Associations and companies that extend entertainment and hospitality to federal officials should audit their practices, in light of recent conflict of interest findings by the Conflict of Interest and Ethics Commissioner and potential follow-up by the Commissioner of Lobbying.[1]  While public office holders are held accountable for accepting entertainment or hospitality that places them in a conflict of interest, the person offering or giving those benefits might face parallel enforcement proceedings under the Lobbyists' Code of Conduct.

On February 26[2] and June 1,[3] respectively, two federal government employees were found to have breached section 11 of the Conflict of Interest Act because they accepted dinner invitations from organizations that had been or were lobbying them.  While lobbyists and organizations that entertain federal officials are not subject to the Act, lobbyists are bound by the Lobbyists' Code of Conduct, which has been interpreted to prohibit lobbyists from placing government officials in a conflict of interest.[4]

With increasing frequency, the organization or company that extends hospitality, provides entertainment or offers a benefit to a federal public office holder may find itself:

  • Called to give evidence before the Conflict of Interest and Ethics Commissioner in an examination under the Conflict of Interest Act or an inquiry under the Conflict of Interest Code for Members of the House of Commons; and
  • Responding to a proceeding under the Lobbyists' Code of Conduct, which is administered and enforced by the Commissioner of Lobbying

Conflict of Interest Examinations and Inquiries

Proceedings to determine whether a public office holder has contravened the Conflict of Interest Act are known as examinations.  Proceedings into possible breaches of the Conflict of Interest Code for Members of the House of Commons are called inquiries.  Both examinations and inquiries are conducted by the Conflict of Interest and Ethics Commissioner.

If your organization or company is asked to provide information to the Commissioner, cooperation is not optional.  In both an examination and an inquiry, the Commissioner or her delegate[5] may order the production of documents, require the attendance of witnesses, and take evidence under oath (or affirmation).[6]

Typically, witnesses are sworn before they are interviewed and the interviews are recorded.  The Commissioner instructs witnesses not to disclose any information about the proceeding, though this does not prevent a witness from seeking advice from legal counsel.  Every participant in an inquiry or examination, including each witness, has the right to legal representation.[7]  A witness may be accompanied at the interview by his or her lawyer.

The subject of the examination or inquiry (i.e., the public office holder or MP) and his or her lawyer will not be present at other witness interviews and will not have the right to examine other witnesses. The subject will, however, be given the right to review and to comment on the Commissioner's findings of fact before her investigation report is finalized and made public.

Before the interview, witnesses may be emailed or phoned by the Commissioner's staff, and asked to provide answers, information or records.  It is prudent to seek expert legal advice immediately upon being contacted by the Commissioner's office, and not to answer questions without benefit of legal counsel and representation.

The Commissioner's ultimate report will be a public document that is tabled in Parliament and posted on the Internet.  While only the conduct of the subject public office holder(s) is at issue, the witnesses, as well as their organizations, employers, or clients, should expect to be named in the report and to have their evidence (and evidence related to them) discussed.

Further, information contained in a report under the Conflict of Interest Act or Conflict of Interest Code for Members of the House of Commons can be considered by the Commissioner of Lobbying in determining whether to launch a proceeding under the Lobbyists' Code of Conduct.

Enforcement Action by the Commissioner of Lobbying

The Commissioner of Lobbying has adopted a two-step process for enforcement of the Lobbyists' Code of Conduct:[8]

  • Administrative review
  • Investigation

The Commissioner is required to conduct an investigation if she has reason to believe it is necessary to ensure compliance with the Lobbyists' Code of Conduct.[9] The Commissioner does not have to conduct an investigation if she feels the matter is not sufficiently important, occurred too long ago or is better dealt with under another statutory procedure (or she has another valid reason).[10]

The purpose of an administrative review is to assemble, analyze, and verify factual evidence, in order to determine whether there are reasonable grounds to believe that a breach of the Lobbyists' Code of Conduct has taken place, and whether a subsequent formal investigation or other compliance measure is required.

