The Revolving Door 

THE “REVOLVING DOOR” of employment is one of the better-observed and documented mechanisms of regulatory capture across all industrial sectors. Career paths which move back and forth between the public and private sectors increase the potential for regulation to orient away from the public interest and towards the private. Also, as regulatory bodies typically require those with expertise in the regulated area, its pool of experts are often drawn from former employees of the regulated industry, making clear the potential for conflicts of interest. Historically, this revolving door has served many people well professionally.

Big Tech has more than tripled its lobbying efforts in Canada since Justin Trudeau became prime minister in 2015, even as lobbying in other sectors has decreased. Meanwhile, the “shadow public service” of private consultancies remains a strong influence. Movements through the revolving door, however, are both under scrutinized and under regulated. According to American research, such movements can be a much better indicator of successful capture than the amounts of money directly spent on lobbying. While lobbying records make formal interactions between companies and government available for public scrutiny, staff movements allow subtler and more organic forms of capture to occur.

The revolving door is not about individuals on their own career paths — there’s nothing inherently nefarious about interesting professional trajectories — but rather the sum effect of what Stéphanie Yates and Étienne Cardin-Trudeau refer to as a “tight-knit circle of actors”. This circle quietly nudges policy through instinct or deliberate action, sometimes proposing regulation that could have come from their former employer’s wishlist, or else cultivating particular expectations of “how things should be done” that emerge from private sector positions more so than public benefits.

Regardless of intent, confidence in regulation is fundamentally undermined by the presence of the revolving door. To give one recent example, when assessing the Canadian Radio-television and Telecommunication Commission’s recent reversal of its 2019 decision on wholesale rates, can Canadians be confident in the neutrality of Commission Chair Ian Scott, a former Telus Vice-President?

While the United States has initiatives such as The Revolving Door Project and the Tech Transparency Project that track movements between the private and public sectors, to date there has been little examination or scholarship on the migration of Canadian government staff to and from the Big Tech companies and the consultancies that represent them.

Our research aims to address this gap by documenting key movements through the revolving door by real people and related to the following tech companies: Alphabet (including Google and Sidewalk Labs), Amazon, Apple, Facebook (now Meta), Huawei, IBM, Microsoft, Netflix, Palantir, Starlink (including Tesla and Space X), TikTok, and Uber.

For more information, contact us at 
info@regulatorycapturelab.ca.

THE “EXIT” STAGE – Government staffers leave or “exit” public office for a private position, whether to work as an employee or as a lobbyist for a company or sector recently within their regulatory purview. They often leave to take on senior policy, communication, or strategy roles. Currently, the exit stage is the only revolving door move covered by the Lobbying Act, which does not account for instances when a private company doesn’t consider their new employee’s lobbying work to account for more than 20% of their total workload.

In the Registry of Lobbyists for example, Facebook’s Canadian Head of Public Policy, Kevin Chan, is not registered as a company lobbyist per se, merely noted as a “Senior Officer”. Chan previously worked for the Liberal Party of Canada, including as Director of Policy to Michael Ignatieff, and was Director of Policy and Research at the Office of the Privacy Commissioner. The Commissioner oversees compliance with the Personal Information Protection and Electronic Documents Act, a federal law that governs how private companies like Facebook collect, use, and disclose Canadians’ personal data.

THE “ENTRY” STAGE – Private sector executives leave their positions to join or “enter” the public office tasked with regulating their former sector. Significantly, the Lobbying Act does not cover the entry stage into public office. Consider Leslie Church. In 2015, she left her role as Head of Communications and Public Affairs at Google to join the Liberal Party of Canada’s back office. She served as a Chief of Staff in multiple departments, including the Minister of Canadian Heritage, a key ministry in the regulating, funding, and taxation of digital content, including content on Google’s YouTube. Church is currently Director of Policy for Chrystia Freeland, Deputy Prime Minister and Minister of Finance.

THE “CIRCULAR” – There’s a reason the door is revolving: it’s not unheard of for someone to move from the private to the public sector then back to the private sector again, bringing with them their knowledge from the government but more importantly their contacts. Among those who have studied regulatory capture in other sectors, the individual typically returns to the same company, sector, or as a lobbyist for the same company or sector.

The patterns we see emerging with Big Tech suggests it is useful to consider not only those who “exit” the public service for the company they came from, but also those who exit to work as lobbyists or consultants on behalf of their former company or sector (see “shadow public service”). Similarly, sometimes individuals leave the private sector to work on party leadership or election campaigns, or hold an official position within a political party. These mouvements sometimes amount to the same thing: efforts on behalf of a company or sector to influence public policy and regulation.

September 2021

Erin O’Toole’s Plan For Gig Workers Was ‘Carbon Copied’ From Uber’s Corporate Lobbyists, Press Progress

Press Progress looks at how the Conservative Party of Canada’s most recent election platform on the protection of gig workers was strikingly similar to the position Uber had been lobbying for. This is hardly a coincidence when Dan Mader, previously a registered lobbyist for Uber, served as O’Toole’s “director of scripting and policy.”

“O’Toole’s platform promises that a Conservative government would require app-based companies like Uber, Lyft and Skip the Dishes to make contributions to an Employee Savings Account every time they pay workers. Workers would be able to withdraw from these funds ‘as needed.’ [...] What O’Toole doesn’t mention is that his proposal aligns with Uber’s recent lobbying to change provincial labour laws around worker classification.”

September 2021

How Accounting Giants Craft Favorable Tax Rules From Inside Government, Jesse Drucker and Danny Hakim, The New York Times

Drucker and Hakim trace the cynical use of the “circular” revolving door move by Big Accounting firms in the United States. The firms place their lawyers in key positions within the Treasury for a couple of years, swaying key tax decisions of benefit to their clients, before returning to the firm as planned.

“‘Lawyers who come from the private sector need to learn who their new client is, and it’s not their former clients. It’s the American public,’ said Stephen Shay, a retired tax partner at Ropes & Gray who served in the Treasury during the Reagan and Obama administrations. ‘A certain percentage of people never make that switch. It’s really hard to make that switch when you know where you are going back in two years, and it’s to your old clients. The incentives are bad’.”

June 2021

Lobbying “from within”: A new perspective on the revolving door and regulatory capture, Stéphanie Yates and Étienne Cardin-Trudeau, Canadian Public Administration

One of the most useful studies to date of the revolving door in Canada, based on primary research undertaken in Quebec with public officers who have been through the door themselves.

“A key finding is that ‘cultural capture’ can occur when new public officers come from the same private sector now within their purview. Based on public officers’ allegiance to their former industry, lobbying is de facto exerted, ‘from within.’ Despite clear irregularities and conflicts of interest, most of those interviewed do not believe in tightening rules and prefer continuing with vigilance from public office holders, journalists, and other observers.”

Web of familiar faces connects government with online giants, Vito Pilieci, Post Media – Ottawa Citizen 

Pilieci surveys the revolving movements between the Liberal backrooms and technology companies as it pertains to pending regulatory reform. As all the companies point out to Pilieci, there’s nothing going on here that’s outside of current rules.

“Crucial decisions are looming on the digital landscape in Canada, giving these connections added relevance. Billions of dollars are likely on the line for companies and for taxpayers.”