Politico

Canada's ethics czar says former envoy to Washington broke conflict-of-interest law in his work for Palantir


OTTAWA — Canada’s ethics watchdog says former U.S. ambassador David MacNaughton broke conflict-of-interest law and is ordering nine senior Trudeau government officials — including Deputy Prime Minister Chrystia Freeland — to cease all official dealings with him for one year.

Conflict of Interest and Ethics Commissioner Mario Dion published the order Wednesday following his investigation of MacNaughton, a close ally of Prime Minister Justin Trudeau.

The probe was launched amid complaints about MacNaughton’s interactions with cabinet ministers and other key officials after leaving his ambassador’s job to take on a senior role last year with Peter Thiel’s data analytics firm Palantir.

In addition to Freeland, the order prohibits official interactions between MacNaughton and figures such as Innovation Minister Navdeep Bains and General Jonathan Vance, Chief of Defence Staff for the Canadian Armed Forces.

Dion said Freeland, Bains and Vance were among those whom MacNaughton communicated with on behalf of Palantir. The list also includes: Rick Theis, Trudeau’s director of policy and cabinet affairs, Bains’ chief of staff Ryan Dunn, Procurement Minister Anita Anand’s chief of staff Leslie Church, Procurement deputy minister Bill Matthews, National Defence deputy minister Jody Thomas and Innovation deputy minister Simon Kennedy.

What the commissioner said: Dion wrote that MacNaughton contravened section 33 of the Conflict of Interest Act, which “prohibits former public office holders from acting in such a manner as to take improper advantage of their previous public office.”

“Mr. MacNaughton has acknowledged, with the benefit of hindsight, that these communications and meetings, to the extent they could have furthered the interests of Palantir, were contrary to section 33 of the Act,” Dion wrote.

The commissioner’s probe found that between March 2 and May 1 MacNaughton communicated with or arranged multiple meetings with the public office holders to offer Palantir’s help, pro bono, with the government’s response to the Covid-19 pandemic.

Dion’s office has limited enforcement powers. Beyond issuing compliance orders, commissioners also have the ability to call on witnesses to provide evidence and to apply fines of up to C$500 for non-compliance.

The backstory: MacNaughton became president of Palantir’s Canadian branch in September 2019 after leaving the ambassador’s post in Washington the previous month.

Dion launched his probe into MacNaughton’s private sector activities in June following a request by Charlie Angus, an NDP member of Parliament. In a letter to Angus, the commissioner said he was examining whether MacNaughton violated rules that place restrictions on former public office holders.

More specifically, Dion said he would explore whether MacNaughton contravened a rule that prohibits him from “taking improper advantage” of his previous public office and another forbidding him from making representations to anyone with whom he had “direct and significant official dealings” during his last year in public office.

MacNaughton did not immediately respond to calls from POLITICO.

In one of his letters to Dion, Angus referred to comments MacNaughton made in a May interview with POLITICO.

MacNaughton maintained that he didn’t do anything wrong. He told POLITICO that he sought advice when he left the ambassador’s job from both the federal lobbying and conflict of interest and ethics watchdogs.

“I received guidance and I followed it,” MacNaughton said in May. “And I wanted to make sure I wasn’t either offside the letter of the law or the spirit of the law.”

Where it started: Word of MacNaughton’s interactions with government officials first surfaced in April in a report by The Logic. The news outlet said MacNaughton told a business audience during a teleconference about Palantir’s discussions with Ottawa as well as with several provinces.

At the time, governments were looking for tech-based solutions to help address the Covid-19 pandemic.

Palantir is a surveillance company co-founded by Thiel, a Silicon Valley billionaire and supporter of President Donald Trump. The firm has pitched its big-data solutions to different countries during the pandemic.

Where Trudeau fits in: In response to a reporter’s question in June, Trudeau insisted he never talked with MacNaughton about Palantir.

The prime minister has close ties to MacNaughton, who served as co-chairman of Trudeau’s election campaign in Ontario in 2015. The prime minister has credited the former envoy as the country’s “point person” during tumultuous trade negotiations between the U.S., Canada and Mexico.

The reaction: John Power, a spokesperson for Bains, said in an email that the ethics commissioner’s order is based on MacNaughton’s conduct and “does not suggest any wrongdoing whatsoever by any current public office holder.”

Power added that Canadians expect former public office holders to abide by all applicable rules, and any direction from the commissioner, after they leave the public service. He also thanked MacNaughton for his commitment to public service.

Angus, the opposition MP who requested the ethics investigation, reacted to Dion’s order on Twitter. “When Peter Thiel the dark lord of surveillance wanted to open up Ottawa for @PalantirTech he called on a top Trudeau pal. Former ambassador David McNaughton [sic] went to work and the list of powerful liberals tied in is staggering.”

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