Rahim & Patrick's Don't Pay a Cent Event - Macleans.ca
 

Rahim & Patrick’s Don’t Pay a Cent Event

Why would Jaffer and Glémaud work for free?


 

Let’s assume everyone’s telling the truth. Rahim Jaffer and his partner, Patrick Glémaud, never got paid for their activities. They were simply making inquiries about the terms and conditions on which certain types of government grants might be available to certain companies. The companies in question never hired them to act as lobbyists. And nobody got a dime of government money. How do we make sense of this?

Why would Jaffer and Glémaud work for free? Were they actively lobbying, or just researching? Did they break any laws? Or is this all just a misunderstanding?

Let me try one theory out. It’s just a theory, I stress. But it might explain what was going on here. Suppose what Jaffer and Glemaud were working was a kind of disguised contingency fee scheme. To wit: You charge no fees in the initial, exploratory, “pre-lobbying” phase, when you’re probing to see whether there’s any takers on the government side. You don’t register as a lobbyist, because you don’t have to: so long as no money changes hands, under the law there’s no requirement to register — one of the loopholes Democracy Watch’s Duff Conacher complains of. Then, once you’ve got some prospect of success, you register, start the meter, and collect your fees.

As Glémaud explained to the committee:

“If there was an interest then there would be a request to submit a detailed business plan with all the details of the project. And that would be viewed as the actual grant or contribution agreement application, and that’s when lobbying would start. We didn’t get to that stage.”

“Our understanding is if we were in a position to be at that stage, then I would have to decide for myself to register as a lobbyist.”

There’s no explicit contingency arrangement, you understand. But the clients are taking far less risk than if they were paying you to make cold calls. The fees don’t start until you’ve got at least a nibble.

The beauty of it is that if it all blows up, everyone can deny everything, truthfully. We weren’t charging any fees, says Rahim. We weren’t paying any, says his supposed client and fellow lobbyist, Joe Jordan. We were just making inquiries, says Glémaud. We never even hired them to do that, says Jordan.

I wonder how common this is. Contingency fees are illegal, as is unregistered (paid) lobbying. But this wasn’t a contingency fee agreement, and they didn’t have to register: whether or not it was lobbying, they weren’t getting paid. It’s possible, in other words, that everything that went on here was within the law. Which may be an argument for changing the law.


 

Rahim & Patrick’s Don’t Pay a Cent Event

  1. Quiet, Coyne. You're interfering with the narrative again.

    • Speaking of narratives get this guy to read "On the Take"

  2. That makes sense, but could the plan have been for R and G approach the gov . without Upper Canada Solar Generation Ltd's go ahead and then, if they'd gotten their nibble, approached the company again and said "Hey, we think we've got somebody interested. Start paying us to learn more". Under the scheme as you outline it, why would UCSG even be upset?

    • Maybe they're upset because of the unwanted media attention. They would probably prefer to be in the news for something related to solar power.

  3. Just like when legal teams don't get a dime unless they win the case.
    Like a Realtor doesn't get a dime unless the property sells…..
    all work, no pay without success

    • Except in those cases, there is a formal contingency fee agreement in place and, with lawyers, you'd still be on the hook for paying their disbursements one way or another.

      Here, there doesn't seem to even be that.

    • That Jaffer even more sneaky than I thought, he really deserves what's coming to him.

  4. The complicating factor is that an expression of interest (call it an executive summary if you like) was submitted on behalf of specific companies. And not just once – three times. And they were then evaluated at some length by people who administer the programs.

    This is not in the same league as meeting with a Minister and saying – hey, I'm interested in green technologies. Would biofueled electricity generation qualify? Rather – it is: here is the technology of a specific company. It has been scoped out and the capital cost is $850 million for a specific location for a specific sized generator. Your contribution will be $200 million. The payback will be x years. Does it fit the screening criteria? Yes/No? If yes, then we will provide the detailed spreadsheets, plans, assumptions and field trip to an existing facility, and they can be reviewed by the next level of technical bureaucrats? That can be provided. Just give us the go-ahead.

