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January 29, 2007

Perceived Conflict

"To suggest he was trying to make illicit profits by buying Alcan shares while his government was cutting a sweetheart contract with the company is a joke. Whatever you may think of him, Campbell simply isn't that stupid."
Columnist Michael Smyth, Vancouver Province, January 28, 2007

Michael Smyth also isn't stupid; he knows the difference between an "apparent conflict of interest" and a "corrupt politician". In his Sunday column he set up the straw man of a corrupt politician who might be following in the steps of Martha Stewart and then proceeded to knock it down. That's fine for entertainment, and it fills the space allocated for his column, but it doesn't offer any insight into the serious issue of apparent conflicts of interest.

Section 2(2) of the Members' Conflict of Interest Act states: "For the purposes of this Act, a member has an apparent conflict of interest if there is a reasonable perception, which a reasonably well informed person could properly have, that the member's ability to exercise an official power or perform an official duty or function must have been affected by his or her private interest." The problem, of course, is determining what a reasonably well informed person could perceive. That determination is delegated to the Commissioner appointed under the Act.

On May 23, 1991, in the dying days of the Social Credit government, The Hon. E.N. (Ted) Hughes, Q.C. was appointed as BC's first Conflict of Interest Commissioner. Hughes commanded everyone's respect, as he does today, but he was appointed under what many saw as a weak Conflict of Interest Act supplemented by guidelines issued by the Premier. In June 1992 the Harcourt government strengthened the Act with various amendments including the introduction of the concept of "apparent conflict of interest".

Unfortunately, the website for the Office of the Conflict of Interest Commissioner does not provide opinions of the Commissioner going back to the first case which involved then Minister of Municipal Affairs Robin Blencoe. In that case, Hughes ruled that Blencoe was in an apparent conflict because he dealt with a development project where one of the developers had made a $25 (just $25, no extra zeros) donation to his constituency association. That ruling shocked many about how little it took to be in an apparent conflict; Hughes remarked that the government of the day wanted the toughest conflict rules in Canada and he was delivering those rules. The Official Opposition, led by Gordon Campbell, subsequently dined out on allegations of conflicts of interest.

Things changed in the world of conflict rulings when H.A.D. Oliver was appointed Conflict Commissioner on August 7, 1997. It seemed as if the pendulum swung from extreme sensitivity as evidenced by the Blencoe decision to one of such a high standard of proof that a hand might have to be found in the cookie jar in order to produce a ruling against a politician.

Questions over whether Premier Campbell's involvement with Alcan constitutes an apparent conflict of interest were raised by NDP energy critic John Horgan. If the Blencoe precedent were applied, one would think the answer would be yes, but if the H.A.D. precedents were applied, the answer would probably be no. It is important to understand that, contrary to some media reports, Campbell's ownership of Alcan shares was not in a mutual fund. Even Mike Smyth conceded that Campbell's shares are held in a manner where he takes ownership of the shares, as opposed to taking ownership of mutual fund shares, and where he receives regular weekly newsletters on the investment portfolio. No one is alleging that Campbell went out to promote the Alcan power deal because he would line his pockets; that's the deal that was rejected by the BC Utilities Commission as being bad for BC. The question is whether, because of Section 2(2) of the Act, Campbell should have disassociated himself from any involvement with Alcan.

If H.A.D. rules that the type of investment fund held by Campbell should be treated like a mutual fund, then the ruling will move BC further from the tough standards originally established by Ted Hughes. H.A.D.'s term will soon end and he has made it clear that he will not accept another appointment. Depending on who is appointed as BC's next Conflict Commissioner, the matter of interpreting what a reasonably well informed person could perceive might change yet again.


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