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PM's chief of staff faces conflict of interest questions over Barrick Gold links

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OTTAWA - The federal ethics watchdog is considering whether Prime Minister Stephen Harper's chief of staff, Nigel Wright, improperly used his influential position to further the private interests of friends at Barrick Gold Corp. (TSX:ABX)

Ethics commissioner Mary Dawson has discussed the matter with Wright and is now pondering whether the one-time Bay Street titan broke any conflict of interest rules by allowing himself to be lobbied twice in May by Barrick.

"All we can say, given confidentiality rules, is that Commissioner Dawson has followed up with Mr. Wright and is continuing to consider the matter," Margot Booth, a spokesperson for Dawson's office, said Tuesday.

Wright enjoys a close personal connection with Barrick founder and board chairman Peter Munk and his son, Anthony Munk, who sits on Barrick's board. Yet he was involved in two phone calls from Barrick in May.

Foreign Affairs Minister Minister John Baird didn't wait for Dawson to rule on the affair. He pronounced Tuesday that Wright did nothing wrong.

"Let me be very clear. Mr. Wright has no personal financial interest in Barrick Gold ... and obviously because he has no financial or personal interest in the company, he isn't a part of it," Baird told reporters.

"I can say this, that there is no conflict of interest, there's no plausible conflict of interest. And I can also confirm that he didn't take part in any decisions made on this issue."

Baird confirmed that Barrick called to discuss concerns about Harper's policy regarding the Falkland Islands.

Harper had angered the government of Argentina, where Barrick has mining operations, by blocking a declaration recognizing Argentina's claim the to the islands during the Summit of the Americas meeting in April.

According to report summaries filed by Barrick with the federal lobbying commissioner, an unidentified representative of the company contacted Wright on May 14 and again nine days later. Harper's foreign policy adviser, Andrea van Vugt, and his principal secretary, Ray Novak, who is Harper's point man on government-to-government relations, were also involved in the second call.

Baird insisted Wright said nothing during the two phone calls and took no action on the issue.

"They raised their point of view, and he made no comments and did not respond and the issue was put to those who are responsible," Baird said, adding that the matter was ultimately "properly dealt with by me as the minister of foreign affairs."

In any event, he said it resulted in no change to Canada's policy on the Falklands.

"We support the self-determination of the people of the Falkland Islands, as we do people everywhere around the world. And that was our position and it is our position today."

The NDP is nevertheless contemplating lodging a formal complaint with Dawson.

Charlie Angus, the party's ethics critic, said Wright should not have participated in any discussion involving Barrick, regardless of the subject matter, given his relationship with the Munks.

"He has very close personal relations, they have a huge financial stake and he is the chief adviser to the prime minister. He needs to recuse himself. That's what the Conflict of Interest Act calls for," Angus said.

Wright has known Peter Munk for years and is particularly close to his son, Anthony. Indeed, Peter Munk has disclosed that Wright is godfather to Anthony Munk's son.

Wright worked with Anthony Munk at Onex Corp. (TSX:OCX), the private equity investment giant from which Wright has taken a leave of absence to work for Harper.

Wright also served as a director on the board of the Aurea Foundation, a charitable foundation established by Peter Munk and his wife in 2006 to support the study and development of public policy. He resigned from the board shortly before joining Harper's office in November 2010.

In a story in the April 2011 edition of The Walrus, Peter Munk lavished praise on Wright, ranking him "among the mere handful of people I've met in whom I have complete trust."

Duff Conacher, a longtime advocate of stiffer ethical rules for politicians and their staff, agreed that Wright should not have been involved in any discussion relating to Barrick, given his relationship with the Munks. But he predicted a gaping loophole in the Conflict of Interest Act will ensure there's no penalty for his conduct.

"It's a conflict of interest but it's legal and that's the problem," said Conacher, a board member of Democracy Watch, calling the act "a loophole-filled joke."

As long as the discussion revolved around a subject of "general application," and wasn't just specific to Barrick, Conacher said Wright's involvement — like about 99 per cent of questionable activities involving ministers or their political staff — is legal under the act.

"These very weak rules ... mean that it is effectively legal for all federal politicians, staff and senior government officials to be unethical," Conacher said, adding that Harper has reneged on a promise to remove the loophole.

The NDP plans to push for closing the loophole during a review of the Conflict of Interest Act this fall by the Commons ethics committee.

Under the Conflict of Interest Act, a public office holder is supposed to recuse himself or herself from "any discussion, decision, debate or vote on any matter" which could result in a conflict.

The act describes conflict of interest as the exercise of "an official power, duty or function that provides (the public office holder) an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person’s private interests."

On the advice of the federal ethics watchdog, Wright set up a "conflict of interest screen" when he joined the Prime Minister's Office. The screen is meant to ensure that Wright abstains from any participation in matters relating to Onex, its subsidiaries and affiliates or even involving general policy matters, such as tax treatment of the private equity industry, that could affect Onex.

The question now is whether Wright should also have recused himself from discussions involving Barrick.

Harper, when he was in opposition, used to rail against this kind of cronyism in the PMO, Angus said.

"It was always this thing of who you know in the PMO and that's what Mr. Harper said he was going to change. And yet, time and time and time again when there's ethics issues, they just shrug them off."

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