Court of public opinion

From the June 2021 print edition

In his May 2021 report entitled Trudeau III Report, Canada’s federal conflict of interest and ethics commissioner Mario Dion cleared Prime Minister Justin Trudeau of any Conflict of Interest Act breaches connected to the WE Charity (WE) contracting scandal, finding that the appearance of conflict did not constitute actual conflict under the statute. However, the ruling exposed significant gaps in the conflict statute, showing why we need to look beyond its minimum statutory standards to avoid future contracting controversies.

Dion’s report found that Trudeau did not influence the government’s decision to recommend the WE organization for the impugned contract awards, that the Prime Minister had no knowledge of those recommendations before they were brought to federal cabinet, that neither Trudeau nor his spouse had any personal relationship with the WE organization’s leaders, and that Trudeau gave no improper preferential treatment in those contract awards. Dion’s report also found that Trudeau’s involvement in the award decisions was not motivated by his or his family’s private interest in winning future work from WE in connection with those new contracts.

The reasoning behind those conclusions exposes glaring gaps in the federal conflict regime. For example, in dealing with section 7 of the statute, Dion found no improper preferential treatment was given by Trudeau since there was no prior personal relationship between Trudeau and the representatives of the WE organization. While arguably a technically correct interpretation of the statute, Dion’s analysis glossed over the possibility of preferential treatment in the absence of direct personal relations since the statute apparently fails to capture preferential treatment when it’s not personal, but strictly business.

Further, even though he confirmed that members of Trudeau’s family were paid by the WE organization for multiple speaking engagements, Dion dismissed the conflict allegations since Trudeau himself was never paid by the WE organization and since neither Trudeau nor his spouse had any personal relationship with the WE organization’s representatives. Again, based on the “not personal, strictly business” loophole, Dion’s report sidestepped the fact that past business relations between a private organization and the family members of senior government decision-makers, even where there are no personal relations, creates obvious conflict concerns over downstream government contract awards.

Finally, in considering the statutory definition of conflict, which refers to the “furthering” of private interests, Dion concluded that Trudeau was not in a conflict since the award decisions were not motivated by Trudeau winning future personal work for himself or his family in connection with the new contract awards.

By interpreting the “furthering” of interest as looking to future private benefits, Dion’s analysis glossed over the main focus of the scandal, which was the appearance of payback to the WE organization for past personal benefits enjoyed by the Prime Minister’s family members.

Even if we accept, as we should in the absence of contrary evidence, that there was no actual retroactive quid pro quo motivating Trudeau’s decisions in the WE contract awards, and even if we accept that there was no statutory recusal required based on Dion’s highly technical reading of the statute, Trudeau himself subsequently admitted that the optics of awarding high-value government sole-source deals to an organization with prior business dealings with his family members should have resulted in his voluntary recusal from those award decisions.

Moving forward, we need to plug these statutory loopholes as has been done in other jurisdictions. For example, to discourage “pay to play” schemes involving future government contract awards made as payback for past private benefits, New Jersey prohibits a company from doing business with the government if that company made a political contribution to the governor’s election campaign.

In its February 2017 decision in Della Pello Paving, Inc. v. New Jersey, a New Jersey appeals court rescinded a $4.2 million contract award because a company made a $500 payment to the governor’s political fundraising dinner.

No evidence of personal relations or personal influence was required in that ruling. The political donation was sufficient grounds to disqualify the company from future business.

Giving work and other private benefits to the family members of senior politicians is a way that companies could try to improperly influence future government contract awards. Whether those companies are in fact motivated by, or successful in, exercising such improper influence is irrelevant.

To avoid the appearance of impropriety, our system needs clearer standards since, in the final analysis, the WE contracting scandal did little to instill confidence in government contracting in the court of public perception, where the battle for trust in our institutions is ultimately won or lost.

Paul Emanuelli is the general council of the Procurement Law office. Paul can be reached at [email protected]