D R S C H O E M A N

Current financial disclosure forms only apply to individuals and not to their immediate family members, which allows concealment of financial interests through family members.

“the current form and disclosure requirements only apply to the individual, whether that is a public servant, elected official, etcetera. ... One of the easiest way of concealing your financial interests and wealth is to place these same companies in the name of your immediate family members”

Concealment of financial interests in immediate family members creates challenges for managing conflicts of interest in public service contexts such as Public Service Commission or line ministry.

“part of the challenge with not extending these requirements to your immediate family members is both the concealment of these assets and your financial interests, but the effect, the downstream effect that that has, for example, on managing conflicts of interest, if we, as I say, for example, as a Public Service Commission or line ministry”

Disclosure forms do not address beneficial ownership, enabling officials to hide assets using nominees or trusts.

“it does not deal with beneficial ownership. ... actors are sophisticated. They will put their financial interests ... in complex legal structures. ... so this starts blurring the lines when you are an investigator and starts making it much more difficult to determine who ultimately benefits from this asset or this company, who has direct control over it”

The current disclosure forms leave open significant gaps in disclosure of family member assets and beneficial ownership, allowing misuse for corruption and money laundering.

“we are leaving open again for them to just use some kind of a nominee or intermediary structure that they can transfer all of those funds in, put it in a trust or find some kind of way that an official does not have to declare these assets or interests because they are not in your official name”

Without extending disclosure requirements to family members and beneficial ownership, officials can circumvent financial disclosure rules by using nominees or trusts.

“what we are leaving open again for them to just use some kind of a nominee or intermediary structure that they can transfer all of those funds in, put it in a trust or find some kind of way that an official does not have to declare these assets or interests because they are not in your official name”

Certain asset types fall outside the scope of the current disclosure form, creating gaps in financial disclosures.

“types of assets that fall outside the scope of the current form. ... So within the current form the focus is largely on some of the more common and I guess high value items that one might consider. ... But I argue that there are several other common asset types that also need to be considered”

Ethics officers have a dual mandate to advise on disclosures and to verify those disclosures, creating a potential conflict of interest as they are officials within the Ministry and are asked to verify disclosures of their colleagues for potential corrupt conduct.

“this is a role that has a dual mandate, both to advise on disclosures and to verify those same disclosures, and so there is a potential conflict there in terms of independent scrutiny, and the reality is these are also officials who are based within the Ministry, and so these would be your colleagues that you are being asked to verify their disclosures to determine whether they are engaging in potentially corrupt conduct”

Once an official leaves the department, the jurisdiction of the ethics officer ends, meaning ongoing investigations can be evaded by moving to another part of government.

“Once an official leaves the department, the jurisdiction of the ethics officer ends, meaning that an ongoing investigation can simply be evaded by moving to another part of government. This is not theoretical. This does happen.”

Recommendations for further investigation or disciplinary action by the SIU lifestyle audit are ultimately given to the head of department to consider and act upon or ignore, allowing possible conflicts of interest especially if officials themselves are implicated in corrupt networks.

“Even in cases where the SIU is seconded to conduct lifestyle audits, their recommendations for further investigation or disciplinary action are ultimately given to the head of department to consider and take forward or ignore... It might be that this official themselves are implicated in the corrupt network... I think it strengthens the argument for why you need some level of arm's length scrutiny”