The Aga Khan can pitch projects and offer gifts to Prime Minister Justin Trudeau and other Canadian politicians without running afoul of lobbying laws because the multimillionaire isn't paid to lobby for the foundation that bears his name, CBC News has learned.

In a letter dated Sept. 21 and obtained Thursday by CBC News, Commissioner of Lobbying Karen Shepherd refused to launch a formal investigation into the Aga Khan following a January complaint he violated the lobbying law by allowing Trudeau and members of the prime minister's family to vacation on his private island in the Bahamas.

In the letter, Shepherd said she conducted an administrative review in response to the complaint.

"After reviewing the information provided to me in the administrative review report, I have come to the conclusion that the Aga Khan receives no payment for his work on behalf of the Aga Khan Foundation Canada and, therefore, does not engage in activities requiring registration as a lobbyist," she wrote.

"Consequently, the Lobbyists' Code of Conduct does not apply to his interactions with the prime minister."

Trudeau meets the Aga Khan on Parliament Hill in 2016. Among the subjects discussed was a $15 million grant for the Aka Khan's Global Centre for Pluralism. (Sean Kilpatrick/Canadian Press)

The complainant, who shared the letter on condition their name not be used, said they aren't satisfied with Shepherd's ruling and plan to ask her to reconsider.

Manon Dion, spokeswoman for Shepherd, confirmed that the letter was sent by the lobbying commissioner's office.

While Shepherd refused in September to investigate, she "can open or reopen files at any given time, based on information available," said Dion. "All factors are considered when making a decision on a file."

Shepherd also has to take into account the provisions of the law such as the requirement that somebody be paid in order to be considered a lobbyist under the law, Dion said.

Democracy Watch to challenge

Duff Conacher, co-founder of Democracy Watch, says refusing to investigate someone on the grounds they aren't paid to lobby could create a giant loophole in Canada's lobbying law.

Among the guests on Bell Island at the same time as Trudeau and the Aga Khan was former U.S. secretary of state John Kerry. (CBC)

"Democracy Watch will challenge this ruling in court, because it is legally incorrect, violates the spirit and purpose of the Lobbyists' Code of Conduct, and opens up a huge loophole that big businesses and other organizations will exploit by having their unregistered board members or staff do favours for, and give gifts to, politicians and government officials they are lobbying as a way of unethically influencing their policy making decisions," he said in an email.

The Aga Khan, believed to be one of the wealthiest individuals in the world, is the spiritual leader of millions of Ismaili Muslims and is listed as a member of the board of directors of the Aga Khan Foundation Canada. The foundation, which has received millions of dollars in federal government development aid over the years, is registered to lobby several federal government departments including the Prime Minister's Office.

A search of the lobbyist registry shows the foundation has filed 132 reports since 2011 outlining its meetings with government decision makers. However, none of those reports list any meetings with Trudeau — despite the meetings the prime minister has had with the Aga Khan and his officials.

A wooden pathway leads to a scenic lookout on Bell Island in the Bahamas. (CBC)

While Shepherd has found the Aga Khan isn't subject to the lobbyist rules which prohibit lobbyists from putting politicians in a position where they could feel a sense of obligation such as giving them gifts, MPs are still subject to conflict of interest and ethics rules if they accept gifts.

Wednesday, Conflict of Interest and Ethics Commissioner Mary Dawson made public a scathing report that found Trudeau violated four sections of the Conflict of Interest Act when his family accepted vacations on the Aga Khan's private island nestled in the turquoise waters of the Bahamas.

She found Trudeau should not have accepted the vacation on Bell Island at Christmas or the vacation his wife Sophie Grégoire Trudeau, a friend and their children took in March 2016. He also violated the rules when he accepted a flight to the island on the Aga Khan's private helicopter, failed to avoid being put in a conflict of interest and failed to recuse himself from discussing a $15 million grant for the Aga Khan's Global Centre for Pluralism, she ruled.

Looking out from Bell Island at night. (CBC)

Only hours after Dawson's report was made public, Conacher sent the lobbying commissioner's office a letter calling on her to investigate whether the Aga Khan "violated the Lobbyists Code by giving Prime Minister Trudeau and Liberal MP Seamus O'Regan the gifts of trips to his island home."

"Your position must be that anyone working for or associated with a company that is registered to lobby a public office holder who gives to or does anything for that office holder … that is more than an average voter does … puts that office holder in an apparent conflict of interest."

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca