Canada's ethics czar investigates former Canadian envoy to Washington over his work for Palantir - POLITICO

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David MacNaughton. | AP Photo/J. Scott Applewhite

OTTAWA — Canada's ethics watchdog is investigating David MacNaughton, Ottawa’s former envoy to Washington, to determine if he broke conflict-of-interest law after taking a senior role last year with Peter Thiel's data analytics firm Palantir.

Conflict of Interest and Ethics Commissioner Mario Dion says he has launched a probe into MacNaughton’s interactions with senior Trudeau government officials since he became president of Palantir’s Canadian branch last summer. MacNaughton, who has close ties to Prime Minister Justin Trudeau, took the job shortly after leaving the ambassador’s post.

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Dion announced the investigation in a letter to Charlie Angus, an NDP member of Parliament who requested the commissioner take a closer look at MacNaughton’s private sector activities. POLITICO has obtained a copy of the letter.

The commissioner told Angus he is examining whether MacNaughton violated rules that place restrictions on former public office holders.

More specifically, Dion said he will 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.

“Given the information in the public domain relating to Mr. MacNaughton’s communications with the Government of Canada on behalf of Palantir Technologies, and additional information the Office has obtained on the matter, I have reason to believe that a contravention of sections 33 and 35(2) may have occurred,” Dion wrote to Angus.

“As a result, I have initiated an examination under subsection 45(1), and have so informed Mr. MacNaughton.”

MacNaughton did not immediately respond to request for comment about Dion's investigation. The Globe and Mail was first to report on the probe.

The commissioner's investigations usually result in reports to the prime minister that are also made public. His office wields powers to summon witnesses to provide evidence and to impose fines of up to C$500 for non-compliance, but that's the extent of his enforcement capabilities under the Conflict of Interest Act.

There have been calls to give the commissioner more teeth after a number of high-profile cases in recent years.

For example, an investigation last year by Dion found that Trudeau broke conflict-of-interest law. The case examined how the prime minister and his staff repeatedly urged his former attorney general to strike a plea-bargain deal with the SNC-Lavalin engineering firm, which faced corruption charges. Dion's finding caught the public's attention, but did not carry criminal liability.

Word of MacNaughton’s interactions with government officials surfaced in late 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, such as tracking and data-related applications, 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.

“I am glad the Ethics Commissioner is investigating Liberal insider/former U.S. ambassador David McNaughton … for his work with surveillance capitalism giant @PalantirTech,” Angus, the NDP’s parliamentary ethics critic, wrote on Twitter late Friday. “This is a good day for accountability.”

Angus said last month that MacNaughton’s remarks about engaging with government raised questions about the “appropriateness of a former ambassador, who’s just stepped down, actively working for a very, very powerful company in the corridors of Ottawa.”

Angus described the situation as “appalling” before sending letters to Dion and Nancy Bélanger, Canada’s lobbying regulator, urging them to investigate.

In one of his letters to Dion, Angus referred to comments MacNaughton made to POLITICO last month.

In the interview, MacNaughton said he sought advice from both Dion and Bélanger when he left the ambassador’s job. “I received guidance and I followed it,” he said. “And I wanted to make sure I wasn’t either offside the letter of the law or the spirit of the law.”

Neither Palantir nor MacNaughton are registered to lobby in Canada.

MacNaughton said at the time that he hadn’t “lobbied anybody as defined by the [Lobbying] Act.” Palantir’s outreach was focused on the Public Health Agency of Canada and the Canadian Institute for Health Information, he added.

MacNaughton was co-chair of Justin Trudeau’s campaign in Ontario ahead of the 2015 election.

As Canada's ambassador, he played a key role in the roller-coaster USMCA negotiations. Trudeau has called MacNaughton Canada's "point person ... in the most difficult and uncertain trade negotiations this country has ever faced."

MacNaughton told POLITICO he still “absolutely” talks to people in the Prime Minister’s Office about broader public policy issues and politics. But he insisted he had never tried to sell Palantir to people in the PMO.

“Do I talk to [Innovation Minister] Nav Bains and do I talk to [Finance] Minister [Bill] Morneau and everything?” he said. “Sure I do. I talk to them about what ... we think is going to happen in terms of Canada-U.S. relations.”

But they don't discuss Palantir, he stressed.

“I’m not going to stop talking to people about public policy issues, I’ve been doing that all my life," MacNaugton said. I’m not going to stop now.”

Palantir has done work for the Canadian government in the past. The company was awarded a C$997,000 contract in March 2019 to develop software for the Department of National Defence.

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