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Annual Report 2004-2005

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Province of New Brunswick




CONFLICT OF
INTEREST COMMISSIONER




The Honourable Stuart G. Stratton, Q.C.



ANNUAL REPORT

2004-2005





Letter of Transmittal
Report





March 31, 2005

The Honourable Bev Harrison
Speaker of the Legislative Assembly
Room 31, Legislative Building
Fredericton, New Brunswick
E3B 5H1


Dear Mr. Speaker:

It is my honour and a pleasure to submit to you this, the fifth Annual Report of the Office of the Conflict of Interest Commissioner for the period May 1, 2004 to March 31, 2005. The Report only covers an eleven month period due to my pending retirement as Commissioner

This report is submitted pursuant to section 31 of the Members' Conflict of Interest Act, R.S.N.B. 1973, c. M-7.01.

Respectfully,

The Honourable Stuart G. Stratton Q.C.
Conflict of Interest Commissioner for the
Province of New Brunswick


COMMISSIONER'S REMARKS
This is the fifth Annual Report of the Office of the Conflict of Interest Commission. It will also be my final Report.

For the record, early last December, I wrote to the Speaker reminding him that my term in office was due to expire at the end of January, 2005, and that I would be stepping down at that time. Late in January, however, the Premier requested me to continue to hold the Office of Conflict of Interest Commissioner after the expiration of my term until such time as a successor could be appointed. This, he informed me, would take place in April at the latest. I agreed to the Premier’s request.

As I stated in my December letter to the Speaker, as I leave, I want to express to all Members of the Legislative Assembly my sincere thanks to them all for their cooperation with this office throughout my term as Commissioner. As many of them will recall, in the beginning it was necessary to create the process for and the documentation necessary to implement the Member's Conflict of Interest Act and to make amendments along the way. Throughout, however, it has been a privilege to work with all Members of the House in seeking, through accountability and transparency, to increase the awareness of the need for ethics in decision making by provincial politicians.

In addition, in my letter, I pointed out that any success this office may have had in assuring the public that its interests have been served by the application of the Act is due in no small part to the assistance so kindly provided to me by the entire Legislative staff, including Ms. Loredana Catalli Sonier, Clerk of the Legislative Assembly; Ms. Gisèle Osborne, Office Manager; Mr. Peter Wolters, Director of Finance and Human Resources; and latterly by Mr. Shayne Davies, Clerk Assistant and Committee Clerk.

I ended my letter to the Speaker by extending my best wishes to the Commissioner who will succeed me and by stating that I had thoroughly enjoyed the challenges of the position but mostly, I had enjoyed the people with whom I have met. I shall miss you all.

SOME ADDITIONAL REMARKS
In last year’s Annual Report, I quoted a statement made by Mr. Howard Wilson, the former Ethics Councillor for Canada, as follows:

"Good governance is essential for any society to operate effectively. Canadians need to know their governments make decisions in the public interest. They need to know the personal interests of public office holders do not influence those decisions."

I added that ethics and integrity are at the core of public confidence in government and the political process. Moreover, I stated that the public demands that all of their institutions of governance set the highest objective standards for the performance of public duty. Those in elected office are expected to meet the high expectations that the public of Canada demands of their political and public servants.

Since the above noted comments were made, the Sheldon Chumir Foundation for Ethics in Leadership together with the Ethics Practitioners' Association of Canada (Alberta Branch) convened a meeting addressing ethical conduct and integrity in the public sector. In a report of that meeting, it was pointed out that "many things have occurred that have rocked the foundation on which ethics, integrity and trust are based" and that these events have increased the resolve of these groups "to address the need to restore confidence in public sector institutions and processes."

One of the speakers at the above noted meeting, Mr. Pierre Martel, the Executive Director of the Public Service Integrity Office of the Government of Canada, echoed what was said in our Annual Report last year. He is quoted as saying "a pollster with EKOS Research Canada recently presented data that showed that in the 60's and 70's, 80% of the general public surveyed indicated that they trusted public institutions and the ‘elite' responsible for them. Now, barely 30% trust government institutions to do the right thing".