    I'm pinching my nose tightly, but even then, this doesn't pass the smell test.

    • I agree they were lobbying. But if they weren't getting paid, they don't have to register. It's clearly unethical, but it's not clear it's illegal. I could say the same about a lot of registered lobbying.

      • "It's clearly unethical, but it's not clear it's illegal."

        If only our pundit class could point that out more often and more directly. There's an entire generation of people out there who are mystified by this distinction.

      • But in this case, it is a defacto form of contingency or success fee. Similar to a geologist who provides his expertise – and gets a working interest in an oilwell. It costs investors nothing upfront for his time. If the well is a duster, he gets nada. If it's a gusher, he scores big time. A form of risk/reward.

        • It's a de facto contingency fee IF you can prove there was some agreement to pay them in the second, registered-lobbying stage, AND that this agreement was linked to the first, dont-pay-a-cent, we're-just-making-inquiries work.

          That may be hard to do. Which is why it's probably a good idea to close the current loophole for unpaid lobbying. If you're lobbying, you have to register. Period.

          The other lesson: former MPs and staff should be covered by the same five-year ban on lobbying that applies to former ministers and civil servants.

          • I don't disagree with your proposed reforms. True, proof is difficult – especially with this group of individuals. I didn't think Pat Martin's Frank Moore school of lobbying analogy was too far off the mark.

            The follow-up question that might be asked is: what would have happened had the "Executive Summaries" met the criteria? Could the individual companies go it alone (cut out Jaffer)? Perhaps. Probably, or more likely, they wouldn't. Maybe another flaw in the R&H business model.

          • One last point. You don't prepare expressions of interest to such a level of detail without co-operation from the company you are representing as an agent. Which suggests quid pro quo. Standard of proof for lobbying – balance of probabilities, or beyond a reasonable doubt?

    • Agree. Stinks, doesn't pass any smell test, and that doesn't touch upon Guergis' role in this, promoting the very project that her husband was lobbying for.

      However, the problem with finding that something is a breach of a law, is that you have to find some law that you are breaching. Technical laws are very technical in that way.

      If he wasn't getting paid, then it may not have required registration. If he wasn't required to be registered, then the government which was dealing with him extensively doesn't have an obligation to make sure he was registered. All nudge nudge, wink wink, but, it seems, technically not illegal (at least so far based on available evidence).

      Jaffer, part of the Federal Accountability Act team, perhaps found a loophole in Harper's legislation and no one was interested in closing it.

  5. I think the theory you're putting forward would make sense if they were merely asking the government for direction or what kinds of projects were suitable for consideration but they sent in 3 specific proposals and they were looking for approval for these projects. It seems to me they were lobbying not fishing.

    • They were fishing for eligibility,
      the proposals were a general outline, not a detailed submission.

    • They did not submit detaied proposals for funding. The story is being streched into something it is not. Get your facts straight!!

  6. They were using their influence and contacts to do an end-run on the process…managing the process on behalf of another is lobbying regardless of their consent to do so. As per bigcitylib (above) once they got a positive nibble from Gov't they would most certainly charge for the info. Once the money starts to flow the company goes public and is sold for huge profits to the initial investors. Not registering as lobbyists keeps them in the background/underground along with the payments (from share?) that end up in Belize?

  7. So they were corporate volunteers? How civic minded of them. Where do I send my donation?

    • Would you pay a Realtor before the house was sold?

      • No, but if I wanted the service of the realtor I'd have an agreement with the agent that constituted a promise to pay once the house was sold. My understanding of the requirement to register as a lobbyist is that it includes contingency payments which is what you're talking about.

        Coyne is talking about some sort of pre-contingency negotation research period, which would be akin to a realtor linining up prospective buyers to come to my open house and then trying to get me to pay the commission once I agreed to sell it to one of them.

