Source : Globe & Mail

OTTAWA -- Two well-connected Liberal lobbyists were paid "success fees" that depended on saving Canadian Satellite Radio Inc.'s endangered broadcasting licence, according to registrations they filed with the federal government. Cabinet upheld the licence in September.

John Duffy, a long-time supporter of Prime Minister Paul Martin and member of his inner circle of informal advisers called "the Board," and David MacNaughton who until June was the top aide to Ontario Premier Dalton McGuinty, declared that payment for their lobbying work would depend on whether they succeeded.

Such fees are legal in Canada and do not violate government guidelines unless companies pay them to help bid on government contracts or obtain government grants.

But opposition politicians said yesterday such fees are inappropriate and some argued they should be outlawed in Canada as they are in many U.S. jurisdictions.

"It's totally inappropriate," New Democrat MP Ed Broadbent said. "It should not be permitted under the law. There should be no percentage advantage, one way or another, whether you're successful getting a change in policy one way or another."

In many American states the fees have been outlawed because of concerns that fees paid only for favourable decisions increase the risk of kickbacks, or encourage lobbyists to make campaign contributions in exchange for a favourable vote or decision.

Bloc Québécois MP Maka Kotto said such fees become disturbing when they are charged by those with connections to people in government.

"When the individuals are so close to power, that's where it becomes questionable," Mr. Kotto said. "That's where you have to ask if this government is free to make its own decisions."

Mr. Duffy defended success fees as a type of "risk-sharing" arrangement where little is paid up front, but more is paid if lobbying succeeds.

"There's nothing wrong with them. They're perfectly normal," he said.

The federal cabinet upheld Canadian Satellite Radio's licence, even though the lead minister, Heritage Minister Liza Frulla, had written a memo to cabinet proposing the licence be returned to the Canadian Radio-television and Telecommunications Commission for review.

Quebec MPs called for the licence to be killed at a three-day Liberal caucus meeting in Regina in August because the lineup of channels proposed by Canadian Satellite Radio and another licensee, Sirius Satellite Radio Inc., included relatively few Canadian and French-language stations.

About the same time, Canadian Satellite Radio brought in a half-dozen former Liberal politicians, political staffers and organizers. Among them: Mr. Duffy and Mr. MacNaughton; lawyer Cyrus Reporter, secretary-treasurer of the Liberal Party and aide to Allan Rock when he was in the Chrétien cabinet; Serge Paquette, a former Liberal organizer; and Richard Mahoney, a lawyer who was executive assistant to Mr. Martin when the latter was finance minister.

Mr. Mahoney's activities as a lobbyist for CSR were not registered until The Globe and Mail called to confirm his role on Oct. 4. He said that after delays caused by the need to obtain a new account with the registry, his assistant believed she had registered by Internet on Sept. 21, and discovered only when The Globe called that the registration had not been received.

CSR representatives showed up at the Liberal caucus meeting in Regina to bend the ear of ministers and other MPs. Among the CSR representatives was David Peterson, the former Ontario premier and brother of International Trade Minister Jim Peterson.

Mr. Peterson also did not register as a lobbyist for CSR. He said he is not a lobbyist, noting that the law defines them as people who are paid to deal with government officials, and that he has known the head of CSR, John Bitove Jr., for some time.

MPs said CSR representatives also discussed issues around the licence with them during the Regina caucus meeting at a cocktail party for members of the Laurier Club. Members of the club donate more than $1,000 to the Liberal Party.

Asked in the Commons yesterday whether such lobbying occurred at another Laurier Club party at the Prime Minister's 24 Sussex Dr. residence in early September, Liberal House Leader Tony Valeri would not say.

Mr. Valeri later told reporters he did not know whether Liberal ministers were lobbied at Laurier Club parties, but he was not; Public Works Minister Scott Brison said he could not recall.

Mr. Broadbent said allowing such lobbying to occur at a party for donors goes against the notion that all citizens are equal.

"You shouldn't, in a democracy, have preferred access because you can put up money to an elected representative."

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