Board clears itself in Tory fundraiser controversy

The board of a federal Crown corporation studied the conduct of its own directors after they attended a Conservative fundraiser and then quietly decided this summer they had not breached internal rules that bar political activities.

Prime Minister Stephen Harper holds a press conference in Whitehorse

Prime Minister Stephen Harper holds a press conference in Whitehorse

OTTAWA — The board of a federal Crown corporation studied the conduct of its own directors after they attended a Conservative fundraiser and then quietly decided this summer they had not breached internal rules that bar political activities.

Two of the five members of the board of the Jacques Cartier and Champlain Bridge Inc., (JCCBI) attended a Tory fundraiser featuring Prime Minister Stephen Harper in May 2009 in Montreal, The Canadian Press first reported a year ago.

Board president Paul Kefalas and director Serge Martel were at the $150-a-ticket event, which was also attended by several executives from engineering firms that would shortly thereafter bid on a multi-million-dollar contract on Montreal’s Champlain Bridge. The contract was awarded just a few months later.

The JCCBI refused to make available its code of ethics, which The Canadian Press later obtained through Access to Information. The code, which each board member is supposed to read and sign upon appointment, contains a specific section on political activities.

“A director must not at any time participate in activities of political parties. He must not … take part in fundraisers, manage a campaign, nor conduct a personal campaign,” the code reads. “A director must not participate in political meetings of any kind whatsoever.”

Micheline Dube, president of the parent agency, Federal Bridge Corp. Ltd., said last fall that her own board was awaiting a report on the incident and would draw a conclusion.

Ultimately, her corporation had no say in the matter. It was the board of subsidiary JCCBI itself that decided Kefalas and Martel did nothing wrong.

“The directors have taken the decision that no breach of the standard of conduct occurred,” said Andre Girard, spokesman for both the Federal Bridge agency and the JCCBI.

The decision was taken in July, but didn’t come to light until The Canadian Press made inquiries this week on the status of the matter. There is no reference to the issue on either the website of the FBCL or the JCCBI.

In 2009, the auditor general reported a “significant deficiency” in the Federal Bridge Corp. Ltd.’s corporate governance, saying the parent board had not exercised enough of an oversight role with respect to its own affairs and those of its subsidiaries.

Liberal ethics critic Marlene Jennings called the process undertaken by JCCBI unacceptable in an era where most public agencies have oversight bodies to review ethics issues.

“I’m always amazed at how, even in this day and age, you have people in these high positions that don’t seem to understand that you need that barrier, that buffer,” said Jennings. “It then calls into question the impartiality of decisions they make, and whether or not those decisions are being made at arms-length.”

The JCCBI figured indirectly in a December 2009 investigation by the Senate ethics officer, who looked at whether Tory Senator Leo Housakos had breached any of the upper chamber’s rules when the Champlain Bridge contract was awarded to engineering firm BPR. Housakos had been working for a BPR subsidiary at the time, and was also a key organizer of the May fundraiser.

Senate ethics officer Jean Fournier cleared Housakos of any wrongdoing and also said he found no evidence of interference in the awarding of the contract by JCCBI. He noted the JCCBI board only approved the final choice of a team of experts.

Martel, who had previous ties with the Canadian Alliance, told Le Devoir newspaper last fall that it was an error in judgment to attend the fundraiser. He said he did not have any contact with the engineering firms while at the event.

“The Crown corporation never told me that I was in a conflict of interest,” Martel told the newspaper. “They told me to be more careful in the future and I intend to be.”