REPORT OF THE SPECIAL ARBITRATOR ON THE EXPENSE CLAIMS IDENTIFIED BY THE AUDITOR GENERAL IN HIS REPORT DATED JUNE 4, 2015 TABLE OF CONTENTS Introduction ......................................................................................................................................1 The Audit Period ..............................................................................................................................1 Part One: Executive Summary ........................................................................................................1 Senators Occupy a Position of Public Trust ..............................................................................2 The Dominant or Primary Purpose of Expenditure of Public Money .......................................3 An Assessment of Reasonableness ............................................................................................4 The Cost Benefit Question .........................................................................................................4 Proportionality ...........................................................................................................................5 Evidence in The Special Arbitration ..........................................................................................6 Conclusion of the Special Arbitration........................................................................................7 Part Two: Background ....................................................................................................................8 The Speaker’s Letters ................................................................................................................8 Notices of Arbitration ................................................................................................................8 Part Three: Proceedings of the Special Arbitration ........................................................................9 Part Four: Interpretation of the Senate Administrative Rules, Policies and Guidelines ...............13 Public Trust and Accountability ............................................................................................14 Use of Senate Resources ........................................................................................................15 Part Five: The Definition of Parliamentary Functions ..................................................................16 Potential for Abuse ..................................................................................................................22 Who Decides the Proper Scope of Parliamentary Functions ...................................................23 Part Six: General Principles of Travel Entitlement.......................................................................28 A Senator Bears Only the "Incremental" Cost of Personal Activities .....................................29 Part Seven: The Auditor General’s Reports..................................................................................31 Fresh Evidence of Justification ................................................................................................32 (i) The Auditor General’s Office Was Not at Liberty to Make Documents Available to the Special Arbitrations .................................................................................................................33 Approval of Reimbursement Claims by Senate Finance .........................................................33 Part Eight: The Accountability Principle ......................................................................................35 Part Nine: Limitations on Travel Entitlement ...............................................................................36 (a) The 64-Point Travel System ..............................................................................................36 (b) Designated Traveller ..........................................................................................................36 (c) Staff Travel ........................................................................................................................37 (d) International Travel ............................................................................................................37 Part Ten: The Senate Rules, Guidelines and Policies Give Rise to a Number of Questions Senators are Expected to Ask Themselves Before Embarking on Travel at Public Expense ........38 A. The Dominant Purpose Question: The Rules require that Parliamentary Function Be The Primary Or Dominant Purpose Of The Travel ...........................................................38 B. The "Reasonableness" Question ........................................................................................41 C. The Cost Benefit Analysis .................................................................................................41 D. Proportionality Question ....................................................................................................43 Part Eleven: Summary of the Accountability Principles ..............................................................44 Conclusion .....................................................................................................................................46 (ii) - 1 - Introduction 1. On the 14th day of May, 2015, the Standing Committee on Internal Economy, Budgets and Administration [“the Internal Economy Committee”] appointed a Special Arbitrator to consider the justification for expense claims made on behalf of a number of Senators put in question by the report of the Auditor General dated June 4, 2015. My mandate is to carry out a series of arbitrations in accordance with the Special Arbitration Rules approved by the Internal Economy Committee on the May 26, 2015 “to determine whether the Senator in fact received an overpayment or made an improper use of the Senate resources.”1 A copy of the Special Arbitration Rules is attached as Appendix A. The Audit Period 2. April 1, 2011 to March 31, 2013 PART ONE: EXECUTIVE SUMMARY 3. It will be seen that I have formulated a number of questions which, based on the Senate’s rules, guidelines and policies, I believe Senators ought to have asked themselves before spending public monies. These questions, and my responses, do not break new ground. They are, in my opinion, either explicit or clearly implicit in the Senate Administrative Rules, and other Senate policies and guidelines. Implementation of these rules, policies and guidelines call for discretion, judgment and common sense. However, they are perfectly workable in the hands of a Senator who wishes to comply with the obvious purpose of a rule, as well as its literal text. 1 Special Arbitration Rules, s. 3.1 LSRSG 5610374 - 2 - Senators Occupy a Position of Public Trust 4. First of all, a Senator occupies a position of public trust2 and Senators are expected under the rules to conduct themselves accordingly. More particularly, as stated in the Senate Administrative Rules the administration of the Senate is to be governed by “integrity, accountability, honesty and transparency.”3 These general principles were affirmed before, during, and after the audit period although, as will be seen, greater precision in their application has been added over the years, especially by the Senator’s Travel Policy 2012. 5. In earlier days the Senate Administration did not demand as much documentation in support of the spending of Senate monies, but it is not because the principles of accountability and transparency were weaker than they are now. Rather, the Senate staff was obliged by the Senate Administrative Rules to acknowledge that “Senators act on their personal honour and Senators are presumed to have acted honourably in carrying out their administrative functions unless and until the Senate or the Internal Economy Committee determines otherwise.”4 6. The Senate expects its staff to serve as helpful watchdogs not bloodhounds. 7. The rules require the expenditure of public funds to be undertaken only in support of “Parliamentary functions”. Many Senators complained in the Special Arbitrations that the concept is vague and uncertain but, in any event, in their view each Senator should be free to define his or her own “Parliamentary functions”. This is viewed as part of a Senator’s independence. There is much to recommend taking a broad view of “Parliamentary functions.” It would be harmful to the public interest to inhibit members of the Senate from exploring and 2 See for example the Conflict of Interest Code for Senators adopted May 18, 2005, section 2 (1) 3 Senate Administrative Rules, Division 1:00, Chapter 1:02 [principles], Section 2 4 Senate Administrative Rules, Division 1:00, Chapter 1:02, Section 4 LSRSG 5610374 - 3 - raising issues which they consider to be important to the country. Many Senators fight a lonely battle on an issue which is regarded by the public to be of little significance until it explodes into public prominence, such as Senator Terry Mercer’s efforts to publicize the disastrous decline of pollinators such as bees, or Senator Pierre-Hugues Boisvenu’s persistent calls for greater recognition of the rights of victims of violent crime. 8. However, given the broad latitude given to a Senator to pursue matters which he or she thinks to be of public importance, the Senate Administrative Rules place countervailing restraints on a Senator’s freedom to spend public monies. It is these limits which have, in some cases,