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Annual Report 2001-2002

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Province of New Brunswick




CONFLICT OF
INTEREST COMMISSIONER




The Honourable Stuart G. Stratton, Q.C.



ANNUAL REPORT

2001-2002





Letter of Transmittal
Report





May 7, 2002

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

Dear Mr. Speaker:

I have the honour to present this, the Second Annual Report of the Office of the Commissioner under the Members' Conflict of Interest Act, for the period May 1, 2001 to April 30, 2002.

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







INTRODUCTION
This is the Second Annual Report of the Conflict of Interest Commissioner under the Members' Conflict of Interest Act, (the Act), and, as mandated by that Act, describes the "progress and activities" of the Commissioner for the period May 1, 2001 to April 30, 2002.

In beginning this Report, I believe it is important to note that on May 1, 2000, to promote public confidence in the honesty and integrity of its Members, the New Brunswick Legislature enacted an ethical code of conduct to guide its Members as they conduct public business.

Moreover, the Act makes it clear that the Office of the Conflict of Interest Commissioner is to monitor compliance with the provisions of the Act; to provide advice to the Members; to investigate complaints against any Member; to prepare disclosure documentation; to assess the effectiveness of the provisions of the Act; and to ensure that the Members of the Executive Council and the Legislative Assembly adhere to the highest standard of ethics as they go about the peoples' business. In each of these areas the Office has progressed in the year just past.

LEGISLATION
While acknowledging that I provided a summary of the provisions of the Act in the First Annual Report of the Conflict of Interest Commissioner, I believe that Members' awareness of these provisions is of such importance that I have included a similar summary of the Act in this, the Second Annual Report.

I would accordingly first remind the Members that in furtherance of its objectives, the Act sets out acceptable standards of conduct for elected Members of the Legislature in order to ensure that the private interests of those individuals 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 hallmark of the New Brunswick Act is that full disclosure is an accepted and necessary requirement for service in public office. What is required to be disclosed is defined in the Act as follows (s. 18(4)(a)):

[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, a Member is required to disclose any salary, financial assistance or other benefit received from a registered political party or a registered district association (s. 18(4)(b)). Also, a Member must disclose any fee, gift or personal benefit greater than $250.00 in value that is connected directly or indirectly with the performance of the Member's duties of office (s. 8). The Act further specifies the information to be disclosed in the Public Disclosure Statement filed by the Commissioner with the Clerk of the Legislative Assembly (s. 20(2)), which is then made available to the public.

There are other important provisions of the Act of which a Member must be aware. One such section precludes the use by a Member of insider information (s. 5). Another section precludes 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 (s. 6). Both of these sections were re-visited during an investigation by this Office in 2001.

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.

Subsection 36(1) of 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 (s. 36(2)). Upon receipt of a request, the Act authorizes the Commissioner to conduct an investigation with or without conducting an inquiry (s. 37(1)). Once an investigation is completed, the Commissioner is required to report to the Speaker and to the Member who is the subject of the investigation (s. 40(1)).

The Act also provides for penalties. If any of the Private Disclosure Statements required by the Commissioner are not filed within the time provided by the Act, or if a Member fails to disclose relevant information in his or her statements, the Commissioner may recommend to the Legislature, as a penalty, a reprimand, a fine, a suspension or expulsion from the Legislature (s. 41(1)).

It should be noted, too, that the Act sets stringent requirements for members of the Executive Council. Subsection 14(1) of the Act provides 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.

Finally, other important sections of the Act prohibit Members from contracting with the Crown (s. 9); or being employed by the Crown (s. 11). Also, former members of the Executive Council must not contract with the Crown or make representations with respect to any such contract for twelve months after he or she has ceased to hold office as a member of the Executive Council (s. 17).

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's telephone number is (506) 457-7890; the fax number is (506) 444-5224; the e-mail address is comm.stratton@gnb.ca; and the web site address is http://www.gnb.ca/legis/conflict/office.htm

I wish next to record that I am assisted in my work as Commissioner by Mr. Shayne Davies, BBA, LLB, who joined the staff of the Office of the Clerk of the Legislative Assembly in the Fall of 2000 as a Committee Clerk - Research Assistant. One of Mr. Davies' duties in this position is to assist me in the management, administration and operation of the Office of the Conflict of Interest Commissioner. I also receive assistance from Mrs. Loredana Catalli Sonier, Clerk of the Legislative Assembly, and from Ms. Gisèle Osborne, Executive Officer in the Clerk's Office. These three individuals, together with the assistance of all other members of the legislative staff, made it possible for the Office of the Conflict of Interest Commissioner to successfully complete a second year of operation. I am indebted to them all.

