Good Day Readers:
The question really is, "What, if anything, has your
Senator done for you
lately?" Likely answer? Nothing! "But what have they done for themselves?" Or as about to retire (June) Conservative Senator Hugh Segal when comparing Canadian Senators to their American counterparts noted, "..... the role of the Canadian senate and its Commonwealth peers is "at best periphery and advisory."
With a behavioural culture toward expenditures that's based mostly on the honour system, no blind trusts for their assets, and only voluntary disclosure of corporate directorships to the Senate Ethics Officer, it's little wonder they're been financially raping the public purse while screwing over taxpayers. Time to turf them out on their asses!
Clare L. Pieuk
'Private interests' in the Senate: How business conflicts are everywhere in Canada's top legislative body
and Jen Gerson
Friday, April 18, 2014
In the dry tone reserved for routine business, Senator Larry Campbell made a
note for the parliamentary record: “I believe that I have a private interest
that might be affected by Bill C-290.”
The Bill, still awaiting the Senate’s approval, would allow Canadians to bet
on individual sporting events; currently, legitimate establishments allow wagers
on the outcomes of three combined games. This increases the odds of losing,
which discourages gambling, which is why the industry wants a change.
Which is also why Mr. Campbell’s “private interest” poses a possible
conflict: The British Columbia. Liberal sits on the Board of Great Canadian Gaming Corporation and,
thanks to arrangements like this, he has earned more than $201,000 from the
gambling firm, above his public salary and benefits.
Paul Massicotte, a Senator with professional connections to the horse-racing
industry in Quebec, similarly declared himself to be in conflict.
Like all such declarations, they were noted in the official transcripts. The
senators recused themselves and none of their colleagues appeared to have
anything more to say.
Although the conflicts between serving the public and personal financial
interests may not have seemed an issue, a National Post
they are everywhere in the red chamber.
While Ministers in the House of Commons must put their business assets in a
blind trust, senators, who can stall, alter or even quash proposed laws, are
under no such obligation.
The scrupulous ones try to segregate their personal business from their
political power. But in many cases, drawing a hard line between the two spheres
of interest is not as simple as recusing oneself from a Senate discussion,
committee or vote.
This raises the question: can a public representative serve two masters,
particularly when work for one could seriously affect work for the other?
“It’s shocking” senators are allowed to join corporate Boards, says Richard
Leblanc, associate professor of law, governance and ethics at York University in
“I think a reasonable person would conclude that this doesn’t make sense.
That a politician that makes laws can sit on the Board of a company that is
affected by laws. I think this has fallen through the cracks.”
The scandals surrounding former Liberal Senatorenator Mac Harb, and suspended Tory
senators Mike Duffy, Patrick Brazeau and Pamela Wallin, have escalated calls for
Senate reform. Next Friday, the Supreme Court will finally rule on the Harper
government’s reference question: How much power Ottawa has to change the senate
without a constitutional amendment, including imposing term limits, electing
senators, or even the power to abolish it.
Senator Mac Harb is shown on Parliament Hill Thursday, May 9, 2013 in Ottawa. The former Liberal Senator has had his court cse put over to April 22. Harb is charged with fraud and breach of trust in connection with the Senate expenses scandal.
(The Canadian Press
More than a third of the Senate currently hold positions on either public and
private Boards of Directors.
There may be more: senators publicly disclose this
kind of information only voluntarily on their websites, although they are
required to privately detail their personal business interests to the senate
itself. The National Post
was able to identify certain senators’ corporate
interests based on a thorough review of voluntarily disclosed information
combined with cross-referencing across databases compiled by Postmedia’s
national bureau, FP Infomart
and the federal NDP.
Mr. Campbell is not the only senator who has had to recuse himself recently.
In the past three years, the chamber’s Ethics Officer has noted several
They include: Larry Smith, who has an interest in a moving and warehousing
company connected to a Defence Department contractor; and Pana Merchant, who has
recused herself from several studies, including reports on prescription drugs
and an examination of CBC’s Radio Canada International
While the direct conflicts of interest are apparent, there are more subtle
conflicts that are just as relevant:
How can senators manage the duties of their
public service job, while running private businesses or serving as business
Data compiled by the National Post
show the largest source of extra
income comes from directorships.
