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.