Questions swirl around Hamilton data centre lobbying investigation
DRAC CEO Michael Schull is cleared of wrongdoing. Blunder Valley dives into the Lobbyist Registrar's report
News drop
At around 7 pm on the Friday before the Labour Day long weekend, the results of an investigation into alleged unregistered lobbying by a Hamilton data centre proponent appeared on Council's September 9 agenda.
The report, authored by Hamilton's Lobbyist Registrar and Integrity Commissioner David G. Boghosian, looks into the activities of Michael Schull, CEO of the Digital Research Alliance of Canada (DRAC) in response to an anonymous complaint.
DRAC has applied for nearly $1 billion in funding from the federal government to build and operate an AI data centre near Hamilton's waterfront.
There are rules that must be followed when an organization lobbies a municipality. Hamilton's lobbyist registry is meant to provide a sliver of public insight into efforts to influence our public officials. Lobbyists and their organizations are required to register their activities, document whatever they plan to discuss, and with whom.
To use the registry all a lobbyist needs to do is make an account using an email address, then they're responsible for updating the registry through the web portal. City staff told Blunder Valley that updates on lobbying activities are "generally visible immediately."
Michael Schull is indeed a registered lobbyist. Allegations, however, suggest that he/DRAC set up meetings with elected officials who are not listed as lobbying targets.
If found to be true, Schull would be in violation of Hamilton's bylaws.
The report
The findings are as follows:
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Schull met with Councillors Hwang and Cassar, and did not list them as lobbying targets;
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Schull is a lobbyist;
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The purpose of the meeting was to advance DRAC's business interests;
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Schull wanted Hwang and Cassar to vote against an Interim Control By-Law (ICBL);
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DRAC had a financial interest in the data-centre moratorium not passing;
But, in a surprise twist:
- A lobbying exemption applies, Boghosian says, because the meeting was at the request of a public office holder.
The idea is straightforward: if a Councillor wants more information about something, they can ask for a meeting to get it, and that meeting isn't considered lobbying.
That seems like a fair, but easily exploitable rule.
Mandating such meeting requests to be written is important. It ensures a paper trail exists if someone gets wind of meetings that aren't on the registry, and wants to make sure everything's on the up-and-up.
Without this rule, the danger is that companies could keep their lobbying off the books entirely, and, if they're well-connected and powerful enough, pressure a Councillor to cover for them in the event anyone discovers a meeting took place.
Boghosian agrees, noting the requirement that the request be in writing "enables the Lobbyist Registrar (in this case, him) to verify that the contact was genuinely solicited and distinguish an invited response from an unrecorded or retrospectively characterized lobbying approach."
Who requested the meeting?
Boghosian's report concludes that Councillor Cassar requested the July 9 meeting with DRAC.
There are a couple of... minor caveats, however.
The report notes that Stephen Wu, a DRAC representative, initiated communications with Council on Friday, July 3rd. The email is included in the report, and concludes with the following:
"We understand through our local partners that members of Council have indicated an interest in learning more about the DRAC and so I’ve included a copy of an FAQ on the project and will be reaching out separately to all your offices to hopefully schedule 1:1 meetings the week of July 6th at your convenience."
In answering Boghosian's questions, Councillor Hwang's response appears to suggest it was indeed DRAC that initiated the meeting, saying "Cassar had taken up his [Wu's] meeting request".
On August 10, Cassar wrote, "I took the meeting with him because I needed more information on this topic, particularly as I judged that there was a lot of erroneous information being shared publicly and being sent to me from residents via email."
Not "I requested the meeting." But, "I took."
The Room Change
Boghosian followed up with Cassar that same day with more questions, seeking further clarification as to "who requested/initiated the meeting."
The next day, Cassar responded, writing, "My office initiated the meeting. Cllrs Hwang and M Wilson were also invited. Only Cllr Hwang attended. Details attached."
These attachments include an email Boghosian describes as a "meeting invitation" from Cassar, originally sent on the morning of Tuesday, July 7.
What's odd, however, is that the email doesn't appear to be a meeting invitation at all, but rather a change-of-location notification for a meeting that has already been arranged.
It reads: "Please note change in meeting location to City Hall Room 222"
What we have in the report, then, is DRAC looking to "hopefully" schedule meetings, promising to get in touch to arrange them, followed by a four-day gap, at which point a City Councillor sends an email that references what looks like an existing meeting.
Where, then, is the written request from the public office holder that forms the basis for dismissing the complaint?
Councillor Cassar's office was contacted by Blunder Valley via phone on the morning of Sept 8. After speaking to his staff, questions were emailed to his office at 10:15 am. These included a request for clarification as to how the meeting with Schull was set up. This email was acknowledged and passed on to Cassar according to his staff, but he did not respond by a 4pm deadline that was subsequently extended to 6pm. This article will be updated if a response is provided.
Interpreting things liberally
Ultimately, the report's conclusion leans on a few statements from the two Councillors.
One of them relates to a section of Wu's July 3rd email ("We understand through our local partners that members of Council have indicated an interest in learning more about the DRAC"). The idea being that this "indication of interest" might constitute a written request for a meeting.
The mention of "local partners" appears to reference a statement by Cllr Hwang, who said she reached out to DRAC with a request for information, but did so indirectly, including through a colleague at Hamilton Community Enterprises (HCE), where she is a Director.
Asked why she chose to reach out in this way, rather than do so directly in her capacity as Councillor, Hwang told Blunder Valley this was because HCE "had a relationship with DRAC already." There is no written record of the request.
Then there is the statement from Cassar that he initiated the meeting. Here again, there is no hard verification of this provided in the report.
And to be clear: it is not Councillor Hwang or Councillor Cassar whose actions are being investigated, but those of Michael Schull and DRAC. A lobbyist is responsible for making sure they either register their lobbying activity, or receive a written request for a meeting. Neither condition appears to have been met based on what is present in the report.
The decision to dismiss this complaint seems like it risks allowing precisely the sort of "retrospectively characterized lobbying approach" that Boghosian himself warns of.
Boghosian concedes that "ideally, written requests for information would be better documented than Cllr Cassar’s email meeting invitation here," and then suggests that in adjudicating cases such as this, the requirement for a lobbyist to receive a written request for a meeting "may be interpreted liberally", concluding that "an unduly strict interpretation of “written” would tend to inhibit any form of verbal discussion".
Councillor Hwang, speaking to Blunder Valley, seemed to agree, saying she is "not sure how feasible or practical it is" to require a written request, and suggested that doing so creates "inaccessibility" for those who wish to meet with Councillors.
When asked for her view as to the core intent of the lobbyist registry, Hwang said "the purpose is to daylight and make transparent" the business interests seeking to influence Council.
However, the Ward 4 Councillor worries the system isn't working as intended, pointing out that "many times there will be people that will not register themselves on the registry, or they might do it after the fact," suggesting the system "could be refined."
I suspect that after this episode, a fair number of Hamiltonians will agree.
Thanks for reading. If you enjoyed this piece, please share it with those you think will be interested. And if you have a news tip about a data centre project, send me an email or find me on Signal.