While some senators continue to work in the
jobs they had before their appointment — mostly lawyers, consultants, public
speakers and landlords, and one Christmas tree farmer — at least 34 of the
current 96 Senators (the Senate count includes the suspended Senators) also sit
on the Boards of public and private companies.
The companies operate in a wide range of industries, including some highly
regulated sectors, from real estate, financial services, mining and energy, to
gaming and lotteries and hygiene. While most senators are affiliated with
privately held companies, at least 12 have paying positions with firms whose
shares trade on major exchanges in Canada and the U.S.
Senator Pamela Wallin speaks with Conservative Senator Hugh Segal, who did not vote along party lines to suspend her, before leaving the Senate on Parliament Hill after being suspended along with Senators Patrick Brazeau and Mike Duffy for their improper expenses in Ottawa on Tuesday, November 5, 2013.
(Justin Tang for National Post
“I find it very surprising that senators can sit on corporate boards,” said
Richard Powers, national academic director and governance expert at the Joseph
L. Rotman School of Management at the University of Toronto.
According to the Senate’s conflict of interest guidelines, the 105 senators —
nine seats are vacant, including three recently suspended Conservatives — can do
so, provided they disclose those positions and any earnings of $2,000 or
Although the federal government introduced tougher disclosure rules for
senators governing outside business interests, recent expense and housing-claims
scandals have raised questions about whether this is enough without more
transparency and accountability.
Hugh Segal, a Conservative senator and one of the more active outside the
chamber, agrees the issue merits further inquiry. “Is it appropriate for
senators to be on boards? I say that is a very legitimate public debate,” he
Long-time Liberal Senator David Smith goes even further. saying, “We’re going
to have to redo a bunch of the rules here.”
The dozen senators who are Directors of publicly traded companies have
pocketed at least $8.25-million in the last decade.Among the top earners: Irving
Gerstein, Mr. Segal, Mr. Campbell, James Cowan, the recently resigned David
Braley, and the recently suspended Pamela Wallin.
Most did not respond to interview requests or declined to comment when
contacted by the Post
James Cowan, leader of the Senate caucus identifying as Liberal, withdrew
from his law practice in Nova Scotia and stepped down as chancellor of Dalhousie
University, Halifax, two years after he was appointed a senator in 2005.
“I didn’t go to the Senate to make money nor do I feel like I’ve made enough
money that I can afford to do the job for nothing,” he said, acknowledging he
has been paid $243,992 for acting as the Halifax Airport Authority
“If people think they can fulfill their jobs as senators and do other things,
I don’t think there’s anything wrong with that.”
Mr. Segal, who sits on the boards of Just Energy Group Inc. and Sun Life
Financial Inc., and has announced that he will leave the Senate in June, also
argues that the Senate job is not overly time-consuming.
“The truth about the Senate is that it sits 80 to 90 days a year,” he
In his eight years as a senator, he has earned about $2.7-million in Board
fees, stock options from directorships, and fees as acting senior fellow at the
policy studies and business schools at Queen’s University, Kingston, Ontario.
However, experts say sitting on corporate Boards has become increasingly
onerous in the past 13 years.
Sweeping corporate governance reforms in Canada and the United States have
curtailed the practice of appointing “trophy” Directors — high-profile
politicians, diplomats and academics. Their responsibilities and personal
liabilities have also increased.
“The demands of time are enormous and the due diligence requirements are such
that it’s questionable whether you can cover duties as both a corporate Director
and a Senator,” said Professor Powers.
In the private sector, executives are limited to three Boards, with terms
usually no longer than nine years. An effective Director is also expected to
devote 250-300 hours a year to a public company, and 100-150 hours to a private
or not-for-profit entity.
The commitment increases if they sit on Board committees, like Mr. Segal (two
at Sun Life); and Mr. Braley (three, including Swisher Hygiene, where has earned
about $191,000 since his appointment to the Board in 2010.
Chairing a Board is even more onerous. Mr. Gerstein, Chairman of the Board of
Boston-based Atlantic Power, also heads four committees there, including the
important audit committee. He has been paid about $1.72-million in Directors’
fees and options since his appointment in 2009.
