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  • Cash-for-access flourishes in BC politics


    Corporate donations and lobbying make meaningful climate action—and democracy—impossible.

     

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    THIS MONTH OUR MAGAZINE features art on the cover (above) by Luke Ramsey. It seems to reflect perfectly the sort of magical thinking that abounds these days. Just as the dinosaurs did not dodge the asteroid, humans will not dodge catastrophic climate change unless we quickly wean ourselves off fossil fuels. Donald Trump’s dinosaurish insistence on bringing back coal, and, closer to home, the Trudeau government’s magical belief that it can be a climate champion while developing and exporting as much bitumen as possible, illustrate the magical-thinking theme well.

    Another deep vein of magical thinking here in BC is the idea that political parties can accept vast sums of money from industry without being influenced by it. Or, in reverse, that corporations and unions can donate millions with no expectation of access or payback. While it applies to many different industries, donations from the coal, oil and gas industries seem especially worrisome. The climate has already changed in dangerous ways; if we are to have any success at maintaining a liveable planet, we must leave most known fossil fuel reserves in the ground (68-85 percent, according to Oil Change International, to avoid going beyond a 1.5 to 2 degrees Celsius temperature increase).

    But BC’s industry-friendly policies won’t get us there. At the very least, the next government must remove the extraordinary ways we’ve allowed the fossil fuel industries (and others) to have influence over public policy.

    BC has no limits on how much donors can give to political parties. And it’s all tax deductible. The real estate, pharmaceutical, tourism and fossil fuel industries have fuelled the Liberals for decades, and unions have donated generously to the NDP. Besides the lack of limits on amounts, unlike most other provinces and the federal government, BC has not banned corporate and union donations. Worse, political parties in BC are allowed to accept unlimited generosity from outside the province and country.

    It’s truly scandalous. And it’s earned BC a lot of negative attention. A recent story in the New York Times was titled “British Columbia: The ‘Wild West’ of Canadian Political Cash.” A Globe and Mail investigation showed that lobbyists were breaking one of the few lax rules that do exist—often being illegally reimbursed by corporations for donations made under their own names (some felt they’d be blacklisted if they didn’t give regularly). That led to an RCMP investigation, and to the BC Liberals returning $174,000.

    This spring, Postmedia investigated the connection between Liberal Party donors and government-awarded contracts, and found that “Among the top 50 donors to the BC Liberals—who have collectively given more than $30 million in the past decade—more than half have received supplier payments or transfers from the BC government.” The Dogwood initiative also did impressive analysis on the relationship between top donors and road-work contractors. Laughably, or perhaps magically, both Liberal politicians and corporate donors dismissed as “ridiculous” the idea that donations could influence contracting.

    Integrity BC has reported on donations from Chinese and Malaysian state-owned companies, international cruise lines, and other generous foreign corporations—and, for the NDP, foreign-based unions.

    The Wilderness Committee recently noted that “donations to the BC Liberals from fracking, gas pipeline and LNG companies have totalled $1,007,456 since the last election.” The Committee’s Peter McCartney stated, “This industry receives billions of dollars in Provincial tax breaks and subsidies from the very government they’re paying to elect.” Local concerns lose out as a result. “We see time and time again this government side with frackers and LNG companies over the people they represent. All this money in our politics sooner or later costs local communities and the global climate.”

    Democracy Watch and the PIPE UP Network have gone to court (the case will start to be heard a few days before the election), claiming that $560,000 in political donations from project proponent Kinder Morgan and other companies connected to the pipeline sector tainted the Province’s environmental assessment so it should be overturned. Their lawyer, Jason Gratl, told the Globe the facts are not in dispute so “The legal test is whether a competent, informed observer would consider the amount sufficient to taint the decision making so as to lend the decision making a conscious or unconscious bias.”

    Well here’s a hint about what that “competent, informed observer” might think: A March 2017 Angus Reid poll found that 76 percent of British Columbians felt that the Liberal government “is only interested in helping its political donors and big business.”

    The Liberals, however, seem blinded by the money they rake in. They’ve had lots of opportunity to change things in the last 16 years, but all they are willing to promise if elected is to establish an independent panel to “recommend” possible revisions to the rules. Fortunately the two other main parties are ready to overhaul the rules quickly, banning corporate, union, and foreign donations and setting a limit on individual ones (e.g. the federal limit is $1550/year). The Green Party voluntarily refused to accept corporate and union donations starting in September 2016.

    As I write at the end of April, I don’t know who will form the next BC government. But the chorus for change on the donation front—and the evidence for its need—is loud and consistent. So there is room for cautious optimism that the rules around donations will change.

