New Brunswick Conflict of Interest Commissioner
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Annual Report 2002-2003

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Province of New Brunswick




CONFLICT OF
INTEREST COMMISSIONER




The Honourable Stuart G. Stratton, Q.C.



ANNUAL REPORT

2002-2003





Letter of Transmittal
Report





May 21, 2003


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


Dear Mr. Speaker:

It is an honour and a pleasure to present this, the Third Annual Report of the Office of the Conflict of Interest Commissioner for the period May 1, 2002 to April 30, 2003.

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

Yours very truly,

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







INTRODUCTION
This is the Third 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, 2002 to April 30, 2003.

 

The New Brunswick Legislature enacted the Members’ Conflict of Interest Act, (R.S.N.B. 1973, c. M-7.01) on May 1, 2000, to promote public confidence in the honesty and integrity of its Members. The Act is intended to be an ethical code of conduct to guide Members of the Legislature as they conduct public business.

The Act provides for the appointment of a Conflict of Interest Commissioner by the Lieutenant-Governor in Council on the recommendation of the Legislative Assembly to serve for a period of five years. The Commissioner, who is an officer of the Legislative Assembly, reports to the Assembly through the Speaker with respect to annual reports, investigation reports and matters relating to the Commissioner’s jurisdiction or authority under the Act.

The Commissioner is assisted in administrative matters by the Clerk of the Legislative Assembly and by a Committee Clerk - Research Assistant. The Commissioner prepares budgetary estimates through the Office of the Clerk and the Assembly approves the final budget.

The Act makes it clear that it is the responsibility of the Commissioner to respond to Members’ enquiries; to monitor compliance by the Members 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. I am pleased to report that in each of these areas, the Office of the Commissioner has progressed in the year just past.

LEGISLATION
While acknowledging that I have included a summary of the important provisions of the Act in previous Annual Reports, I believe that the awareness of these provisions by both the Members, including the members of the Executive Council, and the public at large is of such importance that I have included a similar summary of the Act in this, the Third 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. To this end, all Members are required to file a Private Disclosure Statement with the Commissioner on an annual basis. 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 have been the subject of investigations and reports to the Speaker by the Commissioner.

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 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 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/index-e.asp
I wish next to record that I am assisted in my work as Commissioner by Mr. Shayne Davies, B.B.A., LL.B., 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; Mr. Peter Wolters, Director of Finance and Human Resources; and from Ms. Gisèle Osborne, Executive Officer in the Clerk’s Office. These four 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 third year of operation. I am indebted to them all.

There can, I think, be little doubt that politicians are not always held in high regard by the public. Indeed, a recent public opinion poll shows a low trust rating for politicians. But contrary to some citizens who claim that politicians at all levels of government are not interested in, or have failed to act in the best interests of the public, I can report that the Members with whom I have dealt have been hard-working individuals who are dedicated to assisting their constituents. I agree with Commissioner Osborne of Ontario who, in his latest annual report, expressed the hope that the principles underlying the Members’ Conflict of Interest Act and its specific provisions, which address what Members and Ministers can and can not do, will continue to deter inappropriate conduct and, correspondingly, will provide some degree of public confidence in the honesty and integrity of the Members of the Legislature and the Executive Council.

I would again express my gratitude to all Members of the Legislative Assembly for their continued support of this office and for their co-operation in the timely filing of their statutorily required financial disclosure statements and their appearance at the required meeting with the Commissioner that follows. I am also pleased to report that, at the time of those filings, all Members of the Legislature were in compliance with the Act. In addition, I would record that Public Disclosure Statements prepared by this Office have been filed with the Clerk of the Legislative Assembly. Pursuant to subsection 20(8) of the Act, these Public Disclosure Statements are available for examination by the public and copies can be obtained through the Office of the Clerk.

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 also a statutory duty of the 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 these requirements, the Act authorizes the Commissioner to give advice and recommendations, both general and specific, to Members and former Members of the Legislative Assembly. In furtherance of this duty and obligation, I have prepared and circulated to all Members a series of Conflict of Interest Bulletins, a method of communication first adopted by the Alberta Conflict of Interest Commissioner, Mr. Robert C. Clark.

New Brunswick’s latest Conflict of Interest Bulletin, distributed in June of 2002, the third in the series, deals specifically, inter alia, with exceptions to certain prohibitions under the Act and includes decisions by other jurisdictions on selected inquiries. Copies of this and previous bulletins can be obtained from the Commissioner’s Office and are posted on the Commissioner’s web site.