        Your example is actually a good one that disproves your point, because in the curent sellers market, what do I need Jaffer and Associates for? I've already got bidding wars happening all around, somewhat similar to the rush to spend infrastructure funds quickly when GPGC was flogging someone else's propsoals.

        P.S. I don't think I would pay the commission in either case.

      • No. But don't you usually sign a contract to for them to sell your house at a specified percentage within a specified period?

  8. I have a theory that is similair to Andrew's but rather then a contingency fee they where after the companies. Supposse they had gotten a nibble from the gov. Rather then going back to Wright Tech or UC Solar Generation they took the info to Gillani and his 'investors'. They raise some financing and go back to the companies and offer to buy them out. Once bought, they announce they have secured a grant from the gov. and launch an IPO.

    • I think that's the most plausible theory I've heard. It explains the involvement of Gillani, whose role is as yet unclear.

      Neither Upper Canada Solar Generation or Canada Solar Inc. gave GPG permission to lobby on their behalf, as Mr. Coyne's linked article states. Assuming they're telling the truth, your theory explains this as well.

      Perhaps if GPG got federal funding they would look at the numbers and decide if it would be better to charge lobbying fees (as Mr. Coyne suggests) or buy out the companies as you suggest. Unfortunately, we'll probably never know.

  9. Great job on At panel last night Andrew. In future CBC should give you a remote so that when Chantal gets all self-righteous on you, you can switch off the tv screen she's on. Of course, when she's there in person you'll just have to rely on your wit.

    • Then I'm in trouble.

    • odd you didn't point out Alan Gregg being high and mighty…

  10. Without reading the legislation in question, i would suggest there is a difference between unpaid work and work clearly designed to yield payment upon certain conditions being met.

  11. If Jaffer had registered as a lobbyist, how would that have affected his wife's position as a Minister of the government? If any of their bids had been successful, could Jaffer and Glémaud have set up a shell company to collect fees from their client?

  12. Once again Andrew wanders off the path and gets himself hopelessly lost. This time he also bends right over backwards & twists and turns
    to the point he resembles a pretzel.

    Andrew's loose defintion of the law, interperetation of the rules and a
    very liberal application of the benefit of doubt, has Rahim and Harper et al looking like Mother Teresa. This is absolutely no surprise.

    One of these fine days Andrew will throw away his political bias and become a journalist.

    Andrew's tainted & convuluted logic as it pretains to what constitutes a
    contingency fee and lobbying were particularly feeble.

    Andrew's mad dash to accept Rahim et al's version of events, is less than intelligent, particularly stupid, actually.

    Andrew's very strong reluctance to examine the Harper Government's
    highly possible complicity, definately unethical behaviour, throughout this terribly sordid affair, leaves one's mouth agap.

    Andrew, the problem isn't "the law" in this case. It's unqualified people like yourself acting like a legal expert and reading or interperating it to suit a certain political bent or purpose.

    cont…

    • I think Andrew is making great sense as usual and you are the one showing your political bias. You should be a member of the committee holding the Kangaroo court.

  13. 1) the distinction between "pre-lobbying" and lobbying is COMPLETELY artificial;

    2) Glemaud registering as a lobbyist is insufficient – he is the SOLE PARTNER of Jaffer. They are NOT independent of one another. They are NOT at 'arm's length' from one another. Their interests are ONE & THE SAME.

    Ergo, Glemaud registering as a lobbyist is no different than Jaffer himself registering as a lobbyist (a move that would necessitate that his wife step down from cabinet BEFORE lobbying by EITHER Glemaud or Jaffer began.)

    • I would suggest you make your entire post in all capital letters. It's much more convincing that way.

  14. I thought you had give up posting in the blogs Wells.

    • Your barking up the wrong tree Stew.

  15. "One of these fine days Andrew will throw away his political bias and become a journalist."

