The Lobbying Activities of Neelam J. Makhija on Behalf of TIR Systems, Ltd.

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Findings

In the fall of 2000, Mr. Makhija was in contact with a number of companies in British Columbia to determine if there was a match between their investment needs and the repayable contribution arrangements that might be available through TPC. TIR, which was seeking investment funding for a project to develop technologies for high-efficiency optoelectronic lighting devices, was among these companies. We have no evidence that Mr. Makhija was in a contractual relationship with TIR at this time.

Mr. Makhija arranged a series of meetings to be held in Vancouver in December 2000 between several local companies, including TIR, and federal government employees involved in the TPC funding process. On November 14, 2000, Mr. Makhija advised the President of TIR that he and another individual were working to schedule a visit of government representatives to Vancouver. The following week, Mr. Makhija confirmed that he was scheduling the TPC visit and asked for the availability of the TIR President. Mr. Makhija wrote to a TPC investment officer (investment officer) later that month indicating the scheduled date and time of the meeting between TPC and TIR in December. On December 8, 2000, the President of TIR asked Mr. Makhija which government representatives would be coming to Vancouver and whether taking them and Mr. Makhija to dinner would work "with the schedule you [Mr. Makhija] have arranged". Mr. Makhija replied the following day that both an investment officer and a Program Manager from CRC would attend the Vancouver meeting. The President wrote to Mr. Makhija to thank him for arranging the meeting with TPC. The meeting took place in December as scheduled.

A few days later, senior TIR representatives held a meeting with Mr. Makhija. The notes of this meeting on December 15, 2000, entitled "TIR Strategy for TPC", record Mr. Makhija as having contacts and influence with certain government employees related to information technology and electronics.

TIR submitted an investment proposal to TPC on January 11, 2001. This proposal, along with a number of others from other companies, would be considered by TPC in a formal priorization that would determine which proposals would proceed to the next step in the funding approval process. Later that month, Mr. Makhija provided the President of TIR with an update. He wrote that he had met with the investment officer and added, "For now, I am personally acquainting my associates [the public office holders] with the merits of the projects and checking their receptivity. If they have questions, I'll try to answer or connect them to the companies directly."

At a TPC priorization meeting held on February 6, 2001, TIR was not selected for further funding consideration at that time.

On February 16, 2001, the President of TIR relayed information to a company Director from an update that the President had received from Mr. Makhija. He stated that Mr. Makhija had told him that the TIR proposal was still under review by TPC and had provided him with the names of the government employees involved in the review. As well, Mr. Makhija had advised that the investment officer promised to get back to TIR, but asked Mr. Makhija to tell TIR that TPC was still working on its proposal. Finally, Mr. Makhija asked that the President of TIR not contact or pressure TPC because it was working hard on the proposal, but instead to wait for further instructions from him.

A Memorandum of Understanding (MOU) between NJM Initiatives Inc. and TIR Systems Ltd. was signed by Mr. Makhija on February 23, 2001. The preamble states that NJM had been retained to assist in a planning process "with the objective of qualifying for and securing of financial support from government agencies". In this document, NJM undertakes to provide a range of professional services, including:

  • Initial review of project feasibility.
  • Joint review of corporate R&D strategic planning, assessment of strengths, future growth capability and directions, current business plan, to determine project scope.
  • Identification and determination of project qualification criteria for potential funding and sources; project formulation strategy.
  • Compilation of material supplied by the company and other sources; proposal preparation, initial presentation, submission, discussion and defence.

For these services, the company agreed to pay an amount on signing, and on approval of the government's financial contribution to the project, a professional fee calculated at 15% of the total amount of the financial contribution. This type of arrangement is often called a "success fee" or contingency fee. The LRA requires that consultant lobbyists who are paid in this way disclose that fact as part of their registration.

On March 19, 2001, the President of TIR provided senior TIR officials with a further update that he had received from Mr. Makhija earlier that day. Mr. Makhija reported that he had met with the investment officer, who would schedule a meeting for Mr. Makhija and a TPC Director for the week of March 26 in Ottawa. Mr. Makhija believed that changes in the TPC process would make it possible to get TPC approval in the second quarter of 2001 and that TPC was still supportive and would arrange meetings "to take us to the next level." According to the President of TIR, Mr. Makhija also indicated "we are very much in the system, and making good progress…". He added, "Neelam believes we will likely need to travel to Ottawa in the second half of April to keep the interest high, also create more momentum and pressure."

