Ethics is not always black and white; the ethical decision is not always obvious to all. Even leaders can fail to act ethically all the time. Recent decisions impacted two leaders.
CBC News’s reporter, E. Thompson, filed the following story Aga Khan could face lobbying probe for Trudeau trip on December 21, 2017. It provides a detailed account of the ethical issues surrounding Prime Minister Trudeau’s trip to Aga Khan’s private island.
The Aga Khan could face an investigation into allegations he violated Canada’s Lobbying Act by giving Prime Minister Justin Trudeau and his family free vacations on his private island in the Bahamas at the same time as he was discussing funding for projects.
Democracy Watch sent a letter to the Commissioner of Lobbying late Wednesday, urging her to investigate whether Prince Shah Karim Al Hussaini Aga Khan IV “violated the Lobbyists Code by giving Prime Minister Trudeau and Liberal MP Seamus O’Regan the gifts of trips to his island home”.
In the letter, Democracy Watch co-founder Duff Conacher says the Aga Khan’s actions have put Trudeau and O’Regan in a conflict of interest. It is also against the law to give a public office holder a gift that could create a sense of obligation.
“Your position must be that anyone working for or associated with a company that is registered to lobby a public office holder who gives to or does anything for that office holder… that is more than an average voter does… puts that office holder in an apparent conflict of interest,” he wrote.
The Aga Khan is the spiritual leader of millions of Ismaili Muslims and is listed as a member of the board of directors of the Aga Khan Foundation Canada. The foundation, which has received millions of dollars in federal government development aid over the years, is registered to lobby several federal government departments including the Prime Minister’s Office, although the Aga Khan is not listed among those registered to lobby on its behalf.
A search of the lobbyist registry shows the foundation has filed 132 reports since 2011 outlining its meetings with government decision makers. However, none of those reports list any meetings with Trudeau.
Representatives of the Aga Khan Foundation of Canada contacted by CBC News have yet to comment.
The call for a lobbying investigation comes in the wake of a scathing report by Ethics Commissioner Mary Dawson on Wednesday.
Dawson found that Trudeau violated four sections of the Conflict of Interest Act when he accepted a vacation on the island in the Bahamas and a ride in the Aga Khan’s personal helicopter.
While Trudeau and his family got a tropical vacation, Canadian taxpayers got a bill for more than $215,000 in transportation and staffing costs — far more than the government initially disclosed to Parliament.
Dawson also revealed that Trudeau’s trip during last year’s Christmas holidays was one of three that Trudeau or members of his family had made to the island. Dawson disclosed that Sophie Grégoire-Trudeau stayed on the island in March 2016 with a friend and their children.
Neither the Aga Khan, nor any member of his family, was on the island during their stay.
Dawson said the Aga Khan was on the island during the Trudeaus’ Christmas-time visit last year as was a “senior American official of a previous administration,” who she did not name.
In her report, Dawson describes the relationship between Trudeau and the Aga Khan, the times they met and the questions they discussed.
Among them was a bilateral meeting on May 17, 2016 that was arranged by “representatives” of the Aga Khan. After a 15-minute chat between the two men about “personal matters, the Ismaili community in general and geopolitics,” they were joined by three of the Aga Khan’s representatives, Heritage Minister Mélanie Joly, staff members from the Prime Minister’s Office and senior officials of the Privy Council Office.
Dawson’s report says the government had found a funding mechanism to allow it to contribute to the Global Centre for Pluralism’s endowment fund and Trudeau reaffirmed the government’s $15 million commitment during the meeting.
The Aga Khan’s pitch for government funding for a $200 million riverfront renewal plan in Ottawa was also discussed.
Dawson ruled that Trudeau should have recused himself from two discussions in May 2016 involving the $15 million grant.
“Two months prior to the May 2016 occasions, Mr. Trudeau’s family accepted a gift from the Aga Khan that might reasonably be seen to have been given to influence Mr. Trudeau in the exercise of an official power, duty or function as Prime Minister,” she wrote.
“For this reason, the discussions with the Privy Council Office and later with the Aga Khan about the outstanding $15 million grant to the endowment fund provided an opportunity to improperly further the private interests of the Global Centre for Pluralism.”
