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Ethical Leadership or the Penalty Box

December 11, 2016

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Some people are slow learners, even when they’re penalized and chastised for doing wrong. The Liberal Party of Canada, under the leadership of political street fighter Jean Chretien—the little guy from Shawinigan—got itself into a pile of trouble with Canadians and the courts during the early 2000s. The story started back after the 1995 Quebec referendum, when the No vote to Quebec separating from Canada barely squeaked through, a matter of only some 50,000 votes.

A fund was created to help bolster federalism and strengthen Quebeckers ties to Canada. What emerged over the next few years was a shady fund, with no formal application process and no monitoring, to pay for cultural events. Rumours grew that it was being used to support the federal Liberal party, in particular Liberal supporters. By 2002, Prime Minister Chretien and his government were on the hot seat. The Toronto-based Globe&Mail, through an Access to Information request, discovered that $550,000 had been paid to Groupaction Marketing for a non-existent report.

The Auditor General of Canada, Sheila Fraser, subsequently investigated the growing scandal, releasing an explosive report in 2004, within which she used such words as “scandalous” and “appalling” to describe the Liberal government’s misuse of taxpayers’ dollars. Her report found that some $100 million had been spent solely for the purpose of enriching communications companies through commissions and fees, without producing any benefit for Canadians.

Fast forward a few years and the Liberals were thrown out of power. Chretien had resigned by then, leaving the mess to his successor Paul Martin Jr.. Martin, who naively thought that the Gomery Commission into the sponsorship scandal which he launched would clear him, didn’t last long as prime minister. He received a sound thrashing in the polls by Conservative leader Stephen Harper, who held office for a decade until being defeated in November 2015 by Justin Trudeau, the eldest son of the late and former Prime Minister Pierre Elliott Trudeau.

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Justin Trudeau, a relatively new member of parliament (from Montreal) rode to power on a wave of anti-Harper sentiment, obtaining only 39% of the popular vote, but a significant majority of seats in the House of Commons. Victory was sweet for Trudeau, accompanied by his beautiful and extroverted wife, Sophie Gregoire-Trudeau. It was Trudeau Mania déjà vu.

Well, the shine certainly comes off new political leaders quickly, sometimes surprisingly very fast. As if Justin Trudeau doesn’t have his hands full with a limping economy, stagnant wages, and an over-heated housing market with hugely indebted Canadians, combined with a new incoming president in the United States, he’s had to fend off an ethical problem that blew up in late November 2016.

Prime Minister Trudeau may not have broken any political financing laws when he attended a private $1,500 per plate fundraising event in May 2016, but it sure didn’t smell right, creating a strong perception of a lapse in ethical behaviour from Canada’s top political leader.

At the event were businessman Zhand Bin, president of the China Cultural Industry Association, a state-sanctioned group, and Shenglin Xian, president of Toronto-based Shenglin Financial. Following the event, Bin donated $1 million to the Pierre Elliott Trudeau Foundation and the University of Montreal Faculty of Law. Xian, a past Liberal Party of Canada donor, was seeking to obtain final approval (a process initiated during the previous Conservative government) for starting up a Canadian branch of Wealth One Bank.

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The Pierre Elliott Foundation has a history of being very careful about being politicized. Indeed, board members included former Conservative cabinet minister Chuck Strahl and NDP MP Megan Leslie. However, Strahl resigned his post when the story hit the media, accusing the Liberals of using him as their “foil.” And on December 13th, the National Post and other newspapers reported on the Trudeau Foundation possibly facing a conflict of interest probe, due to the huge increase in donations to it following Justin Trudeau’s election as prime minister.

As Conservative MP Blaine Calkins expressed: “The Liberals have an ethical problem following their own rules that the prime minister has set out for himself. He set the bar for his government’s ethical behaviour.” And NDP leader Thomas Mulcair stated: “Pay-for-access was supposed to be over once the Liberals came to power, and now we see that it’s continuing.”

The only other certainty in the world other than the sun rising to the east is politicians regularly having lapses in ethical judgement. It’s guaranteed. Period. Even for Sunny Ways Justin Trudeau. When a top leader, whether of a company, public institution or nation, espouses that he or she will practice sound ethical, transparent leadership, then the only direction to go is down with your followers. The only way to save your neck and to redeem yourself is to honestly admit that you screwed up and that you’ll work to ensure it never happens again.

Justin Trudeau didn’t do that in the case of the fundraiser. His aides went into spin control for him, and Trudeau never directly confronted the issue to admit that he had made a mistake. It doesn’t matter whether he was within the legal political boundaries of attending the event. Perception is reality in the eyes of followers, and not addressing an issue face-to-face only pulls the leader further into the mud.

Honesty is the first chapter in the book of wisdom.
— Thomas Jefferson


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