03 June 2015

Duff in the Hole #nlpoli #cdnpoli

Dwight Ball’s announcement last week about Liberal Party funding was a good example of how relatively simple mistakes can turn a good-news announcement into a major public relations problem.

Another aspect to the story is a good example of how false information can make the story worse.

The Claims

Duff Conacher runs a small lobby group that calls itself Democracy Watch.  CBC interviewed Conacher about the Liberal Party announcement that three banks had written off a portion of the party debt. You can listen to a longer interview with Conacher on CBC Radio’s On the Go.

Conacher said that, in forgiving the interest, the banks provided the Liberals with “a treatment that the banks could show that they give to every borrower and, as a result, they are doing a favour and they're accepting that favour as the politicians.”

As a result, Conacher said,  the Liberals were now in a “conflict of interest in dealing with any regulation that affects the banks directly or indirectly.”

Conacher went further:
“They have a personal benefit from receiving a break from the banks and I believe, it's my opinion — legal opinion — that they are accepting extra benefits in violation of section 7 of the Conflict of Interest Act.”
Conacher said this was an extra benefit because it would relieve the party members of having to raise additional money.

He also criticised Ball for not disclosing the names of the banks or the amount they wrote off:
“Essentially what [Ball] is saying is, ‘I don't know how to do simple math and that's why I can't tell you what the amount is.' Or he's just saying, ‘I believe in secrecy in terms of who has paid us off,' and neither of those are great things to be saying."  [Emphasis added]
Conacher said during the On the Go interview that the amount of the loan would raise an issue with financial limits on political donations.  He later said that the provincial election finance law placed no limits on donations.  Therefore, politicians were for sale “to the highest bidder.”

The Truth

At about the 7:00 mark of the interview Ted Blades pointed out to Conacher that the banks had reached a similar deal in 2003 with the Conservatives.

Blades essentially blew Conacher’s entire argument out of the water.  The unethical benefit, according to Conacher, was supposedly that the banks offered the Liberals a benefit that was not available to any other lenders. 

The Conservative example wasn’t the only one.  Banks regularly alter loan agreements with businesses and private individuals.

Conacher was unfazed by facts that disproved his claim.  He instead said he was unsurprised since local politicians supported unlimited contributions and therefore  had a ”a low standard” of ethical behaviour.
That doesn’t change the fact that Conacher’s argument was founded on a false premise:  the banks did not provide the Liberal party with a benefit that was not generally available.

A Benefit, Conflict of Interest, and Disclosure

Did they provide a benefit at all?

On the face of it, Conacher’s claim makes sense:  by forgiving the interest on the loans, Liberals didn’t have to raise the money to pay the interest on the debt. 

But logically,  any donation in any amount paid by anyone relieves a party member of having to raise that amount of money from someone else. Thus every amount raised by a party by any means becomes an automatic conflict of interest. 

Even if we were to replace the existing system of private political contributions with money from the state, the result would still produce a  conflict of interest.  In this case, we would have a situation in which the parties determined how much money to give themselves out of public funds.  

Some Liberals argued that the Conflict of Interest Act doesn’t apply in this case as it supposedly only applies to public servants.  That isn’t correct and it also isn’t the main problem with Conacher’s argument.
Conacher’s contention is that the forgiven interest was a benefit, in and of itself.  He also contends that it violates section 7 of the Conflict of Interest Act.  Section 7 makes it illegal for a public officer holder to accept a benefit in relation to the performance of his or her job.  That’s an arguable point as well.

But for the sake of this point, let’s allow that the financial deal constitutes a benefit and therefore a conflict of interest.  For Conacher’s argument to work you would have to accept that the politicians who produced the two pieces of legislation allowed this situation to exist.

You’d have to go through a lot of evidence to confirm that Conacher is wrong on this point. For the sake of brevity, let’s just note that the same legislators who created the 1995 conflict of interest law had no intention of creating a situation in which they made political donations needed to run a political party out to be a fundamental conflict of interest that would in effect, make it impossible to legally be a politician.  Logically Conacher’s argument doesn’t make any sense on that basis.

Rather,  it would be logical to assume that they understood the problem for a potential conflict of interest and took a step to guard against the conflict.  The step was public disclosure of political donations,  required under the earlier Elections Act, 1991.

You don’t have to look too hard to find cases from across Canada that deal with the question of donations and conflict of interest. You will also find that disclosure is a key element in determinations that no conflict of interest existed.  You also don’t have to assume what the members of the House thought.  You can read the debates on both the Elections Act, 1991 and the Conflict of Interest Act, 1995

Disclosure is a crucial aspect of this Liberal deal.  It isn’t surprising Conacher avoided it altogether.  It’s a basic point, for one thing.  And for another, Conacher clearly wasn’t interested in logical or factual arguments.  He gave CBC what they went looking for, namely some controversial quotes for a news story.
The fact the details of this deal would be disclosed, by law, is what undermines the political attacks made on the deal by members of other political parties and people like Conacher. The interest written off by the banks will be recorded by the Chief Electoral Office and by the Liberal Party as a contribution. On that basis, it will also be reported publicly by the CEO.

Incidentally, the banks apparently won’t get a tax receipt for the money they have written off.  That’s what distinguishes it from a donation by an individual or a company or union.  Neither Conacher nor On the Go host Ted Blades seemed to understand that distinction.

Democracy Unwatch

Over the past decade there have been numerous examples of the questionable mingling of politics and money in Newfoundland and Labrador.  A former premier funded a private charity run by his family, using his salary as Premier.  The charity gave cash to organizations  - including health care foundations belonging to government agencies – as well as to individuals.  The same Premier completed a massive land assembly project  - much of it involving Crown land - on the day he was sworn in as Premier.  On top of that he took upwards of 18 months to place his business interests in a blind trust.

The Conservatives funded part of their pre-2003 party operations with money raised illegally from the House of Assembly..  Once the illegal funding became public knowledge, the Conservative party official appointed as chief electoral officer refused to investigate.

An unelected leader of the Conservative Party managed to have people fired from the Premier’s Office and others hired before he officially became leader.

There are other examples.

Duff Conacher and Democracy Watch stayed silent about them all.

Between that and the ludicrous comments Conacher made about the Liberals’ bank deal,  it’s amazing anyone pays attention to anything Conacher says.  That doesn;t mean we don;t need some serious campaign finance reform in Newfoundland and Labrador.  it just means we shouldn’t pay attention to people who are – at the very best – safari commentators. They breeze in, make some superficial comments that may or may not be true, and then frig off back where they came from.

Jesse Jackson at Oka had nothing on Duff Conacher.