Did corporate interests create conflict for city councillors?

Post by Daniel Fontaine in

29 comments

conflict story
Vancouver's CRTC debate still making headlines

It was a bit bizarre last week at Vancouver city council. When the elected officials weren't debating news articles from Maclean's magazine or fighting over lucrative committee appointments they were spending a fair chunk of time focusing on the CRTC's internet billing policy. It was kind of like when COPE used to introduce motions regarding international space treaties and making Vancouver a nuclear weapons free zone.

Were it not for the investigative skills of Bob Mackin over at 24 Hours, it might just have been another wacky week at silly hall. That's because a story appeared online in his newspaper today which opens the debate regarding whether Vision's councillor Raymond Louie and COPE's David "Carbon" Cadman were in a conflict of interest.

According to Mackin, both of these men own shares in communication companies that may well be financially impacted by the CRTC's decision. Thus their active participation in a lengthy debate on a motion which could impact their stock holdings caught the attention of the 24 Hours team.

We've written in the past regarding Cadman's extensive investment portfolio. According to his financial disclosure, the left leaning councillor (who claims to be one of Vancouver's "greenest" elected officials) owns part of Exxon Mobil, Verizon Communications, SBC Communications, Coca Cola, Fannie Mae, Ford Motor Co., Eli Lilly and many other blue chip multinational corporations.

Meanwhile, according to 24 Hours, Vision Councillor Raymond Louie:

...owns shares in BCE Inc. Communications (the parent of Bell), Bell Aliant Regional Telecommunications and Manitoba Telecom.

Given that both of these councillors have a financial stake in the communications sector, one would assume they might have chosen to recuse themselves from the debate while the CRTC motion was on the order paper.

Did that happen? Nope. In fact, both councillors not only stayed in the room during the debate, the actively participated in it (see the council video).

When Mackin asked each councillor whether their participation in the CRTC debate might be perceived as a conflict of interest, they both stated that they were not. Although they don't dispute the fact they own telecom shares, they told Mackin they weren't in a conflict because of the way they voted.

This is very interesting logic that I'm uncertain would pass muster at either the provincial or federal level. 24 Hours highlites a section of the Vancouver Charter which relates to potential conflicts:

Section 4.2 of the city’s code of conduct says a conflict exists when an individual is or could be influenced or appear to be influenced by personal interest. “Personal interest” can include direct or indirect financial interest, bias, pre-judgment, close mindedness or undue influence.

It should be noted this isn't the first time the issue of a potential conflict of interest has come up when it comes to Coun. Raymond Louie. As we've previously written, there are many people in Vancouver who think he's in a conflict of interest in his role as Chair of the PNE board. It's a claim that Louie has dismissed outright.

What do you think? Will other mainstream media pick up on this story and ask some tough questions? Do you agree with Councillors Cadman and Louie that they were not in a conflict of interest? Let us know by leaving a comment below.

- Post by Daniel

29 Comments

I don't know if I'd go that far. Most people with a mutual fund RRSP would own Bell as part of their portfolio. And anything they decided wouldn't have moved the stock price a penny. There needs to be a standard, but do we really want it that tight?

That being said, they had no business wasting council time with this issue to begin with. Unless the city wants to get into the costly telecom industry, it's way out of their jurisdiction.

I agree. I gotta defend them on this kind of piece, Mike.

These guys own what the industry calls a "Wrap" account. It's a Managed Account that they have no control over, much like a mutual fund or a pension fund.
The main difference is that they hold the actual stocks, rather than a unit of a mutual fund.

Not even their Investment Advisor controls the holdings. It's simply a managed pool of assets. By holding the actual stocks rather than units of a fund there are some simple tax advantages. Buy and sells are made by the third party. The client and their advisor has no say on the holdings.

If they owned an ETF of a major stock index you probably wouldn't write something like this but the fact is, they would own the same things, just in a different way.

Mike, a blog like this is really a cheap shot from an uninformed view. You should take it down, sincerely.

