New Brunswick Conflict of Interest Commissioner
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Issue No.3 - June 2002

To:        Members of the Legislative Assembly

From:   Hon. Stuart G. Stratton, Q.C.
             Conflict of Interest Commissioner

Section 28 of the Members' Conflict of Interest Act, (the Act), requires the Conflicts Commissioner to promote the understanding by Members of their obligations under the Act by personal discussion with them and by preparing and disseminating written information. In addition to this requirement, sections 29 and 30 of the Act authorize the Commissioner to give advice and recommendations, both general and specific, to Members or former Members of the Legislative Assembly. In furtherance of these provisions, I would like to present the third issue of the Conflict of Interest Bulletin, which addresses the following issues:

I. Exceptions to Certain Prohibitions under the Act

1. Prohibition against Gifts

2. Prohibition against Contracts with the Crown

3. Prohibition against Certain Activities by Ministers

4. Prohibition against Certain Activities by Former Ministers

II. Reference and Support Letters

III. Appearance before Boards and Tribunals

IV. Decisions by Other Jurisdictions on Selected Inquiries

1. Acceptance of Gifts

2. Acceptance of Gifts

3. Complimentary Memberships

4. Paid Expenses

5. Status Inquiries - Law Society

6. Status Inquiries - Ombudsman's Office

7. Appearance at Hearings

8. Letters of Support

9. Letters of Recommendation

I. EXCEPTIONS TO CERTAIN PROHIBITIONS UNDER THE ACT

The purpose of this part of the bulletin is to remind all Members of certain requirements of the Act, with emphasis on the exceptions to these requirements, either by way of a statutory discretion granted to the Commissioner, or through a general exemption in specified circumstances.

1. Prohibition against Gifts

One of the most frequently asked questions posed by Members is the propriety of certain gifts. In answering this question regard must be had to the general prohibition against the acceptance of gifts contained in subsection 8(1) of the Act. Specifically, this subsection provides that "[a] member shall not accept a fee, gift or personal benefit . . . that is connected directly or indirectly with the performance of the member's duties of office." However, the prohibition against the acceptance of gifts is subject to an exception. This exception is set out in subsection 8(2) of the Act, which provides that the prohibition against gifts does not apply "to a gift or personal benefit that is received as an incident of the protocol or social obligations that normally accompany the responsibilities of office."

In my research as to the meaning to be given to the prohibition against gifts and the exception to that prohibition as it relates to "an incident of protocol or social obligation", I have been unable to locate any rulings or decisions by conflict of interest Commissioners in other jurisdictions which attempt to define the terms of this exception. Apparently, each time a Member invokes the exception, the issue has been resolved on the basis of what is reasonable and proper on the facts of each particular case. I have, however, located a set of New Brunswick Guidelines entitled "Gifts and Gratuities" contained in a "Minister's Handbook" dated June of 1994, some years before the present Act was put into place. Under the Conflict of Interest Act in force at that time, it was a conflict of interest for any Cabinet Minister, (or any other person named in the Act), to accept any fees, gifts, gratuities or other benefits which could reasonably be deemed to influence his or her decision as a Cabinet Minister.

The author of these Guidelines points out that the law then in effect did not prohibit the receipt of gifts but placed the test of "reasonableness" on the value of the gift. The author added, however, that "the definition of what is reasonable was not what might be defined as reasonable in a court of law but what would be defined as reasonable in the much stricter court of public opinion."

The 1994 Guidelines also contained these statements:

"It would be simple, but completely unrealistic, to ban the receipt of gifts of any kind. Gifts may be simply a company calendar or a ballpoint pen with a company logo. A gift is also a company or another government hosting a dinner or paying for lunch. Many firms may send a bottle of scotch for Christmas or offer tickets to a sporting event if they are hosting provincial officials. Gifts are sometimes received from foreign countries visiting the Province or from another province that is hosting a national event. To refuse a gift or return it implies that the giver has committed an impropriety or is attempting to buy favor with the recipient.

In specific terms, a bottle of scotch may be acceptable, but a case is not. A ticket to a single
sporting event may be acceptable, but a season's pass is not. Clearly, the provision of free transportation and accommodation to a government official by a company doing any business whatsoever with the government is unacceptable.

In rare instances gifts may be offered that exceed the guideline under circumstances that would cause embarrassment to other persons should the gifts be refused. Under such circumstances, the gifts should be accepted and turned over to the Department of Supply and Services as the property of the Government of New Brunswick."