But contrary to those who claim that politicians at all levels of government have failed to act in the best interests of the public that they have been elected to serve, I can report that, at least since the coming into force of the Members' Conflict of Interest Act in 2000, the Members of the New Brunswick Legislative Assembly have, in my opinion, consistently shown their concern for ethical conduct, integrity and trust in the service of the citizens of this province. I would, however, continue to reaffirm my belief that the principles underlying the Act and their specific provisions which address what Members and Ministers can and cannot do, will continue to deter inappropriate conduct and provide some degree of public confidence in the honesty and integrity of all elected Members.

To paraphrase the principle set forth in the conflict of interest acts in the Northwest Territories and Nunavit, I would again counsel all Members of the Legislative Assembly of New Brunswick to perform his or her duties and arrange his or her private affairs in such a manner as to maintain public confidence and trust in the integrity, objectivity and impartiality of the Members.

THE NEW BRUNSWICK MEMBER'S CONFLICT OF INTEREST ACT
Conflict of Interest Commissioner
It is important to note that unlike some other jurisdictions, the process involved in the selection of a Conflict of Interest Commissioner in New Brunswick requires the Premier of the province to consult with the Leader of the Opposition and the Leaders of the other political parties in the Assembly before an appointment can be made. Moreover, the appointment of a Commissioner only becomes official upon the recommendation of the Assembly and the passage of an order-in-council. The Act also provides that a Commissioner holds office for a term of five years and may be reappointed. It also provides that upon the recommendation of the Assembly, the Lieutenant-Governor in Council may remove a Commissioner from office for cause or incapacity due to illness.

The Commissioner, who is an Officer of the Legislative Assembly, reports to the House through the Speaker with respect to Annual Reports, Reports of Investigations, and matters relating to the Commissioner's jurisdiction or authority under the Act.

The Commissioner is assisted in the performance of his or her duties through the Office of the Clerk of the Legislative Assembly, including the preparation of the budgetary estimates of the Commissioner's Office. The final budget, as with all independent offices and government departments, is approved by the Legislative Assembly.

The duties assigned to the Commissioner under the Act include preparing the disclosure documents required by the Act; reviewing the disclosure documentation when submitted by the Members; meeting annually with all Members; preparing Public Disclosure Statements and filing them with the Clerk of the Legislative Assembly; responding to Members' enquiries; providing advice to the Members, both verbally and in writing, concerning their duties and responsibilities under the Act; investigating complaints against Members concerning alleged breaches of any of the provisions of the Act and reporting the results of any such investigation to the Speaker of the House; and generally working to ensure that all Members of the Legislative Assembly adhere to those principles which have been recognized as essential elements in retaining public trust in the Members as they go about the business of government. Transparency and ethical decision making are the goals of the Act.

Conflict of Interest
In so far as the Members of the Assembly are concerned, the Act requires them to ensure that their private interests do not come into conflict with the performance of their public duties. In this respect, the Act defines "conflict of interest" in these terms (s. 4):

A member shall not make a decision or participate in making a decision in the execution of his or her office if the member knows or reasonably should know that in the making of the decision there is the opportunity to further the member's private interest or to further another person's private interest.

The Act also specifies the procedure to be followed in dealing with potential conflict of interest situations. Section 13 of the Act provides for both disclosure and withdrawal or recusal from proceedings. This section states that during a proceeding, any Member who has reasonable grounds to believe that he or she has a conflict of interest in a matter that is before the Assembly, or the Executive Council, or a committee of either of them, must disclose the general nature of the conflict of interest and withdraw from the meeting without voting or participating in the consideration of the matter.

Disclosure Statements
The Act requires that the assets, liabilities and any business interests of a Member must be disclosed to the Commissioner in a Private Disclosure Statement to be filed annually. The requirements for this important annual statement are specified in paragraph 18(4)(a) of the Act as follows:

[A] statement of the nature of the assets, liabilities and financial and business interests of the member and, so far as is known by the member, of the member's spouse and minor children, and of private corporations controlled by the member, the member's spouse and minor children, or any of them . . . .

