Conflict? What Conflict?

Have you seen that video clip of New York Congresswoman Alexandria Ocasio-Cortez questioning witnesses during a recent hearing by the House Oversight and Reform Committee? The committee was considering strengthening ethics rules for the executive branch of government (i.e. the president) and Ocasio-Cortez used the opportunity to highlight how much members of Congress — who are held to a higher standard than the president — can legally get away with.

One of the things she noted was that there was nothing to stop Congresspeople from buying shares in companies affected by the legislation they helped draft and pass. I was reminded of that particular point the other morning when I read this:

Canada Carbon Inc. (the “Company”) (TSX-V: CCB) announces that effective immediately Michael L. MacDonald has resigned from the board of Canada Carbon Inc. Canada Carbon Executive Chairman and CEO R. Bruce Duncan said, “On behalf of the Board, I would like to thank Michael for the contributions and insights during his brief tenure.” Canada Carbon press release, 11 February 2019

That would be Conservative Nova Scotia Senator Michael MacDonald and his tenure on the board of the Quebec-based mining company Canada Carbon truly was brief — his appointment was only announced on 10 October 2018.

This CBC article does a very good job of explaining the ins and outs of the situation, but basically, Senator MacDonald, besides being a member of the Canada Carbon board, had 500,000 call options on company shares.

Canada Carbon wants to mine graphite for use in small modular (nuclear) reactors — or SMRs.

(Okay, I have to allow myself an aside here — have you ever heard of SMRs? I ask because I hadn’t and it turns out Natural Resources Canada has been exploring “the potential for on- and off-grid applications for small modular reactor (SMR) technology in Canada” since at least February 2018. Or as UBC prof M.V. Ramana put it in the Tyee; “Canada’s government is about to embrace a new generation of small nuclear reactors that do not make economic sense.”)

Senator MacDonald, it turns out, is a big fan of SMRs. In fact, he sang their praises in the press release announcing his appointment to the Canada Carbon board:

I am a believer in clean nuclear energy and especially the potential of Small Modular Reactor’s [sic] (SMR’s) to replace much of the outdated and polluting technology we are burdened with today.

But Senator MacDonald is also the vice-chair of the Senate’s energy committee, which is in the process of reviewing Bill C-69 which will “overhaul the environmental assessment process for the natural resources sector.” As the CBC explained:

Among other things, the bill would rework the framework that governs development in the country’s nuclear sector — changes that could affect two graphite mining projects in Quebec that are under development by a company in which MacDonald has ‘call options’ — which are options to buy a stake in a company at an agreed price within a specific time period.

What surprised me most about the story, I must admit, is that there is nothing to stop senators from sitting on corporate boards or holding shares in companies — the Senate Conflict of Interest Code simply says:

If a senator has reasonable grounds to believe that he or she, or a family member, has a private interest that might be affected by a matter that is before the Senate or a committee of which the Senator is a member, the Senator shall, on the first occasion at which the Senator is present during consideration of the matter, make a declaration regarding the general nature of the private interest.

A senator who has made a declaration … may not participate in debate or any other deliberations in the committee on the matter, and must withdraw from the committee for the duration of those proceedings.

MacDonald told the CBC he’d disclosed his board membership to the Senate Ethics Officer who had no problem with it.

And yet, four days after the CBC published the story, MacDonald stepped down from his board position (no word on what happened to the 500,000 call options).

What’s particularly interesting here is that although the Senate Ethics Officer had no problem with MacDonald’s situation, the two ethics experts the CBC spoke with — Concordia corporate governance professor Michel Magnan and University of Ottawa law and poli sci professor (and Democracy Watch co-founder) Duff Conacher — did.

Magnan said:

When you’re a member of a board, your job is to look after the best interests of the company. But when you’re a senator, your interest is to look after the best interests of Canadians, the common good. These interests are not necessarily the same.

And Conacher said:

[T]he senator’s statement is problematic because it gives the impression that a senator is promoting the interests of the company.

“It’s not just an appearance of a conflict of interest. It is a conflict of interest,” he believes.

 

‘Low-key’ lobbying

That’s one variety of conflict of interest  — but it requires you to be a current holder of elected office. Fortunately for people who want to trade on their political connections, there’s another option — one that simply requires you to have served as high-ranking political staff. A good example of that is Iris Communications.

Iris Communications is the Halifax-based lobbying firm headed by Kirby McVicar, former chief of staff to Nova Scotia Premier Stephen McNeil. A nice person would let this slide, but I’m not nice, so I’m going to point out that there’s a typo on McVicar’s LinkedIn page — and I realize I am firmly in glass-house territory here, but I’m going to push on because the misspelled word happens to be the premier’s last name:

But my real beef isn’t typos.

My real beef is the revolving door between the government and the private sector as represented by this firm. McVicar left McNeil’s employ in November 2015 and claims to have started Iris Communications in November 2015. (This isn’t actually true —  in April 2016, he was working for Louisbourg Seafoods, a gig not mentioned on his LinkedIn CV and, according to the Joint Stocks Registry, Iris Communications was incorporated and registered on 27 September 2017). But the point is — he could have started Iris Communications the same month he left McNeil’s employ. Nova Scotia apparently has no “cooling off” period before high-ranking political staff can leap into phone booths and emerge as lobbyists.