During the year 2001, three by-elections were held to replace Members of the Legislative Assembly who had retired. After reviewing their Private Disclosure Statements and consulting with them, I prepared Public Disclosure Statements for the newly-elected Members, which were subsequently filed with the Clerk of the Legislative Assembly on May 28 and July 29, 2001, respectively. On October 25, 2001, fifty-two Public Disclosure Statements for the remaining Members of the Assembly were filed with the Clerk. At the time of those filings, all Members of the Legislature were in compliance with the Act. Pursuant to subsection 20(8) of the Act, these Public Disclosure Statements are available for examination by the public and copies are available through the Office of the Clerk of the Legislative Assembly.

I would again like to remind Members of the Legislative Assembly of the important advisory role that the Commissioner is called upon to play under the Act. In this respect, 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. Section 30 of the Act goes even further. That section permits a Member or former Member to seek the written advice and recommendations of the Commissioner on any matter respecting the Members' 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, in all of my 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 variety of topics.

It is a duty of the Commissioner under the Act to educate the Members about their obligations under the Act. In furtherance of this duty, the Act provides that the Commissioner shall prepare and disseminate to the Members written information concerning Disclosure Statements. This was done in June of 2001 through the preparation and distribution of a second Conflict of Interest Bulletin dealing specifically with Disclosure Statements. Copies can be obtained from the Commissioner's Office and are posted on the Commissioner's web site.

As an aside, the first Conflict of Interest Bulletin, which was sent by this Office to all Members of the Legislature in May of 2000, was published nationally, in a slightly different format, in the 2001 Summer edition of the Canadian Parliamentary Review.

I should report as well that in 2001, because the Members of the Legislature had previously filed complete disclosure documents with this Office, we prepared and circulated "Short Form Private Disclosure Statements" to all Members of the Legislature. These forms could, in the main, be completed by simply checking "yes" or "no" to most questions asked and required to be answered to comply with the provisions of the Act. According to subsequent feedback, these forms were well received by the Members.

One interesting issue that arose during the year under review and alluded to earlier in this Report, was the investigation of allegations by a Member of the Legislative Assembly that the Minister of Natural Resources and Energy may have used insider information to further his private interest contrary to section 5 of the Act. Further, the Member also alleged that the Minister may have used the influence of his office to seek to influence the decisions made by other persons to further his own private interest, contrary to section 6 of the Act.

The issue arose as the result of a letter sent by the Minister's riding association to a number of forestry-related companies across New Brunswick, soliciting the purchase of tickets for a fundraising dinner to be held in the Minister's riding. According to the letter, tickets were available at $100.00 each or $1000.00 per table for ten persons.

The letter soliciting the purchase of tickets concluded by stating that "[y]our presence at this dinner will grant you the opportunity to meet our MLA and Minister of Natural Resources and also to participate in our fundraiser."

In his affidavit in support of his request for an investigation, the complaining Member deposed that the letter in issue "was sent to both potential corporate and individual donors throughout the province" including "a number of forestry related companies" and that "a number of follow-up phone calls were made by members of [the riding association] to some of those forestry related companies to determine how many tickets they were purchasing." The Member further deposed that "targeting forestry related companies as recipients of the letter possibly constitutes a breach of subsection 5(1), 5(2) and section 6 of the Members' Conflict of Interest Act."

As previously noted in this Annual Report, section 5 of the Act deals with insider information. The section prohibits the use of information that is obtained by a Member in his or her capacity as a Member and that is not available to the general public to further or seek to further the Member's private interest. Section 6, on the other hand, deals with the issue of influence. This section prohibits a Member from using his or her office to seek to influence a decision made by another person so as to further the Member's private interest.

It should be noted that in my earlier decision in the Weir-Blaney matter (December 5, 2000), I expressed the opinion, shared by fellow Conflict of Interest Commissioners in Alberta and British Columbia, that the furthering of a "political interest" will rarely be the same as furthering a "private interest" as the latter term is defined in the Members' Conflict of Interest Act.