In addition, paragraph 18(4)(b) provides that a Member shall also disclose any salary, financial assistance or other benefit received from a registered political party or a registered district association.

The information obtained by the Commissioner from a Member's Private Disclosure Statement and a subsequent consultation with each Member, the latter of which is made mandatory by subsection 18(6) of the Act, is used by the Commissioner to prepare a Public Disclosure Statement, which is filed with the Clerk of the Assembly pursuant to subsection 20(7). Once filed with the Clerk, these Public Disclosure Statements are then made available to the public.

Initially, the completion of Private Disclosure Statements was looked upon by some Members as an intrusion into their private affairs. While this may be so, the Act specifically requires these statements and consultations to ensure that the transparency and accountability of the Members of the Assembly is adhered to as they go about their duties as representatives of the people in their various consistencies.

As an aside on the issue of privacy, I have advised Members of the Assembly that some other Canadian provinces have gone further than the New Brunswick Act to require the disclosure of "any income that the Member or his or her spouse and minor children have received . . . and indicate the source of the income". Indeed, in some American jurisdictions, potential Members of their Legislatures are required to disclose a copy of his or her Disclosure Statement prior to seeking public office.

Further, it should be noted that the Commissioner is required by the Act to destroy any record in his or her possession that relates to a former Member twelve months after the person ceased to be a Member of the Legislature. It has been my practice at the expiration of the one year period to formally advise these former Members that their privileged conflict of interest materials have been destroyed.

Gifts
The question of gifts is one frequently raised with our office. Pursuant to subsection 8(1) of the Act, a Member is prohibited from accepting a fee, gift or personal benefit that is connected directly or indirectly with the performance of the Member's duties of office. There is, however, one exception to this general rule with respect to gifts or benefits that are received "as an incident of the protocol or social obligations that normally accompany the responsibilities of office."

If this latter type of gift is greater than $250.00 in value, or if the total value received from one source in any twelve month period is greater than $250.00, the Member must file a Gift Disclosure Statement with the Commissioner. Such gifts are then recorded in the Public Disclosure Statement prepared by this office.

Insider Information and Improper Influence
Section 5 of the Act prohibits a Member from using information obtained by the Member in his or her capacity as a Member that is not available to the general public to further the Member's private interest or to further another person's private interest.

Section 6 of the Act prohibits the use of a Member's office to seek to influence a decision made by another person so as to further the Member's private interest or to further another person's private interest.

Both sections 5 and 6 have been the basis for complaints against three Members of the Assembly during my term in office. All three complaints presented issues with respect to the raising of funds by Members and were the subject of investigations and Reports by me to the Speaker of the House. These Reports have been summarized in my previous Annual Reports and are also available in their entirety from our office.

Contracts with the Crown
The Act expressly prohibits Members of the Assembly from being a party to a contract with the Crown, (defined to include Crown corporations), under which the Member receives a benefit.

There are, however, three exceptions to this prohibition. The first such exception is in respect to contracts that existed before the Member's election to the Assembly, but not to any renewal or extension thereof.

The second exception is in respect to contracts with the Crown, where a Member has an interest in a partnership or a corporation, or the Member is an officer or director of a corporation, that is a party to a contract with the Crown. In these cases, the prohibition does not apply if the Member entrusts his or her interest in the partnership or corporation to one or more trustees in a blind trust.

The third exception to the express prohibition against contracting with the Crown is a discretion provided to the Commissioner to grant an exemption to a Member 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." By way of example, I have declined to grant an exemption to a Member who, prior to his election, was doing business with the government. The Member accepted my decision that the provisions of the Act applied to his business and stopped selling product to the government.

Members of the Executive Council
It must be noted that the Act sets stringent requirements for members of the Executive Council (The Cabinet). These requirements are set out in subsection 14(1) of the Act which directs that Cabinet Ministers 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.

