It seems that the Senior Manager of CBC – PEI, Jim Ferguson, won’t be responding to my complaint about the failure of CBC-PEI to report on the e-gaming scandal and CMT lawsuit after all – it got bumped up to a higher level at CBC overnight.
This morning I received an email from Nancy Waugh – cc’d to Jim Ferguson and Donna Allen – who identifies as the Managing Editor of CBC Atlantic. I don’t get a sense from what she wrote that she’s conceding there’s any legitimate basis for my complaint…what do you think?
It’s reassuring to know that it will be Ms. Waugh – someone who doesn’t live in PEI – who will eventually respond to the Ombudsman. I’m sure she’s more in touch than me – I only live here.
Her telling me that she’ll be responding to the Ombudsman, well, I take that to mean that she isn’t willing to acknowledge there’s any legitimate basis whatsoever for my complaint. I expect I’ll get more of the same nonsensical nonsense in her response to the Ombudsman that she provided to me in her email today.
Do these high-paid Managers in off-Island cities really believe there’s that much happening on PEI that dozens of people working at CBC in Charlottetown are too overwhelmed chasing down more-important stories to take a minute to tell Islanders about the upcoming PEI Supreme Court Contempt Motion Hearing against the PEI Government scheduled for February 6th? Or the growing number of “deemed refusals” being chalked up with e-gaming FOIP documents being illegally withheld by the King Government?
Consider the top five breaking news stories on CBC PEI’s website I just took a screen capture of:
I’m interested in knowing if CBC is interesting in knowing what you would like to see reported with CBC news. I’ve embedded a poll (you can check back later to see how the results are shaping up) and I’ll send the results to Ms. Allen in a couple of days.
The Two Most Important Stories for CBC-PEI to Cover?
Let’s help Donna Allen figure out what Islanders truly want our public broadcaster to keep us informed about – perhaps in the process we can also reduce the anxiety and stress that CBC reporters are apparently experiencing constantly trying to figure out what’s going on out in the real world in PEI politics outside the CBC bubble.
Knowing that – as Ms. Waugh states so beautifully in her email – at the CBC “…the needs of the audience are always at the centre of our thinking,” then why not exercise your democratic right as a member of the audience and cut and paste the following message to communicate your “needs”. Here is Ms. Allen’s email address [Donna Allen], paste the content, add your own personal touch if you want, then click “send.”
Send Donna a message and you’ll accomplish two amazing things: (1) you’ll have helped to ensure that democracy is still (at least for the time being) alive and well in PEI; and (2) you’ll have hopefully helped CBC Management to better grasp the true meaning of the phrase: “YOU HAD ONE JOB!”
Dear Ms. Allen:
Could CBC please start covering the e-gaming CMT stories in a regular and in-depth way that truly informs Islanders of the many recent and important revelations revealing what is really going on with that ongoing scandal?
And could you also start reporting about the ongoing refusal of the PEI government to abide by the FOIP law? Including perhaps interviewing the Premier – or at least asking him a question – about the upcoming February 6th PEI Supreme Court Contempt Hearing against the PEI government and why his government is refusing to release documents in accordance with the law?
CBC is supposed to be our “public broadcaster” protecting our constitutional rights and freedoms, with a mandate that ties “informing Canadians” to fostering an open, transparent and democratic society.
It’s no secret to those following the e-gaming and CMT lawsuit stories that CBC PEI is failing us badly with fairly and diligently telling Islanders the truth about what’s been going on behind the scenes.
I have been keeping a log of just how poor a job our public broadcaster has been doing on this story, and I was just about to file a complaint with the CBC Ombudsman, but then realized that the first step in that process is to “complain” to the local CBC Manager.
I sent the following letter to Senior Manager, Jim Ferguson, today. I think a week should be a reasonable amount of time to wait to receive a response. If I don’t get a satisfactory response by then, I’ll be filing the more documented and detailed complaint with the CBC Ombudsman. I’ll let you know what happens.
It’s hard to know what’s going on inside the hallowed halls of government these days. After the Guardian published a front-page article informing the public that the King government must appear before the PEI Supreme Court on February 6 to explain why it first broke the FOIP Act, and then ignored a Supreme Court Order to turn over those e-gaming documents to Paul Maines, as per the terms of a Consent Order signed by Paul Maines, the Information and Privacy Commissioner (Karen Rose) and the Deputy Minister of Economic Growth, Tourism and Culture, Erin McGrath-Gaudet, well, you’d think things would be improving. They’re not.
Maines has 4 Court Orders against the PEI government on four separate FOIP requests for which the King government is refusing to release e-gaming documents. Last week, I reported that there was now a 5th FOIP request for which the Dennis King Government is breaking the law.
I’m sad to report that there is now a 6th deemed refusal “non-response” from the King government, with another one of my FOIP requests. That request, as well as the letter I sent to the Information and Privacy Commissioner, Karen Rose, this morning, are included below.
As more has been discovered in the investigation, these last FOIP requests have been very focused on getting additional documentation pertaining specifically to those “cover-up” things that have come to the light of day. I expect there are lots of new bombs ready to go off in those documents, and I’m starting to think one may have a nuclear warhead!
There must be some truly shocking information in those e-gaming documents for the newly-elected Premier – who so forcefully promised so recently to finally deliver true transparency and access to information to Islanders – to have made a name for himself, in such a short time, as the Premier who rules as if PEI had no Freedom of Information Act at all.
Gordon Campbell Robert Ghiz Shane MacEachern Wes Sheridan
This episode revisits issues dealt with in previous episodes concerning the Securities Investigation against Paul Maines and CMT initiated in September 2012 by Steven Dowling, a PEI Government Department of Justice lawyer at the time.
We’ll be looking at those players, actions, and events with new glasses, however, as revelations over the past couple of months shed new light on those actions and events. Things not considered “significant” just weeks ago have suddenly become incredibly important, providing new keys to unlock puzzles making sense out of more and more things, and the connections between them, providing a clearer understanding of what really happened and why.
Such is the case with Shane MacEachern. Never once mentioned in the local media in connection with the e-gaming scandal, Paul Maines, CMT, the Securities Investigation, CMT lawsuit, or the bid to establish FMT as the local company delivering the CMT/Simplex Global Transaction Platform for North America in PEI.
Nor was MacEachern ever called before the Public Accounts Committee investigating e-gaming. He was referred to just once in the Auditor General’s report, but only as a faceless “broker” handling the RevTech reverse-takeover Investment money-raise; his name wasn’t provided.
The Significance of the Pre-MOU Period
More and more pieces of the investigative e-gaming scandal puzzle are now coming together. As sections of those pieces are linked, they reveal what was really going on behind the shroud of secrecy which the PEI government draped around its business relationship with Paul Maines and CMT/FMT.
That Shroud is comprised of materials like (1) a “scorched-earth” policy of e-gaming document destruction; (2) unexplained missing records; (3) non-disclosure of materially-relevant documents to the Court; and now, (4) contempt of a PEI Supreme Court Order to release government documents to Paul Maines requested in a FOIP request, which Maines has a legal right to obtain under the FOIP Act, and which the PEI Government had finally agreed to provide when Deputy Minister Erin McGrath-Gaudet signed a Consent Order issued by Information and Privacy. Commissioner, Karen Rose.
In this quite extensive article, I’m providing a substantial amount of new information within a new framework and context, so it really was impossible to keep this episode any shorter. I was considering breaking it up into a “mini-series,” but the information is best kept together.
The conclusion from the documentary evidence will – if you’re able to persevere through the 20 pages or so – leave you completely gob-smacked. There truly has been so many “shocking” scandals identified within the entire scandal, however, for this one, it’s important to carefully work through that new information leading to the conclusion, not present the conclusion and then see how it was reached; there’s too much new material to cover.
In this episode – which is really the second-last in the series – since episode #25 will be a synopsis of the key findings from all previous episodes – I want to show how the PEI government’s business relationship with CMT/FMT started, in earnest, in the Fall of 2010, gained significant momentum over the winter, leading up to a big, expensive, and secret “gala event” with CMT/Simplex at the provincially-owned Crowbush golf course (as Steven Myers put it in the video clip I present a little later in the episode) back in May 2011.
The truth is that CMT/FMT had a dynamic business relationship with the PEI government since 2010, and there were several early “stages” of development in that working business relationship that had been identified, agreed upon, initiated, and in some cases, achieved (such as CMT’s success in recruiting Virgin Gaming to PEI as a major client for the FMT Global Transaction Platform).
‘There were ongoing discussions and negotiations aimed at eventually reaching a formal agreement, and there were even hopes that progress could lead to a major public announcement later in 2011 to inform Islanders that FMT would be hosting a SWIFT-certified Global Transaction Platform in North America from little ole Prince Edward Island, and Virgin Gaming, a global gaming leader, would be relocating to PEI as a major client on the Platform.
The ridiculous narrative presented by Justice Campbell in his nearly 200-page ruling dismissing the CMT lawsuit rests entirely on two foundational factual errors: (1) that neither Paul Maines nor CMT/FMT/764 had anything to do with e-gaming, and (2) that FMT/764 had absolutely no business relationship with the PEI government prior to the signing of the MOU in July 2012.
Here are just two examples of statements that show how Campbell effectively “severed, then discarded” anything that happened outside the MOU period (60 days + a 30-day extension):
Paragraph 17: Neither CMT nor 764 were ever involved in any way with the so-called e-gaming project.
That’s why those two years of missing Brad Mix records (the ones related to the Order on my review which the Information and Privacy Commissioner will be issuing soon) were deemed to be totally “irrelevant” by Judge Campbell. It didn’t matter to him what was in the documents, they were of no value to the plaintiff, in Campbell’s view, because they fell outside the time scope of the MOU period:
Paragraph 652: …The claims against Mix specifically relate to actions occurring “during the course of the MOU” or “during the period of exclusivity”, which is the same period of time as the MOU was in place. The issue regarding non-archived sent emails relates to a period well before that, being between June 2010 and April 2012.The claims against Mix do not relate to matters in 2010, 2011, or prior to July 6, 2012.No relevance has been shown to Mix’s emails from earlier periods.
What a completely wrong-headed way to look at those missing records. Limiting the scope of consideration on whether those records were of “relevance” to specific “claims” against Brad Mix completely fails to acknowledge that Brad Mix was a key player throughout that entire 2 year period, both sending and receiving many key documents that would shed light on countless issues, including claims against other named Defendants. Tying those key documents to only Brad Mix is a misdirection away from, well, everything that’s about to follow in this article.