    No way. This stuff is a lot easier to do and pays better. And it provides him enough free time to worm his way around all the other nooks, crannies, cubby holes, drop ceilings and sub basements that adjoin the halls of power.

  16. I see Jim Prentice has finally come clean and spilled the beans. The flames were licking at his heels. Who's next?

    Get on it Andrew, don't get lost, take a compass.

    • They can't be blamed for Jaffer's stupidity, and talking advantage of them, It's like if a former coworker approaches you with a question and it turns out he scams people, is that has anything to you with you, probably not! They are telling what they know and what Andrew just said here, probably is making them connect the dots too.

      • Please don't try and tell me that Jim Prentice has just figured things out or found out, that Rahim had paid a visit to his Calgary office, to solicit funds. Another thing, Rahim wasen't being stupid, he was being greedy. As far as Andy goes, he's not connecting the dots, he's just making things a lot more complicated than they are.

        • I agree with you about Jaffer being greedy and as it usually happens it backfired big time, he thought he was smarter than anyone and could get away with it. But when it comes to Prentice, I truly will give him the benefit of the doubt, Jaffer is a coward, and a piece of crap for trying to use them and his knowledge of Government workings (they really need to change this Lobbyist act) and I really believe that, and I guess that's what makes the world go around, different opinions for different folks!

          • Sorry, but they do not have to change the Lobby Act, it just has to be interperted correctly and as intended and it's law, rule and regulation recognized and used when the situation requests or demands it.

            That is, although Prentice claims he didn't know of the meeting between Rahim and his staff, (which I do not believe for a moment) then one must ask….why didn't his staff know of the Lobby Act, it was his responsibility
            to insure they did know.

            But then again, you could also ask….are Prentice's staff so berift of scruples, that even if they didn't know about the Lobby Act, didn't their moral compass tell them something was unethical when Rahim walked through their office door with his proposal in hand ? If not, I would suggest they have their moral compass adjusted.

            The fact of the matter is, from no matter what angle you look at it, Rahim should not have been allowed to set foot into the Calgary office of Prentice, with proposal in hand.

            cont….

          • I understand that Jaffer approached Prentice in Ottawa. The two of them met in the Parliamentary lobby and exchanged words for about 30 seonds (Prentice's account of the "meeting")

            Now, it is up to you whether to believe Prentice or not, but that would be your opinion, or belief, or prejudice, whatever. We have just as much reason to believe that Prentice's version of events is true.

          • Cont…

            Have you noticed that Canadians are always having to decide whether the actions of Harper et al are right or wrong. Under Harper nothing is right or wrong, black or white, everything is a ugly shade of grey.

            This is exactly what the Americans went through with Bush, it's on purpose. Please open your eyes.

          • Like, were you alive when this fella named Jean Chretien was PM? Just wondering.

  17. But because he strikes YOU as being such and such a character, does not make him so. You are confusing a lot of things and pass on your confusion as clear thought. It would be silly for any one of us to take that seriously.

  18. In all, I find Coyne's musings to be very interesting. At least he's willing to look at the issue from different sorts of angles, something that does not happen too often witin MSM punditry.

    Coyne ain't no dummy but neither is Jaffer, and so that clearly calls out for various understandings.

    It doesn't mean that what Coyne muses about must be absolutely true, but it could very well be. And that is the point. It should be well taken.

    • Andy has you running around it circles, just like him. Sometimes things are right or wrong and black or white, clear as a bell and this is one of them. Please quit running around in circles. And accept the fact what happened here was a clear as a bell that it was wrong and broke the law. You must be getting exhausted.

      • Well, actually, I think the state of our modern world has us all running around in circles: what's up is down, what's wrong is right, what's not right must be left, what's honourable is feebish, what's criminal we're no longer sure of.

        Exhausted? Heck no! All this going around in circles makes me dizzy, without the use of cocaine or any other drugs. Dizzy, dizzzy, are you not dizzy yet?