In addition to these prohibitions, sections 16 and 17 of the Act impose further restrictions on members and former members of the Executive Council. These are the so-called "cooling off" provisions which expressly prohibit Cabinet Ministers from knowingly awarding contracts or benefits to their former colleagues "until twelve months have expired after the date on which the former member ceased to hold office".

There is, however, an exception to these "cooling off" provisions regarding contracts or benefits "with respect to further duties in the service of the Crown or if the conditions on which the contract or benefit is awarded, approved or granted are the same for all persons similarly entitled".

It has been my practice to remind departing Cabinet Ministers of the post-employment provisions of the Act that apply for the one year period after leaving office.

Investigation into Breaches of the Act
The Act permits "any person" to request the Commissioner to investigate an alleged breach of the Act by a Member. A request for an investigation must be in the form of an affidavit setting out the grounds for the belief and the nature of the alleged breach. As a matter of interest, although the Act permits requests for investigation by "any person", all requests for investigation made to me during my term in office have been made by Members.

Upon receipt of a request for an investigation, the Act authorizes the Commissioner to carry out the investigation or, in the alternative, to conduct an official inquiry. It should be noted that by a recent amendment to the Act, the Member who is the subject of the investigation must respond promptly and completely to all of the Commissioner's questions and requests for information.

Once an investigation is completed, the Commissioner is required to report to the Speaker. The Report must set out the facts as found by the Commissioner, the finding as to whether or not the Member has breached the Act, the nature of the breach, and the recommended sanctions, if any.

Sanctions
The Act provides for sanctions. If the Commissioner finds that a breach of the Act has occurred, that any of the Private Disclosure Statements required by the Commissioner have not been filed within the time provided by the Act, or that a Member has failed to disclose relevant evidence in his or her Statements, the Commissioner may recommend to the Legislature as a sanction, a reprimand, a fine, a suspension, or expulsion from the Legislature.

When dealing with the Commissioner's Report, the Legislative Assembly may accept or reject the findings of the Commissioner or substitute its own findings and may, if it determines that there has been a breach of the Act, impose the sanction recommended by the Commissioner, vary the sanction, impose any other sanction that it considers appropriate, or impose no sanction.

The decision of the Assembly in these matters is final and conclusive. Thus, in the result, the Commissioner reports and recommends through the Speaker to the Assembly, but the Legislative Assembly has full and final authority with respect to disciplinary matters relating to its Members.

Confidentiality
In concluding this portion of my Annual Report, it should be noted for the record that any information disclosed to the Commissioner under the Act is confidential and cannot be disclosed to any person except in the following circumstances:

(a) by the person to whom the information relates or with his or her content,
(b) in a criminal proceeding, as required by law, or
(c) for the purposes of the Act.

I wish to record that during my term in office, I have been attentive to this admonition and have declined requests by the media and all others to discuss Members' affairs unless the Members have expressly authorized me to do so.

PROGRESS AND ACTIVITIES OF THE OFFICE
I begin this section of my Report by reminding the Members and the public that the Office of the Conflict of Interest Commissioner is located in Edgecombe House at 736 King Street in the city of Fredericton. The mailing address is P.O. Box 6000, Fredericton, New Brunswick, E3B 5H1. The Office telephone number is (506) 457-7890; the fax number is (506) 444-5224; and the web site address is http://www.gnb.ca/legis/conflict/index-e.asp.

The Members' Conflict of Interest Act requires the Commissioner to submit Annual Reports to the Speaker describing the progress and activities of the Commissioner in the previous year. These Annual Reports are filed with the Clerk of the Legislature and are then laid by the Speaker before the Assembly. Overall, this fiscal year has been relatively quiet in our office. During the months of September and October, we processed the annual documentation required by the Act and I have met with and interviewed all fifty-five Members of the Legislative Assembly. I am also pleased to report that, at the time of writing, all Members of the Legislature are in compliance with the Act. In addition, this year there have been no requests for investigations.