Campbell puts the complete onus on Maines to prove that Brad Mix’s emails from the pre-MOU period are relevant, but how exactly was Maines or his legal Counsel supposed to do that when: (1) information was not produced and made available to the Court by Counsel Coady, denying the Plaintiff’s knowledge of the particulars and details of those materially-relevant emails and documents that existed; (2) Coady had stated during Brad Mix’s Cross-examination last January 2019 that he believed he had received all of Mix’s emails; and (3) Coady had already told the Court that he had disclosed all relevant documents, yet, in fact, did NOT inform the plaintiff or Court that 2 years of missing records from Brad Mix that were once in the possession of the government were missing, something he was required to do by law; and (4) particular Brad Mix emails eventually identified in inbox’s of other government employees with whom Brad Mix worked on the file, and requested through targeted FOIP requests, are being illegally withheld by the King government.
Judge Campbell’s refusal to acknowledge the 2-year relationship between CMT/FMT and the PEI government – and everything that transpired between them since 2010, all of which paved the way for the MOU in 2012 – was made easier by Coady withholding documents that would have swiftly and unequivocally demolished Campbell’s rationale for concluding nothing of importance happened before the MOU was signed in July 2012.
In previous episodes, specific issues in Campbell’s ruling were addressed. In this episode, I’ve structured it to show how Campbell’s reckless “severing” of the pre-MOU period represents a fatal flaw in both his legal argument and his ability to tell a truthful story.
To correct Campbell’s distorted narrative, it’s necessary to start from the beginning and tell it the way government documents say it happened. When you’ve finished reading this episode, I want you to remind yourself of this one thing: Absolutely everything discussed in this episode happened in the pre-MOU period. They say if you want to get to the bottom of a covered-up secret scandal just follow the money.
Follow the Money
But first, we have to understand why there was a need for money. To grasp that, we need to recall how and when CMT/FMT first became engaged with the PEI government.
For the purpose of this article, I’ll provide only as much information from previous episodes as needed to provide sufficient context to support the claims being made, and the conclusions that are drawn.
++++++++++++
1. Genesis of the “CMT/FMT-PEI Gov’t” Business Relationship
Garth Jenkins introduced Paul Maines to his cousin Paul Jenkins at a meeting at Smitty’s in the summer of 2010 – 2 years before any talk of a MOU. In a July 16, 2010 email, Garth suggested Paul meet Maines:
I’ve already provided the documentation on that initial meeting in a previous episode, but again, with a different purpose in mind: previously it was to show how Paul Jenkins became aware of the CMT investment opportunity from his cousin Garth Jenkins, not Paul Maines.
We revisit that meeting with an eye to understanding the money trail, why the money was being raised, who was involved in raising the money, who actually invested, and how those people became aware and involved so they could invest, i.e., investigate whether there were any “connections” between all of those investors and if so from whence they sprang as the initial source of information about the money-raise.
Spoiler Alert: Undertaking this investigation on the “investment” side of the story revealed that Paul Maines was never traveling on that yellow brick road – it was initiated by Garth and Paul Jenkins, and from the get-go involved Paul Jenkin’s good friend and “Broker,” who was best friends with Premier Ghiz, Shane MacEachern. All that happened before Paul Maines even met Paul Jenkins.
We need to back up a step.
When Garth Jenkins was pitching PEI to Paul Maines as the ideal place for CMT/Simplex to locate its North American financial transaction platform, Garth had already forwarded CMT’s confidential company financials to Paul Jenkins, and Paul Jenkins, in turn, and unbeknownst to Paul Maines at the time, forwarded them on to his Broker, Shane MacEachern:
Why would Paul Maines be so naive to think that just because his “relation-through-marriage” (Garth Jenkins) was well-connected to key players in the PEI government he’d be able to convince the Boards of Directors of CMT and Simplex that PEI was the place to establish its North American Financial Transaction Hub?
Well, here’s another part of the story that’s never been made public. Garth Jenkins was a major player (VP of Business Development, the same role Maines had with CMT) in a company called Ventis, that offered exactly those kind of services:
Garth Jenkin’s “bio” certainly would have given Maines a sense of confidence, given Jenkin’s past success in pulling off major financial deals such as was being considered with locating the CMT/Simplex Global Platform in PEI:
When Garth Jenkins passed the information on to Paul Jenkins about the CMT/Simplex location in the North American plan and the possibility of that happening in PEI, with government cooperation, as well as the money-raise with Raymond James (a brokerage firm in Toronto), Paul Jenkins expressed strong interest in spearheading the venture, as we know in retrospect.
Garth contacted the person managing the fund at Raymond James to inform him that his cousin (Paul Jenkins) was not only interested in making an investment in CMT, but had knowledge of potential “shell” companies to target for a takeover.
Just a month later, in an August 19, 2010 email from Garth Jenkins to Philip Walsh, (also cc’d to Paul Jenkins and Paul Maines), we see just how far things had moved down the road with the PEI Government plan to recruit and establish FMT in PEI for CMT/Simplex’s planned launch of the Global Transaction Platform/Claimatrix in North America. FMT had been incorporated, and hundreds of thousands of dollars had already been raised for the initiative:
“PJ [Paul Jenkins] and Paul [Maines] will see Gary [Jessop, CMT’s lawyer] in Ottawa. The only thing to do now is for Gary to clarify the steps for completing the transaction and to come to agreement/decision on the allocation of the initial CDN $300k in funds…We have prepped the PEI government to the fact that we will have a business plan for submission by mid-Sept. As well, the financial budgets are 90% complete. For the business plan, we will just need your final budget for work in the UK.”
Garth Jenkins went on to explain how the money that was being raised would be divided up and allocated: a 1/3 component was to go to the RevTech Shell Company purchase.
It was, in the beginning, Garth Jenkin’s connection with Paul Maines that gave birth to the idea that the CMT/Simplex Global Transaction Platform presented a huge opportunity for PEI.
It was both Garth and Paul Jenkin’s connections with certain key individuals in the government that gave rise to the secret CMT/FMT Simplex Global Transaction Platform initiative beginning in July of 2010, two full years before the MOU.
It was especially the “Jenkins” direct line to Premier Ghiz through Jenkin’s Broker that clearly expedited the process, without question. Things moved quickly, and by early 2011 the due diligence on CMT/Simplex and the PEI government had contracted an expert to undertake a study of the feasibility of the CMT/Simplex Platform locating in PEI.
February 28, 2011: Innovation PEI signs a contract with Patrick Mason on February 28, 2011, authorized by Brad Mix and then-CEO of Innovation PEI, Neil Stewart.
March 14, 2011: Paul Jenkins emails Paul Maines (CMT), and Philip Walsh (Simplex), to say that Patrick Mason’s report on FMT (100%-owned by CMT) on the PEI Government potentially locating the Simplex Global Transaction Platform in PEI through FMT (CMT had exclusive North American rights to distribute the Simplex Global Platform) was completed.
Following the completion of Mason’s “big doc” report, FMT was formally recruited to establish in PEI. Innovation PEI provided a tailored recruitment “package” with details on what the PEI Government was offering if FMT decided to establish the Transaction Hub in PEI, including the following:
There was growing enthusiasm about the prospect of getting an internationally-recognized SWIFT-accredited financial services platform established in PEI and “all systems were a go” for FMT to establish the Financial Transaction Platform.
May 4, 2011– Melissa MacEachern, still the Deputy Minister of Tourism, contacted Paul Maines and learned that FMT could deliver a Loyalty Card Program through the Transaction Platform. MacEachern’s “it’s a go” email response to Eddie Francis (Maines hired Francis to work on the Loyalty Card Program, on behalf of CMT) was a testament to the confidence MacEachern had that the FMT deal was also “a go,” and that her view was that it would just be a matter of working out the details. She was obviously counting on the Platform being in place by the time the program was developed and ready for roll-out in about a year – without the Platform, there could be no Loyalty Card.
MacEachern’s contact with Maines on the Loyalty Card Program wasn’t just a question of getting an opinion from Maines, but I’d say some pretty high-level thoughts. Here’s some of what Maines provided MacEachern in response to her inquiry:
What was MacEachern’s response? Pretty much exactly the same as mine:
The pace at which things were moving forward for CMT/FMT from late summer, 2010 to early Spring, 2011 was actually quite remarkable.
The recruiting package provided to FMT stipulated the need to establish a local company with local investors and local representation on the board, and from all appearances, Maines and others with CMT and Simplex were satisfied that Paul Jenkins was doing what they expected him to do: establish FMT (raising money for the Shell company takeover) and move things forward with the PEI government.
Paul Jenkins seemed to have everything under control and headed in the right direction. He was working with his trusted “Broker of Record” Shane MacEachern, money was being raised with all the paperwork in order, and up until September 2012, there were simply no red flags that might have alerted Paul Maines that all was not as it seemed when he learned of the “Keith Laslop” Newco sabotage from Tracey Cutcliffe in September 2012.
Everything was going so well by May 2011, Ghiz apparently offered his buddy MacEachern the Crowbush Golf Course to wine and dine CMT/Simplex on the very day before the golf course was scheduled to open to the public, allowing a select group of Island individuals to socialize with CMT and Simplex on the greens while working out a game-plan for the eventual rollout of the transaction platform. The Agenda shows there was also a scheduled meeting with Premier Ghiz with prepared “briefing notes”.
2. Remember Crowbush?
Let’s start with a video clip of Steven Myers asking Allen Roach about that CMT/Simplex get-together on the greens at Crowbush with PEI government personnel (and others) at the Crowbush golf course that took place in May 2011. That event only became public knowledge in 2013, when the PC Official Opposition obtained e-gaming documents from a FOIP request:
Yes, the Loyalty Card Program was a part of the discussion, but the Crowbush event was not happening because of the Loyalty Card Program. And no, efforts to establish gaming on PEI had not ended – it had been “married” to the Financial Transaction Platform project just after Neil Stewart informed Wes Sheridan about Virgin Gaming, a client of CMT/FMT, deciding to relocate to PEI.
The only thing that “ended” with the drive to establish gaming was the illegal scheme by the “gaming committee” [Gary Scales; Don McKenzie; Mike O’Brien, Wes Sheridan, and Chris LeClair] to regulate online gaming and collect tax revenues, which was deemed in contravention of the Canadian Criminal Code and should never have been initiated in the first place.
