Report on Investigation — The Lobbying Activities of Mark Jiles

Background

History of the Case Prior to the Lobbyists' Code of Conduct Investigation

On June 9, 2008, the former Registrar of Lobbyists commenced an administrative review after receiving a letter of complaint from Mr. Leonard Krog, the Member of the British Columbia Legislative Assembly for Nanaimo and Peter Julian, the Member of Parliament for Burnaby-New Westminster. The letter contained allegations that Patrick Kinsella and Mark Jiles, consultants associated with the Progressive Group and the Blue Stone Group, had engaged in unregistered lobbying activity.

The complainants provided documents acquired from the State of Washington through an access to information request. They included contractual agreements between the Progressive Group and the State of Washington, monthly reports; and invoices of payment relating to the undertakings.

The complainants requested that the Office of the Registrar of Lobbyists investigate five issues "… with regard to failure to register and disclose activities as required of consultant lobbyists by the Lobbyists Registration Act." The allegations were described as follows:

1. Lobbying activities conducted by the Progressive Group, Blue Stone Group and their principals and staff on behalf of the State of Washington directed at the Government of Canada and related 2010 Olympic Games and supporting activities.
2. Lobbying activities conducted by the Progressive Group, Blue Stone Group and their principals and staff on behalf of the State of Washington directed at Government of Canada appointees to the 2010 Vancouver Olympics Organizing Committee (VANOC) and related 2010 Olympic Games and supporting activities.
3. Lobbying activities conducted by the Progressive Group, Blue Stone Group and their principals and staff on behalf of Orca Creative directed at Government of Canada appointees to VANOC and related 2010 Olympic Games and supporting activities.
4. Lobbying activities conducted by the Progressive Group, Blue Stone Group and their principals and staff on behalf of Canfor Forest Products directed at the Government of Canada, related to the Softwood Lumber Agreement and other forestry issues.
5. Lobbying activities conducted by the Progressive Group, Blue Stone Group and their principals and staff on behalf of the Motion Picture Production Industry Association directed at the government of Canada.

The complainants contended that documents enclosed with their letter confirmed that the Progressive Group conducted lobbying activities, including the arrangement of personal meetings with federal government appointees, senior cabinet ministers, senior government officials and staff, as part of a government relations strategy to further the interests of various clients.

Prior to January 2009, neither Mr. Kinsella nor Mr. Jiles was registered to lobby federal public office holders. In January 2009, Mr. Jiles registered in the federal Registry of Lobbyists as a consultant lobbyist acting on behalf of an organization unrelated to this file.

When the Office of the Commissioner of Lobbying (OCL) was created in July 2008, the administrative review commenced by the Office of the Registrar of Lobbyists was continued. Based on information obtained during that review, I had reason to believe that an investigation was necessary to ensure compliance with the Act and the Lobbyists' Code of Conduct and I opened an investigation. I also determined that I had reasonable grounds to believe that by failing to register his activities on behalf of his client, Mr. Jiles had committed an offence under the Lobbyists Registration Act. As a result, I referred the matter to the Royal Canadian Mounted Police (RCMP) on March 2, 2010 as required by the Lobbying Act. I also suspended the investigation by the Office that was underway, as required by the Lobbying Act.

On September 17, 2010, the RCMP advised me that they had decided not to lay charges against Mr. Jiles. Later that month, I determined that I had sufficient information to continue with an investigation in relation to the Lobbyists' Code of Conduct.

The Lobbyists' Code of Conduct Investigation

The investigation conducted by the Investigations Directorate indicated that there was no evidence upon which to conclude that Mr. Kinsella had communicated or arranged meetings with federal public office holders on behalf of any of the clients listed in the allegations of the complainants.

In terms of Mr. Jiles, the Investigations Directorate found no basis upon which to conclude that he had communicated or arranged meetings with federal appointees to the Vancouver Olympics Organizing Committee (Allegation 2), or that he communicated or arranged meetings with federal public office holders on behalf of the Orca Creative Group (Allegation 3) or on behalf of Canfor Forest Products (Allegation 4). As a result, this Report on Investigation does not report on those matters.

However, the Investigations Directorate found a basis to conclude that Mr. Jiles engaged in activities requiring registration as a consultant lobbyist when, for payment, he arranged meetings between federal public office holders and two of his clients: the State of Washington (Allegation 1), and the Motion Picture Production Industry Association of British Columbia (Allegation 5). The activities in question occurred between March 2006 and March 2007. This Report on Investigation is concerned only with those activities.

The Lobbyists' Code of Conduct investigation of Mr. Jiles covered his activities on behalf of the State of Washington and the Motion Picture Production Industry Association of British Columbia during the period of his engagement by those organizations. It involved an examination of various materials provided by the complainant, including contracts between Mr. Jiles and his clients and invoices for services rendered, correspondence with federal public office holders, and interviews with federal public office holders, Mr. Jiles and Mr. Kinsella, as well as the clients of Mr. Jiles.