In preparing this, my final Report, I thought it might be useful to repeat some of the comments that I have made in previous Reports which still have relevance today. As I stated in my Annual Report last year and repeat now, the opinion and comments expressed in the media still leave little doubt that politicians are not held in high regard by the public. These opinions and comments make clear that politicians are viewed by the electorate as lacking integrity, even-handedness, and objectivity. But I hasten to report that this is not necessarily true of the Members of the New Brunswick Legislature. It has been my experience that the Members of the Assembly, led by the Premier, the Honourable Bernard Lord; the Leader of the Opposition, Mr. Shawn Graham; and the Leader of the New Democratic Party, Ms. Elizabeth Weir, have consistently confirmed their support of the principles set out in the Act which address what Members can and cannot do. I would therefore urge all Members to continue to be guided by these principles and thereby deter inappropriate conduct. This should, as well, provide some degree of public confidence in the honesty and integrity of all elected Members.

I continue to think that it is important that all Members of the Legislative Assembly be aware of the advisory role that the Commissioner is called upon to play under the Act. Indeed, section 29 of the Act expressly authorizes the Commissioner to give advice and recommendations of general application to Members or former Members respecting their obligations under the Act, while section 30 of the Act goes even further. This section permits a Member or former Member to seek the written advice and recommendations of the Commissioner on any matter respecting the Member's obligations under the Act. If a Member provides all material facts to the Commissioner and follows the advice and recommendations of the Commissioner, the Member is protected from any subsequent proceeding or prosecution against him or her under the Act relating to the matter in question.

I would report that during my term in office and in all of my interviews and discussions with the Members, I have stressed the fact that I am available to assist them in any way I can to ensure that they avoid any conflicts of interest as they go about the province carrying out their duties and responsibilities as Members of the Legislative Assembly. To this end, I have given oral and written advice to several Members on a wide variety of topics. It is a pleasure for me to be allowed to offer proactive advice and recommendations and the Members are to be commended for their initiative in coming forward with potential problem situations.

I wish to reaffirm in this Report that in carrying out my duties as Commissioner, I have attempted to interpret both the words and the spirit of the Act in a reasonable and fair manner. When doing so, I have discussed the disclosure requirements of the Act with the Members and, in some cases, the need for blind trust agreements. In addition, I wish to express my appreciation to those Members who have discussed problem situations with me before taking any action. I would stress again that the giving of advice is an important function assigned to the Commissioner under the Act. As I have said to each Member, I have seen it as my task, with the cooperation of the Members, that conflict problems are avoided before they occur.

A RECOMMENDATION
By a recent amendment to the Members' Conflict of Interest Act, a section was added to provide for the mandatory review of the Act every five years to monitor its effectiveness and to determine whether public attitudes about standards of conduct in public life have changed.

Although the next review of the Act is not required to be undertaken until 2008, I would like to record a suggestion for a revision to the Act for consideration by the review committee. At the present time, there are two conflict of interest acts on the books. One, of course, is applicable to Members of the Legislature while the other, presently administered by a designated judge of the Court of Queen's Bench, has application to Deputy Ministers, executive staff members, and heads of Crown corporations. I express the opinion that the latter group could conveniently be made subject to the provisions of the Members' Conflict of Interest Act and report annually to the Commissioner, rather than to a designated judge.

CONCLUSION
To conclude, during the fiscal period which ended March 31, 2005, expenditures of the Commissioner's office for salaries and benefits, office equipment and supplies will total approximately $115,500.00. This compares to $103,047.39 in the previous year. In closing, I again express my appreciation and gratitude for the support and assistance so pleasantly provided to me by the Clerk of the Legislative Assembly and her staff, in particular Mr. Shayne Davies, and for the cooperation and constructive relationship which has existed with all Members of the Legislative Assembly.

Dated at Fredericton, New Brunswick this 31st day of March, 2005.

The Honourable Stuart G. Stratton Q.C
Conflict of Interest Commissioner for the
Province of New Brunswick

 


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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