It would seem, in the opinion of the author of these Guidelines, the test of what is reasonable in respect of gifts becomes a matter of the dollar value of the gifts involved. I personally doubt that the answer to the issue is quite that simple as other circumstances, such as whether the gift could influence the decision of a Member of the New Brunswick Legislature, may also play a role in determining what is reasonable in the circumstances. In any event, it must be remembered that the present Act precludes all gifts or benefits connected directly or indirectly with the performance of the Member's duties of office, save only such gifts as are received as an incident of protocol or social obligation that normally accompany the responsibilities of office.

Although the provisions of the present Act are different than the legislation in effect in 1994 when the Guidelines were written, I believe the Guidelines may be of some assistance in determining the propriety of gifts to Members under section 8 of the current Act. Overall, I would emphasize that, as pointed out in the Guidelines, Members are expected to exercise good judgement in accepting gifts or benefits, always taking into account the circumstances involved.

I would add only that I am always available to discuss the relationship between a Member and the donor of a gift or benefit to determine whether the gift or benefit is received as an incident of protocol or social obligation, or is more directly related to the performance of the Member's duties of office and therefore not acceptable.

2. Prohibitions against Contracts with the Crown

Subsection 9(1) of the Act prohibits Members from being parties to a contract with the Crown under which a benefit is received. Subsection 9(2) prohibits Members from having an interest in a partnership or private corporation, or from being an officer or a director of a corporation, that is a party to a contract with the Crown under which a benefit is received.

There are exceptions to this prohibition in respect of pre-existing contracts. Subsection 9(3) states that subsections 9(1) and 9(2) do not apply to a contract that existed before a Member's election to the Assembly, but do apply to its renewal or extension. Subsection 9(4), on the other hand, states that subsection 9(2) does not apply if the Commissioner is of the opinion that the interest or position of the Member will not create a conflict between the Member's private interest and public duty.

It should be noted that the exception referred to in subsection 9(3) has reference to both individual Members who have contracts with the Crown and Members who have an interest in, or are officers or directors of, a partnership or private corporation that is a party to a contract with the
Crown. The exception contained in subsection 9(4), however, has reference only to Members who are partners or own shares in, or are officers or directors of, a corporation that is a party to a contract with the Crown.

As I read this prohibition and the exceptions to it, it is my opinion that if a Member, or a partnership or private corporation that a Member has an interest in, owns a commercial building and, prior to the Member's election, leases space to the Crown on a long term basis, then until such time as the term of the lease expires, the fact of the existence of the lease does not constitute a conflict of interest.

On the other hand, if a Member has an interest in a partnership or private corporation that owns a commercial building and leases office space to the Crown, the prohibition against contracts with the Crown contained in subsection 9(2) of the Act may not apply if the Commissioner is of the opinion that the Member's interest will not create a conflict between the Member's private interest and his or her public duty.

As an aside, I have to admit that I do not understand why the drafters of the Members' Conflict of Interest Act created two specific exceptions to the prohibition against contracts with the Crown. Whether a Member, when elected, has a contract with the Crown as an individual, or as a member of a partnership or corporation, it would seem to me that any exceptions to the requirements of the Act should apply equally to both.

3. Prohibition against Certain Activities by Ministers

The Act restricts members of the Executive Council from several specific activities. Subsection 14(1) of the Act states that members of the Executive Council shall not:

(a) engage in any trade, occupation or employment or in the practice of any profession,

(b) engage in the management of a business carried on by a corporation,

(c) carry on business through a partnership or sole proprietorship,

(d) hold or trade in securities, stocks, futures or commodities, or

(e) hold an office or directorship, unless holding the office or directorship is one of the member's duties as a member of the Executive Council.

But with the approval of the Commissioner there is an exception to these strict requirements. The exception is contained in subsection 14(2) of the Act which states:

14(2) A member of the Executive Council may engage in an activity prohibited by subsection (1) if

(a) the member has disclosed all material facts to the Commissioner,

(b) the Commissioner is satisfied that the activity, if carried on in the specified manner, will not create a conflict between the member's private interest and public duty,

(c) the Commissioner has given the member his or her written approval and has specified the manner in which the activity may be carried out, and

(d) the member carries out the activity in the specified manner.

