September 6, 2020
Mr. Mario Dion
Conflict of Interest and Ethics Commissioner
House of Commons
Ottawa, Ontario K1A 0A6 Sent via email: Mario.Dion@cie.parl.gc.ca
We are writing to request that you conduct an examination under the Conflict of Interest Act in respect of media reports of Rob Silver’s lobbying efforts on behalf of his employer, MCAP, in relation to its eligibility for the Canada Emergency Wage Subsidy.
The picture which emerged is one of triangular backscratching among Mr. Silver, his spouse and the Prime Minister’s Chief of Staff, Katie Telford, and a long-time political associate of these two, Mike McNair, a “volunteer” Special Advisor to the Prime Minister while between paid jobs in the Prime Minister’s Office.
VICE News reported, on August 21, that Mr. Silver conducted a persistent and sustained campaign to secure specific amendments to the Income Tax Act which had, as their object, expanding the wage subsidy’s eligibility criteria in a manner which, according to that outlet, would have “uniquely benefited MCAP” or, according to the National Post, “would have benefited very few organizations other than MCAP”.
After failing to have the then-Minister of Finance, Bill Morneau, and his staff bring forward the necessary amendments, it is reported that Mr. Silver turned to the Prime Minister’s Office, which his spouse Ms. Telford runs as the Chief of Staff, and engaged Mr. McNair.
According to the report, Mr. McNair “referred Silver back to Morneau’s office, and asked the staffers there to speak to him” [our emphasis]. It is at this point where we believe that sections 7, 9 and 21 of the Conflict of Interest Act have been breached by Mr. McNair.
While a government source stressed to VICE News that Mr. McNair was, at the time, an informal advisor and not a “public office holder”, you will know that paragraph (c) of the definition of “public office holder”, in subsection 2(1) of the Act, captures “ministerial advisors”. The definition of “ministerial advisor”, which Mr. McNair fell squarely within, is found elsewhere in subsection 2(1):
a person, other than a public servant, who occupies a position in the office of a minister of the Crown or a minister of state and who provides policy, program or financial advice to that person on issues relating to his or her powers, duties and functions as a minister of the Crown or a minister of state, whether or not the advice is provided on a full-time or part-time basis and whether or not the person is entitled to any remuneration or other compensation for the advice. [our emphasis]
According to your website, Mr. McNair entered “post-employment” from the Prime Minister’s Office on January 3, 2020, yet he was back on the scene in March and then re-employed from June. Indeed, we understand Mr. McNair was carrying out his “informal” work this spring with a Prime Minister’s Office e-mail address. Clearly, to anyone he interacted with, he brought the formal weight and authority of the office of the head of government.
By indulging Mr. Silver’s appeals, referring him back to Mr. Morneau’s office, and directing Mr. Morneau’s staff to speak to Mr. Silver, Mr. McNair, in our view, gave preferential treatment to Mr. Silver, contrary to section 7 of the Act,1 based on his identity as both a friend and the spouse of his friend and immediate superior Ms. Telford. As VICE News put it, “Few people in the country would have direct access to as many senior officials as Silver.”
Furthermore, in directing the Finance Minister’s office to “speak to” Mr. Silver—something which had already happened repeatedly, likely known to Mr. McNair—this was, we believe, a coded direction for Mr. Morneau’s office not to renew this cyclical behaviour but to reach a different decision.
Recognizing that private-sector financial executives’ compensation packages often feature significant performance bonuses, it is likely that Mr. Silver’s delivery of success for MCAP could see MCAP, in turn, reward Mr. Silver’s accomplishment.
Mr. McNair’s conduct, therefore in our view, amounts to seeking to influence a decision so as to further a friend’s private interests or to further improperly another person’s private interests, contrary to section 9 of the Act,2 in advancing Mr. Silver’s interests.
Bearing in mind that cohabiting married couples are, for all intents and purposes, a single integrated economic unit, any material benefit for Mr. Silver would also benefit Ms. Telford. Therefore, Mr. McNair’s conduct also breached section 9 of the Act in respect of Ms. Telford’s interests.