The plan to recruit a financial transaction platform to host gaming companies, financial institutions, etc. was actually intensifying at the time, and the assumption was that FMT was going to be that Transaction Platform company.
Melissa MacEachern had contacted Maines in May 2011 to inquire about FMT/Simplex’s capacity to deliver a Loyalty Card Program for Tourism PEI [She was still Deputy Minister of Tourism in the Spring of 2011] BECAUSE she knew things were moving forward with the FMT Platform. The Crowbush event planning was already well underway by that time, and, as you’re about to see, the discussion was all about the platform, not the Loyalty Card Program as Roach stated.
Notice that the date on MacEachern’s email to Maines was May 4, 2011. That was the very same time the Crowbush plans were coming together, and lots of chatter was happening amongst the e-gaming secret society members, one of whom was Melissa MacEachern. Consider the following email sent on May 5, 2011, the day after MacEachern’s email to Maines:
The information Paul Maines, as VP of Business Development, provided to Paul Jenkins by way of background information and “briefing notes” on the Platform, as material for the briefing notes to the Premier, began as follows:
The presentation was all about what FMT/Simplex could offer PEI, and although I won’t present all the details of that here, consider the information in just one slide in the document:
Myers doesn’t mention that Shane MacEachern attended the event, and why would he have singled him out? Shane MacEachern was a financial broker at RBC. Sure, his wife was the Deputy Minister involved with both the Loyalty Card Program and MOU with FMT, and apparently, he golfed twice a week with Premier Ghiz, but still, Shane MacEachern was NOT a government employee or agent contracted by the government.
Myers doesn’t mention that Shane MacEachern attended the Crowbush event with FMT/Simplex because, I suspect, he regarded his presence on that list of attendees as insignificant. Who was Shane MacEachern in the e-gaming scandal besides a low-level broker at RBC doing administrative paperwork on a money-raise anyway?
Nor does Myers mention – because I’m sure he didn’t know – that it was Paul Jenkins and Shane MacEachern who planned the Crowbush event with Premier Ghiz.
Pay close attention to the details in this May 15, 2011 email that Shane MacEachernail sent to Paul Jenkins:
In fact, it was Shane MacEachern who worked with Paul Jenkins on a draft of the “Briefing Notes” prepared for Robert Ghiz on the FMT/Simplex meetings and, using the overview description of the FMT/Simplex Global Financial Transaction Platform information drafted by Paul Maines regarding establishing CMT’s North American hub for that Platform in PEI.
You’ll notice from the following email exchange between Shane MacEachern and Paul Jenkins that a draft of those “Briefing Notes” for Ghiz was attached, however, Maines was not copied on that email, and never obtained a copy of the actual briefing notes provided to Ghiz, nor did Jonathan Coady disclose that key document to the Plaintiff or the Court.
To sum up a bit:The initiative to establish a local company (CMT was a US-registered company) to provide the Global Transaction Platform came entirely from the PEI government – not Maines – after Garth and Paul Jenkins enlisted government support for the initiative. A very big part of that “support” came from Shane MacEachern’s close friendship with Robert Ghiz.
The “money raise” wasn’t something that was initiated by, or in anyways involved, Paul Maines, who was the VP of Business Development for CMT at the time, It was entirely driven by the two Jenkins as they began picking and choosing who they were going to “let in” on what they belived would be a bonanza coming from the purchase of “convertible debentures” that would later become “shares” in FMT, paying huge returns.
3. There’s Zero Evidence Paul Maines Solicited Investments
If Paul Maines didn’t solicit investors for CMT, then the Securities Investigation launched against him was not only bogus, it was incredibly malicious.
There is absolutely no evidence anywhere in the Court Record that Maines solicited any investments, as Judge Campbell claims he did. Once we better understand the genesis of the CMT/FMT “money-raise,” we’ll see how it happened just like any other secret insider deal among a tight-knit group of Island business people, bureaucrats, and politicians, and Maines wasn’t a part of that circle.
As this first 25-part series winds down, it’s important to pull some of the findings together to reveal what has not previously been known or understood about who did in fact “solicit investments” – someone like the hidden e-gaming power Broker nobody knows anything about, Shane MacEachern.
I spent three full episodes proving that the accusations that lawyer Steven Dowling swore – and Judge Campbell accepted – claiming that three investors in CMT had told him that Paul Maines had solicited investments from them (Paul Jenkins; Jeff Trainor; and Gary Evans) – were all completely false. Those three individuals each swore an Affidavit proving those sworn claims from Dowling about what they each said to him were false. Campbell went with Dowling’s “direct evidence” which he said was “unrefuted” nonetheless.
Campbell not only relies on Dowling’s sworn testimony that some of the investors had been solicited by Maines, but he also relies on a document he claims that Paul Maines distributed “for the purpose of soliciting investments”:
Paragraph 286: I note the slide presentation 764 shared with Innovation in late 2012 was actually a set of slides copyrighted by Simplex and identified as confidential which had previously been in the possession of Paul Maines and had been distributed by him to others in 2011 for the purpose of soliciting investments.
I’m not sure if Judge Campbell reviewed that slide presentation document, but I have, and there is absolutely no mention of “investments,” or any particular business plan or initiative. They are slides that CMT/Simplex used repeatedly with prospective clients to describe the Global Transaction Platform, how it works, and all the services that CMT/Simplex can offer clients with that SWIFT-accredited platform, including CMT’s world-class “Claimatrix” patented software providing a foundational and highly-valued “stack” on the Simplex Global Platform.
Simplex’s Global Transaction Platform has been mentioned often in my previous articles, and I’m sure a lot of readers struggle to envision what it might look like, so it’s probably a good time to show you. Here’s one slide from that package that Campbell refers to:
The reason I said earlier that I’m not sure whether Campbell even reviewed these slides is that Campbell refers to “Claimatrix” in his decision as a UK company [See Paragraph 486], and doesn’t seem to realize that Claimatrix was financial services transactions software 100%-owned by CMT/FMT.
4. “Who Exactly is Shane MacEachern Again?”
I mentioned there was but a single reference to Shane MacEachern in the Auditor General’s E-gaming Report. She drew attention to the fact that the Deputy Minister of Innovation [Melissa MacEachern] was in a potential Conflict of Interest situation when M MacEachern authorized both the MOU and Loyalty Card programs with FMT:
Section 6.19: Section 9 of the Conflict of Interest Policy in place at the time, which applied to Deputy Heads, outlines the concept of preferential treatment. Specifically, it states that “employees must not accord preferential treatment in relation to any official matter to family members, friends, other persons or organizations in which the employee, family members or friends have a financial or other interest”.
Melissa MacEachern was the DeputyMinister of Tourism and Culture when the Loyalty Card Program study began. She was subsequently made the Deputy Minister of Innovation and Advanced Learning, during the time the MOU was signed.
This was problematic for the AG since it raised the question of whether the Deputy Minister provided preferential treatment to CMT and Simplex involving both the Loyalty Card Program and the Memorandum of Understanding signed with TBT, a subsidiary of CMT, because those came about without any public tendering process.
What the AG didn’t mention – because she apparently wasn’t provided the documents that would have made her aware – was that FMT was already in a business relationship with the PEI government on track to establish a local company to deliver the CMT/Simplex financial transaction platform and had “first-mover advantage” on things like the Loyalty Card Program. The government was keeping all of that entirely secret at the time.
In a May 16, 2011 government email confirms that the government knew exactly why FMT was later offered a MOU and was asked to develop the Loyalty Card Program – because, as Eden put it, FMT is the “company that is part of the secret e-gaming file”:
The other day I was discussing my research on this episode with someone who used to be a client of Shane MacEachern. I don’t rely on “hearsay” in my research, but this individual knew him well, and told me that Shane MacEachern had told him once that he had inside connections with Billy Dow and Robert Ghiz, and golfed with them on a regular basis (he said “twice a week”).
Of course, another close friend of MacEachern was Paul Jenkins, the “sole director” of FMT at the time and the face of the company to the PEI Government. It was to Shane MacEachern that Paul Jenkins went to get a “Broker of Record” for the CMT investment money-raise.
Shane MacEachern – despite being the money-man for the entire Global Financial Transaction project with FMT/Simplex – has flown under the radar in PEI. He has somehow managed to keep everyone unaware of his core role in the secret e-gaming scandal and that activity completely hidden. He was, however, “detected” by Robyn Doolittle as having played a significant role in the scandal nearly 5 years ago.
It’s taken me 2 years to realize what Robyn Doolittle somehow grasped when she looked into the E-gaming scandal back in early 2015, then published her piece in the Globe and Mail, titled Small Island, Big Bet. When I recently returned to her article to fact-check something else, the first three words in her piece struck me as incredibly significant for the first time: John….Shane…MacEachern:
“John Shane MacEachern worked in finance. His wife was PEI’s deputy minister of tourism. Jeff Trainor was a manager at a golf club, and his wife worked part-time at an investment firm in town. The couples lived next door to each other and had kids around the same age. They saw each other nearly every day.
So when Mr. MacEachern learned about a big money-making opportunity, he told the Trainers about it.
Mr. MacEachern was brought in by his pal Paul Jenkins, who’d gotten involved via his cousin, Garth Jenkins, who was dating the cousin of one of the main players, a man named Paul Maines.
The tip making its way around Charlottetown went like this: A U.S.-based tech firm wanted to open some sort of global banking platform on the island and the province was supposedly interested. If things played out the way boosters envisioned, a big payday was awaiting everyone involved.
Mr. Trainor wired $10,000 to Capital Markets Technologies. He was one of 36 islanders to invest a combined $701,030 in CMT.
Even those close to power got in on the gold rush. A Charlottetown lawyer – one of then-premier Robert Ghiz’s close confidants – invested $10,000, then later advised the government during a phase of the proposed deal. PEI’s conflict of interest commissioner put in $15,000. The premier’s chief of staff also had an interest: Records show his wife invested in a dormant shell company that CMT was trying to buy. The money flowed despite the fact that only a handful of CMT’s investors knew the full plan behind the financial hub.”
Shane MacEachern and Paul Jenkins were the main “financial architects” operating behind the scenes, always in secret, driving things forward, step-by-steps from the very beginning.
If Shane MacEachern was the Power Broker for the FMT money-raise, why was Paul Maines accused of soliciting investments? If any of the investors were, in fact, not “accredited” as Dowling claimed, shouldn’t have Shane MacEachern been the person penalized for that, not Maines?