I have interpreted subsection 14(1) of the Act broadly as including any outside activities by a
Minister which could interfere with his or her full time duties as a member of the Executive Council. I would record, however, that I have applied the discretion granted to the Commissioner by subsection 14(2) of the Act in respect to Minister's memberships in certain religious and charitable organizations, which, in my opinion, would not create a conflict of interest nor interfere with their duties as Ministers.

In furtherance of this issue, I would report that in the past year, the office of the Ontario Integrity Commissioner has reviewed its policies with respect to Members and Ministers accepting positions of Honourary Chair, Honourary Member, or Honourary Patron, usually with charitable organizations. After citing a definition of the term "honourary", Commissioner Evans stated in his Report to the Ontario Legislature:

"Upon election, and every year thereafter, all members are required to provide the Integrity Commissioner with information regarding offices, directorships or similar positions held by them in any corporation or other organization. Members, with the exception of Ministers, may retain or accept directorships or honourary positions in these entities, but must be careful that conflicts of interest do not arise. Members are required to devote their full attention to the discharge of their responsibilities as members and if the ability of the member to perform his or her duties is affected due to the amount of time required, such activity would be incompatible with his or her role as a member."

After quoting paragraph 10(c) of the Ontario Members' Integrity Act, 1994 dealing with the holding of an office or directorship, (a provision similar to our paragraph 14(1)(e)), Commissioner Evans stated:

"No member, including Ministers, may use the prestige of his or her office to raise funds nor should he or she personally solicit or give the impression that he or she is personally soliciting funds for an organization or personally inviting potential contributors to fundraising events. Any role other than that as an Honourary Chair, etc. would be inappropriate.

Should the organization's mandate fall within the jurisdiction of the Minister, or in fact, be a Ministry stakeholder, such appointment would be inappropriate.

As a public office holder, the member may permit the organization to use his name as MPP only on the organization's letterhead or public announcements, however, he or she should not sign any letters on behalf of the organization, nor should Ministers associate their Ministerial office with the cause in which they are participating."

Commissioner Evans concluded his report on this issue with the statement, with which I agree, that "it is strongly recommended that all members and in particular, Ministers, seek the advice of the Integrity Commissioner before accepting such appointment."

4. Prohibition against Certain Activities by Former Ministers

Subsection 17(1) of the Act prohibits former members of the Executive Council from entering into contracts with the government or making representations to the government until 12 months
have elapsed from the date when the Minister ceases to hold office. The subsection in question provides as follows:

17(1) No former member of the Executive Council shall, unless twelve months have expired after the date when he or she ceased to hold office as a member of the Executive Council,

(a) accept a contract or benefit that is awarded, approved or granted by the Executive Council, a member of the Executive Council or an employee of a department or office of the Government of New Brunswick or a Crown corporation, or

(b) make representations on his or her own behalf or on behalf of any other person with respect to a contract or benefit.

But, again, there is an exception to this prohibition, in respect of contracts which involve a former Member's further service with government or if the terms of any such contract are the same with respect to all persons similarly entitled. These exceptions are contained in subsection 17(2) of the Act which reads:

17(2) Subsection (1) does not apply

(a) to contracts or benefits with respect to further duties in the service of the Crown, or

(b) if the conditions on which the contract or benefit is awarded, approved or granted are the same for all persons similarly entitled.

As yet I have had only one enquiry with respect to section 17, the so called "cooling off" provision of our Act. To my knowledge, provisions similar to our section 17 have been invoked by other Commissioners only once. In a reported investigation which took place in Saskatchewan in 2002, (Bakken-Serby), the issue involved the assistance given by a former Executive Council member to a business associate in arranging a contract with the Crown. On the basis of the facts as found by him, Commissioner Gerrard concluded that a breach of their Members' Conflict of Interest Act had not been established.

II. REFERENCE AND SUPPORT LETTERS

I turn now to another topic of concern to Canadian Conflict of Interest Commissioners, namely the writing of letters of reference or support for constituents. As pointed out by Commissioner Clark of Alberta, "members are encouraged to consider how well they know the constituent and that person or corporation's suitability for whatever the reference is sought."

Commissioner Evans of Ontario expressed a similar view. He stated that "a member should have some level of familiarity with an individual or group before writing a letter of reference and support, the member is unable to write a support letter if there is no such familiarity."