The Subject

Mark Jiles is a former account director with Hill and Knowlton Canada Inc., a public relations and government relations firm. He runs a public affairs company, the Blue Stone Group, which specializes in sports marketing, and is also a partner with Patrick Kinsella at the Progressive Group.

The Clients

The State of Washington

According to documents obtained by my Office, the Progressive Group was engaged by the State of Washington, Department of Community, Trade and Economic Development (CTED), on at least two occasions. The contracts were for services provided from May 1 to September 30, 2006 and from January 12 to June 30, 2007. The information obtained during the investigation indicates that the Progressive Group was engaged by the State of Washington to find business opportunities associated with the 2010 Olympics in Vancouver, in order to "…assist Washington State's 2010 Task Force and the Trade and Economic Development Division of CTED with its 2010 Olympics public affairs and business development strategies".

The initial contract specified that the Contractor (Progressive Group) was to provide the following services:

• identify 2010 business opportunities for Washington State companies;
• develop relationships with key 2010 stakeholder groups;
• monitor all 2010 activities and announcements; and
• assist in securing business opportunities for Washington State companies.

An attachment to the contract, entitled "Scope of Work," outlines the services and deliverables to be provided by the Contractor, and includes a "Relations Building Program" that is described as follows:

"…we will facilitate opportunities for Washington State to develop important relationships with key individuals within targeted business, political and Olympic circles… We have strong relationships with these individuals and Ministers; however we are also able to engage other groups, Ministers or Olympic officials, as required."

The Scope of Work section contains a list of "key individuals" including the Honourable David Emerson, formerly the federal minister responsible for the 2010 Olympics. The contract provides that the contractor will be paid a total of $15,000 in two $7,500 increments on May 30 and June 30, 2006.

In January 2007; Mr. Jiles signed a second contract to represent and advance Washington's interests in relation to the 2010 Olympic Winter Games. The "Scope of Work and Deliverables" described in an attachment to the contract describes the responsibilities of the contractor as follows:

The Contractor will provide services in three broad categories: matchmaking services; relationship development services (events and programs); and opportunity intelligence (B.C., Canada and the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC)), as well as other duties.

The list of matchmaking services included: developing a strategy of events and activities that further business introductions and partnership opportunities; working with CTED client companies to provide intelligence in their market and introductions to advance their business opportunities; making introductions to key decision-makers and potential business partners to position companies for successful commercial engagement; and, maintaining records of activities and results.

The contract amount was set at $32,500 for the period from January 12 to June 30, 2007.

Invoices sent to the State of Washington CTED were listed as payments of a "monthly retainer fee for consulting services provided by Mark Jiles and Patrick Kinsella…"

The Motion Picture Production Industry Association

According to documents obtained by my Office, the Blue Stone Group was retained by the Motion Picture Production Industry Association of British Columbia (MPPIA) during the period of July 2005 to March 2007 with respect to the following mandate: "To convince the Provincial government to extend the foreign tax credits and to convince the Federal Government to drop the idea of taxing residual profits on motion pictures made in Canada."

The MPPIA represents participants in the motion picture industry in British Columbia, and describes itself as "…a broad-based film and television industry association 80 members strong and growing." It has an interest in working with various levels of government in order to improve competitiveness.

During an interview conducted by my Office, the chairman of the of the Motion Picture Production Industry Association of British Columbia indicated that Mr. Jiles has been working for the MPPIA since 2005 and that he had been retained to provide government relations services, mostly at the municipal, regional and provincial levels. In addition, Mr. Jiles was engaged to stay aware of issues at the federal level.

The Blue Stone Group developed a government relations strategy for its client, the MPPIA. In July 2005, Mr. Jiles proposed a program to assist the MPPIA with a government relations strategy "…to advance the MPPIA's business objectives within the various levels of government." The objectives of the strategy included: the renewal of tax credits; caucus relations; and, relationships with key stakeholder groups. That contract was subsequently renewed in January 2006, in order to maintain "…on-going relationships with key stakeholder groups." Mr. Jiles indicated to his clients that:

"…the federal government, which within the next week could potentially be a new government, needs to be educated on the impact that a residual tax on productions would have on the industry."

Mr. Jiles sought a further renewal of his existing agreement with the MPPIA in January 2007, in which he indicated that a "Provincial and Federal Government Relations and reception" was included among the objectives of his government relations strategy. He indicated that he sought to "…facilitate opportunities for MPPIA to develop important relationships with key individuals within targeted bureaucratic and political circles…" among them key federal ministers with regional responsibilities for British Columbia. The contracts between the MPPIA and Mr. Jiles provided for a fee structure for the cost of the services of Mr. Jiles. The MPPIA paid Mr. Jiles for his services accordingly.