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Trudeau to end controversial cash-for-access fundraisers

Prime Minister Justin Trudeau, speaking at a news conference at the University of Winnipeg on Jan. 26, 2017, will pass legislation to address concerns the Liberals have been offering privileged face time with wealthy donors in private.

JOHN WOODS/THE CANADIAN PRESS

Prime Minister Justin Trudeau will end the controversial practice of cash-for-access fundraising by passing legislation that lifts the veil of secrecy from these political events, requiring them to be transparent, open to public scrutiny and reported to Canadians, The Globe and Mail has learned.

Mr. Trudeau will instruct Democratic Institutions Minister Karina Gould to work on legislation that would effectively ban elite fundraisers for cabinet ministers that are usually held in private homes, a senior government official said.

The legislative initiative is in response to a series of revelations in The Globe and Mail that showed Mr. Trudeau and senior cabinet members were raising millions of dollars through private fundraisers with tickets as high as $1,500 that gave donors access to his cabinet outside of the glare of public scrutiny.

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The legislation, which will apply to other federal party leaders as well as leadership candidates for federal parties, will include three specific measures to address criticism that the Liberal Party has been offering privileged access to wealthy donors.

Changes will include:

  • All fundraisers must be conducted in publicly accessible spaces rather than private homes or clubs.
  • These fundraisers must be publicly advertised in advance.
  • A public report on each individual fundraiser must be released in a timely manner. These reports would detail how many people attended and how much was raised.

The federal government will also commit to allowing the media to cover all of its fundraisers – it will begin discussions with the Parliamentary Press Gallery – and expects the other parties will do the same. A source explained this would not be part of the legislation because the government does not want to legislate on media attendance.

The new measures will not apply to backbench MPs who will be free to raise money at private or closed-door events.

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The government is not cutting the maximum political donation allowed. For 2017, the limit is $1,550 per individual for donations to a federal party.

"She [Ms. Gould] will be mandated in the letter to enhance transparency in the fundraising system for cabinet members, party leaders and leadership candidates," a senior government official said.

"The fundraisers will be advertised in advance so you will know where they are – not only for the media but other interested members of the public. It is more transparent."

These reforms are an effort by the Liberal government to put the fundraising controversy behind it as a new sitting of Parliament begins. The issue had dominated debate in the House of Commons since mid-October.

The Prime Minister has instructed Ms. Gould to reach out to the other political parties and see whether they can suggest other reforms they want to see in the new legislation. The Conservatives and New Democrats have urged the government to allow the Office of the Ethics Commissioner to investigate political fundraisers.

"The minister will reach out to the other parties to see if there are any other measures that they would like to see included but those are three specific pieces that we will be moving forward with," the senior official said.

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The decision to ban cash-for-access fundraisers is a major reversal for Mr. Trudeau, who defended these events even though they were in breach of his own Open and Accountable Government guidelines that state "there should be no preferential access, or appearance of preferential access" in exchange for political donations.

Ethics Commissioner Mary Dawson has asked that these rules be transferred to her mandate so she could investigate political fundraisers. However, the government source said this was not part of the Trudeau plan to reform fundraising.

The Liberals were accused in recent months of quietly holding private fundraisers featuring Mr. Trudeau or key cabinet ministers that targeted wealthy business people, including some from the Chinese-Canadian community.

The party's fundraising practices over 2015 and 2016 also ran counter to internal Liberal Party rules, held up by the party as evidence of due diligence, that say "there is a thorough process to ensure that the rules are followed – especially that no department stakeholder, lobbyist, or employees of lobbying firms are specially targeted for fundraising."

In mid-December, Mr. Trudeau himself conceded people lobbied him at the fundraisers but said he ultimately made up his own mind as to what policy is good for Canadians.

Days later, the Ethics Commissioner announced she would question the Prime Minister to determine whether Mr. Trudeau breached the Conflict of Interest Act when he attended party fundraisers with corporate executives wanting favours from Ottawa.

Ms. Dawson, who has called the cash-for-access system "not very savoury," said she will also focus on what Mr. Trudeau discussed at a $1,500-a-ticket fundraiser at the Toronto home of Chinese Business Chamber of Canada chair Benson Wong on May 19. One of the donors was insurance tycoon Shenglin Xian, the principal investor in Wealth One Bank, which was awaiting final federal approval to begin operations at the time.

Chinese billionaire Zhang Bin attended the same event. Less than two weeks later, Mr. Zhang and Chinese philanthropist Niu Gensheng pledged $1-million to the Pierre Elliott Trudeau Foundation and the University of Montreal's law faculty "to honour the memory and leadership" of the Prime Minister's father, Pierre Trudeau. The contribution includes $200,000 to the Trudeau foundation and $50,000 for a statue of the elder Mr. Trudeau.

Lobbying Commissioner Karen Shepherd announced in November that she had also launched an investigation after The Globe revealed that business executives who have lobbied the government were buying tickets to cozy up to senior ministers.

Of particular focus for Ms. Shepherd's probe was a $500-a-ticket fundraiser in Toronto on Nov. 7, at the home of philanthropist Nancy Pencer. Finance Minister Bill Morneau was the featured guest at the event in which Barry Sherman, the chairman of the pharmaceutical giant Apotex, was helping to organize. Mr. Sherman, whose firm had directly lobbied the finance department, withdrew his involvement after The Globe reported it.

New Democratic Party Leader Tom Mulcair said the NDP's ethics critic, Alexandre Boulerice, will introduce a private member's bill next week to reform political fundraising – one that would "essentially give Mr. Trudeau the opportunity to start walking the talk."

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About the Authors
Ottawa Bureau Chief

Robert Fife is The Globe and Mail's Ottawa Bureau Chief and the host of CTV's "Question Period with The Globe and Mail's Robert Fife." He uncovered the Senate expense scandal, setting the course for an RCMP investigation, audits and reform of Senate expense rules. In 2012, he exposed the E. More

Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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