Jim Horgan tried to slam Gordon Campbell for the same thing when Alcan was making a deal up north. Gordo owned a wrap account and it had like 100 shares of Alcan. Horgan cried conflict. There's no conflict. No more than a union flunky like Horgan having a pension plan. His pension plan owned it too.

Consider the source on this one (me). There is no conflict here. It's just a cheap shot to try and sway the ignorant. You can do better, Mike.

It depends on the effective market worth of the investments. If it's a few hundred bucks who cares. But if it's a substantial amount then it might be a factor even if it's a wrapped investment.

@rf I think you are missing the point of this article. Maybe it was trying to get across the fact that councillors shouldn't be debating crtc policy at all. Then there would be no issue with whether they are in potential conflict or not.

BTW Does Louie owns shares outright or are they in a blind trust? Hard to tell with info we've been provided. Would that make a difference?

You should be more concerned with their "bias, pre-judgment, close mindedness or undue influence".

This Council isn't in it for the money, even though $60K/yr is 2 or 3 times more than most of them made before their election and in those jobs they actually had to do something. Their focus is on making money for the developers who donated to their campaign and, after that's done, reforming human nature.

Vision has made no secret of their "social change" agenda and a good case can be made for the undue influence of American donors. Close-mindedness, bias and prejudice are their trademark or, as they like to call them, "beliefs".

The defining characteristic of conflict of interest is that those in conflict never, ever admit it. If civic unions provided the cash and "volunteers" that elected you, how can you represent the public interest during contract negotiations?

Jim, I completely agree with you on this part.
Why is it that left wing city councils can't stick to local issues? The old Cope Council did this all the time.

If Reimer wants to change the CRTC, have the guts to run federally and make it happen. Stop wasting city time debating it.

They have a 30 foot sinkhole on Marine Drive and they are debating a topic they have ZERO influence or control over.

Not quite true on the Cope call.

They spent $25 K on a communications plan in case we were contacted by 'aliens'.

On another note - I understand the city is spending $43 million on planting 150,000 trees throughout the city over the next x years as part of their 'greening Vancouver' plan.

Why???

Zero influence or control? Not once has a nuclear bomb been detonated within our city limits since they were banned by a previous COPE-dominated City Council. That's an accomplishment this council must surely look back on with envy.

A Vision-led council hopes that it too can do Vancouver proud. Leave the day to day running of the city to those who actually care - this council has real work to do!

(... and you all thought a homeless chicken was only good for making soup...... )

Hey douglas:

Our hard working mayor and councilors just got a 'bump' in pay - a 3.14% increase.

They are all making roughly $2 K over what they were making last year.

Like Vancouver City Council, you should stick to things you actually know something about. You are sounding sillier and sillier on this thread. Have you actually read the CRTC materials and do you understand Bell's position?

If you are going to follow this thread, please disclose your own equity holdings and those of your sponsors. Hold any shares in companies that benefit from oil consumption? How about shares anywhere in the automotive sector? Are you going to ask all NPA candidates to disclose and then recuse themselves everytime they vote on something that leads to increase automobile use or promotes the energy industry?

Your eagerness to attack Vision is making you look foolish.

I would agree with a cost-of -living adjustment in principle, but this council and mayor have to actually be seen as doing something remotely resembling running the day-to-day aspects of the organization entrusted to them.

All my sarcasm aside, this council waste a lot of time on a lot of non-important (unless you are a chicken) initiatives while the day-to-day problems go down the big sinkhole. I am almost inclined to believe we should dispense with a council altogether and just retain the necessary staff to pick up the garbage and repair the potholes. An election can't come soon enough.

I know you will join me in shedding a sympathetic tear at the realization that, having exceeded the $61K/yr level (placing them among the top 10% of Canadian incomes), they are now in the highest income tax bracket. 43% or so goes right back where it came from. Are club memberships and city-wide free parking permits a taxable benefit?

It's a shame they hounded from office the only politician who ever reduced income taxes.

Steven:

Are the telecommunications companies and the CRTC now answerable to Vancouver City Council?

