington, former vice-chairman of Global Investment Banking at Scotiabank, to be honorary chair. The report said Mr. Sherrington "worked his Rolodex to invite individuals from his professional network."

Twenty-four people attended, including officials from banks, unions, government relations firms and the energy sector, the report said. The event came just a month after the initial public offering (IPO) of Hydro One shares on Oct. 29, 2015.

The report notes that "nine of the 16 banks involved in either the IPO or subsequent Hydro One offerings had representatives at the event."

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"While the Act applies to actual conflicts of interest, it does not seem to apply to apparent conflicts of interest," the commissioner wrote. "An apparent conflict of interest exists when there is a reasonable apprehension, which reasonably well-informed persons could properly have, that a conflict of interest exists."

Mr. Wake said that while he believes the ministers may have benefited politically, he does not believe they received personal benefits from attending the fundraiser.

The Ontario Liberals' loose fundraising practices, including cash-for-access fundraisers, have been the centre of controversy for months. Premier Kathleen Wynne's government has introduced new campaign finance reform, but is refusing to ban the cash-for-access events.

The Globe and Mail has reported that corporate and union leaders paid up to $10,000 to spend time with Ms. Wynne and members of her cabinet, and that in her first three years as Premier, the Liberal Party held 223 fundraisers, of which 159 were for 50 or fewer guests.

The commissioner would not comment beyond his report. However, Cathryn Motherwell, director of his office, said former commissioner Lynn Morrison "advocated for changes to the legislation related to a number of the office's mandates, including the Lobbyists Registration Act, the Public Service of Ontario Act and the Members' Integrity Act."

Jennifer Beaudry, spokeswoman for the government, said the Liberals are taking the report seriously, and "look forward to reviewing Commissioner Wake's recommendations on the Member's Integrity Act with all members of the legislature."

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She said the Premier has stated political donations do not "influence policy decisions."

Mr. Singh's complaint charged that the two ministers violated the act by "receiving a fee, gift or personal benefit connected with their attendance at a fundraising event … and their involvement in the decision-making process related to the privatization of Hydro One."

Mr. Wake interviewed the key players, including the ministers. Mr. Chiarelli said the only discussions he had at the fundraiser relating to the Hydro One offerings were "social in nature about the success of the IPO."

Mr. Sousa said his role was greeting guests and "thanking them for their donations to the Liberal Party."

"Mr. Sherrington doubted that any guests would discuss business-related matters as such events because of the presence of their competitors," Mr. Wake wrote.

Mr. Wake said that while he could not find conflict of interest as there was no proof the ministers' private interests were advanced, he considered whether their involvement created an appearance of conflict.

"The appearance of a conflict has an impact on the trust and confidence the public has in government," he wrote.

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