Administrative Review

Administrative reviews are classified as Level One (low gravity) or Level Two (medium to high gravity), depending on the severity of the potential contravention being reviewed.

The administrative review is a fact-finding exercise.  The Commissioner's staff will typically conduct background research and searches of the Registry and other publicly available information.  Where the matter under review is of medium to high gravity (including when there is an indication that the potential breach resulted from negligence or intent) the review will also include in-depth interviews. The subject,  the subject's employer or client, and any public office holders or individuals with relevant information can be interviewed.

The administrative review concludes with the preparation of an internal report for the Commissioner. The review will be closed if the allegation of a Code breach is not well-founded. Even if the allegation of a Code breach is well-founded, the review may be closed if the Commissioner considers the matter not serious enough to warrant an investigation or decides alternative compliance measures (e.g., a warning letter) are more suitable.  On the other hand, if the Commissioner determines that the allegation of a contravention of the Code is serious and apparently well-founded, she will initiate an investigation.[11]

Investigation

If the Commissioner initiates an investigation, she possesses the power to require the attendance of witnesses, to compel the production of documents, and to take evidence under oath.[12]  Before she publishes a report finding that someone has contravened the Lobbyists' Code of Conduct, the Commissioner must give the subject an opportunity to respond.[13]  Specifically, the subject is given a copy of the investigation's factual findings and invited to make representations.

The Commissioner's final report of a violation of the Lobbyists' Code of Conduct is public, tabled in both Houses of Parliament, and posted on the Internet.

The subject of an administrative review or an investigation has the right to be represented and accompanied by legal counsel.  Because the administrative review is critically important – it could lead to a determination that no contravention occurred or that an alternative compliance measure (e.g., a warning letter) is suitable, or it could form the basis of an investigation – lobbyists and their employers or organizations should consider engaging expert legal advice as soon as they become aware of the administrative review or the potential for one.

Everyone has the right to obtain legal advice before responding to communications from the Office of the Commissioner of Lobbying.  A decision to forego that advice should not be taken lightly.

Referral to Police

If at any point the Conflict of Interest and Ethics Commissioner or the Commissioner of Lobbying has reasonable grounds to believe that an offence has been committed, she shall suspend the examination, inquiry, or investigation and notify the police.[14]

In the case of the Conflict of Interest and Ethics Commissioner, the duty to notify the police arises only if she believes the offence has been committed by the public office holder or MP who is the subject of the examination or inquiry, and that offence is an offence under federal law.

On the other hand, the Lobbying Commissioner is obliged to make a referral to the police if she believes that any person – whether or not the subject of the investigation – has committed an offence under any federal or provincial law.

Compliance Audits

In light of enforcement activity by the Commissioner of Lobbying and the Conflict of Interest and Ethics Commissioner, associations and companies (and all others that deal with the federal government) should ensure that they and their employees are observing all applicable lobbying laws, including the rule against placing public office holders in a conflict of interest. Particular attention should be paid to gifts, entertainment and hospitality.

A compliance audit is an appropriate step. A compliance audit should include the following:

  • Reviewing practices, to confirm that the Lobbying Act and Lobbyists' Code of Conduct are being upheld, and to identify areas of potential risk or vulnerability
  • Reviewing internal policies and protocols (including those dealing with government relations and with hospitality, entertainment and gifts) to ensure they are appropriate and complete
  • Training employees, to make them aware of the rules affecting hospitality, entertainment and gifts, and lobbying
  • Revising employment and consulting contracts to address the need for compliance with lobbying law

Even if you hire a consultant, lawyer or other third party to communicate with government on your behalf, you still should take steps to protect your interests. While each consultant is solely responsible for complying with lobbying law, a breach can harm the reputation and business interests of the client. Unfortunately, standard government-relations consulting contracts do not contain explicit assurances that lobbying laws will be honoured. A client should insist on such language, and on an adequate remedy in the event of a breach.