In the third Conflict of Interest Bulletin, I discussed the often raised question concerning the propriety of Members accepting gifts. As noted earlier, the Act precludes all fees, gifts or personal benefits connected directly or indirectly with a Member’s duties of office save only such gifts or personal benefits that are received “as an incident of the protocol or social obligations that normally accompany the responsibilities of office.” It is the interpretation of this latter exception that is most often brought into question by the Members of the Legislature.

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. This is because 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 note, however, that although I have reported extensively on the issue of gifts, no serious or contentious gift problems have arisen in this province. This having been said, 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.

Another issue that is of concern to me and to other Canadian Conflict of Interest Commissioners relates to the writing of letters of reference or support for constituents. I agree with the recommendation of those Commissioners 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. Ultimately, 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.”


On another topic, an issue currently under consideration by this Office relates to a letter sent by a Member’s riding association, soliciting funds and support from various individuals and businesses who had received contracts or benefits in previous years from the provincial government. The issue initially arose in 2001 as a result of a request for an investigation by another Member of the Assembly. The Member, (the complainant), alleges that the letter in question implies that receipt of donations will result in influence being used to favorably further such donors private interest. In this respect, sections 4 and 6 of the Act may be in issue. For ease of reference, I repeat the provisions of these sections of the Act which read as follows:
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.

6 A member shall not use his or her 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.

Since the complainant had also made a similar request for an investigation to the R.C.M.P., the investigation by this Office was initially suspended as a result of section 39 of the Act. That section states:

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.



As a result, any investigation of the matter by this Office was suspended until such time as the police investigation was finally concluded. I reported as much to the Speaker on August 13, 2001. I am now advised that the police investigation has been concluded. In any event, by letter dated March 28, 2003, the original complainant has requested that the matter be revived. I have accordingly commenced a review of the circumstances surrounding the allegation and the matter is presently under investigation.

In last year’s annual report, I informed the reader that the Legislative Administration Committee, an all-party Standing Committee of the Legislative Assembly, had tabled a report in the House recommending several amendments to the Act. At the time of my report, the Committee’s recommendations were being studied. Since that time, amending legislation was introduced in the Legislature and subsequently enacted. The amending legislation resulted in the following revisions to the Act:


1. The addition of a provision outlining what is to be done if a Member fails to consult with the Commissioner.

2. The addition of a provision clarifying the status of the Commissioner as an officer of the Legislative Assembly.

3. The addition of a provision allowing the Premier 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.

4. The addition of a provision making it mandatory for a Member who is the subject of an investigation to respond promptly and completely to the Commissioner’s inquiries

5. The addition of a provision expressly dealing with the distribution of the Commissioner’s report of an investigation as follows:


a) that the provision of the Act which requires the Commissioner, upon the completion of an investigation, to report to the Speaker and to the Member who is the subject of the investigation, be expanded to include the leader in the Legislative Assembly of the political party to which the Member complained against belongs;

b) that a provision be added to reflect the practice currently followed by the Commissioner to provide a copy of the report to the Member who complained, if the complaint was referred by a Member;

c) that a provision be added to provide that if the Legislature is not in session when the Commissioner’s report is filed with the Speaker, the report is to be deposited with the Clerk of the House who shall make copies available to all Members of the Legislative Assembly;

d) that the Act be further amended to provide that the Commissioner’s report remain confidential until such time as it is tabled by the Speaker or filed by the Speaker with the Clerk of the House pursuant to the provisions of Standing Rule 39 of the Standing Rules of the Legislative Assembly.

 


6. The addition of a provision providing for a thirty-day time frame for the consideration of the Commissioner’s report of an investigation by the Assembly or such other period of time as may be determined by a resolution of the Assembly.

7. The addition of a provision providing for a mandatory review of the Act every five years in order to monitor its effectiveness and to determine whether public attitudes about standards of conduct in public life have changed.

I should report as well that subsequent to an announcement by the Prime Minister of Canada, conflict of interest issues have taken the forefront on the national scene. As a result, guidelines for federal Members have been issued on several matters. These include guidelines for Cabinet Ministers and Secretaries of State, guidelines for the Ministry and Crown Corporations and guidelines for the Ministry and Activities for Personal Political Purposes. In addition, another issue now under study at the federal level is a code of conduct for parliamentarians. The latter has been described as an effort to clean up the image of politics and politicians and to ensure an honest and ethical federal government. In any event, this proposed federal code is, in some ways, similar to a draft Statement on the Role and Responsibilities of an MLA and a Code of Conduct for Members of the New Brunswick Legislature presently before the House.

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 co-operation 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.

To conclude, during the fiscal period which ended March 31, 2003, expenditures of the Commissioner’s Office for salaries and benefits, office equipment and supplies totalled $87,680.53. This compares to $85,255.68 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 21st day of May, 2003.

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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