WHO IS MARK CARNEY? — PART THREE
THE BLIND TRUST — BLIND, OR A BLIND SPOT?
Can the Prime Minister financially benefit from decisions made by the government he leads?
Mark Carney arrived in the Prime Minister's Office with something few Canadian political leaders have possessed:
An extraordinarily extensive financial résumé — and substantial financial interests to go with it.
His career included Goldman Sachs, Brookfield Asset Management, Bloomberg, two major central banks and numerous international financial organizations.
So what happened to those financial interests when he became Prime Minister?
Carney placed controlled assets into a blind trust and became subject to an additional conflict-of-interest screen.
That sounds reassuring.
But what exactly does "blind" mean?
WHAT A BLIND TRUST DOES
A blind trust is intended to separate a public office holder from the day-to-day management of personal investments.
Carney does not direct what the trustee buys or sells and is not supposed to know what securities the trust currently holds.
But there is something a blind trust cannot do.
IT CANNOT ERASE HIS MEMORY.
Carney knows what he owned when those assets went into the trust.
What he may not know is whether the trustee still owns them today.
That distinction matters.
THE 103-ENTITY CONFLICT SCREEN
Because of Carney's extensive previous business and financial connections, an additional conflict screen was established covering 103 companies and organizations.
If certain government matters involving those entities arise, they are supposed to be intercepted before reaching the Prime Minister.
The screen has already resulted in Carney being excluded from government deliberations.
That tells us something important.
The potential for conflicts is not imaginary. The ethics system itself recognizes that situations can arise where Carney's private financial interests and his responsibilities as Prime Minister may intersect.
WHAT ABOUT THE "574 CONFLICTS"?
You may have seen claims that Mark Carney has "574 conflicts of interest."
That wording goes too far.
The figure largely comes from counting individual securities and investments associated with his financial holdings.
It does not mean Canada's Ethics Commissioner has found Carney guilty of 574 conflicts of interest.
There are enough legitimate questions here without exaggerating them.
BROOKFIELD IS THE BIG ONE
Carney's relationship with Brookfield deserves particular attention.
Before entering politics he was a senior Brookfield executive and later Chair of Brookfield Asset Management.
Some of his compensation included Brookfield-related shares, options, deferred interests and other investment-linked benefits whose value can rise or fall with Brookfield's performance.
The blind trust and conflict screen are intended to prevent Carney from participating directly in matters where those interests create a conflict.
But the underlying question remains:
Can decisions made by the Government of Canada increase the value of financial interests from which the Prime Minister may ultimately benefit?
In principle, yes.
That does not prove improper conduct.
But it explains why the conflict screen exists.
BLIND DOES NOT MEAN DISCONNECTED
Consider a simple example.
Suppose Carney entered office owning an interest in Company A.
The blind trustee may have sold that investment.
Or it may still be there.
Carney isn't supposed to know.
Now suppose the federal government makes a decision that substantially increases Company A's value.
Carney may ultimately benefit — or he may not.
Neither he nor the public necessarily knows whether the investment is still in the trust.
THE PRIME MINISTER MAY BE BLIND TO WHAT HE OWNS TODAY — BUT NOT TO WHAT HE OWNED WHEN HE ENTERED OFFICE.
HAS CARNEY BEEN FOUND TO HAVE ACTED IMPROPERLY?
This needs to be made clear.
There has been no finding that Mark Carney has illegally used the Prime Minister's Office to enrich himself.
His arrangements were established under Canada's conflict-of-interest rules and are overseen by the federal Ethics Commissioner.
But that does not end the discussion.
The larger question is whether the rules themselves provide enough protection when a Prime Minister enters office with financial interests this extensive.
EVEN PARLIAMENT HAS ASKED THAT QUESTION
A parliamentary Ethics Committee reviewing Canada's conflict-of-interest rules has recommended that future prime ministers be required to sell controlled assets rather than simply place them into blind trusts.
That is a significant recommendation.
In plain language:
Perhaps a blind trust is not enough for the person holding Canada's most powerful political office.
There is a simple logic behind outright divestment.
If the investment no longer exists, there is no need to wonder whether a government decision might increase its value.
THIS IS NOT ABOUT CALLING CARNEY CORRUPT
There is no evidence establishing that.
The more useful question is:
SHOULD CANADIANS HAVE TO WONDER WHETHER DECISIONS MADE BY THEIR PRIME MINISTER COULD INCREASE THE VALUE OF FINANCIAL INTERESTS HE STILL ULTIMATELY OWNS?
The blind trust reduces that concern.
The conflict screen reduces it further.
But neither necessarily eliminates the underlying economic interest.
BLIND TRUST — OR BLIND SPOT?
Mark Carney's blind trust complies with Canada's existing rules.
The real question is whether those rules were designed for a Prime Minister arriving in office after decades spent at the highest levels of global finance and investment.
When the Prime Minister's financial affairs require a conflict screen covering more than one hundred organizations, it is reasonable to ask whether Canada's existing safeguards are strong enough.
Perhaps that is the issue Canadians should be considering:
Is the blind trust eliminating the conflict — or simply managing it?
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