It does not matter one bit the views of city council on this issue (and many others to boot) IF said issue does not fall within their governing mandate.That is why some people are pissed off, and why Vision are entirely ripe for legitimate attack here (unless of course I thoroughly misunderstood their mandate for civic governance, which i did not think covered such things as telecommunications policy, media criticism, and private funding for the development industry)

The issue of the stock holdings is in my mind a bit off base (per rf) and a red herring. Does the CRTC issue merit time and debate at this level of government in the first place? Or is Vancouver City Hall planning a takeover of the CRTC?

Individuals have every right to complain to the CRTC to lobby them towards whatever policy best reflects their personal views. A governing body elected by ourselves on the understanding they will fix our potholes and maintain our sewers does not.


Yes, there are far worse things to be upset about but CC did not write the initial article so save some of the rocks for Bob Mackin.

The council debate was silly, as are many council debates. Fortunately, there were not people waiting to speak for a subsequent agenda item that had to wait for hours while this nonsense unfolded.

As for wage increases - maybe we would get brighter light bulbs on council if we paid a little better.

The telecommunications industry's pricing structure is arbitrary and based mostly on how seriously they take your threat to move to another provider. I don't see why a City Council shouldn't have an opinion on this topic, nor why they shouldn't communicate that position to a regulatory body. I think the comparison to roads and sewers is apt but misguided.

The Internet is arguably as important to the economy as any other form of transporting goods and information and municipal gov'ts are sensible to be aware of issues and communicate policy suggestions to the federal level, as a means of representing local interests.

Sure, Council can have an 'opinion' - but does the discussion require a formalized motion and debate when the issue is totally out of their jurisdiction and mandate? If they have nothing else to do, perhaps they can go and help out in one of the departments where they cut the budget.

Unless City Council decides to start laying down fiber optic cable, they have zero role to play in regards to the telecom industry.

Hear, hear. Let's keep Vancouver politics focused on Vancouver.

Douglas

I must have been more than usually vague in my comment. I comepletely agree with you that this is not a Vancouver city government issue and that the debate is a waste of time. I doubt that any of the people on council or at City Caucus have done the research needed to have an important point of view on the issues involved.

I also think that this site is clutching at straws in this post. To suggest that this shows a conflict of interest is just silly.

I agree with you about clutching at straws this time. Sometimes we bash this Vision council just to bash them. On the potential conflict of interest I see no issue - but damn I enjoyed laying into them for going beyond their scope!

@Julia:

From the City's charter:

"Power to watch legislation

186. Where it is satisfied that any proposed Dominion or Provincial legislation affecting the city should be watched, promoted, or opposed, the Council may provide for such watching, promotion, or opposition, and may defray the expenses incurred in relation thereto.

1953-55-186."

I must say I stand corrected.

Now I ask everyone to read the attached and discuss whether Raymond Louie should now be obliged to resign.

Read the relevant parts of the Vancouver Charter and remember to have fun kids!


I re-read the motion, and also CRT decision 2010-255 (www.crtc.gc.ca/eng/archive/2010/2010-255.htm) I will not debate the merits or non-merits of the city motion itself, but only the conflict of interest as it pertains directly to Councillor Louie, father of the motion. Despite what Clr. Louie said, how he voted has nothing to do with whether he acted properly or not.

According to 24H, unlike Councillor Cadman, Raymond Louie is a shareholder in Bell's parent company and Bell Alliant. The applicant to the CRTC trying to introduce usage-based billing is Bell Alliant and Bell Canada.
Raymond Louie appears at first blush to be in conflict for bringing forth a motion pertinent to this matter without disclosing his holdings. However the Vancouver Charter needs to be consulted to determine if he has stepped out of line or not. VC 145.2(2) suggests Raymond Louie is out of line. VC 145.2 (6-d) may let him off the hook.