I agree with the comments by Commissioners Clark and Evans and would adopt Commissioner Evans' conclusions on this issue which he expressed as follows:

"It is generally recommended to members that when writing letters of reference or support, the following principles should be kept in mind:

(1) Do you know the constituent? If not, it is suggested that the member consider taking a few minutes to speak with the constituent to obtain a comfort level before writing such letter. Ulti
mately, it is the member's decision whether or not such letter is written.

(2) Letters should be written on constituency letterhead, however, a letter for a personal friend should be written on personal letterhead.

(3) Letters should not be addressed "To Whom It May Concern" as the member loses control over the destination of the letter."

III. APPEARANCE BEFORE BOARDS AND TRIBUNALS

On still another topic, the issue of Members dealing with agencies, commissions and crown corporations on behalf of constituents has been raised for consideration. While each such inquiry must be decided on its own facts, some general principles have emerged for the guidance of Members.

One accepted principle is that legislators should never communicate with a judge or other judicial officer with respect to a matter which is or has been before the courts. According to Commissioner Evans of Ontario, the rationale for this statement is based on the principle that although the legislature and the judiciary are both branches of the provincial government, they are separate and independent and in accordance with parliamentary convention, any encroachment in either direction is strictly forbidden.

Moreover, insofar as the question of Ministers appearing before boards, agencies or commissions on behalf of constituents is concerned, an answer has been given in a 1996 court decision in New Brunswick in Valcourt v. Tyler [1996] N.B.J. No. 614. The facts in that case were that a Minister had appeared before an appeals tribunal on behalf of a constituent. Madam Justice Larlee of The Court of Queen's Bench held this to be a breach of the Conflict of Interest Act then in force.

While, in my opinion, a balance must be maintained between the responsibilities of Members to represent their constituents and any limitations that may be placed on them in the exercise of that responsibility, nonetheless, I believe that the prohibition that now exists as to Ministers appearing before quasi-judicial tribunals ought to include all Members of the Legislature and be extended to include provincial agencies, commissions and crown corporations. I hold this opinion because of the perception that such activity raises in the minds of a questioning public.

IV. DECISIONS BY OTHER JURISDICTIONS ON SELECTED INQUIRIES

In Ontario, Alberta and British Columbia, where the number of legislators is much larger than is the case in New Brunswick, the Commissioners receive more numerous inquiries, some of which they summarize and include in their Annual Reports. I cite some of the questions posed to them and their answers for the information of the Members of the Legislative Assembly of New Brunswick.

Inquiry No. 1 - Acceptance of Gifts

Q. A Minister has inquired as to the appropriateness of a stakeholder organization extending to the caucus an invitation to a Blue Jays baseball game, with the intent that they would discuss
business during the game.

A. Citing the equivalent to section 8 of the New Brunswick Act with respect to the acceptance of gifts and benefits, it was the Commissioner's opinion that a Blue Jays game does not fall within the provisions of section 8 and it would, therefore, be inappropriate to accept the invitation. If a Ministry stakeholder wishes to discuss business, the appropriate forum for such a discussion is within Ministry offices.

Inquiry No. 2 - Acceptance of Gifts

Q. A Member is offered a season pass to a ski hill in his riding. It was offered in recognition of years of service to the community in different capacities. The Member wished to accept the offer and inquired as to whether this was a conflict.

A. It was the Commissioner's opinion that as long as the Member continued to represent the people of that riding, it would be a conflict to accept such a gift, regardless of the circumstances in which it was offered.

Inquiry No. 3 - Complimentary Memberships

Q. A Member has been offered a complimentary membership in a local private club.

A. Citing the equivalent to section 8 of the New Brunswick Act, it was the Commissioner's opinion that a complimentary membership in a local private club is a personal benefit, and in accordance with section 8, does not fall within the responsibilities of the office of the Member. It would, therefore, be inappropriate to accept the membership.

Note: The issue of complimentary annual memberships in golf clubs, business clubs and religious and charitable organizations has been of some concern to me. In a number of cases I have ruled that the gift provisions of section 8 of our Act applied. In cases involving members of the Executive Council, I have granted exemptions under subsection 14(2) of the Act in respect of specific charitable and religious organizations when I was satisfied that the activity, if carried on in the manner reported, would not create a conflict between the Council member's private interest and public duty.

In a recent report to the Legislative Administration Committee I noted that the Conflict Acts in some of the other provinces contained specific provisions dealing with gratuitous annual memberships in golf clubs, business clubs, religious and charitable organizations. It was the view of the Committee, however, that such issues were strictly administrative in nature and specific provisions dealing with them need not be included in the New Brunswick Act.

