Law Times

Law Times • December 9, 2013 Page 7 COMMENT Support grows for bill taking aim at party leaders F or most Canadians it came as a surprise when Conservative backbencher Michael Chong stood up in the House of Commons last week and presented an unusual private member's bill challenging the powers conferred on the prime minister's office. But it wasn't a surprise to the one person potentially most directly affected by the legislation: Prime Minister Stephen Harper. He saw it coming. Chong made no secret of what he was planning and even went as far as giving Harper his own copy of the legislation several months ahead of time. It also explains why Harper created the mysterious position of minister responsible for parliamentary reform during the last cabinet shuffle and appointed his trusted foot soldier, Pierre Poilievre, to the post without anything specific to do. People began calling him the minister waiting for something to do with a minister's salary, a fancy limousine, and a very nice office. It was Harper once again trying to prevent something from blowing up in his face as has happened with the Senate expenses scandal. Chong is the MP for Wellington-Halton Hills. He was minister of intergovernmental affairs six years ago until one day, without telling him, Harper announced in the Commons — in English only — that "Quebeckers" were "a nation." Talk about a disaster. Forget about would be a simple majorHarper referring to the Québécois as Quebeckers. At least The Hill ity vote by the parliamentary caucus. Harper didn't announce that Chong's legislation has Quebec was a state in its own other useful clauses to give right. That would have been power back to elected repretantamount to inviting Quesentatives. The parliamentary bec to apply for standing at the caucus, not the party leader, United Nations and even as would choose party caucus a separate entry at the World committee chairs, for example. Cup of Hockey. And the party leader would Chong had no choice but Richard Cleroux no longer have to sign official to admit Harper hadn't briefed him and resign as cabinet minister. Harper nomination papers for elections. Instead, never apologized and never asked Chong a designated riding association officer would sign them. Still, a leader would at back into cabinet. So on Tuesday, two days earlier than least be able to decide how much party planned, Chong sprung his legislation money would go to the candidate. The parliamentary caucus, not the with his proposed bill to amend the Canaparty leader, would decide whether to turf da Elections Act. a misbehaving MP or senator and would Chong's bill is interesting. Parliamentary caucuses would have have the power to decide whether or when the power to dump their leaders much to allow the miscreant back in. A great many people on Parliament as the Conservative caucus in the British House of Commons unexpectedly turfed Hill seem to think Chong is out to get former prime minister Margaret Thatcher back at Harper for past wrongs. That's not the case, says Chong. First, the legislation many years ago. All it would take is a petition signed would only apply to whoever the party by 15 per cent of a party caucus to force leaders are after the next federal election. a vote on dumping the leader. A vote 50 And the legislation would apply to all per cent plus one would decide the issue. party leaders. Imagine if the legislation had been Then there would be a second vote to choose an interim leader pending a full in effect when the Liberals still had Stéphane Dion as their leader. Would some party convention. Forget that the party membership had Liberals have wanted to force a vote on chosen the leader at a national conven- his leadership? Or how about Canadian Alliance tion. All it would take to remove a leader members going for a petition signed by 15 per cent of MPs when Stockwell Day was zipping around on his jet ski at news conferences? Or what about Paul Martin loyalists forcing former prime minister Jean Chrétien into retirement? The legislation does have support. MP James Rajotte, a very serious and highly respected Conservative from Alberta, seconded the bill. Suddenly, a great many MPs from all parties were lining up to endorse Chong's bill. Green Party Leader Elizabeth May said yes to it. So did Conservative Sen. Hugh Segal, independent MP Brent Rathgeber (who fled Harper's caucus earlier this year), Conservative MPs Stella Ambler and Larry Miller, and the NDP's Craig Scott, who said he would work to convince fellow party members to vote for it. Liberal Leader Justin Trudeau went further and invited Chong to make his pitch to the entire Liberal caucus. NDP Leader Tom Mulcair said his party would have a free vote on the legislation. As for Stephen Harper, he hasn't done a head count yet. Last week, he was still trying to find out which way the crowd was running. LT Richard Cleroux is a freelance reporter and columnist on Parliament Hill. His e-mail address is richardcleroux@rogers. com. Charities should heed changes to anti-corruption legislation BY TERRANCE CARTER For Law Times W both in this country and the jurisdiction in question, the law will deem that person to have conspired to commit the act in Canada. A Canadian charity might also fall under the jurisdiction of the U.S. Foreign Corrupt Practices Act if it makes payments through the U.S. banking system or sells goods of U.S. origin or with U.S. content. In this regard, it is possible that a Canadian charity that has any of these affiliations to the United States and is engaging in bribery could be subject to the anti-bribery provisions