MEDIA WATCH

Conflicts and credibility gaps

George Bain December 21 1987
MEDIA WATCH

Conflicts and credibility gaps

George Bain December 21 1987

Conflicts and credibility gaps

MEDIA WATCH

By George Bain

Chief Justice William D. Parker of the Supreme Court of Ontario found a serious defect in Ottawa’s rules on conflict of interest to be the lack of a definition of conflict of interest. As a result he devised his own. A real conflict of interest, he said, denotes a situation in which a minister knows of a private economic interest that is sufficient to influence the exercise of his public duties and responsibilities. An apparent conflict of interest exists where there is a reasonable apprehension, which reasonably well-informed persons could properly have, that a conflict of interest exists.

Of the second, he said that, although the perception of a conflict of interest needs to be fair-minded and reasonably well-informed, it does not follow that it must be based on complete understanding of all the facts, including the public office holder’s actual knowledge. He did not say if he thought the media, which inform the reasonably well-informed, should attain a higher standard.

In any case, let us say that I am his reasonably well-informed person. Having viewed the matter reasonably and practically and thought it through, I have concluded that there is an appearance of conflict of interest in the coverage of his commission’s report. My perception is that there is a gap — the commissioner said that things undone as well as done can reflect a conflict of interest—and I perceive a private economic interest to account for it, namely the interest of the media in preserving credibility as purveyors of reliable information.

Look at some facts underlying my reasonable apprehension of conflict of interest. The lead player in the Sinclair Stevens revelations was the Toronto Globe and Mail, which produced two stories—one about a business loan to a company controlled by Stevens from the Hanil Bank, in which the Hyundai group of companies has a small stake, and the possible influence of that on his ministerial dealings with Hyundai; and the other about the minister’s wife having secured a $2.62million loan from a man associated with Magna International Inc., the big car-parts maker to which her husband made development loans as minister of regional industrial expansion.

Of the one, the commissioner said: “It would be quite accurate to say that there is a complete absence of evidence

that Mr. Stevens had any personal pecuniary interest in Hyundai or that he stood to gain in any way by giving Hyundai favorable treatment .... Mr. Stevens acted entirely properly . . . .” In the other, he found that the minister, denials notwithstanding, was aware of the loan his wife had negotiated and that, although Magna received no preferential treatment, the minister’s knowledge of the loan was sufficient to influence the discharge of his public duty. As a result, a conflict of interest existed.

The Globe and Mail, in its national edition the day after the report was issued, carried 22 stories on the subject, to a total of 263 inches of type, including an editorial that modestly, within parentheses, reminded readers that “the inquiry grew out of stories in The Globe and Mail." Nowhere did it find room to acknowledge that in at

The paper's hatting average was .500. That is great in baseball but is usuallg less highlg regarded in journalism

least one key fact, and in its implications (“Bank with ties to Hyundai lent $3.6 million to minister’s company”— headline on a March 27, 1986, story), the first of those stories was found to be wrong. The paper’s batting average, therefore, was .500, which is great in baseball but is usually less highly regarded in journalism.

Still, while its editorial judgment in running the Hanil-Hyundai story may have been defective, at least the Globe had honestly researched it. The same cannot be said for the media generally. As damning an illustration as anyone could invent of the malign influence of pack journalism begins with the fact that the first reaction of much of the media was not to touch the story. The four authors of Sine, The Story Behind the Sinclair Stevens Inquiry—Jim Coyle, E. Kaye Fulton, Bob Hurst and Margaret Polanyi, all reporters—relate how CBC and CTV television cautiously reported not a word when the story broke. They also said, “The Globe and Mail story about the Hanil-Hyundai connection was ignored by other news agencies.” In Parliament, it quickly died.

However, a few weeks later, with

publication of the second story, about Noreen Stevens’s $2.62-million loan obtained from the former Magna executive Anton Czapka, the Hanil-Hyundai story was revived and embellished in both print and broadcast media—and in Parliament. In the excitement of the chase, everything became fair game. The commission collected 50 allegations under the Hanil-Hyundai heading. Some examples:

“The minister allowed Hyundai . . . to break a commitment which . . . cost a minimum of 10,000 jobs ... on his own private negotiation for his own private purpose. . . .” “The minister’s helping Hyundai to get established in Canada was his way of returning a favor.” “The location of Hyundai’s first manufacturing venture in North America . . . was negotiated without the involvement of his departmental officials.” The commissioner found none of the allegations to be true.

Or consider the block of allegations under the Parker commission’s heading, The CDC [Canada Development Corp.] Shares Sale, of which these are a sample: “The way the CDC shares sale was handled . . . favored companies already given preferential treatment by the minister.” “There was a conflict of interest in the way the minister handled the sale of the CDC shares .... The sale allowed the Toronto-based Edper [financial] group to buy the largest single interest in CDC.” “Gordon Capital, retained by the [Canada Development Investment Corp.] to monitor the CDC * shares sale, blatantly manipulated the price . . . .” “Brascan wanted to get control of CDC so that they could ‘cherrypick off ’ its best assets.”

Of those and others, the commissioner said, “I find the allegations relating to the CDC share sale and amounting to an accusation that there was a Brascan-related effort to take over CDC, and that Mr. Stevens was improperly involved thereto, to be wholly without merit and contrary to the evidence.”

There was a lot that was reported that the commissioner did find to be true and to reflect conduct that was reprehensible, all of which has been extensively recorded. But as the exemplification of that fair-minded, reasonably well-informed person, what I would like now is to have my reasonable apprehension of a conflict of interest allayed by signs of media introspection on how so much duff information got on the record.