Inquiry No. 4 - Paid Expenses

Q. A member of a Minister's staff attended a two-day conference sponsored by a Ministry stakeholder with expenses paid for by the stakeholder company.

A. If the Ministry feels that attendance at the conference is beneficial to the Ministry, such attendance is appropriate, however, all expenses should be paid by the Ministry.

Inquiry No. 5 - Status Inquiries - Law Society

Q. A constituent filed a complaint with the Law Society of Upper Canada and despite numerous letters inquiring as to the status of the matter, the constituent has not heard from the Law Society. Can the Member inquire as to the status of the matter?

A. Citing the equivalent to section 7 of the New Brunswick Act, it was the Commissioner's opinion that the Member was entitled to request the status of the complaint before the Law Society as such request is considered an activity under section 7.

Inquiry No. 6 - Status Inquiries - Ombudsman's Office

Q. A Member inquired as to the appropriateness of contacting the Ombudsman's Office with respect to an investigation by that office involving a constituent.

A. The constituent's family was represented by counsel, and it was the Commissioner's opinion that it was the counsel's responsibility to make the inquiries of the Ombudsman's Office. For the Member to become involved may be interpreted as an attempt to interfere with or influence the process, contrary to the equivalent of section 6 of the New Brunswick Act.

Inquiry No. 7 - Appearance at Hearings

Q. A constituent has asked his Member sit in on his Housing Tribunal hearing to ensure that he gets a fair hearing.

A. The constituent is suggesting that the member use his position for intimidation purposes, contrary to the equivalent of section 6 of the New Brunswick Act. Accordingly, the Member should not attend the hearing. If the constituent is not happy with the decision of the Tribunal, he is entitled to pursue appeal processes that are available to him.

Inquiry No. 8 - Letters of Support

Q. A Minister has been asked by a local library to provide a letter of support for funding from the provincial government. The guidelines for the application state that the library "may wish to obtain a letter of support for their application from their local [Member]."

A. It was the Commissioner's opinion that the guidelines were only a suggestion and not a specific criterion for the acceptance of applications for funding. The Commissioner's opinion continues as follows: "It is an accepted convention that there are limitations on the ability of a Minister to act on behalf of constituents and parliamentary convention prohibits all Ministers from personally appearing or advocating on behalf of a private party with any agency, board or commission. Ministers always wear the cloak of ministerial responsibility and there is no way that their actions, whether verbal or written, and whether in the Member's position as an elected Member of the Legislature or as a Minister, can be considered by the recipient as other than actions by a Minister, and thus could reasonably be considered as attempting to influence a decision."

The Commissioner concludes "that letters of support may be written directly to the Minister responsible and must be on the Member's constituency letterhead."

Inquiry No. 9 - Letters of Recommendation

Q. Is it appropriate for a Member of the Executive Council, either in the capacity of a Cabinet Minister or an MLA, to write a letter of recommendation either on Ministerial or official MLA letterhead? What restrictions exist?

A. After reviewing examples that illustrate the many different problems likely to arise in the question of letters of reference written on Member's legislative letterhead, it was decided that the letterhead employed by the Member should make clear to the reader the capacity in which the Member supports the recommendation. Where support is of a purely personal nature and where it is not intended to convey anything more than personal support on a basis of friendship or a general character reference, a Minister or MLA may properly convey support using personal letterhead only.

A FINAL NOTE

According to recently published reports, a majority of the public, (sixty-nine percent), do not have faith in the integrity of elected public officials. These reports, if accurate, are a matter of concern and we must do what we can to dispel this belief at least in so far as the Province of New Brunswick is concerned. This is one of the purposes behind the preparation of these bulletins; to remind all Members of the Legislative Assembly of New Brunswick that the Members' Conflict of Interest Act is legislation enacted to promote public confidence in elected public officials as they conduct public business. Together, we must assure the public that on all occasions, all Members act in accordance with the public trust placed in them and observe the highest standard of propriety in public life.

Please note that additional copies of this bulletin, along with the previous two, are available at the Office of the Conflict of Interest Commissioner, as well as on the Commissioner's web site at http://www.gnb.ca/legis/conflict/office.htm.


Office of the Integrity Commissioner
Edgecombe House, 736 King Street
Fredericton, N.B. CANADA E3B 5H1
tel.: 506-457-7890
fax: 506-444-5224
e-mail:coi@gnb.ca

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