Following an investigation of the 2001 matter, I reported to the Speaker on September 28, 2001, that the assertions by the Member that the Minister had breached section 5 and 6 of the Act, had not been established. My conclusion with respect to the alleged violation of section 6 was again based upon the interpretation to be given to the term "private interest", which, in my opinion, does not include "political interests". While I agreed that the issue of campaign contributions can, in some circumstances, be a matter of "private interest", I found that it was not so in this case. The following excerpt is taken from my September, 2001, report to the Speaker:

"I want to record that I agree with the proposition that fundraising is an important an legitimate part of the political process and that the raising of funds for political purposes does not generally constitute a breach of the Members' Conflict of Interest Act as there is usually not a furtherance of a private interest. This notwithstanding, I have been persuaded that there may be special circumstances which could bring the Act into play. As one example of special circumstances, there is a serious question in my mind as to the propriety of a Minister's riding association targeting a particular industry or specific individuals for political donations when that industry or those individuals do substantial business with the Minister's department. To target a particular industry or specific individuals in this manner may, in my opinion, amount to the furtherance of a Minister's private interest because it could put the Minister in a position to confer an advantage or a benefit on the persons who made the contributions."

I should also report that during the present reporting period, the Office received one other request for an investigation, which was subsequently suspended as a result of the operation of section 39 of the Act. That section provides as follows:

39 If the Commissioner, when conducting an investigation, discovers that the subject matter of the investigation is being investigated by police or that a charge has been laid, the Commissioner shall suspend the investigation until the police investigation or charge has been finally disposed of, and shall report the suspension to the Speaker.

In the result, any investigation of this matter by this Office has been suspended until such time as the police investigation is finally disposed of. In my role as Commissioner, I reported as much to the Speaker on August 13, 2001.

An important development this year in respect of the activities of the Office was a request by the Legislative Administration Committee, which is an all-party Standing Committee of the Legislative Assembly, that I conduct a review of the Members' Conflict of Interest Act and report to the Committee.

By way of background to this request, it was acknowledged in the Legislative Assembly when the Act was initially passed that once the Act came into force, a period of adjustment would be necessary and that the Act would need to be re-visited following a period of time in operation. As a result, in response to the Committee's request I carried out a detailed review of the Act and its administrative challenges. On September 27, 2001, I submitted my report to the Committee.

Subsequently, I appeared before the Legislative Administration Committee and presented a summary of the issues and recommendations as outlined in my report. In the course of doing so, I advised the Committee that the Act is working to accomplish its purpose with no particular difficulties in its administration. I commented that all Members of the Legislative Assembly have been pleasant and forthcoming with me. I stated, however, that certain sections of the Act require amendments.

Following my appearance before the Legislative Administration Committee, the Committee met several times to review the recommendations and on January 8, 2002, tabled its report in the Legislative Assembly. The Committee's report, inter alia, included the recommendation that a Member who is the subject of an investigation be required to respond promptly and completely to the Commissioner's inquiries; that there be a mandatory review of the Act every five years; that the Premier be enabled to request the opinion of the Commissioner on any matter respecting the compliance of a Member of the Executive Council with the provisions of the Act; and that the Act stipulate that the Commissioner "shall be an officer of the Legislative Assembly". The Committee's Report is presently being reviewed in order to obtain approval to make amendments to the Act. It is anticipated that amending legislation will be introduced in the House before the end of the current year.

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 continue to give advice to Members and 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, my task is to ensure, with the cooperation of the Member, that conflict problems are avoided before they occur. I would again repeat that I am available to assist Members when they are faced with doubtful situations.

Finally, I have to report that family illness again prevented me from attending the Annual Meeting of the Canadian Conflict of Interest Commissioners, (CCOIN), which this year was held in Toronto in September 2001. This time it was not my illness but that of my wife which kept me at home. I was very disappointed that I was again unable to attend this important meeting with the other Canadian Commissioners.

To conclude, during the fiscal period which ended March 31, 2002, expenditures of the Commissioner's Office for salaries and benefits, office equipment and supplies totalled $85,255.68. This compares to $85,775.93 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 co-operation and constructive relationship which exists with all Members of the Legislature.

Dated at Fredericton, New Brunswick this 7th day of May, 2002.

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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