Senators receive a basic annual salary of $132,200, and can earn more by
participating in the 17 committees and two joint committees, where most of the
Senate’s legislative and public policy work is done.
Mr. Gerstein gets an extra $10,000 a year for chairing the Senate’s
influential banking, trade and commerce committee. Fellow members Wilfred Moore,
Douglas Black and Paul Massicotte are among the busiest senators working.
"I simply, in my own mind, couldn’t do justice to my Senate
The bottom line: if a senator is committed to numerous corporate Boards and
committees and must devote thousands of hours a year to outside work, how much
time does that leave for Senate responsibilities? Not much, says Mr. Cowan.
“I simply, in my own mind, couldn’t do justice to my Senate job,” he said.
“Maybe some of the other senators feel they can manage their workload but I
can’t speak for them. I certainly haven’t found it to be a part-time job.”
Mr. Segal says he resigned three corporate Directorships since joining the
Senate because “I wanted to make sure I had the time to do a proper job as a Director and follow best practices and meet my primary responsibility as a
member of the upper house.”
Outsiders ask whether senators should profit from Board appointments that
have much to do with their political and government connections as any
“It smacks of self interest,” said Professor. Leblanc. “Senators are named to Boards to open doors and advance the interests of a company while getting paid
by taxpayers and collecting Directors’ fees from shareholders. It’s frankly
What is less clear is how the public interest is served by allowing senators
to sit on private-sector Boards.
“They were appointed because of their proximity to power, which is all the
more reason to have a dividing line,” said Professor Leblanc.
“Just the perception of a politician sitting on a commercial Board is
troubling. And the perception of a conflict is just as important as a real
For example, fiduciary duty requires Directors of private and public
companies to act in shareholders’ best interests. But, senators are also members
of government, who have taken an oath to the Queen to act in the best interests
of all Canadians. How do they reconcile this conflict?
“If I’m a constituent of that senator, I would be concerned about whether
that politician was serving me or the corporation. Are my interests being
compromised because the politician is being paid by the corporation in Directors
fees and other incentives, monetary or not that may be compromising?” said Mr.
Charlie Angus, the New Democrat Party’s ethics critic, says it’s high time
the rules governing senators were overhauled.
“Conflicts have been longstanding but they’ve been under the radar,” he said.
“Canadian attitudes have changed and the rules haven’t kept pace with changing
Conservative Speaker of the Senate Noel Kinsella.
(Adrian Wyld/The Canadian Press
That’s why the Senate’s culture of behaviour and controls is just as
important as its rules, says Professor Powers. He points to the housing and expense
claims, now being investigated by the Royal Canadian Mounted Police, as proof
the current conflict-of-interest rules — which are largely based on an honour
system — are too permissive.
More disconcerting, he said, is that without an independent auditor to
scrutinize senators’ activities outside government, the upper chamber and its
members may find their reputations irrevocably tarnished.
Indeed, some senators have run into problems with their Board
Last May, Mr. Braley quietly resigned from the Board of Swisher Hygiene Inc.
amid claims of accounting fraud and a class-action lawsuit from irate
shareholders alleging the once-high-flying company had manipulated its financial
Then there’s the case of George Furey, who sits on the Board of Canada
Fluorspar Inc. He received $111,438 in cash and stock in 2010-12, while the
company negotiated a $17-million loan from Newfoundland & Labrador to build
a deep-water port facility.
Washington has much tougher regulations for its 100 U.S. senators. Anyone
employed for more than 90 days and earning more than US$25,000 cannot sit on the Boards of publicly held or publicly regulated companies.
That’s because this “involves a fiduciary duty — and, thus, an increased
potential for conflict of interest,” says the U.S. Senate’s Conflicts of
Interest, Ethics Rules.
Senators, who are legislators similar to Canadian MPs, may sit on Boards or
act as officers of non-for-profit organizations. They cannot be paid for their
work and their time.
Mr. Segal dismissed the comparison, arguing U.S. senators are “in real
positions of power,” while the role of the Canadian senate and its Commonwealth
peers is “at best, periphery and advisory.”