    Unfortunately, a lot of damage has already been done. And, as a new report notes, lobbying rules are also working to corrupt governance on the climate action front, so they too must change.

     

    “MAPPING CORPORATE INFLUENCE,” released in March by the Canadian Centre for Policy Alternatives (CCPA) and the Corporate Mapping Project, zeros in on spending-for-influence practices of the fossil fuel industries. It found “a remarkable and disturbingly close relationship between industry and the provincial government—one that not only contradicts the Province’s stated aim to fight climate change but also undermines democracy and the public interest.”
    On the donations front, its team of researchers combed through the Elections BC database, taking a line-by-line approach, explained Nicolas Graham, a doctoral student in sociology at the University of Victoria. This was very time-consuming but necessary because, as Graham told me, “a lot of companies give under different names, so you can easily miss companies.”

     

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    UVic Professor Bill Carroll and doctoral student Nicolas Graham comment on Mapping Corporate Influence

     

    The researchers found that, since 2008, the fossil fuel sector donated $5.2 million to political parties in BC—92 percent of which went to the BC Liberals. “The top 10 fossil fuel industry donors account for more than three-quarters (78 percent) of total donations, with the two top firms—Teck Resources and Encana—contributing nearly half.”

    A “distinct geography of giving” was noted, with the majority of the top 10 firms headquartered in Calgary. Only two of the companies are headquartered in BC.

     

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    Their generous donations to BC parties allow fossil fuel firms to be heard by key political decision-makers. As Graham told me, “If you have a political party that feels heavily indebted to political donors, it’s certainly going to help [donors] gain access or at least develop this familiar relationship.”

    Like so many others who have looked at the facts, Graham and his co-authors recommend simple, straightforward fixes: banning corporate and union donations to political parties outright; and limiting individual donations to people whose primary residence is in BC—“and these should be capped at a modest level that prevents those with deep pockets from skewing the democratic process in their favour.”

    What’s not so simple to fix, and constituted the second half of their report, is the undue influence fossil fuel corporations have on public policy through lobbying. Donations and lobbying work hand-in-hand, said Graham, and “paint a troubling picture, a kind of troublingly close relationship between the sector and the government and raise concerns about the ability of the government to regulate the industry in the public interest.”

    Lobbying activity was more difficult to research than donations because, said Graham, “there are major transparency issues” to contend with. Still, going on the basis of what information was available, the team came up with 22,000 lobbying contacts between fossil-fuel companies and government officials between 2010 (when the lobbyists registry was set up) and 2016. By comparison, environmental organizations had only 1324 contacts over the same period. Almost all of the corporate contacts (19,517) were made by 10 firms—many of them the same as the top donors.

     

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    Graham found the sheer volume shocking, especially when he realized that it worked out to 14 lobbying contacts per business day from that sector alone. Ministries lobbied by the fossil fuel corporations and associations include Energy and Mines, Natural Gas Development; Environment; Aboriginal Relations and Reconciliation; Finance; Forests, Lands and Natural Resources; as well as the Oil and Gas Commission.

    Rich Coleman is the most targeted cabinet minister, but as the report notes, “Twenty-eight percent of lobbying by the top 10 most active lobbyists is with cabinet ministers—an unrivalled level of access.”

    And then there are all the bureaucrats (48 percent) and MLAs (24 percent)—both NDP and Liberal—who are also lobbied. NDP leader John Horgan is one of the top three lobbied MLAs.

    Remember, this is just from the fossil fuel industries. The real estate industry is even more active. Which means BC’s public servants are spending a lot of their precious taxpayer-funded time listening to skilled pitches from corporate lobbyists.

    As the report states: “Considering that a handful of organizations and state officials are the target of most lobbying by the fossil fuel industries, the network amounts to a small world, dominated by the few large corporations that control much of this economic sector. While it is not possible to determine the extent to which a given lobbying effort directly influences a specific policy outcome, what shines through is the extent to which well-funded and well-organized corporations (and their industry associations) exert continual pressure on, or work in tandem with, key decision-makers to develop policies that align with their interests.”

    Co-author Bill Carroll, a UVic Sociology professor and co-director of the Corporate Mapping Project, drew my attention to the fact that the Canadian Association of Petroleum Producers (CAPP)—with 29 registered lobbyists in BC—is the most active lobbyist, bar none, at both the provincial and federal levels.

    This helps explains a number of things. Like why the provincial government ended up endorsing a weak climate plan despite their Climate Leadership Team’s recommendations for a more aggressive  lowering of emissions. CAPP alone, in an 11-month period, made 200 lobbying contacts with government in relation to development of its Climate Leadership Plan—a plan condemned by environmentalists for doing little to reduce global warming.

