Income trust report finds no proof of RCMP wrongdoing

A former RCMP commissioner refused to shed light on his motives for releasing information on an income trust probe during the last federal election campaign, but there's no proof he meddled for political reasons, the Mounties' complaints chairman says.

There's no evidence to suggest the former commissioner of the RCMP deliberately meddled in the last federal election, although he has refused to shed any light on his motives for releasing sensitive information during the campaign, the Mounties' complaints chairman concluded Monday.

Chairman Paul Kennedy said former commissioner Giuliano Zaccardelli would not answer questions about why, in the month leading up to the January 2006 election, the RCMP decided to announce that it was launching a probe into the former Liberal government's handling of an income trust taxation decision.

RCMP complaints commission chairman Paul Kennedy told reporters Monday that senior RCMP officials refused to participate in his investigation into the income trust scandal. ((Sean Kilpatrick/Canadian Press))

Other top RCMP officials also declined to be interviewed during Kennedy's investigation, in what Kennedy called an "inappropriate" move.

"The police officers, who hold a public function and are accountable to the public, ought to be accountable for articulating why they did or didn't do something," Kennedy told reporters in Ottawa while releasing the conclusions of his investigation.

"It does the RCMP a disservice to have a situation where we have half the members are participating, and half not.… I think it's inappropriate."

Kennedy, who leads the independent Commission for Public Complaints Against the RCMP, said that while no insight into the matter was offered by Zaccardelli and other top RCMP members, he still completed his investigation.

"Despite their non-co-operation, statements provided by other witnesses, some of whom are RCMP members, coupled with e-mails and other documentation, provided a detailed narrative sufficient for my review," he said.

New non-interference policy recommended

Kennedy recommended that the RCMP create a detailed policy to handle situations such as the income trust probe in the future, one that favours non-disclosure of information that might have an impact on election campaigns.

He said the policy would have to balance two important public interests — that everyone be treated equally under the law, and that elections be held fairly, without interference.

"The RCMP policies and standards are not comprehensive," Kennedy said. "In fact, they are largely discretionary and they are not capable of addressing sensitive situations that require the weighing of competing public interests."

He said the lack of policy allowed the RCMP to argue that no rules were broken, because there were never any true rules in place.

"Clearly, if you have no policy, you aren't going to break policy," Kennedy said. "It was an easy out."

Kennedy said a new policy must:

  • Favour non-disclosure during the relatively brief duration of an election campaign, although this policy could be overridden if deemed essential to public interest.
  • Require that any decisions during an election campaign be made by a senior RCMP member.
  • Specify that any decision to make a sensitive disclosure during the electoral process be made by the commissioner of the RCMP.
  • Require that a detailed written record of all decisions be provided in an effort to provide transparency and accountability. The record should demonstrate that politics didn't play a role in the decision process.

The RCMP said it welcomes Kennedy's report.

"The RCMP has already begun a review of its policies governing public communications relating to investigations," current Commissioner William Elliott said in a statement.

"[Kennedy's] report provides the RCMP with valuable advice and recommendations which will assist in the development of enhanced policies and guidelines, especially related to sensitive investigations."

Goodale's name added to RCMP press release

The income trust fiasco began on Nov. 23, 2005, when Ralph Goodale, then the finance minister in Paul Martin's Liberal government, announced that the Liberals would not impose a tax on income trusts.

Giuliano Zaccardelli, then RCMP commissioner, announced in December 2005 that the RCMP was launching a probe into the income trust scandal. ((Tom Hanson/Canadian Press))

Hours before the 6 p.m. ET announcement, there was an unusual spike in market activity involving the popular investment vehicles, leading to speculation that inside information about the government's intentions may have been leaked to traders, allowing them to profit from the knowledge.

On Dec. 28, at the height of a heated federal election campaign, Zaccardelli announced that the force was launching a full-fledged criminal investigation into the matter.

He specifically named Goodale in the announcement. His media relations team drafted two press releases on the matter — one with Goodale's name in it, and one without — and Zaccardelli chose to issue the one with the name included, Kennedy said.

"But there is no evidence that Commissioner Zaccardelli relied on any improper considerations in coming to his decisions," Kennedy said. "I don't know what the thinking was, one can only speculate," he added.

Soon after the RCMP announced it was launching the income trust probe, the slim Liberal lead in public opinion polls evaporated. Conservative Leader Stephen Harper was elected prime minister of a minority government on Jan. 23, 2006, a victory that critics say was influenced by the RCMP.

Liberal strategist David Herle, a key Martin adviser, said it is widely accepted among political observers that the Mounties' announcement had a considerable effect on the Liberals chances.

Herle told CBC News' Don Newman on Monday that Kennedy's findings warranted a public inquiry, and the current RCMP commissioner "has an obligation" to conduct a continued probe within the ranks.

"This is just a launch pad for further investigations that have to happen," Herle said.

Kennedy said he does not have the ability to rule on whether the RCMP did or did not influence the election outcome. However, he said the simple fact that such a public perception exists is troubling.

"It is important to note that any such real or perceived negative influence on the election could break the trust between citizens and police that is essential to maintaining the rule of law in a civilized society," Kennedy said.

The only charge ever laid in the income case came a year after the scandal erupted. Serge Nadeau, a Finance Department bureaucrat who was accused of using inside information to personally profit from trades in income trust shares, was charged with breach of trust. He has yet to face trial.

With files from the Canadian Press