Shane MacEachern was eventually investigated and fined, but that too was covered-up by the PEI government. He was not investigated and fined for security irregularities by the PEI Securities Commission (Dowling) – but rather, a National Regulator, IIROC.
The PEI Securities Commission decided not to post the documents about that on the website, like other cases, such as Paul Maines & CMT. All cases are supposed to all be posted on the website, but someone apparently has the power to decree that only Paul Maines and one other poor schmuck need to be publicly flogged – Shane MacEachern got a pass:
The CBC – the only news outlet that reported the Securities violations by Shane MacEachern back in May 2014 – was (for reasons I’m not privy to) careful to provide no information that would make a connection to e-gaming, CMT, Robert Ghiz, or, quite frankly, anything. I decided to take a closer look.
5. IROC’s Investigation Into Shane MacEachern
The Investment Industry Regulatory Organization of Canada (IROC)is the national organization that regulates brokers like Shane MacEachern, as well as the “Dealer” companies and institutions which those brokers belong to, like RBC Financial.
In early 2014, it appears Mr. MacEachern was investigated and found guilty of various “investment securities” irregularities. To my knowledge, there was just one news article reporting that incident.
It’s unfortunate the CBC reporter didn’t mention the name of the company for which Shane MacEachern solicited and brokered investments with RBC clients. notwithstanding he hadn’t been “…approved by his employer” to do so. So what was the company?
Settlement Agreements – like Court rulings – are public documents. In fact, you can find Shane MacEachern’s Settlement Agreementonline. Anyone want to venture a guess as to what company MacEachern sold investments to his clients behind the backs of his boss and compliance officer?
The following is from the News Release issued by IIROC following reaching the agreement with S. MacEachern:
What’s especially important to note here is that several of the Investors Shane MacEachern solicited were not deemed to be accredited by IIROC
Paragraph 22: In total, 17 potential investors who were communicated with by the Respondent invested approximately $178,000 in securities of CMT. Twelve of these investors were clients of RBC DS. None of the investments were recorded on the books of RBC DS. Although some of the investors qualified as “accredited investors” pursuant to NI 45-106, several did not.
Shane MacEachern was acting – as far as Paul Maines knew at the time – as a bona fide Broker on the request of Paul Jenkins. I suspect Maines had no reason to assume anything other than that all the proper procedures were being followed, and all the regulations and rules requiring compliance with RBC and IIROC policy, as well as the PEI Securities Act and Regulations were being complied with by Shane MacEachern as a result of RBC’s internal compliance procedures and officer.
Even more shocking than learning that MacEachern facilitated investments with RBC clients without RBC’s oversight and approval, is the discovery that Shane MacEachern had sought approval from his supervisor to act as the “Broker of Record” for the CMTmoney raiseand was declined approval, but went ahead and did it anyway, on the sly..
From the Settlement Agreement:
When someone tried to throw Paul Maines under the bus and essentially ruin him -as well as CMT/FMT’s venture with the PEI Government – by spreading a bogus rumour that Maines bilked some old lady with cancer out of her life savings, Steven Dowling almost immediately began a securities investigation into Paul Maines and CMT.
The main point I want to make here is that it was BECAUSE Dowling began that investigation that we now know he would have discovered that it was Premier Ghiz’s good buddy Shane MacEachern who did all the soliciting on the CMT money-raise (with his good friend Paul Jenkins) – not Paul Maines.–
Dowling nonetheless proceeded to launch an investigation against Paul Maines for which there was absolutely no evidence, notwithstanding the fact that no one EVER filed a complaint against Maines, and not a single one of the CMT investors ever complained about the investments they had in CMT. Nor has anyone ever lost any money. Those wanting their money back received it, with 12% interest. Many chose to keep their shares in CMT and attempt to ride out the storm.
What did Shane end up having to admit he did following the IIROC Investigation? Get ready to be shocked!
“Paragraph 5. The Respondent admits to the following contraventions of IIROC Dealer Member Rules, Guidelines, Regulations or Policies: Between July 2010 and June 2011, he recommended and facilitated an investment in securities without the consent or knowledge of his Dealer Member, contrary to IIROC Dealer Member Rule 29.1. 6. Staff and the Respondent agree to the following terms of the settlement: a) A fine in the amount of $25,000; b) A 6 month period of strict supervision; and c) The Respondent shall re-write and successfully complete the Conduct and Practices Handbook Course within 12 months of acceptance of this Settlement Agreement. 7. The Respondent agrees to pay costs to IIROC in the sum of $5,000.”
I’ve seen the documents for those particular CMT Investments, and CMT’s lawyer – Gary Jessop – was careful to include a waiver where each and every investor signed to confirm that they were “accredited”. With the documentation coming from a bona fide broker with RBC, why would Paul Maines or Gary Jessop have any reason to question that all due diligence and compliance by the broker had taken place?
But here’s the problem for MacEachern, and it’s a big problem, one that would have probably put Shane MacEachern on the list of Defendant’s in CMT’s lawsuit if it had been realized at the time of filing: Shane MacEachern had asked for, but was denied permission to act as the Broker of Record for the CMT investment, but went ahead and did it anyway, behind the backs of his supervisor and compliance officer.
By undertaking this underhanded strategy to engage in raising funds while presenting himself as an RBC Broker when he was doing that privately, in defiance of his supervisor and compliance officer, he was, by so doing, denying himself all the compliance tools and authority needed to undertake proper due diligence and compliance assurance: in effect, although he continued to present himself as a bona fide RBC Broker to CMT, he was effectively acting on his own without the approval or support of RBC. Surely Dowling would have discovered that at the time!
So why didn’t Dowling drag Shane MacEachern through the muck and issue a news release across Atlantic Canada warning the public that if anyone should be approached by Shane MacEachern, and he mentions “money,” they should immediately contact the PEI Securities Commission? Like they did with Paul Maines.
More importantly, Dowling would have also discovered what IIROC discovered, namely that there were “several” of the investors who (although they signed documents saying they were accredited investors) that IIROC had determined were not accredited, investors.
If MacEachern had asked the compliance officer at RBC whether those “several” investors met the standard to be considered “accredited” (whatever that is) he would have been told “no;” but MacEachern denied himself access to that critically-important service legitimizing his brokerage work by doing his dealing completely on the sly.
The really important question remains:If Dowling (1) discovered the truth about who solicited the investments (Shane MacEachern) that were (2) deemed to be not accredited, thereby (3) violating securities regulations, why did Dowling pin what he surely knew Shane MacEachern did – regarding soliciting and brokering CMT investments – on Paul Maines? Someone who had anything whatsoever to do with either soliciting investors or offering brokering services of any kind – and for which there is no evidence produced to support to this day, notwithstanding Campbell’s declarations that’s what Maines did. Goes to show the power with the hidden e-gaming Power Broker that no one ever heard about I guess.
Meanwhile, the scapegoat used to effect this ongoing cover-up, Paul Maines, has spent five years, and probably a couple of million dollars (with the $1 million Judge Campbell forced him to pony-up just to have his case considered by the former President of the PEI Liberal Party, and then years wasted, only to finally to be denied a trial) is still trying to get his day in Court in PEI’s justice system – that’s all – his day in court!
Most days I’m bursting with pride to be an Islander. This is not one of those days.
In yesterday’s post about the new filing against the King government for a contempt order Maines is hoping to obtain on February 6th, the date set for the Motion Hearing, I mentioned there is now a “5th” deemed refusal by the King government, and that one is one of my e-gaming investigative FOIP requests seeking records that Brad Mix had sent or received from John Eden from Eden’s email archives.
I don’t believe in coincidences. All of these refusals pertain to Brad Mix’s records. Two years of his records (in two separate archives) mysteriously went missing, and an Order from the Information Commissioner will be coming out on that sometime before June, 2020.
The government must be very concerned (afraid?) with what they discovered when they became the government. No other explanation comes to mind to explain the outrageous and absolute flip-flop on e-gaming and the CMT lawsuit, and the quite irrational non-compliance with our basic Freedom of Information provincial laws, not to mention our Charter Rights.
I received an email this afternoon from the Information and Privacy Commissioner, Karen Rose, with an attached letter she sent to the Deputy Minister of Economic Growth, Tourism and Culture, Erin McGrath-Gaudet on this file.
First, read my letter to Ms. Rose sent via email on January 6th, requesting an Order compelling the King government to follow it’s own law.
I hope you had a nice break over the holidays and, all the best in 2020.
My instinct is that 20/20 is going to provide Islanders with some new insight into just how difficult it is to receive an honest, complete and supportive response from the government when requesting information or documents as a tax-paying citizen.
When I look back over the past two years, and all the time and money and effort I put into trying to obtain information from the PEI government on e-gaming, I honestly wonder why I bother. If it’s this difficult for me, someone with a fair bit of experience doing this kind of investigative work, it makes me think that most Islanders would not be able to navigate the system to even initiate a process to get information.
This is not the way the system is supposed to work. The government is supposed to cooperate with applicants and assist them in getting expeditious access to the information they are seeking. Yet, it seems there has been a perennial, systemic bias in government against releasing information, and the objective always seems to be to release as “little as possible” rather than “as much as possible.”
I’m not sure if the promised “additional resources” in the PC pre-election platform have trickled down to your office yet, and I know you have a lot on your desk; however, I’m not getting a response on this Access Request, so I’m treating it as a failure to provide me with the records to which I have a right under the FOIPP Act and I’m seeking your assistance in getting these records.
I’m not sure what else to do but to request an Order from you compelling the Department to produce the records in accordance with the provisions of the FOIPP Act to which they are bound.
Sincerely,
Kevin J. Arsenault, Ph.D.
Attachments:
Acknowledgment of FOIP Request Letter
Request for Extension
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Following is the Letter Ms. Rose sent to Deputy Minister Erin McGrath-Gaudet today:
There’s lots more happening in the coming days. I’ll do my best to publish the most important information by way of updates.
Earlier today (January 15, 2020) Paul Maines filed a Motion Record, Affidavit, and supporting documents in the PEI Supreme Court, and served Deputy Minister Erin McGrath-Gaudet with a Notice of Motion for a hearing to be held in the PEI Supreme Court on February 6, 2020. Maines sent that Court filing document (23 pgs) to a long list of media earlier this evening.
Maines is seeking two Orders from the PEI Supreme Court: (1) a Contempt Order, pursuant to section 60.12; and (2) an Order for the government documents he is seeking to be released.