I attach the relevant portions of Vancouver City Charter. Sorry its lengthy

Disclosure of conflict
145.2 (1) This section applies to Council members in relation to

(a) Council meetings,
(b) Council committee meetings, and
(c) meetings of any other body referred to in section 165.7 [application of open meeting rules to other city bodies].
(2) If a Council member attending a meeting considers that he or she is not entitled to participate in the discussion of a matter, or to vote on a question in respect of a matter, because the member has
(a) a direct or indirect pecuniary interest in the matter, or
(b) another interest in the matter that constitutes a conflict of interest,
the member must declare this and state in general terms the reason why the member considers this to be the case.
(3) After making a declaration under subsection (2), the Council member must not do anything referred to in section 145.3 (2) [restrictions on participation].
(4) As an exception to subsection (3), if a Council member has made a declaration under subsection (2) and, after receiving legal advice on the issue, determines that he or she was wrong respecting his or her entitlement to participate in respect of the matter, the member may
(a) return to the meeting or attend another meeting of the same body,
(b) withdraw the declaration by stating in general terms the basis on which the member has determined that he or she is entitled to participate, and
(c) after this, participate and vote in relation to the matter.
(5) For certainty, a Council member who makes a statement under subsection (4) remains subject to section 145.3 [restrictions on participation if in conflict].
(6) When a declaration under subsection (2) or a statement under subsection (4) is made,
(a) the person recording the minutes of the meeting must record
(i) the member's declaration or statement,
(ii) the reasons given for it, and
(iii) the time of the member's departure from the meeting room and, if applicable, of the member's return, and
(b) unless a statement is made under subsection (4), the person presiding at that meeting or any following meeting in respect of the matter must ensure that the member is not present at any part of the meeting during which the matter is under consideration.
1999-37-320; 2003-52-504.

Restrictions on participation if in conflict
145.3 (1) This section applies if a Council member has a direct or indirect pecuniary interest in a matter, whether or not the member has made a declaration under section 145.2 (2).

(2) The Council member must not
(a) remain or attend at any part of a meeting referred to in section 145.2 (1) [disclosure of conflict] during which the matter is under consideration,
(b) participate in any discussion of the matter at such a meeting,
(c) vote on a question in respect of the matter at such a meeting, or
(d) attempt in any way, whether before, during or after such a meeting, to influence the voting on any question in respect of the matter.
(3) A person who contravenes this section is disqualified from holding an office described in, and for the period established by, section 141 (2) [disqualification], unless the contravention was done inadvertently or because of an error in judgment made in good faith.
2003-52-504.

Restrictions on inside influence
145.4 (1) A Council member must not use his or her office to attempt to influence in any way a decision, recommendation or other action to be made or taken

(a) at a meeting referred to in section 145.2 (1) [disclosure of conflict],
(b) by an officer or an employee of the city, or
(c) by a delegate under section 161 [delegation of powers],
if the member has a direct or indirect pecuniary interest in the matter to which the decision, recommendation or other action relates.
(2) A person who contravenes this section is disqualified from holding an office described in, and for the period established by, section 141 (2) [disqualification], unless the contravention was done inadvertently or because of an error in judgment made in good faith.
2003-52-504.

Restrictions on outside influence
145.5 (1) In addition to the restriction under section 145.4 [restrictions on inside influence], a Council member must not use his or her office to attempt to influence in any way a decision, recommendation or action to be made or taken by any other person or body, if the member has a direct or indirect pecuniary interest in the matter to which the decision, recommendation or other action relates.

(2) A person who contravenes this section is disqualified from holding an office described in, and for the period established by, section 141 (2) [disqualification], unless the contravention was done inadvertently or because of an error in judgment made in good faith.
2003-52-504.