The President provided senior TIR officers with more information on March 29, 2001 based on a recent conversation with Mr. Makhija. He wrote that Mr. Makhija advised him that although the TPC Director had said there was more demand than available money, the Director was "just giving us the standard line" and that Mr. Makhija would evaluate this at his meeting with him on March 30 or the week of April 1. Since both the TPC Director and investment officer had indicated that they would be in Vancouver in early May, Mr. Makhija would try to co-ordinate the trips so both would be in Vancouver at the same time. As well, Mr. Makhija would call an employee from the NRC, whom Mr. Makhija stated that he had known for twenty years, in order to "start building support within NRC."

Mr. Makhija met with a TPC Director on April 6, 2001. Later that day, Mr. Makhija spoke with the President of TIR to inform him of the meeting. According to notes of that conversation, Mr. Makhija reported that he had also met with an employee at TPC who he believed could help TIR by providing a supportive expert opinion on TIR's project. The notes contain a list of names of those government employees considered supportive of TIR. A meeting in Ottawa between TIR and TPC was scheduled for May 2, 2001. The TIR President informed TPC that he, a TIR Vice-President, and Mr. Makhija would represent TIR. He described Mr. Makhija as "TIR's Representative in Ottawa (Consultant)". The President also inquired as to who would represent TPC at the meeting. An investment officer replied concerning TPC's representatives and added "Neelam has invited… [a CRC manager] at my request."

Mr. Makhija arranged a meeting held in May 2001 in Vancouver between TIR, the investment officer and another Industry Canada employee. On April 12, 2001, Mr. Makhija wrote to the investment officer that the Vancouver trip schedule was going well and that most slots were booked. A few days later, he added, "this is how the visits are shaping up. More when we meet later this week." At one point, the investment officer wrote to Mr. Makhija to ask whether the dates for the trip to Vancouver could be changed. An agreement between the Minister of Industry and TIR Systems was signed by the TPC Executive Director on October 30, 2001 and by the TIR President on November 5, 2001. The maximum funding to TIR was set at $6,636,271. Section 6.11 of Schedule 1 of the agreement provides that any person lobbying for TIR in order to obtain the agreement or any of its benefits would register under the Lobbyists Registration Act. The President of TIR had signed a certification dated October 5, 2001, just prior to the signing of the agreement with TPC. He certified to TPC that TIR would advise if a lobbyist were used for the purpose of its Investment Proposal and that such a lobbyist would comply with the Lobbyists Registration Act.

Mr. Makhija's activities on behalf of TIR continued after the company had reached the financing agreement with TPC. This was in accordance with a "caveat" in the MOU between TIR and NJM which states ; "The role of NJM concludes with the achievement of the stated objective, i.e. qualifying for government funding. However, as a complimentary service subsequent to approval of funding, ongoing liaison with funding source(s) will be provided, until completion or termination of the project."

On September 26, 2003, an investment officer spoke to Mr. Makhija, who was in Ottawa to meet later that day with the Executive Director of TPC concerning TIR. The investment officer advised Mr. Makhija that based on information recently received from TIR, a substantive amendment to TIR's agreement with TPC was required, which would take four to six months. Mr. Makhija said that TIR did not want a substantive amendment and then entered into discussions with the investment officer about what external financing changes might be acceptable to TPC in order to avoid a substantive amendment to the TIR agreement.

NJM, Mr. Makhija, and TIR entered into a Settlement and Release agreement dated December 16, 2003. It refers to the MOU of February 23, 2001 between TIR and NJM, which the release terminates, and NJM acknowledges receipt of $1,065,121.50. The agreement specifically names Mr. Makhija as a principle of NJM and is signed by Mr. Makhija both on his own behalf and as the authorized signatory of NJM. In the period from October 2000 to December 2003, there was no registration of either Neelam Makhija or NJM Initiatives in the Registry of Lobbyists.