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Supreme Court Clarifies Constituent Elements of Influence Peddling

Friday, March 23, 2018 - Filed in: Court Cases
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"C was formerly a Senior Advisor in the Office of the Prime Minister. The year following his departure from this position, he agreed to use his government contacts to help H2O Professionals Inc. sell water treatment systems to First Nations. In exchange, H2O promised to pay a commission to his then girlfriend. After this agreement was made, C spoke to government officials in order to promote the purchase of H2O’s products. He sought to convince Indian and Northern Affairs Canada to set up a project whereby it would fund the purchase of H2O’s products to pilot them in First Nations communities. Sections 121(1) (a)(iii) and 121(1) (d)(i) of the Criminal Code criminalize the selling of influence in connection with any matter of business relating to the government. C was charged with influence peddling under s. 121(1) (d). At trial, he took the position that his assistance was not in connection with a matter of business relating to the government. The trial judge agreed and acquitted him on the basis that First Nations, rather than government, decided whether to purchase the type of water treatment systems sold by H2O. A majority of the Court of Appeal allowed the appeal. It set aside the acquittal, entered a verdict of guilty and remitted the matter to the trial judge for sentencing."
The S.C.C. (8:1) dismissed the appeal.

Justice Karakatsanis wrote as follows (at paras. 5-7, 23-24, 47-48):

"... s. 121(1) (d) requires that the promised influence be in fact connected to a matter of business that relates to government. Furthermore, a matter of business relates to the government if it depends on or could be facilitated by the government, given its mandate. The phrase “any matter of business relating to the government” therefore includes publicly funded commercial transactions for which the government could impose or amend terms and conditions that would favour one vendor over others. Governments are not static entities — legislation, policies, and structures delimiting the scope of government activity evolve constantly. “Any matter of business relating to the government” must not be considered strictly with reference to existing government operational and funding structures.

Here, Mr. Carson’s promised assistance was in connection with a matter of business relating to the government. While government approval was not required for First Nations to purchase the systems sold by H2O, INAC could have facilitated these purchases, for example, by changing its funding terms and conditions to H2O’s benefit. It also could, and sometimes did, participate in and fund pilot projects involving water treatment systems for First Nations communities. Indeed, Mr. Carson tried to convince the government to create a pilot project to promote H2O’s products.

By demanding a benefit in exchange for his promise to exercise his influence with the government to H2O’s advantage, Mr. Carson undermined the appearance of government integrity. This is exactly the type of conduct s. 121(1) (d)(i) is intended to prohibit.

...the promised influence must be actually connected to a matter of business relating to the government for the offence to be made out. Accordingly, the relevant constituent elements of the offence in this case are:

  1. having or pretending to have influence with the government, a minister, or an official;
  2. directly or indirectly demanding, accepting, or offering or agreeing to accept a reward, advantage or benefit of any kind for oneself or another person;
  3. as consideration for the cooperation, assistance, exercise of influence, or an act or omission;
  4. in connection with a transaction of business with or any matter of business relating to the government.

I also conclude that the phrase “any matter of business relating to the government” must be interpreted broadly. A matter of business relates to the government if it depends on government action or could be facilitated by government, given its mandate. Thus, s. 121(1)(d) captures promises to exercise influence to change or expand government programs.

...In most cases, a lengthy trial will not be required to determine whether the accused is guilty of the s. 121(1)(d) offence. That said, the trial judge’s findings of fact clearly establish that Mr. Carson’s promised assistance was connected to a matter of business relating to government, properly defined. INAC funds some reserve water infrastructure and pilot projects related to the provision of drinking water on reserves. At the time of the offence, First Nations could have purchased decentralized systems such as H2O’s with INAC funds without obtaining INAC’s prior approval. However, INAC could have changed its mode of operations, modified its funding structure or terms and conditions, or created new pilot projects in a manner favorable to H2O. Indeed, the trial judge found that Mr. Carson sought to set up a project to pilot H2O’s products with INAC funding and approval.

In these circumstances, and on a correct application of the law, the benefit Mr. Carson demanded was in consideration for his promise to exercise influence in connection with a matter of business relating to the government. But for the trial judge’s unduly narrow interpretation of the scope of the expression “any matter of business relating to the government”, Mr. Carson would have been convicted. The Court of Appeal did not err in substituting a conviction to the acquittal entered by the trial judge."

Note: The summary and body are drawn from Eugene Meehan’s SupremeAdvocacy Weekly Updates for the Law Community.
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