Background
On May 14, 2019, Maines filed a FOIP request with the Department of Economic Growth, Tourism and Culture seeking the following:
When months passed, and the Department exhausted all legitimate reasons for extensions, and still refused to release the records, Maines filed reviews on four separate Access Requests with the Information and Privacy Commissioner, Karen Rose.
By that time all four files were considered by the Commissioner to be in “deemed refusal” – e .g., the government was defiantly refusing to turn over the records to the applicant despite having no legal grounds to withhold them, in complete contravention of its own FOIP Act.
“Consent Orders” were sought by the PEI government as a show of good faith in providing Maines with the documents. Maines agreed to provide the Department with additional time, on a schedule for document releases (each of the four “staggered” and to be released at different times) and that schedule was determined by – so obviously acceptable to – the government at the time.
Those four Consent Orders were signed on September 23, 2019, by all three Parties: (1) the Deputy Minister (Erin Gaudet-McGrath), (2) Paul Maines, and (3) the Information and Privacy Commissioner.
Maines then filed those four Orders with the PEI Supreme Court, each Order getting its own Court File number, effectively making them Supreme Court Orders.
The deadline for the PEI government to turn over the documents on this particular Court Order was January 7, 2020. That didn’t happen. Now Maines has filed a Court Action to compel the release of the documents, and we’ll find out what will happen soon.
Premier King made sure the Minister of Economic Growth, Tourism and Culture was aware that transparency was a priority when he wrote the following in the Mandate letter to Minister MacKay: “We seek the involvement of the People, ensuring our progress is measurable through transparent decision making and broad public engagement.”
In keeping with the theme of my next 25-part series, “All the King’s Horses: Then and Now” – which will feature the myriad of flip-flops on the e-gaming/CMT lawsuit file with the PC government – I’ll end with the THEN words of Dennis King (before he became Premier) spoken at the all leader’s debate at the Murchison Centre. King received rousing applause with these eloquent words:
“I think that a lot of problems become challenges for the government when the proper information is not in the public domain…I come from this background of Journalism, and I believe deeply that knowledge is power, and I think that transparency is something that all people in Prince Edward Island are not just expecting, but they’re demanding, from their elected officials, I think it’s really a value of trust. At the end of the day, it comes down to proper transparency.” [Premier Dennis King]
Those words were not only very wise, that part about “…problems becoming challenges for government…” was eerily prophetic.
If you want the full monty, step-by-step detail on this “breaking news” (I wonder if the CBC, Guardian, Journal Pioneer, and Eastern Graphic will report this news?) you can read the Motion, Affidavit and 5 accompanying documents here: Maines January 15, 2020, Court Filing.
If you’ve been following this 25-part series on e-gaming, the CMT Securities Investigation, CMT’s lawsuit, and Judge Campbell’s September 25, 2019 decision to dismiss all claims by CMT against all defendants, then you’ll recall from my last episode (#22) that the King government was facing an important January 6, 2020 deadline to file a Response with the PEI Court of Appeal.
I have been receiving lots of inquiries about what happened on the 6th (Monday) – since, once again, sadly, there’s been no mention of any PEI government filing by any Island media. So, I thought I’d provide an update on that, as well as on a number of other aspects of my ongoing investigation.
I want to also let you know how I plan to present further results from my investigation on a go-forward basis. The Appeal is set for mid-May. The King government and Jonathan Coady have now played their last card with this filing. I, on the other hand, have a full deck in my back pocket I’ve yet to take out of the box.
In this article I’ll provide updates on the following:
The King Government’s Filing in the PEI Court of Appeal
The Status of Several of my FOIP Document Requests
What’s Remaining in my 25-part series: “Truth and No Consequences”
My new 25-part Series: “All the King’s Horses: Then and Now”, and
A Crowd-Sourcing Plan to Improve the Research
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The King Government’s Filing in the PEI Court of Appeal
If I sue you, I’m the “Plaintiff” because I’m filing a “complaint” against you, and both words come from the same root Latin word “plangere” meaning “to strike, beat one’s breast, or lament.” I guess that’s why lawsuits can be pretty painful.
You disagree with my complaint and deny that you caused me any loss or damage and then mount a defense, so you’re the “Defendant”.
If the Judge throws out my case and I appeal, I now become the “Appellant” the one appealing the first Judge’s decision. You’re no longer defending your case – you won – but rather, the Judge’s ruling that said you won. You don’t file a defense to any new claims (they’re not allowed); you file a Response to the Appellant’s claims that the Judge erred in his or her judgment, so you’re now referred to as the “Respondent.” The Respondent is essentially “defending” the judge’s decision, arguing that he or she made no errors in law.
So you can see how this filing was the e-gaming “watershed moment” for Premier King and his Cabinet. It was a “pick-a-side” moment when Premier King had to decide whether he was going to: (1) marry himself to the same Liberal position presented by Counsel Coady to Judge Campbell or (2) take a stand in support of the PC Party position on the countless issues on which Campbell’s ruling erred, and stop refusing to produce scores of materially-relevant documents.
How is the Premier going to explain himself? So far, he hasn’t had to say anything. No one has asked a single question. Neither the Opposition Parties nor Media. In two full sittings of the Legislative Assembly. Not a single question.
Sometimes (not often) I dream that a reporter – or Opposition member – either mustered up the courage to ask or blurt out in “naivete,” like the little boy in the Emperor’s New Clothes, a question to Premier King about: (1) the e-gaming Court costs Island taxpayers are covering, or (2) missing government records or (3) why most of the same people the PCs demanded be ousted from positions of power for all their wrongdoings on e-gaming are still in government? and then I see an ominous pale descend on the Premier’s face, and, shuddering, and ever so slowly, he nervously and quietly says: “Unfortunately, since the matter is before the Courts….” and I wake up screaming with night sweats. Then I realize it was only a dream and tell myself: “deep breaths, no one’s going to ask the Premier anything that could prompt those words, and even if by some miracle someone did, well, that tired-old line isn’t going to cut it this time around.” I can usually calm myself in a few minutes and fall back asleep (But seriously, I’m really not sure I could survive him saying those words if asked a question in real life).
The next couple of months are going to reveal a lot more – but this article is to provide a 5000 ft. view of what’s ahead from now until the Hearing, as well as some additional background information. Things like how the case is structured in this action, e.g., not all Respondents have the same lawyers.
There are currently 13 “Respondents” in the PEI Court of Appeal hearing coming up in May 2020, but there are four “pairs” of lawyers/Respondents, each of which filed a separate response to CMT’s Appeal. Three filed late last week, and Jonathan Coady Q.C., filed this past Monday.
Jonathan Coady is counsel for the following Respondents:
Government of Prince Edward Island, (1) Wes Sheridan, (2) Steve MacLean, (2) Allan Campbell, (4) Chris LeClair, (5) Brad Mix, (6) Cheryl Paynter, (7) Melissa MacEachern, (8) Robert Ghiz, and (9) Neil Stewart.
The other three sets of “lawyers/defendants” are:
Gavin J. Tighe and Alexander Melfi – Lawyers for the Respondents, (10) William Dow and (11)Tracey Cutcliffe
R. Leigh Youd – Lawyer for the Respondent, (12) Gary Scales
Greg Temelini – Lawyer for the Respondent, (13) Steven Dowling
I have given the four factums a quick scan – more like a speed read – since I’m currently concentrating my efforts on finishing my first 25-part series. However, this much can be said from the outset: The King government now owns a scandal. The cover-up that the PC Party railed against the Liberals almost daily for first creating (Ghiz) and then covering-up and refusing to address (MacLauchlan) is now officially the legal property of the PC government. Only now, as time marches on, the “corruption and coverup” factor has spiked significantly.
The King government’s wholescale adoption of all the false claims made previously by the Liberals (many of which are now proven false with new documents from FOIPs) have, unbelievably, reappeared in the King/Coady Appeal Response. That, combined with the “avoidance” of countless issues that were previously at the top of the PC Party’s agenda and 2019 election platform will guarantee that the King government’s Appeal Response will signal the beginning of what will in time become known as the most blatant and all-encompassing “about-face” any government in Prince Edward Island has ever undertaken. I’ll explain why.
What’s happening here is not a “flip-flop” on one issue, but rather, a core betrayal on a global scale, something comprising so many individual “flip flops” that the only way to properly express that visually is to imagine a surprise announcement from the King government that his government was about to launch PEI’s very first “Flip-Flop Shops” franchise: if the franchise is the scandal, the items on the walls and racks would fairly represent the number of points, facts and positions experiencing a “flip flop”.
Apparently, all you need to get a Flip Flop Shops Franchise license is $100k. When Cheryl Paynter, Neil Stewart, David Arsenault, and Wes Sheridan needed $100k to pay off an old debt with McInnes Cooper [for work allegedly done AFTER the government canceled the e-gaming project] all that was required was an email saying “…send 100k for a future economic development project” and the grant was issued. So coming up with a Flip Flop Shops franchise fee shouldn’t actually be a problem for them. But I digress.
There are many more documents that the King government is continuing to withhold in additional FOIP requests. I know from Maine’s Affidavit filing (where he listed all those pages of information about different FOIP delays and Court Orders and Schedules for Release of those documents in Exhibits) that he has over a 1,000 pages that he’s still waiting to receive. It will be interesting to see if the King government complies with those Court Orders. As of this week, the King government is now in another “deemed refusal” position with one of my requests, but I’m going to give the government a little more time on that one.
I have a number of other FOIPs in the works which I haven’t provided information about, so I want to give you a summary overview of those active files so you’ll have some sense of what’s coming down the road.
Coady’s Factum not only completely denies just about everything the PC Party ever previously claimed they believed about e-gaming – which will be explained issue-by-issue in the new series – he also filed a separate motion asking the Appeal Court not to accept and consider Maines’ Affidavit and all those new FOIP documents!
Fresh evidence that Coady served CMT’s lawyer as a second Affidavit of Documents days before Judge Campbell’s ruling – but not the Court nor Campbell, as required by the Rules of Court, is neither included nor mentioned in his Response: those two documents were about Laslop (that add substantial weight to the documents that the PC Party was already satisfied were sufficient proof of a breach of the MOU).
Nor is there any inclusion nor mention of the other two documents in that second Affidavit of Documents, records withheld from Campbell that completely refute the conclusion he drew from the sworn claims of Wes Sheridan that he (Sheridan) didn’t have any further communications with Laslop after mid-September, 2012.