And if you’re thinking, “It’s a communications firm, it’s not like he’s trading on his time in the Premier’s Office,” let me quote McVicar himself:

As a Partner of Iris Communications Inc I have spent the last number of years assisting numerous clients navigate both the provincial and federal bureaucracy in a professional low-key manner. I would suggest I should not be seen for who I know, but more for what I know.

Prior to my Iris Communications work, I was Chief of Staff for five years to Leader of the Opposition and the Premier of Nova Scotia where I acted as a senior advisor. I also worked with Cabinet Ministers and Deputy Ministers to develop and implement Government policy objectives, strategies and operating plans.

McVicar is listed in the Nova Scotia Registry of Lobbyists representing Anaconda Mining Inc (the firm looking to establish an open-pit and underground gold mine at Goldboro, NS); Nova Waste Solutions, Atlantic Canada Offshore Developments, Seaside Wireless Communications, Shoppers Drug Mart, Cultivator Catalyst Corp and — wait for it – Northern Pulp Nova Scotia Corporation.

McVicar’s partner at Iris Communications is Trevor Floyd, a former habitat biologist with Fisheries and Oceans Canada (2011-2014), then executive assistant to the NS Environment Minister (2013-2015) and the Finance Minister (2015-2017.) And in case you’ve lost track of the McNeil cabinet, this just means Floyd was an executive assistant to Randy Delorey for four years. Floyd left his provincial government job in June 2017 and immediately went to work for M5 Public Affairs (“Atlantic Canada’s foremost public affairs firm”) where his clients included the Discovery Center. He joined Iris Communications in November 2018.

Here’s how Floyd describes what he has to offer on LinkedIn:

Strong knowledge of government and political processes acquired through over a decade of providing research, analysis and strategic advice to senior government leaders on highly sensitive issues. Has established and cultivated a robust network that includes not only key federal and provincial players at both the bureaucratic and political level, but many key players from the private sector as well

Floyd is listed in the provincial Lobbyists Registry working on behalf of Nova Waste Solutions and Northern Pulp. He’s also listed in the Federal Lobbyists Registry representing Northern Pulp (in which capacity he met with Central Nova MP Sean Fraser — in whose riding the mill is located — on January 5 and with Dale Palmeter, director of issues management at the Treasury Board on January 15).

 

Paper trails

My final example of a homegrown conflict of interest is arguably the most egregious. This is when you, as a former office holder, go on to join the board of a private company — preferably one whose fortunes you aided in some way while in office. An excellent example of this was raised by Jennifer Henderson (who, may I just say in passing, has been doing some great stuff for the Halifax Examiner) in a February 10 article:

In a wrinkle that highlights the thin curtain between political and private careers in Nova Scotia, former [Premier John] Hamm is now Chair of the Board of Northern Resources Nova Scotia Corporation, the umbrella company for the mill’s operating company, Northern Pulp Nova Scotia (NPNS). Hamm has been a director of NPNS for the past decade.

As Henderson points out, it was Hamm whose 2002 decision to sign a 25-year lease agreement with a previous owner of the mill, Kimberly-Clark, allowed Northern Pulp to “continue dumping wastewater into the already-polluted Boat Harbour lagoon on First Nations land until 2030.”

Henderson “tagged Hamm for a brief conversation” on Friday, during his appearance at the PC Party’s annual general meeting in Halifax, and asked him if he regretted the decision. I’m not giving anything away if I tell you he doesn’t, because it’s in the headline (“John Hamm says he has no regrets about signing pulp mill lease.”) But to find out just why he regrets rien, you must read the story (see the message at the end of this article).

There’s something particularly unseemly about a former premier leaving office and trotting off to join the board of a private company — particularly one as controversial as Northern Pulp. Hamm’s tenure as premier ended in 2006 and he joined the board of Northern Pulp in 2008, which means his party (under Premier Rodney MacDonald) was still in power. In fact, one of MacDonald’s last acts as premier was to loan Northern Pulp (which had just been sold by Neenah Paper to Atlas Holdings LLC and Blue Wolf Capital Management) $15 million.

Although I’d be remiss if I didn’t note that it was Darrell Dexter’s NDP government that really made it rain for the mill, lending Northern Pulp $75 million in 2010 to buy woodland from the mill’s former owner.

I’d also be remiss if I didn’t point out yet another conflict here — as Aaron Beswick did in this January Chronicle Herald article — Paul Black, one of Dexter’s key advisers, went on to start his own PR firm (I’m beginning to think it’s an actual requirement of the job) and signed Blue Wolf as a client. Black told Beswick this was not a conflict because by the time he signed Blue Wolf, it no longer owned Northern Pulp. Interestingly, Black’s LinkedIn profile — on which his tag line is, I kid you not, “Let’s Connect some Dots” — says he’s been an operating partner at Atlas Holdings since 2016. (Connect those dots, why doncha.)

You might, at this point, be thinking it’s not fair of me to pick on these few people when really, everybody does it. And you know what? You’d be right.

So let’s focus on the real problem — that everybody does it. That morphing from elected official or high-ranking political staffer or bureaucrat into lobbyist is considered business as usual.

The power of Ocasio-Cortez’s exercise in that committee hearing (video of which has become one of the most-watched of all time on Twitter) was not that she revealed something no one knew but that she highlighted just why this thing that everyone knows is actually really bad.

And while she was talking about problems with campaign financing, I don’t think it’s a big stretch to shift the focus to the revolving door between politics and the private sector.

It’s not a bombshell revelation — but it’s really bad.