While the Aga Khan is not paid to lobby government (one of the criteria under the law) Conacher said he believes the Aga Khan violated the lobbying rules. Otherwise, it would create a giant loophole, he said.
“Every single corporation, business, union, non-profit organization would start using board members to give gifts to politicians if this loophole were opened up by the lobbying commissioner.”
Conacher is also calling for outgoing lobbying commissioner Karen Shepherd and incoming lobbying commissioner Nancy Bélanger to recuse themselves from ruling on the investigation because of the way Shepherd’s contract was renewed and the way Bélanger was chosen in “a secretive, PMO-controlled process.”
Manon Dion, spokeswoman for the lobbying commissioner’s office, said she cannot reveal whether they are already looking into the issue.
Moving Ethics To the Business World
Perhaps you have heard of Bernie Madoff, founder of Bernard L. Madoff Investment Securities and former chairman of the NASDAQ stock exchange.  Madoff is alleged to have run a giant Ponzi scheme  that cheated investors of up to $65 billion. His wrongdoings won him a spot at the top of Time Magazine’s Top 10 Crooked CEOs. According to the SEC charges, Madoff convinced investors to give him large sums of money. In return, he gave them an impressive 8 percent to 12 percent return a year. But Madoff never really invested their money. Instead, he kept it for himself. He got funds to pay the first investors their return (or their money back if they asked for it) by bringing in new investors. Everything was going smoothly until the fall of 2008, when the stock market plummeted and many of his investors asked for their money. As he no longer had it, the game was over and he had to admit that the whole thing was just one big lie. Thousands of investors, including many of his wealthy friends, not-so-rich retirees who trusted him with their life savings, and charitable foundations, were financially ruined. Those harmed by Madoff either directly or indirectly were likely pleased when he was sentenced to jail for one-hundred and fifty years.
Headlines from more corporate scandals since 2015:
- In 2023, Canadian Retail Grocery executives came under fire for price fixing and calls for a national grocery code of conduct have been rising. Government and the Competition Bureau are asking questions of these executives.
- In 2016, then Wells-Fargo CEO John Stumpf was fired for a scandal that included the creation of 1.5 million fake deposit accounts and more than 500,000 fake credit cards, all in customers’ names and without their permission. This was just the beginning of more scandals to be uncovered at one of the Top 5 largest banks in the United States.
- In 2015, Volkswagen admitted cheating the United States emissions tests for diesel engines. Volkswagen ordered to pay $196.5M after pleading guilty to all Canadian emissions-cheating charges
What can government, business and/or society do to reduce these types of ethical scandals? What can YOU do?
- Thompson, E. (2017, December 21). Aga Khan could face lobbying probe for Trudeau trip. CBC News. https://www.cbc.ca/news/politics/trudeau-aga-khan-bahamas-lobbying-1.4459561 ↵
- Time Magazine. (2009). Top 10 Crooked CEOs. Retrieved from: http://content.time.com/time/specials/packages/article/0,28804,1903155_1903156_1903160,00.html ↵
- Langan, F. (2008, December 15). The $50-billion BMIS Debacle: How a Ponzi Scheme Works. CBCNews. Retrieved from: http://www.cbc.ca/news/business/the-50-billion-bmis-debacle-how-a-ponzi-scheme-works-1.709409 ↵
- Post Media News. (2023, July 17). Price-fixing at Canada’s grocery stores is bigger than just bread: Full Comment podcast. National Post. https://nationalpost.com/opinion/price-fixing-at-canadas-grocery-stores-is-bigger-than-just-bread [footnote/]
- In 2019, Facebook agrees to pay $5 billion to settle with the US Federal Trade Commission over privacy and data concerns.[footnote] Gostick, A., & Telford D. (2003). The Integrity Advantage. Salt Lake City: Gibbs Smith. ↵
- Gostick, A., & Telford D. (2003). The Integrity Advantage. Salt Lake City: Gibbs Smith. ↵
- The Canadian Press. (2023, August 8). Volkswagen ordered to pay $196.5M after pleading guilty to all Canadian emissions-cheating charges. CBC News. https://www.cbc.ca/news/business/volkswagen-pleads-guilty-emissions-cheating-canada-1.5436346 ↵