in the U.S. act. Charities should also note that the Department of Foreign Affairs, Trade, and Development includes anti-corruption clauses in its requests for proposals, contract documents, and loan or contribution agreements. As a result, charities that collaborate with the department on foreign activities are contractually bound to refrain from engaging in bribery. Canadian charities wanting to prevent their organization from participating in bribery may wish to consult some of the resources generated by the British Ministry of Justice. After Britain adopted the Bribery Act of 2010, the Ministry of Justice recommended six principles for preventing bribery. They include proportionate procedures; top-level commitment; risk assessment; due diligence; communication, including training; and monitoring and review. The violation of anti-corruption laws carries severe consequences, including criminal liability, the possible loss of charitable status, and the potential for personal liability on behalf of directors. In this regard, charities should use their best efforts to ensure they have no involvement in activities prohibited by anti-corruption laws, including bribery, domestically or abroad. To do so, they must be mindful of both Canadian legislation, including the repeal of the exemption for facilitation payments under the Corruption of Foreign Public Officials Act, as well as the laws of any foreign jurisdictions they operate in. LT u SPEAKER'S CORNER ith significant attention on recent changes to Canada's Corruption of Foreign Public Officials Act, there are a few applications of the law charities need to be aware of. Bill S-14, an Act to Amend the Corruption of Foreign Public Officials Act, received royal assent on June 19, 2013. It introduced two important amendments to the Corruption of Foreign Public Officials Act with regard to charities operating outside of Canada. The law, of course, prohibits charities from engaging in bribery since to do so would constitute giving an unacceptable private benefit in violation of their charitable purpose. Any charity involved in such activities could face the loss of charitable status as well as allegations of breach of trust through the misapplication of charitable property. This, in turn, could leave the directors and officers of the charity open to personal liability for the misapplication of charitable funds or property paid out as a bribe. Charities, therefore, need to be aware of the possible application of the Corruption of Foreign Public Officials Act to their operations. In this regard, s. 3(1) of the act prohibits bribery of foreign public officials in order "to obtain or retain an advantage in the course of business." Section 2 defines "business" as "any business, profession, trade, calling, manufacture or undertaking of any kind carried on in Canada or elsewhere." This definition, and in particular the reference to "undertaking of any kind," could affect charities carrying on activities outside of Canada where their programs in the foreign jurisdiction include a "related business" activity permitted under the Income Tax Act or a charitable program that involves an inherently commercial element. The seriousness of the Corruption of Foreign Public Officials Act is clear in s. 3(2) that states that every person who contravenes s. 3(1) is "guilty of an indictable offence and liable to imprisonment for a term of not more than 14 years." As well, there is a similar indictable offence under s. 4(2) of the Corruption of Foreign Public Officials Act for falsifying books and records for the purpose of bribing a foreign government official or hiding such bribery in contravention of s. 4(1). The recent amendments to the act have further implications for charities. One amendment, for example, removed the words "for profit" from the definition of "business," meaning the prohibition on bribery applies to organizations involved in any business or undertaking in a foreign country regardless of whether they did so for profit. The second amendment will repeal the provision for a facilitation payment exemption in the Corruption of Foreign Public Officials Act. Currently, s. 3(4) of the act permits facilitation payments in order "to expedite or secure the performance by a foreign public official of any act of a routine nature that is part of the foreign public official's duties or functions" by excluding those situations from the prohibition on bribery. However, the amendments introduced by Bill S-14 will repeal this exemption on a date fixed by order of the governor in council, which means that in the future charities could face criminal liability for activities that up to now would have been allowable under the exemption for facilitation payments. The laws of the jurisdiction a charity operates in may also serve as a source of criminal liability for its employees and agents who engage in bribery. Many countries dealing with bribery have far-reaching anti-bribery legislation. In this regard, the Canada Revenue Agency reminds charities that "being registered in Canada does not exempt a charity from the laws in the jurisdiction where they operate." Also, ss. 465(1) and 465(3) of Canada's Criminal Code make it illegal to conspire to commit an indictable offence. They state that if an individual conspires, while in Canada, to commit an act outside of Canada that is an offence www.lawtimesnews.com Terrance Carter is managing partner with Carters Professional Corp., counsel to Fasken Martineau DuMoulin LLP on charitable matters, and editor of charitylaw.ca.

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