While we suspect the evidence will bear that Mr. McNair is friends with each Mr. Silver and Ms. Telford, we would submit that it is immaterial to the test because, in any event, to engage in this sort of activity—giving direction to the Finance Minister’s office for the benefit of your supervisor’s spouse—is a form of improperly furthering another person’s private interests.
An additional curious element to this situation is that Mr. McNair was, apparently, a volunteer while in between jobs in the Prime Minister’s Office. While we could speculate about the reasons for this, the pandemic’s consequences on the employment market makes it a reasonable inference that Mr. McNair may have been “auditioning” to come back as a paid employee.
Since his own re-employment prospects were likely on the line, and recognizing that reports of his co-operation and helpfulness could pass from Mr. Silver to Ms. Telford, Mr. McNair, in our view, was also effectively seeking to influence a decision so as to further his own interests, contrary to section 9 of the Act.
This trinity of interests goes to the heart of what we perceive to be the benefit triangle propelling this transaction:
- Mr. McNair sought to influence a decision which stood to benefit Mr. Silver.
- Mr. Silver’s potential for reward from his employer stood to benefit his family, including Ms. Telford. Mr. Silver was well-positioned to put in a good word for Mr. McNair with Ms. Telford.
- Ms. Telford, as Mr. McNair’s supervisor, could exercise decision-making powers over his potential re-employment, to Mr. McNair’s obvious benefit.
Trinity of Interests
Based on the same analysis, by engaging with Mr. Silver and Mr. Morneau’s staff, Mr. McNair failed to recuse himself from a discussion where he was in a conflict of interest, contrary to section 21 of the Act,3 recalling that the definition of a conflict of interest, at section 4 of the Act,4 can oblige a recusal even in cases where a perfect stranger’s interests are at stake, if someone is furthering them improperly, let alone when a friend’s or one’s own interests are at stake.
In response to assorted media enquiries about Mr. Silver’s dealings with the federal government, the Prime Minister’s Office points to a voluntary ethics screen Ms. Telford established—interestingly, run, for the Prime Minister’s Office, by the person who took Mr. McNair’s position when he left in January. It is disappointing that they are seeking to apply your and your office’s good reputation as a veneer of respectability over these transactions. As your office told the Prime Minister’s Office on January 13:
if a matter does come to Ms. Telford’s attention involving MCAP that could further her husband’s private interest, I would remind her that she is required to recuse and contact our office to report the recusal. A public declaration could be required within 60 days that the recusal took place.
It is stunning to think that Ms. Telford was obliviously kept in the dark by her staff, let alone her spouse, that Mr. Silver was burning up the phone lines, pressing her subordinates, to bring about the legislative changes MCAP sought. Therefore, it is our view that Ms. Telford failed to recuse herself from these matters, contrary to section 21 of the Act. Alternatively, given the absence of any recusal in your public registry, she failed to disclose her recusal, contrary to subsection 25(1) of the Act.5
With respect to the government position, expressed to VICE News, that Mr. McNair had been “an informal advisor”, this arrangement within the Prime Minister’s Office could, we believe, amount to a breach of the anti-avoidance obligations of the Act by Ms. Telford.
While outwardly appearing to have neatly sidestepped her direct ethical obligations to recuse when Mr. Silver’s interests were at stake, Ms. Telford actually appears to have placed Mr. McNair in an impossible situation: see that Mr. Silver’s interests were looked after or jeopardize his own chances of being re-employed. By placing an “informal advisor”, seemingly volunteering and potentially coming back on strength as an employee soon, in a position where
he would be required to handle and manage the aggressive and unregistered lobbying campaign of her spouse, Ms. Telford, in our opinion, breached section 18 of the Act.6 Through this staffing action, Ms. Telford, in our view, circumvented her obligations under the Act.
Finally, with Mr. McNair’s subsequent hiring back into the Prime Minister’s Office, it would appear that Ms. Telford failed to recuse herself, contrary to section 21 of the Act—or, alternatively, to declare a recusal, contrary to subsection 25(1) of the Act—in respect of the staffing decision in favour of the “informal advisor” who had just given his level best to have the Finance Minister’s office change its position to the benefit of Mr. Silver and, by extension, Ms. Telford.