  19. The issue that seems to have attracted the attention of the Ottawa crowd this week is what right does a former politician have to use his politicial notoriety to further his efforts in the private sector.
    Let`s be realistic here.
    Would Jean Chretien and Brian Mulroney have been able to make Millions if they had not used their former PM influence ?
    Would Brian Tobin have been able to make such a lucrative move from Newfoundland to Bay Street without a stop in Ottawa ?
    Would Axworthy and Rock be University presidents and would Manley be a CEO now ? etc, etc.
    The fact is that former politicians have always used their politicial experience to make money in the private sector. The big difference here is that some are either more accepted than others or are better at it than others.

    • The lobbyist rules apply to them as well though.

      In fact, they are no doubt even more scrupulus about lobbying registrations and more aware of the technicalities because they would be even more in the public's eye and the media gunsights.

      No one is saying you can't have a career based on your political experiences. But there are lobbying and influence peddling laws you can't break. Whether Jaffer did or did not is the issue and the only issue.

      • I know why there has to be laws concerning lobbying but I doubt if most former politicians have to actually go door to door in gov`t to find their place in the private sector. The fact is those close to power are probably arranging their post-politicial career while they are in office.

        So rather then getting caught up in lobby-registration rules for relatively minor former MP`s why don`t we do a comprehensive review of all politicians from the past 40 years and review how their post-politicial careers were positively enhanced by their politicial connections. The study could be broke down into specific categories such as MP`s gender,skin colour, region, etc.

        A ridiculous suggestion right………much like the idea that a black man and a brown man had some kind of disproportionate power over a predominately white bureaucracy to promote their green company.

        • We could start with secret "business-related" cash payments in envelopes in clandestine hotels to sitting Prime Ministers by paid lobbyists, perhaps? Oh, I see we already did that and Conservatives said then we shouldn't care about that kind of graft.

          It should be no surprise that they found a loophole and turn a blind eye (after a nudge and a wink) to "pre-lobbying lobbying".

    • But could a former MP practice law without being admitted to the Bar?

    • …and if former politicians are not allowed to work, then people should stoop complaining about thier fat pensions. You can it one way or another. I'd prefer dropping the fat pensions and allowing them to work.

      • I'm with ya on that. Sometimes peoples' outrage has a lot more to do with a blanket, knee-jerk hatred of politicians and Ottawa than anything founded in logic or common sense.

  20. Cont…

    Andrew, according to the law as it was intended and written, Rahim et al were carrying out the exercise of lobbying and had received written or verbal "consideration" to do so, in all likelyhood delayed, however still received.

    It all boils to this….

    When Rahim et al are found to have been lobbying, then a whole set of very serious implications automatically accrue to Harper et al.

    And that folks, is why Andrew is now looking and feeling like a pretzel.

    • I think Coyne isn't on anyone's side here, except trying to find balance in what possibly could have happened. I mean, Rahim Jaffer isn't exactly stupid either. It is not as if he would have gone completely bananas when appearing before the committee. If he had flipped there would certainly have been more signs to that effect, not?

      Not that I think Jaffer has played it all that smart (PR wise) but if one considers Coyne's scenario to be a possible one, Jaffer's comments might be understood in a much different light.

  21. What do you want to bet that jaffer & wifey (or their "EA's") are commenting on these blogs and driving certain scores down.

    • I think you're mistaking this blog for something that's important.

  22. At those gazillion panels and speeches where you take the podium — are you "lobbying"? Did you make friends, deepen your network, put out feelers? Let's get real. The villain here is John Baird with his big fund of taxpayer money who says "come and get it". We need laws to control the dogs that run to that dish. Do we? Paid/registered, unpaid …WHATEVER! It's all a sleazy grab for taxpayer money.

  23. While one has no idea if this has any relevance in this case, it is not at all uncommon for consultants to defer raising invoices until a result has been obtained. It is called, "business development". The hungrier consultants are, usually the more work they will do on a file prior to results.

