Revealing CSA’s Pay-to-Play Profits

September 18th, 2017

“These allegations are baseless, for starters, and they’re simply untrue”.  Thus spake Anthony Toderian, spokesperson for the Canadian Standards Association (CSA).  And what allegations was he referring to?  Why, those on RestoreCSA, of course.

In a National Post interview, Toderian issued his blanket denial in response to our claim “that CSA Group allows foreign entities to exert influence, via their system of paid membership, on the safety regulations that eventually become Canadian law.”  In other words, pay-to-play.

The CSA sells influence over legislation.  Amazingly, if you want to amend the law to your advantage you have the option of purchasing legislative votes from CSA to pass your changes to law.  Seriously.  Voting rights at CSA are for sale for as little as $2,000.  As with most cases of influence peddling, the more you pay, the more influence you get.  At CSA, if you pay enough to become a “Level 1 member,” then you are “entitled to 2 votes.”  If you pay double that amount, then you are “entitled to 4 votes.”  See how this works?  If you’re willing to trade more than $6,000, then you become a “level 3 member” and are “entitled to 8 votes.”  If you buy enough votes, you can pretty much do whatever you want with the law.

The reality of CSA’s pay-to-play activities is easy to prove.  Why?  Well, because they were brazen, they actually publicized their influence peddling on their website (and, of course, we have screen captures of all of it).

And that’s not all, our screen captures also reveal that paying the influence fee gives companies “access to key standards information” and “quick access to CSA staff” through the use of a “special unlisted telephone number.” 

Of course, the CSA claims that they don’t take any revenues like that.  Indeed, they’ve claimed in Court that there is no pay-to-play whatsoever, evidence be damned, there are no payments by members for access or influence.  That’s what CSA told the National Post.

We’ve long been able to prove that CSA is indeed selling influence over legislation.  Since 2014, we’ve known how much they were charging, how they were charging it, etc., but we didn’t know the annual sum of all this money CSA was taking in influence sales.  That is, until recently.

Several weeks ago, we received a package of information from Industry Canada in response to an Access to Information filing in 2015 (yes, it takes that long to receive the information).  This filing contained some interesting admissions regarding CSA’s pay-to-play activities.  When reviewed with other government files that we’ve received, it paints a damning picture.

Consider this line, from a Government report on CSA activities;  “USA: FCPA [Foreign Corrupt Practices Act] offences in relation to payments in order to buy influence / votes on CSA boards / committees setting standards for Canadian legislation.”  Or how about this one;  “Secret commissions [and] the receipt of payments in order for companies to buy influence in relation to the setting of Canadian Safety standards with the CSA.”  Or this one;  “Fraud on the Government [in] exercising influence over standards which will be enacted into law”. 

All of these characterizations of CSA conduct originated with the RCMP, Industry Canada is just the Department fretting on how to bury it all.

Yet Industry Canada officials are also buried up to their necks in CSA activities.  While CSA was publicly denying the receipt of any influence payments whatsoever, they were also privately briefing Industry Canada officials on the scale of these payments.  That is, the profitability of CSA’s influence peddling was being used as a marketing pitch at Industry Canada to show how popular regulatory burdens are, how pleased people are to pay for them, and therefrom how badly we need more of them.

Our latest Access to Information report is over 700 pages in length and, amid this morass, it contains one of CSA’s PowerPoint presentations, a confidential one, shown only to their colleagues in the civil service. 

Sometimes sensitive information slips past the Access to Information sensors.  This otherwise bland presentation is unwittingly enlivened on just one slide by the inclusion of mightily sensitive information indeed.  It’s a smoking gun slide.  On this slide, the CSA admits to taking “$60-70MM” in influence payments every year.

If you offered your MP even $100 in trade for voting a certain way, you’d be locked up.  Yet here we have CSA, a renegade regulator of Industry Canada, bragging to their bosses about bribe revenues reaching $70MM per year. 

Remember; these are the sums that manufacturers pay to CSA in order to amend legislation to their liking.  In sad irony, CSA’s denial of these pay-to-play “contributions” was made to the National Post in October, 2013, less than four months after their Powerpoint bragged of the opposite to Industry Canada.

Also note that $70MM in pay-to-play revenues is annual income.  As the CSA takes just over $330MM from taxpayers annually, their pay-to-play revenues represent $21% of their annual income.  For perspective, since CSA launched their litigations against PS Knight Co in 2012, they have receipted more than a third of a billion dollars in influence payments.

This is a big thing.  Measuring the scale of CSA’s influence peddling by their pay-to-play revenues, against the full sum of the famous $8MM Adscam scandal, the CSA situation is 875% larger than Adscam.  Measured against CSA’s total annual revenues, the CSA scandal is 4,125% larger than Adscam.  And Adscam brought down a Government.

Hold on folks, its getting interesting.