In fact, Coady is fighting to keep his own sworn supplementary Affidavit of Documents from the Appeal Judge’s consideration.
The first thing you learn reading laws is the fundamental distinction between “may” and “shall”. The meanings are obvious: if it says you “may” you have discretion; if it says you “shall” you have no choice, you must do what it says. Look for the word “shall” in the following section of PEI’s Rules of Court and ask yourself if there’s any confusion about whether Jonathan Coady should have produced (and given “consent” to submit the FOIP documents Maines had already obtained):
The Coady/King Appeal Court Response is clearly not about truth and justice. It’s all about avoidance, misdirection, and relying on technical, legal ways to prevent the truth from coming out at the Appeal to serve justice.
In Episode #22 I pondered what position Jonathan Coady could conceivably take in his Response and came up with two possibilities: either he would (1) say he didn’t receive documents and information that he should have filed, thereby effectively throwing his client (PEI government and Defendants/Respondents) under the bus, or (2) blame CMT for not doing more to force him to produce materially-relevant documents that Coady was obligated to produce on his own. I know. It doesn’t really make sense, but that the option Coady chose to pursue in his “…we’re in too deep to go back….keep digging!” strategy.
So just to be clear, the King government’s Response filed Monday – in its entirety – is the post-election PC “antimatter” to the pre-election “matter” giving substance to the PC Platform. I honestly don’t know if it’s fact or fiction, but I seem to recall that the deadliest of all explosions happen when uncontained anti-matter comes in contact with matter. Brace yourselves!
2. The Status of Several of My FOIP Document Requests
It’s a constant struggle (and a lot of work) to get information and documents from the PEI government. I’ve been doing this investigative research for many years, and I’m sorry to have to report that it’s never been harder than since the King government has come into power. Here is a synopsis of the status of my active FOIP files and Information Commissioner reviews:
Access Request EGTC 2018-287 [OPIC # FI-2019-271]
This is the Brad Mix Missing Records Review with the Information Commissioner. This is a big one. I filed for records in October 2018 and began the review with the Commissioner’s office in January 2019. Since then, four of Paul Maine’s FOIPs that also led to reviews with the Information Commissioner have been “joined” to my initial review, and Ms. Rose is going to issue a Joint-Order sometime before June 2020.
The final step in the process is for the Public Body (King government – in this instance, the Deputy Minister of Economic Growth, Tourism, and Culture, Erin McGrath-Gaudet) to make a final submission to Ms. Rose by January 20, 2020. She had provided her with my submissions on the file :
I’ll eventually be provided a copy of the Deputy Minister’s final submission, so that should be interesting.
On October 25, 2019, I was informed that that information and documents were being withheld, and others were being sent to 3rd Parties for consultations (44 pages).
On November 1, 2019, I submitted a request to the Information Commissioner for a review of this FOIP on the following grounds:
On November 26, 2019, I received a letter from the Public Body with the following news:
On December 19, 2019, the Information wrote to Deputy Minister Erin McGrath-Gaudet with a request to make submissions on the file, providing additional information about the search undertaken, and legal arguments for withholding information by January 24, 2020.
This request submitted on August 29, 2019, asked for the following:
On September 27, 2019, I received a letter indicating that the Department needed an extension of time to respond, but then on October 7, 2019, I received a letter from Deputy Minister Dan Campbell saying the search had “failed to retrieve any records responsive to your request”:
I already had a few documents from other FOIP requests that were “responsive” to this request and should have been provided to me, so I followed the same process I had embarked upon with the Brad Mix records and in a letter to the Privacy Commissioner sent October 10, 2019, asked that she investigates why these records are, apparently, no longer in the government’s possession.
The Commissioner opened a file on October 15. That same day she sent a letter to the King government with the following information:
I then received a letter from the OIPC saying there would be a further delay:
“Good afternoon, Dr. Arsenault.
Please be advised that the solicitor who usually drafts the submissions in relation to the above-referenced review is unexpectedly out of the office for the next couple of weeks.
The Commissioner has granted an extension to the Public Body to provide submissions to December 20, 2019. The submissions were originally due on November 29, 2019.”
Normally I would have received a copy of the Public Body’s response to the Commissioner by now; however, knowing how busy the people in that Office are at the moment, I’m not surprised I haven’t. Doing this summary has reminded me to pop an email to ask for a status update on this important file.
Access Request EGTC 2019-287
I filed this review asking for two things: (1) Board Meeting minutes for Innovation PEI for a specified time period; and (2) communications between the CEO of Innovation PEI at the time, Cheryl Paynter, and the members of the Board that make mention of the MOU and/or Trinity Bay (CMT/FMT). I wrote to the Information Commissioner on January 8 providing the following information:
As much as I hate to add anything to your workload, I received a response on EGTC 2019-287 indicating there were no responsive Records to my FOI request. I asked for the board minutes for Innovation PEI for a specified time period and was informed that the search found no records, but surely they must keep minutes of their meetings.
I’m not challenging the Public Body’s claim that there were no records related to communication between the Board members and Cheryl Paynter; however, my request for board minutes was totally separate from that – as is evidenced by the “Period” after the first four words: “Innovation PEI Board Minutes.” I would, therefore, ask for any board minutes and related preparatory documents.
The Commissioner responded the following day:
“I contacted APSO, who advise that while board minutes do exist, they were reviewed and found not to contain reference to the MOU referenced in your request. Based on the wording of your request, and your email, it sounds as though APSO may have misunderstood your intention with that part of your request.”
The Commissioner suggested I speak with the APSO worker handling the file for the Department. After a lengthy phone conversation with the APSO worker about the “meaning of the words” in my initial request, I was given one and only one option to get access to the Board Minutes: file a new request, which I’ve done.
There is likely important information in those minutes about what was said about the addition of “financial services” as a target sector for Innovation PEI recruitment during that period. We know from the Auditor General that proper authorization for the MOU wasn’t obtained; this request has now confirmed that there was NO communication between the CEO and Board members that a MOU was even in place!
Access Request 2019-254 EGTC
In this FOIP I filed on November 1, 2019, I requested:
“All records in all formats (electronic, paper, etc.) either received from Brad Mix or sent to Brad Mix by John Eden from January 1, 2011, to June 15, 2011.”
I received acknowledgment of receipt of my request on November 7, 2019, informing me that I could expect a response to my request by December 1, 2019, or sooner. I received a letter on November 29, 2019, informing me that the Department needed an “extension” indicating that consultations with 3rd Parties would be required and that “…a response to your request will be ready no later than December 31, 2019. It wasn’t.
On January 6, 2020, I sent the following email message to the APSO worker on this file:
“Can you kindly update me on the status of this FOIP (2019-254)? Your last communication on this file indicated that I would receive a response before December 31, 2019.”
I received a response on January 10, 2020, and was informed that the Department would need to undertake consultations – something that was supposed to have already happened – and she is now promising to provide me with a “final decision” on disclosure no later than February 10, 2020. This means that the Department is now in contravention of the law on this request and have been deemed to be refusing me these records.
The one encouraging thing in this particular FOIP process is that in the back-and-forth communication I learned that there are 113 pages of records. This is a bit of a surprise. Paul Maines had previously asked for essentially the same records for the same time period and was told that “no records exist”!
Access Request EGTC 2019-278
In early December 2019, I filed the following request with the Premier’s Office:
I was informed that I would receive a response to this request by January 23, 2020, or sooner.
Access Request EGTC 2019-299
On December 19, 2019, I submitted a request for the following records:
“All records in all formats (paper, email, text message, PINS, BBM, Fax) sent by Wes Sheridan to Chris LeClair, or received by Wes Sheridan from Chris LeClair, as well as records cc’d to Chris LeClair or mention Chris LeClair, Paul Maines, or Keith Laslop from September 1, 2011, to March 31, 2013.”
I received a response dated December 23, 2019, indicating that I could expect a response by January 18, 2020, or sooner.
Access Request EGTC 2019-300
On December 19, 2019, I submitted a request for:
All records in all formats (paper, email, electronic documents, BBMs, Text Messages, Faxes) of Neil Stewart that he either sent to or received from, Ed (Edward) Curran that make mention of either “Paul Maines” or “Steven Dowling” from July 1, 2012, to December 1, 2012.
I received a response dated December 20, 2019, informing me that I would receive a further response to the request by January 18, 2020.
In a more recent communication from the Information Commissioner, I was informed that her office is currently preparing a schedule on when Orders will be released, but that all Orders would be issued by June 2020.
3. What’s left in my 25-part series: “Truth and No Consequences”?
The main reason I’m posting this article rather than episode #23 is that the work I’m currently doing on this entire file is substantial, with the final three episodes requiring a couple of weeks of work.
Shane MacEachern
Episode #23: Shane MacEachern: the “Broker of Record”. This issue aims to provide a “network” chart showing the “connections” between all the 36 investors. The aim here is to show how the “insider” information by a Deputy Minister on an “off the shelf” investment deal was an “opportunity” seized upon by a relatively tight-knit group of wealthy Islanders and their family and friends. A name that has yet to be mentioned but in passing – Shane MacEachern – will figure prominently in this episode.
I believe this episode is especially important for the CMT lawsuit because it not only proves that CMT had asked MacEachern to be the “Broker of Record,” but provides concrete evidence that claims by Paul Maines that he never solicited investments – the allegation that prompted the fatal PEI Securities Investigation by Steve Dowling in September 2012 – make perfect sense.
This episode will also reveal the basis for Campbell’s conclusion – stated emphatically – that Maines solicited investments, explaining how that so-called “direct evidence” (sworn statements in affidavits by PEI defendants) are baseless: not a single shred of actual evidence is provided to justify this incredibly serious conclusion. Lots of work left on this one!
Episode #24 is perhaps the most challenging of the entire series in that it attempts to provide arguments and evidence showing not only more of what happened behind the scenes during that fateful period when CMT/FMT was derailed from an imminent agreement with Innovation PEI to establish a financial transaction platform in partnership with the PEI government to build a “near-shore” financial services centre in PEI. It revisits those amazing series of “coincidences” surrounding the same day, September 6, 2012, when everyone involved believed the MOU was due to expire.
Episode #25will be more of a “list” of all the findings from the 25-part series than an actual article. The focus will be on those conclusions that are materially relevant to the CMT now before the Courts.