    • "business development" = lobbying

      • Sure, but not so sure. I was trying to adhere to Mr. Coyne's attempt to be dispassionate and a bit legalistic. After all, these two guys have not been charged with anything, to one's knowledge, and it may well be that there are no sticky charges that can be made.

  24. Oops, Does that has anything to do with you… sorry about that!

  25. What does it matter Andrew, they're all Freemasons.

    That is the real network of influence in the Government & Political Parties, it is pure hypocrisy and theatrics on the part of the NDP and Liberals .

    A Firm in a Firm as Scotland Yard Investigative Reporter and Author Martin Short put it.

    • Best comment ever!

      "Nothing" seems to make a difference.

  26. What is the difference Andrew, you know they are all Freemasons. That is the real network of influence.

    The NDP and Liberals are just engaging in theatrics, they are as much a part of it as their Brethren in the Tory Government & Party.

    Inside the Brotherhood, by Martin Short http://www.youtube.com/watch?v=9JVrIFFTbbE

  27. This is all BS. All Policians are cons. When they get an oppurtunity, they sacricies anyone to their advantage. I am sick of this politics.

  28. is it possible that parties were seeking to have the appearance of govt support to back an IPO through ISI?

  29. Andrew, here's another theory — Jaffer and Green Power Solutions weren't concerned about getting paid any revenues for assisting businesses such as Green Rite (Wright Tech.). The reason for this is because Jaffer (and Guergis) were planning to earn millions in offshore capital gains (along with Gillani). Gillani, Jaffer and Guergis planned to be amongst a group of shareholders of Green Rite (Wright Tech.) who would own cheap, pre-IPO, pre-pump & dump, stock. Jaffer's role was to try and get government funds for Green Rite (Wright Tech.). The sizeable government grant to be received by Green Rite (Wright Tech.), along with any other business assistance that the business receives (e.g. see Guergis' letter to Simcoe Country), would help to facilitate the stock promotion story and related pump and dump efforts. Jaffer and Green Power Solutions weren't planning on getting paid directly for their lobbying activities; instead they were lobbying in order to get funds into corporations that could be promoted for financial gain by Gillani.

  30. On another note, Gillani (and International Strategic Investments) represents himself as a financier and stock promoter. This has apparently been going on for years if the stories in the media are accurate and if International Strategic Investments' website is to be believed. Why isn't Gillani and International Strategic Investments registered as a securities dealer or advisor? Where has the OSC been? What is the OSC doing now? This may turn out to be yet another enforcement embarassment for the country's largest securities watchdog. Jeesh.

    • I'm going to guess that you are not a securities lawyer.

  31. Andrew, your contingency fee theory doesn't account for Gillani's involvement with Jaffer or Gillani's now famous email comment to his dozen or so associates following the infamous Sept. 10 Harbour 60 dinner: “As most of you may have heard, we had a rather earth moving experience last night at dinner with Rahim Jaffer … Mr. Jaffer has opened up the Prime Ministers' office to us and as a result of that dinner – he today advised me that is just as excited as we are and joining our team seems to be the next logical step.”

  32. Maybe Jaffer is not in it for money at all. Jaffer is a publicity hound and craves media attention. It's working thanks to hyper-over-reacting scandal-starved media and Coynesian forensic over-analysis. Jaffer no doubt will write a book, or become a newspaper columnist, or TV commentator – he's a celebrity now!

  33. Pull your head out of your Ottawa Ass, Coyne- I expect more for my tax-paying dollars.

  34. The Conservative Party is corrupt as hell. Maxim Bernier, these two idiots, Helena Giurgis, Karl-Heinz Schriber, Brian Mulroney.. is the entirety of this government on the take?

    It's become the Scandal of the Week. Its sort of like a regularly scheduled television show-tune in next week to find out which Conservative will get busted for being Canada's Top Crook!