When Nigel Wright took a leave of absence from Onex Corp., the big Toronto-based private equity company, to become Prime Minister Stephen Harper’s chief of staff nearly two years ago, hard questions were asked about how such a widely connected business insider could possibly avoid ethical conflicts on federal policies that affect corporate interests. To try to put those concerns to rest, the federal ethics commissioner set up a “conflict of interest screen,” spelling out at least some files Wright wasn’t allowed to even hear about. There are grey zones, but the screen clearly deems a few topics out-of-bounds—including, for obvious reasons given Wright’s ties to Onex, “the taxation of the Canadian private equity industry and its participants.”
And yet, last May 10, an unnamed official from Omers—the Ontario municipal employees pension fund, and indisputably a major private equity “participant”—filed a report with the federal lobbying watchdog, as required by law, disclosing a phone call with Wright the previous month. Omers listed the subject of its lobbying as “taxation and finance.” For a big equity player to talk to Wright directly on taxation would seem to set off alarm bells about a possible violation of his ethical screen. Indeed, asked by Maclean’s about that call, the office of Mary Dawson, the ethics commissioner, said it planned to “follow up” with Wright on the matter, but declined any further comment.
As you’ve likely read, Dawson is already examining Wright’s dubious decision, revealed by Canadian Press, to allow himself to be repeatedly lobbied last spring by Barrick Gold, the Toronto-based mining giant founded and chaired by Peter Munk. The problem there wasn’t a business overlap but a personal one: Wright has been close to Munk and his son, Anthony, also a Barrick board member, for many years. With mines in Argentina, Barrick was concerned after Harper annoyed the Argentine government by helping block its bid to advance a claim on the British-controlled Falkland Islands at last spring’s Summit of the Americas. But the Prime Minister’s Office says Wright doesn’t have any financial interest in Barrick, and anyway didn’t “take part in any government decisions” after the company called.
On his conversation with Omers, too, the PMO asserts that Wright is clean. After Maclean’s asked questions, Wright consulted his notes on that phone call of last April 20. According to a PMO official, he found that the Omers official was lobbying, not for the pension fund itself, but on behalf of an industry group called the Canadian Venture Capital Association. And the subject of the call was not—contrary to what Omers reported—taxation. The topic was apparently the government’s plan to launch a new $400-million venture capital fund, announced in last spring’s federal budget. According to the PMO, the inaccurate Omers report to the lobbying registry, which triggered our interest, will soon be amended to clear up the impression that Wright was wading into a policy area he’s supposed to scrupulously avoid.
Still, for Wright to be lobbied by the venture capital association raises another question. Onex is a full member of the industry group. Should he have taken a call from an organization that represents, along with many other firms, the one he left in 2010 and plans to return to when his service to Harper is done? The PMO says “nothing related to any private interest of Onex was discussed,” so Wright did nothing wrong. Indeed, that’s how the federal Conflict of Interest Act is written. A politician or senior official is allowed to participate in decisions that affect large groups of companies or people—so-called matters of “general application”—even if the government’s actions might help or hurt that official’s private interests as part of the wider group.
Critics of the conflict law argue this is a gaping loophole that should be closed. NDP MP Charlie Angus has been pleading in the House, during early Question Periods of the fall sitting, for the government to reform the conflict rules in light of Wright’s contacts with Barrick. But the Conservatives have rebuffed Angus, preferring to defend Wright under the rules as they now stand, although more precise disclosure about who exactly is doing the lobbying will reportedly soon be required.
Some outside observers suggest the government is setting a low ethical bar here, applying the letter of the law instead of addressing what certainly look like valid concerns. A key point here is that on conflict of interest questions, how things look matters along with what actually transpired behind closed doors. “From my perspective,” Lorne Sossin, dean of York University’s Osgoode Hall Law School, says in an email, “the real question is whether a public official should act in a way to advance or appear to advance private interests (whether those private interests involve considerations of friendships, past business dealings, prospect of future dealings, etc).” Sossin goes on to ask: “So, is the PMO aspiring simply to ‘follow the rules’ or to lead by example when it comes to providing access to lobbyists?”
As for Wright himself, he hasn’t commented lately. Back in the fall of 2010, though, he testified before the House ethics committee on how he would avoid conflicts. “They won’t come close to me,” he pledged of “anything touching an Onex company.” At the time, that sounded like a sweeping assurance. Now, it rings as carefully worded—a pledge covering Onex’s holdings that was perhaps not broad enough to ease concerns about elite personal ties and extensive business linkages that are again the subject of serious scrutiny.