4. My new 25-part Series: “All the King’s Horses: Then and Now”
Unlike the first series of “episodes” which provided a substantial amount of information, this new series will provide much shorter pieces (3-5 pages) on targeted “issues.” I’ll be following a very simple format: (1) A key issue in the CMT lawsuit will be identified. (2) A minimum amount of information will be provided to explain why the issue is key; (3) direct video or print material will be provided from one or more of the four King’s men (Aylward; McKay; Fox; and Myers) stated position of the PC Party THEN (before the election last April); and finally, (4) direct quotations from the King government’s Response to CMT’s appeal Counsel Coady just filed, showing the PC government’s position on the very same issue NOW.
A Guide to Understanding the Graphic for This New Series
My graphic for this series is very deliberate. You might think the “play on words” in the analogy is flawed – Egghead Humpty Dumpty wasn’t a “King”,…. was he? Wikipedia notes that Katherine Elwes Thomas in 1930 put forth a theory, later adopted by Robert Ripley, that Humpty Dumpty was based on King Richard III of England, who apparently was a hunchback.
The four unhappy and pretty worried-looking men in the picture are NOW four prominent Cabinet Ministers in the King government. THEN they were PC Party Opposition MLAs – and three of them held interim and/or permanent roles as PC Party leaders (Aylward, Myers, and Fox). These four individuals were the principal spokespersons on the e-gaming issues for the PC Party.
The two main lawyers working on e-gaming – Billy Dow (who helped to create the whole e-gaming mess) and Jonathan Coady (the “fixer” called in from Stewart McKelvey to make the mess disappear) – are, of course, the horses. Why? Because people (politicians) ride horses (lawyers) in this analogy to giddy-up to where they want to get (in power) not the other way around.
When the peasants (Islanders) revolt (have an election) and Humpty goes Dumpty, all the King’s men are suddenly left standing around powerless and confused, able to do nothing but gaze upon their shattered dreams of a life in Cabinet for years to come, trying to understand how all their good intentions could have gone off the rails so badly so soon after having just achieved their long-sought dream of becoming government.
But guess what? When the peasants remove the King and his men (and women) from the castle, and new people take up residence, they’ll saddle up the very same horses as the previous tenants because they don’t live in the palace where people come and go, they live in the stable. The moral of the story is that whenever politicians promise a stable government, we need to ask what kind of “stable” they’re talking about.
Notice the horse who’s been the stable stallion for many years – the guy who helped to create the mess (Dow) is smiling. The horse on the left, however (Coady) is not smiling. Coady, who recently crowned Lawyer of the Year and awarded the Queens Counsel designation, is likely pretty worried that his clean-up efforts and strategic legal decisions will have “consequences” that will not be pleasant.
But it was Humpty Dumpty’s dialogue with Alice on the meaning of certain words in “Through the Looking Glass” that really grabbed my attention and inspired the image. This very same citation actually became a popular citation in United States legal opinions, appearing in 250 judicial decisions in the Westlaw database as of 19 April 2008, including two Supreme Court cases (TVA v. Hill and Zschernig v. Miller).[27]:
“I don’t know what you mean by ‘glory,’ ” Alice said. Humpty Dumpty smiled contemptuously. “Of course you don’t—till I tell you. I meant ‘there’s a nice knock-down argument for you!’ ” “But ‘glory’ doesn’t mean ‘a nice knock-down argument’,” Alice objected. “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.” “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master—that’s all.”
5. A Crowd-Sourcing Plan to Help Improve the Research
Investigative research is all about making connections to reveal the meaning of the events those facts are connected to, or understand the context of what you may “know” happened, but not “why” it happened, or “who” made it happen, or whatever. Making the right connections reveals new insights, which in turn assists in making further, and more targeted, discoveries.
Not many of us are inclined to start a 5,000 piece puzzle of an ocean scene with far too much calm blue water – it’s just too daunting a task to take on. But if your family was anything like mine, after one or two people worked for days to get the thing mostly together, leaving just a few hundred pieces, everyone walking by wanted to pull up a chair and stick in a few pieces before it was finished. So why not pull up a chair and see what we can figure out together to finish this investigative e-gaming puzzle?
Anyone with a conscience can do good research for justice with just three things: (1) time (2) the interest and willingness to use that time to ponder relevant source material; and, of course, (3) source material. It’s getting to the stage where you have easy electronic searchable access to a comprehensive body of source material that’s the really big challenge.
I’m currently in the process of putting together a collection of material I’m dubbing TheE-gaming Chronicles. I’m creating PDF files of all my research articles and then merging them chronologically into one document. It will be completely searchable, with links on almost every page to source documents I’ve uploaded to my secure website archive, most of which are also searchable.
You might remember one of a thousand details from a previous article, or connect something I write to something you learned elsewhere, and that gives you an insight or hunch, and you find yourself asking: “I wonder if…?” or “Wasn’t his name on those meeting minutes, and now he swears he was never at that meeting?….or whatever, and you’ll be able to search every instance of that name or keyword in all the research I’ve published and source documents with one search.
If you then discover documentary evidence of significance that your hunch was correct, and it’s something not already in any of the articles, then you can either: (a) send it as a news tip to the local media; (b) start your own blog; or (c) send your research finding to me so I can incorporate it into the 52 blog postings I’m planning to post before the Appeal Hearing in May: [I didn’t use the reference to the “deck of cards” earlier solely as a metaphor, but as an actual statement of my plans].
So I’m challenging you to give some thought to this “sleuthing-made-easy” initiative – that way, I can perhaps play something a tad more interesting than “solitary” with those 52 cards.
And who knows? If our collective research efforts go well, maybe, in the end, all those individuals who should be held accountable for wrongdoings – as well as all those individuals in government who should be held accountable for the promises they made to deal with, and end, coverups, and corruption – will be forced to cooperate in a publicly-broadcast game of 52-card pickup.
Summary
As you can see, there is a lot going on behind the scenes. My work plan for the next couple of weeks is (1) finish the first series [I hope to have Episode #23 published in several days]; then (2) compile and make the E-gaming Chronicles available for the community research outreach project; then, (3) begin the next series.
Your comments, feedback, and corrections (public or private) are always appreciated!
Please share these articles. More Islanders deserve access to information that so severely affects the nature of our democracy and the quality of our life in Prince Edward Island.
With just 4 episodes remaining in this 25-part series, I want to make them count. If you’ve been following this docu-series on Judge Campbell’s ruling to dismiss CMT’s lawsuit and forbid a new claim from being filed, then you’ll know that previous episodes have already provided indisputable evidence of errors in Judge Campbell’s decision.
In fact, there’s so much accumulated evidence, it’s hard to keep track of just how much evidence there is. Consequently, my final episode in this series (#25) will provide a summary list of findings that challenge Campbell’s interpretation of the facts and disprove his conclusions supporting his decision to dismiss CMT’s lawsuit so emphatically and completely.
With the Dennis King government having to file a response to CMT’s PEI Court of Appeal case in less than a week (January 6, 2020), we’ll soon see whether the PC Minority government will dare to attempt to argue there are no “triable” issues. If it does, it will be telling for sure; especially given the persistence and force in which the PC Party MLAs (now members of Cabinet) argued so fiercely as the Official Opposition that a number of major issues demand the scrutiny of a trial. Issues including: (1) multiple instances of the wanton destruction of government records; (2) a completely bogus Securities Investigation, initiated despite there never being an official complaint from anyone [one of the remaining 3 episodes]; and (3) what the PC Party declared in the Legislative Assembly to be clear evidence of a breach of the MOU, with the Keith Laslop/Newco documents which the PC Caucus uncovered in an e-gaming FOIP.
For this government to defend Judge Campbell’s ruling would represent a complete “about-face” on the issue. Such a position would be hard to justify, and to many, it would be viewed as complicity in the previous Liberal Government’s e-gaming cover-up strategy, not to mention a glaring failure to deliver on the King Government’s promise to deliver full transparency and due process. Whatever is filed next Monday will be owned by this government, not the MacLauchlan government, not the Ghiz government.
These issues raise the basic question: “Does our Justice system need to know the truth to rule justly?” and strikes at the heart of what it means to live in a free and just society. Such a society demands that the PEI government ensure that the fundamental principles of natural justice which are enshrined in the Canadian Constitution – and which are absolutely essential for a system of parliamentary democracy such as ours to function effectively, and ethically, in the service of truth and justice – are protected, upheld, and not allowed to be undermined.
There is a growing number of influential people becoming aware of the travesty of justice that has been unfolding (and getting worse) since CMT and Paul Maines were first subjected to a targeted and totally unwarranted PEI Securities Investigation in September 2012. There are now approximately 1,000 dedicated followers of this investigative series, with that number growing with each new episode.
I’m very encouraged to know that retired Supreme Court Justices are paying close attention, National Investigative News Agencies are staying updated, waiting for more to unfold (e.g., rulings from the Information and Privacy Commissioner; what happens at the upcoming Appeal Hearing, now scheduled for May 2020), federal parliamentarians, PEI MLAs, senators, lawyers, etc., are all following this sorry saga of secret shenanigans and self-serving strategizing with great interest. I know this because I’ve heard directly from many of them, and indirectly from others who have shared information about their conversations with many of those individuals.
The evidence presented in previous episodes already far exceeds the threshold required to warrant a trial. The remaining episodes will add to that body of evidence, but more importantly, they will more clearly reveal the length, breadth, and depth of the cover-up strategy that has been employed over the years to hide the truth about what really happened from everyone other than those involved, apparently, even the Court, as more information and many more records become public through targeted FOIP requests due to produce records in coming weeks.
It appears Campbell never intended to let this case go to trial. At a minimum, he knew that a lot of information was being withheld from the Court by Counsel Coady. Two years of unexplained Brad Mix records gone missing were of no consequence to Campbell whatsoever, since he had already determined that they were documents from before the MOU time period and that FMT had no involvement with the “so-called” e-gaming project (as Campbell referred to it) nor Maines, nor the PEI Government any time prior to the summer of 2012 when the MOU was signed. The findings from the Auditor General completely contradict Campbell’s reasoning, of course, and countless new documents also shatter that view, which has been completely and extensively proven false in previous episodes.
When Maines and CMT obtained new FOIP documents prior to Campbell’s ruling on September 25, 2019, Coady refused to consent to have those materially-relevant documents entered into the Court Record for Campbell’s benefit. When CMT’s lawyer brought the matter up in a Case Management Conference call, Campbell ruled that he would not consider any new documents, despite CMT’s lawyer insisting on their key importance, and actually expedited filing his decision.