    It’s also now clearer for me why pipelines have been approved despite so much opposition and their role in fostering climate change. One of the Liberals’ most generous donors and most active lobbyists is pipeline promoter Encana.

    The lobbying efforts—combined with hefty donations—also explain how LNG became so central in the 2013 election and why in spite of everything, the Liberals continue to beat that drum. If proposed LNG processing and export facilities come to fruition, they would represent a major new source of emissions. Christy Clark said it was about jobs, but maybe that’s because so many gas promoters had her ear long enough and often enough to help her figure out the way to sell it. They also had the ear of the Oil and Gas Commission, which was heavily lobbied, including by its former CEO Alex Ferguson.

    The corporate largesse and lobbying pay off in policies favourable to the extractive industry. Issues such as royalty rates from hydrocarbon extraction, land access, corporate taxation, consultation processes with First Nations, greenhouse gas emissions, and LNG development, are among the areas lobbyists weigh in on. “The influence can most clearly be seen in the government’s strong advocacy for the development of an LNG export industry,” writes the Corporate Mapping team. Cited as examples are credits provided to industry for deep drilling and road infrastructure assistance. It notes too that natural gas royalties have plummeted in BC since 2008/09 despite substantial increases in production levels, and that in 2014 the Liberal government cut its proposed LNG income tax in half (from 7 to 3.5 per cent). “This made its already highly unlikely claim of a $100 billion ‘Prosperity Fund’ arising from LNG over 30 years (Office of the Premier, 2013) even more far-fetched. In addition to a reduced LNG income tax, companies can deduct the full capital costs of their LNG plant investment before they pay the full tax (locked in at 3.5 percent).”

     

    IT’S HARD TO SHOCK PROFESSOR CARROLL. He’s done scads of research over the years on corporations and their influence. He knows corporate power is highly concentrated. Still, he admitted, “It was interesting to see the extent of overlap between the top lobbyists and the top corporate donors. Seven out of ten are the same company, and these companies account for three quarters of all the lobbying and all the corporate donations coming from this key sector. So it’s an extreme concentration of corporate influences. And, obviously, that’s very worrying from a democratic perspective because the logic of this runs against the grain of one person, one vote.”

    When I asked about the Liberals’ promise to set up an independent panel to review the situation, Graham characterized it as “dancing around the issue” and “ a bit of delay tactic.” The only argument proffered by the Liberals in defense of the current donation free-for-all is that without corporate and union donations, taxpayers would have to fund election campaigns. Carroll dismissed this as perplexing if not hypocritical, especially in the face of glitzy pre-election-period  government ads—paid for by tax payers. The government spent $15 million, in fact, of taxpayers’ funds blanketing TV airwaves and social media bragging about their 2017 budget; the auditor general expressed her concerns, though had no power to stop it.

    In terms of what to do about lobbying, Mapping Corporate Influence advocates an overhaul of the Lobbyists Registration Act, “which creates major loopholes that impede true transparency.” At minimum, it recommends lobbyists be required to report who they have lobbied—rather than to list who they expect to lobby—including the specific date of communications and a more detailed description of the type of contact that occurred, and its subject matter. “Lobbyists should also be required to disclose meetings initiated by public officials. And disclosure of the costs of lobbying—fees paid to professional lobbyists and firms by clients—should be reported.”

    It’s not rocket science; and many others have recommended similar interventions. Who knows—maybe we’ll have a new party in power come May 9. Both the NDP and Green Party have promised to change the rules around donations at least. That would give developing a good climate change strategy a fighting chance, despite the baggage left behind by all the cozy corporate-cash-for-access-and-influence of past decades.

    In the words of the Mapping Corporate Influence authors, “At this climate crossroads any realistic strategy for tackling climate change must involve a gradual wind-down, rather than expansion, of fossil fuel industries, leaving the majority of oil, gas and coal reserves in the ground and fully transitioning to renewable energy sources.”

    In an atmosphere befogged by carbon and money from the fossil fuel industries, that’s just not possible.

    The Corporate Mapping Project hopes to encourage dialogue on this subject. On May 10, it will present David Lavalleé’s award-winning documentary To the Ends of the Earth. 7pm and 8:45pm at Cinecenta at UVic. www.cinecenta.com. 
    Leslie Campbell is the founding editor of Focus. See www.corporatemapping.ca for more information on this topic. For another instance of provincial magical thinking, see Briony Penn’s article in this edition.



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