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Wednesday, December 20, 2017

Barry Sherman Was Under Investigation For Breaking Lobbying Rules

 Tamar Harris, The Toronto Star
with Marco Chown Oved

       Only days before he died, Toronto billionaire Barry Sherman was attempting to quash an investigation into a political fundraiser he held for Prime Minister Justin Trudeau that allegedly ran afoul of lobbying rules.
       Sherman, who was found dead along with his wife, Honey, at their house on Friday, had been under investigation by Lobbying Commissioner Karen Shepherd since October 2016, and was facing a possible five-year ban from lobbying because of the fundraiser he hosted during the last federal election.   The Lobbyists’ Code of Conduct prohibits registered lobbyists, such as Sherman, from lobbying officeholders they helped get elected.

Last May, Sherman filed a lawsuit in Federal Court to block the Lobbying Commissioner’s probe into him and his pharmaceutical company Apotex because it had been “taken and pursued in bad faith and/or for an improper purpose.”

“The investigation is an unanchored fishing expedition,” Sherman states in his notice of application, further alleging subpoenas issued by the Lobbying Commissioner to compel Apotex executives to talk are “unconstitutional and, as a result, unenforceable.”

The allegations haven’t been proven in court and the case is ongoing, but documents were filed by Sherman’s lawyers days before he died.

“Mr. Sherman’s fundraising activities for Prime Minister Trudeau and Finance Minister (Bill) Morneau and the Liberal Party created conflicts of interest,” said Duff Conacher, co-founder of Democracy Watch, the government accountability group that filed two complaints against Sherman with the Lobbying Commissioner.

In addition to the August 2015 pre-election fundraiser, the lobbying commissioner probed a second fundraiser, co-organized by Sherman in November 2016.

But in the Lobbying Commissioner’s administrative review recommendation to open an investigation, Phil McIntosh, Director of Investigations at the Office of the Lobby Commissioner, wrote they did not uncover “sufficient evidence” that Sherman’s activities on Nov. 7, 2016 breached the Lobbyists’ Code of Conduct.

McIntosh continued: “However, while conducting the administrative review, the directorate found evidence indicating that Mr. Sherman engaged in political activities that risk creating a sense of obligation on the part of one or more public office holders” through the fundraising event held at his home on Aug. 26, 2015.

“Democracy Watch’s two complaints should still be ruled on by the Commissioner of Lobbying despite the unfortunate and sad passing of Mr. and Mrs. Sherman,” Conacher told the Star.

Lawyer Nando De Luca, who represented Apotex and three company executives, including Sherman, declined to comment, saying the case is still before the courts.

Apotex founder Barry Sherman and wife Honey were found dead in their North York home on Friday. Sherman had been under investigation by Lobbying Commissioner Karen Shepherd for a political fundraiser he hosted during the last federal election.  Sherman had been under investigation by Lobbying Commissioner Karen Shepherd.  A spokesperson for the Lobbying Commissioner declined to comment on the case, but Shepherd told iPolitics Tuesday:  “There’s obviously an impact because of recent events, so I’m assessing what that means at this point.”

When asked for comment, a Liberal Party spokesperson responded by email, and referred to Trudeau’s previous comment on the Shermans’ passing.

“Sophie and I are saddened by news of the sudden passing of Barry and Honey Sherman,” the Prime Minister tweeted. “Our condolences to their family (and) friends, and to everyone touched by their vision (and) spirit.”

In an interview with lobbying commissioner investigators in November 2016, Sherman described how he and his wife hosted a fundraising event for the Liberal Party in their home in August 2015. Somewhere between 100 and 150 guests attended, including Trudeau, then-leader of the Liberal Party, and Michael Levitt, then a Liberal candidate in York Centre, Sherman said, according to documents filed in court.

Sherman said he believed proceeds from the event would be split between the Liberal Party and Levitt’s Electoral District Association.

“There is basis to conclude that the private interests of (REDACTED) were advanced to a high degree, and that a sense of obligation was created by Mr. Sherman’s contribution to the 2015 election campaigns,” wrote McIntosh, in a recommendation to open a full investigation into the case.

“There is basis to conclude that Mr. Sherman is in breach of … the Lobbyists’ Code of Conduct as a consequence of his involvement in the organization of a fundraising event for the (Liberal Party),” McIntosh wrote on Jan. 18, 2017.

Shepherd checked the box, “I agree,” the same day.

In April, Shepherd subpoenaed two executives at Apotex to compel them to speak with investigators after they declined requests to be interviewed.

Shortly afterward, Sherman filed his lawsuit, claiming the subpoenas were “unconstitutional” and the investigation was “unlawful and unreasonable.”

Conacher believes the strategy behind the lawsuit could be to delay the lobbying commissioner’s final ruling.

“They may end up having no ban, because they continued lobbying after August 2015, they’re lobbying now, and if they can just delay the ruling until 2020, there may be no ban put on them. That’s the whole strategy with this court case.”

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