Martin’s Shadow PMO

Putting a face on the special interests behind contender's scheming


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I’m not a big Jean Chretien fan. But I don’t buy that the campaign to retire the prime minister — which crescendoed this month but really has been playing out since before the last federal election — has simply been about internal Liberal party politics and the narrowing window for an aging Paul Martin to cap his political career.

Even after Chretien announced last week that he was leaving in 18 months, unnamed Grit and Bay Street sources were whining that it wasn’t soon enough.

Why? What’s the rush?

For months the so-called Liberal family feud has been stoked by partisan sources who have cultivated the notion, through the media, that tired, old Chretien has got to go sooner rather than later or the party is doomed.

It is? And just what dysfunctional opposition party in Ottawa is poised to knock the Liberals off?

Now those largely unnamed sources are telling us we should be worried about Chretien’s agenda over the next 18 months. And who exactly are these anonymous fixers who want the prime minister gone yesterday?

That brings me back to Paul Martin and, more specifically, the power brokers behind the so-called PM-in-waiting.

It’s no secret that Martin’s staunchest supporters reside on two floors in an Ottawa office building at Elgin and Sparks, just around the corner from Parliament Hill.

Considering that Martin has so far declined to reveal his financial backers, the activities of these supporters offer a rare glimpse of the special interests swirling around big-business’s favourite federal official.

A relatively small but well-connected lobbying and consulting firm, Earnscliffe, has been dubbed “the shadow PMO.”

Earnscliffe, which set up shop in 1989, has only 21 employees, including six principals. Some of those principals are Tories, some are Liberals.

Two of them have been actively backing Martin for Liberal leader:

Michael Robinson, an Earnscliffe lobbyist who managed Martin’s 1990 party leadership bid

David Herle, Martin’s former executive assistant, who also worked with him at Canada Steamship Lines and now does strategic communications at the firm.

As well, Scott Reid, a former communications director at the Department of Finance, also works on the strategic communications side at Earnscliffe and is actively supporting Martin for leader.

Over the past decade, Earnscliffe has represented a blue-chip list of corporations on the Hill — from Bombardier to Microsoft to AT&T. And, according to lobbyist registry records, Earnscliffe lobbied Martin’s Finance Department on behalf of many of these clients.

But it was more than just close ties that made Earnscliffe’s relationship with the Department of Finance different from other lobby firms trying to bend the ear of the minister.

While one side of Earnscliffe was lobbying Martin, another side was actually paid by the Finance Department to provide the minister with strategic advice and polling on various public issues, including the budget.

From September 1993 until just this past July, Earnscliffe won a total of $1.6 million in communications contracts with the Finance Department.

The last contract, for $234,000, was awarded in August 2001 and terminated prematurely this July because, according to Finance spokesperson Jean-Michel Catta, “in the context of a new minister (Martin’s leadership rival John Manley), the department determined that at least in the short term it would not need on-site strategic services.”

Despite protests from the Ottawa-based public advocacy group Democracy Watch that this multi-pronged relationship posed a potential conflict of interest, Chretien’s ethics counsellor, Howard Wilson, has never objected.

Wilson relied on guidelines for screens (also known as Chinese walls) put out by the Canadian Bar Association in the early 1990s to prevent conflicts at law firms that found themselves representing competing interests.

“I concluded that indeed, confidential information that would have of course been known to the (Earnscliffe) communications people in terms of developing the messaging for budgets was not going to become available to other parts of Earnscliffe to the benefit of their clients,” Wilson tells NOW.

Another Earnscliffe principal, Elly Alboim, a former CBC Parliament Hill bureau chief, tells NOW that the firm “maintains separate support staff, separate files, we’re on different floors of the building” and “we all sign undertakings to respect the Chinese walls between the two divisions.”

As well, says Alboim, Earnscliffe staffers who have done communications work for Finance have sworn oaths to the government under the Official Secrets Act. He says the company even went so far as to make a policy decision not to represent banks during the merger question, over which Martin had the final say a few years back.

However, four Earnscliffe lobbyists, including Robinson, were registered last year as representing CIBC World Markets, the investment banking group.

Despite the powerful interests they represent, Alboim says the principals keep their business and politics separate.

“People who work in Ottawa in government affairs and research and communications have political interests and carry out those political interests,” he says. “But they do it ethically and morally, as far as I know.”

Some observers say the onus was clearly on the Department of Finance, and not Earnscliffe, to prevent a potential conflict on behalf of taxpayers.

“The party that is letting us down is the government that would hire firms that knowingly are associated with both sides of the fence,” says John Chenier, editor of the Lobby Monitor in Ottawa. “That’s where the ethical boundary was crossed.”scottand@nowtoronto.com

Research assistance by Martha Lai

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