Political donations and lobbying lead to major problems at the top

OTTAWA--As Parliament awaits the political finance reform proposals promised in June by Prime Minister Chretien as part of his so-called "ethics package", Democracy Watch released a study revealing links between top federal government contractors and their lobbying and donation activities.

"The study reveals a clear pattern of large donations to the Liberals, and significant lobbying efforts, by most of the corporations that receive the most federal government contract dollars," said Democracy Watch board member Aaron Freeman in an Oct. 31 press release.

The study examines the activities of the top 25 federal government contractors. (They are ranked by dollar value of total contracts.) The key conclusions of the study are that:

The donation and lobbying patterns of the top 25 federal government contractors match the patterns of many industry sectors which are regulated by the federal government. As a result, they have a great stake in federal government policy-making.

For example, Canada's big banks, large telecommunication corporations, construction and engineering corporations, and oil and gas corporations have consistently been the largest industry sector donors to the federal Liberals for the past several years. In 2000, for example, Canada's Big Five banks and their subsidiaries gave the Liberal Party a total of $700,973.

"Corporate executives often claim that they make political donations to support the general democratic pro-cess," Freeman said. "But their donation patterns reveal that they consistently donate much more money to the ruling party, raising the suspicion that they are really donating to try to influence the ruling party's decisions."

The study illustrates the need for an overhaul of Canada's undemocratic political finance law, and for more restrictions on the activities of lobbyists.

Prime Minister Chretien has promised changes to the system to require disclosure of donations made to riding associations, trust funds, MPs between elections, party leadership candidates, and to riding nomination candidates.

The prime minister's promised measures do not go far enough. The following additional measures are needed to make the federal political finance system democratic:

The changes to the federal lobbying law proposed during the last week in October should be strengthened by including the following measures:

"Canadians have a right to know how much lobbyists are spending to influence the government," Freeman said. "And the revolving door of private interest lobbyists moving in and out of government and political parties must be closed before the government will ever consistently protect the public interest."

Democracy Watch's nationwide, 50-member group, Money in Politics Coalition, and its nationwide 30-member group, Government Ethics Coalition, will push for these stronger and more comprehensive measures to be included in the changes that are finally made to the federal political finance law and federal lobbying law.

In addition to his work as board member with Democracy Watch, Aaron Freeman is author of Cashing In: Money and Influence in Canadian Politics.