Exceptions from conflict restrictions
145.6 (1) Sections 145.2 to 145.5 [disclosure of conflict; restrictions on participation; inside influence; outside influence] do not apply if one or more of the following circumstances applies:

(a) the pecuniary interest of the Council member is a pecuniary interest in common with electors of the city generally;
(b) in the case of a matter that relates to a local improvement project, the pecuniary interest of the Council member is in common with other persons who are or would be liable for the cost of the local improvement project;
(c) the matter relates to remuneration, expenses or benefits payable to one or more Council members in relation to their duties as Council members;
(d) the pecuniary interest is so remote or insignificant that it cannot reasonably be regarded as likely to influence the member in relation to the matter;
(e) the pecuniary interest is of a nature prescribed by regulation.
(2) Despite sections 145.2 to 145.5 [disclosure of conflict; restrictions on participation; inside influence; outside influence], if a Council member
(a) has a legal right to be heard in respect of a matter or to make representations to Council, and
(b) is restricted by one or more of those sections from exercising that right in relation to the matter,
the Council member may appoint another person as a representative to exercise the member's right on his or her behalf.

by definition the "indirect" interest is where this goes off the rails.
The Canada Pension Plan holds these stocks. Therefore we all have an indirect interest.

Pension Plans, Mutual Funds, Index Funds, you name it, they all have some ownership and therefore just about anyone would have indirect holdings.

Now if Raymond bought shares, on a non-discretionary basis, that's another story.

Don't count on it.

And Chris, there's no bike-lane on the information superhighway.

If if Reimer and co. are dumb enough to think that if they were actually successful in this rule change, that the telco's wouldn't just jack up prices on everyone, she's even more ignorant to actual business than I thought.

Ahem.

In passing I note that you must be thinking of Section 145.6(1)(d), the "remote or insignificant" clause, and perhaps also (with a clever lawyer and depending on Bell's current market share) Section 145.6(1)(a), "in common with electors...generally".

This is why they must disclose (honour system) on taking the oath of office. Even if they forget later about the recusing stuff, it's out there and bears on motive. Remember, they were elected to represent the interests of ALL the citizens of Vancouver, not just those who hold a few shares of BCE.

You are really stretching the spirit of the charter on this one. And when does watching turn into motions and formal debate with no balancing information. Sounds more like they just wanted to hear themselves talk.

There is endless legislation that they SHOULD be watching that they are not that actually affects city residents but hey, what fun is that?

Julia
as Mr. Keam invoked the charter, I would love it if we all follow the charter - in its narrowest form. Therefore I posted the charter rules verbatim.

The reality is this is probably just tempest in a teapot (my previous viewpoint and the issue is one I don't give a hang about).

However, if Chris Keam wants to trot out the charter in defense of the council, so I too would love to, in the spirit of the piece discuss, using the same narrow confines of the charter, whether Councillor Louie must now resign (he of the undisclosed BCE shares - Mr. Cadman in my eyes is wholly off the hook).

If nothing else, this is amusing. After all, if you are the CRTC, and you receive a strongly worded letter from Vancouver City council asking you to reverse a decision, and the seconder of the motion leading to the motion is a shareholder of the applicant to the CRTC of said decision, are you going to :

a) quake in your boots or
b) pin the letter up on the wall alongside a photo of a group of drunken Shriners as a source of continued amusement ?

I applaud City Council for weighing in on issues like the MacLeans article or CRTC policies and urge them to apply their considerable, if unappreciated, talents to other important issues like the Middle East, North Korea or the search for the cure for the common cold. Yes, they can have no impact on these issues but at least it doesn't cost taxpayers unlike their Green Policy which will have zero impact on climate change which has and will continue to cost us a bundle.

Of course it would be nice if they had some positive results such as ensuring the City can fill in a sinkhole on a major artery in less than a week but that would be a bonus.

Private sector business usually charge what the market will bear to suggest telcoms are arbitrary because they deploy a competitive pricing strategy is a bit odd. Sounds like a quote from CEP CRTC submission. This is not surprising given it comes from someone who supports/advocates allocating hundreds of miilions of dollars worth of real estate to a handful of cyclysts. Working downtown I see congested traffic made worse by constricted aceess due to bike lanes. Ever notice a tarffic jam in a bike lane???

landlord:

Councillor Louie tells us he is in no conflict because he voted as each Vancouverite would have no doubt approved, regardless of their unsolicited opinions on the issue {Section 145.6(1)(a)}.

That proves there is no conflict.

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