Defenders of this government are quick to point out that Mr. Silver did not “get what he wanted”. That, however, is not the threshold for being in a conflict of interest.
Indeed, the emerging facts about the WE scandal, into which you have now opened multiple investigations, is that WE had originally been pitching ministers and ministerial staff on a $12-million social entrepreneurship program. Rather than securing that, WE walked away with a $543.53-million contribution agreement to administer the Canada Student Service Grant.
Though it is not clear how much wage subsidy MCAP might have otherwise been eligible to receive, earlier media reporting has established that MCAP subsequently secured $84-million in contracts to administer the Canada Emergency Commercial Rent Assistance program.
Could it be that there is another ‘bait and switch’ here with MCAP, similar to how WE walked away with something different, yet better, from what it first sought? What role, for example, did Mr. McNair play in developing the rent assistance program’s parameters such that the Canada Mortgage and Housing Corporation would be assigned notional responsibility while finding it necessary to contract out the work immediately? Your investigation could get to the bottom of this questionable and remarkable coincidence.
In summary, we are asking that you look into:
1) whether Mr. McNair breached section 7 of the Act by showing preferential treatment to Mr. Silver;
2) whether Mr. McNair breached section 9 of the Act by seeking to influence another person’s decision so as to further Mr. Silver’s interests;
3) whether Mr. McNair breached section 9 of the Act by seeking to influence another person’s decision so as to further Ms. Telford’s interests;
4) whether Mr. McNair breached section 9 of the Act by seeking to influence another person’s decision so as to further his own interests;
5) whether Mr. McNair breached section 21 of the Act by failing to recuse himself from the conversations involving Mr. Silver and the Finance Minister’s office when Mr. McNair was in a conflict of interest;
6) whether Ms. Telford breached section 21 or subsection 25(1) of the Act by failing to recuse herself, or failing to declare a recusal, concerning Mr. Silver’s lobbying efforts in respect of the wage subsidy;
7) whether Ms. Telford breached section 18 of the Act by circumventing her obligations under the Act through the staffing action of placing Mr. McNair, a volunteer advisor possibly coming on strength as an employee, in the position of having to respond to and handle her husband’s lobbying efforts in respect of the wage subsidy; and
8) whether Ms. Telford breached section 21 or subsection 25(1) of the Act by failing to recuse herself, or failing to declare a recusal, concerning the decision of re-employing the volunteer advisor who advanced Mr. Silver’s lobbying efforts.
We look forward to your prompt response confirming that you will be opening an examination into yet another troubling pattern of behaviour by those working in the country’s highest offices.
Pierre Poilievre, MP
Shadow Minister for Finance
Michael Barrett, MP
Shadow Minister for Ethics
1 Section 7 of the Conflict of Interest Act provides that “No public office holder shall, in the exercise of an official power, duty or function, give preferential treatment to any person or organization based on the identity of the person or organization that represents the first-mentioned person or organization.”
2 Section 9 of the Conflict of Interest Act provides that “No public office holder shall use his or her position as a public office holder to seek to influence a decision of another person so as to further the public office holder’s private interests or those of the public office holder’s relatives or friends or to improperly further another person’s private interests.”
3 Section 21 of the Conflict of Interest Act provides that “A public office holder shall recuse himself or herself from any discussion, decision, debate or vote on any matter in respect of which he or she would be in a conflict of interest.”
4 Section 4 of the Conflict of Interest Act provides that “For the purposes of this Act, a public office holder is in a conflict of interest when he or she exercises an official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person’s private interests.”
5 Subsection 25(1) of the Conflict of Interest Act provides that “If a reporting public office holder has recused himself or herself to avoid a conflict of interest, the reporting public office holder shall, within 60 days after the day on which the recusal took place, make a public declaration of the recusal that provides sufficient detail to identify the conflict of interest that was avoided.”
6 Section 18 of the Conflict of Interest Act provides that “No public office holder shall take any action that has as its purpose the circumvention of the public office holder’s obligations under this Act.”