In retrospect, it appears Campbell may have realized that the decision he had drafted to dismiss the case would need to be significantly altered – with a different conclusion regarding whether there were any “triable” issues – if he was to consider those new documents. By closing the gate, the full onus for refusing to file materially-relevant documents immediately fell to Jonathan Coady.
Coady may have allowed himself to be precariously positioned “under the bus” by Campbell, as they say. I’m at a loss to know what to expect with Coady’s filing on January 6th. To me, it’s one of those “no good answer” scenarios for Coady.
Will he argue he was kept in the dark by his own clients, and attempt to throw the PEI government under the bus? Or will he perhaps argue that the onus was on CMT to “take legal measures” to “force” them to comply with the Rules of court and release documents they will continue to argue are not materially relevant? It’s one of those “wait-and-see” moments in this long and bizarre saga.
And will Coady mention any of the new documents which he kept from Campbell’s eyes? Especially those records that are particularly damaging to the Government’s case? If the lawyers had been aware of how Coady refused to produce countless materially-relevant documents, in contravention of the Rules of Court, I wonder whether they would have still voted him the 2020 Civil Litigation Lawyer of the Year?
That’s why Campbell’s picture isn’t in the graphic for this episode. Campbell never saw the new important documents about Brad Mix’s trip to Osaka, Japan that Paul Maines obtained in a FOIP just before Christmas.
This episode examines some of this new information under the following headings:
More Fruits from CMT’s “FOIP” Strategy. Looks at how the new documents were finally made available to Maines under a Court-enforced Order from the Information and Privacy Commissioner;
Campbell’s Ruling that Mix did not Breach the MOU: Some of this was dealt with in Episode #13; however it is being presented again in part to highlight the exact nature of the basis for Campbell’s ruling on this matter.
Revisiting the “Exclusivity Clause” looks at the literal and normal meaning of the words, especially the phrase “hosting or creating a financial services centre”; and
The Smoking Gun: Two new documents made public in a December 18, 2019 FOIP (which Paul Maines shared with investors, media, etc.) which reveal the manner in which Mix, on behalf of Innovation PEI and the PEI Government, breached the MOU.
+++++++++++++++++++++++++++
1. More Fruits from CMT’s “FOIP” Strategy
Recall that the 2 years of Brad Mix’s documents generated during the e-gaming/financial transaction platform project period (Fall, 2010 – Fall, 2012) mysteriously “went missing” in not one, but TWO of Mix’s email archives.
That important piece of information was kept secret and wasn’t known at the time when CMT’s lawyer cross-examined Brad Mix last January 2019. I mentioned in a previous episode that when John MacDonald, CMT’s lawyer, asked Mix if he had produced all his records at cross-examination, Coady jumped in to answer for Mix, saying: “I believe so.”
Well, six months later, as a result of my Brad Mix review with the information Commissioner, we learned in a July 10, 2019 letter from Deputy Minister McGrath-Gaudet to the Information Commissioner that Mix had confessed about those two years of missing records for the first time. That’s also when I realized I had been strung along with lie after lie about those missing records since I filed my request in October 2018!
Recall, as well, that a number of the communications of significance during that period of time were between Paul Jenkins (representing FMT) and Mix, and that Jenkins also claimed to have been “hacked” and had the same 2 year time period of records mysteriously go missing.
Knowing that materially-relevant documents had existed at one time, Maines sought out those records – and found a good number of them – in the inboxes of other government employees. If not for this unprecedented (and what should have been an unnecessary FOIP strategy) this case would likely be a dead issue by now, with no documented grounds to challenge Campbell’s ruling to dismiss. That’s not how things are turning out.
Things are now exploding in a way that will continuously reveal more and more about what has been an unprecedented and carefully-choreographed attempt by literally dozens of people, who are, each in their own way, complicit in the coverup of a deliberate attempt to thwart both democracy and justice. The shroud used to obscure the truth is now rapidly unraveling, thread by thread. This episode represents another thread-pulling exercise in that shroud-shredding process.
On December 18, 2019, Paul Maines received an early Christmas present – 187 pages of documents from a FOIP request filed last May. Those documents were in response to the following request for Government records:
Before getting into what was contained in those 187 pages the Information Commissioner ordered the PEI government to release, it’s important to first revisit Campbell’s ruling on Brad Mix’s attendance at the SIBOS conference, especially the time-scope of the documents that he had before him to consider, along with the essential structure of his legal argument concluding no breach occurred with Mix going to Osaka, Japan.
2. Campbell’s Ruling that Mix did not Breach the MOU
You may recall from Episode #13: Why Did Brad Mix go to Osaka, Japan? that Judge Campbell dismissed CMT’s claim against Mix that he violated the Memorandum of Understanding (MOU), that Innovation PEI had signed with FMT, by attending a “SWIFT” conference in Osaka, Japan in October 2012.
Paragraph 290: On October 15, 2012, Mix was advised by their matchmaking consultant that they had arranged a meeting between Mix and Kaflon of Sterci. Mix advised Paynter and asked if he should decline the meeting. I note again that the email respecting a future meeting was sent 5 days after the final expiration of the MOU. Mix did meet with Kaflon at the SIBOS conference and expressed in his travel summary that he felt Sterci had no interest in following up on his invitation to invest in PEI.
Campbell pointed out that any meetings held at the SIBOS conference were also when the MOU had expired.
Paragraph 287: Once again, it is important to note that the SIBOS conference took place approximately three weeks after the MOU expired for the second and final time.
He presented his interpretation and understanding of what Mix was doing at SIBOS on behalf of Innovation PEI as work undertaken in the “ordinary course of business.”
With the “Exclusivity Clause” in effect, there was no “ordinary course of business” available to Innovation PEI with respect to recruitment in the financial services sector during the time when the MOU was in effect.
I will not repeat here what I presented in Episode #21: Covering up the Breach of the MOU (Part 1) with a section titled “3. The Negative Impact on Innovation PEI from the “Exclusivity Clause”, beyond restating what the Auditor General identified as a concern that senior staff at Innovation brought to her attention regarding the impact of the MOU on their work:
Section 5.11: Further, clarification on the terms and conditions in the agreement was not obtained. This was particularly important forInnovation PEI because the wording of the exclusivity section was very broad. Financial service was a key sector identified by Innovation PEI for economic development in the province. Innovation PEI senior officials advised that they were concerned about the exclusivity clause and how it would impact their work.
Having dismissed any meetings that took place at SIBOS as having any significance – since they happened outside the time period the MOU was in effect – Campbell then also considers the communications between Mix and HMC Global, which he knew would have happened during the time the MOU was in effect. He concludes that no evidence was provided to HMC Global by Mix breaching the MOU in those communications:
Paragraph 281: Mix used the services of HMC Global, a corporate matchmaking service, for the purpose of arranging meetings for Mix to introduce PEI as a near-shore location in North America for business investment. Neither Mix or anyone else at Innovation disclosed any information regarding CMT, 764, Maines or Walsh to HMC Global when it was arranging meetings for Innovation.
He further concludes there was no evidence that Mix “discussed any interest of Innovation PEI or the Government in establishing a financial services centre on PEI.”
Paragraph 295: I accept the evidence of Mix that he attended the SIBOS conference at the invitation of Walsh, and that he did not hold himself out to be a financial services expert. I also accept his evidence that his purpose was to introduce people to PEI and to invite them to consider PEI as an opportunity for business investment. I find there was no evidence presented showing he disclosed any confidential information or discussed any interest of Innovation PEI or the Government in establishing a financial services centre on PEI.Finally, once again, I note the SIBOS conference was held weeks after the final expiration of the MOU.
Paragraph 298: The defendants have met the onus upon them of showing that Mix did not use or disclose any proprietary or confidential information of the plaintiffs, or of Simplex, gained through the MOU or otherwise, or have any discussions prohibited by the MOU, or improperly have discussions with or recruit any potential clients of the plaintiffs. In doing so, the defendant Mix has shown there is no genuine issue requiring a trial regarding the allegations against him. With that, the onus shifted to the plaintiffs to show through evidence or argument that their claims against Mix have a real chance of success. The plaintiffs have failed to satisfy that onus.
Once again, Campbell is revealing either his ignorance about what a financial services centre and SWIFT-accredited platform are, or he is being willfully blind about what he actually knows. With first-mover advantage and the Simplex Global Transaction platform capabilities, every single financial services company that was approached on behalf of Brad Mix by HBC Global was a “potential client” of the plaintiffs. With “first-mover advantage,” FMT would have been providing SWIFT connectivity (along with a range of other services such as messaging, claims processing, etc.) to other SWIFT-based companies relocating in PEI which would have been clients of FMT.
The Simplex/Sterci Global Financial Transaction Platform was adopted by HSBC – the biggest bank in the world – which was announced at SIBOS in 2010. It’s as if Campbell doesn’t get it, or doesn’t want to get it, when it comes to understanding what FMT/CMT/SIMPLEX/Sterci were, and the interrelated nature of the global platform these companies were together offering with SWIFT connectivity, Claimatrix, and much more:
3. An Updated Response to Campbell’s Ruling of “No Breach”
Campbell states in paragraph 295, “I accept the evidence of Mix that he attended the SIBOS conference at the invitation of Walsh.” I’ve already dealt with this issue in Episode 13, showing how ridiculous it was for Campbell to have drawn that conclusion when the documentary evidence clearly shows that Walsh pretty much went ballistic when he learned from Kaflon at Sterci that Brad Mix was planning to attend SIBOS in Japan on his own. Even more baffling was Mix’s interest in meeting with Sterci, SIMPLEX’s partner, while he had completely kept FMT/Simplex in the dark about his attendance at SIBOS and his efforts to recruit other financial services companies to PEI.
In reviewing documents for this episode, it occurred to me that Judge Campbell – in a blatant case of biased cherry-picking – cited Gary Jessop’s (CMT’s lawyer’s) October 23, 2012 email to Billy Dow, but only a short segment where Jessop seems understanding (and even supportive) of Mix attending SIBOS:
Paragraph 282: The MOU had fully expired on October 10, 2012. On October 23, 2012, Jessop wrote to Dow acknowledging that 764 did not have the right to prevent Mix or the Province from meeting with anyone, and stating they were not trying to prevent Mix from doing his job but felt it would be in everyone’s best interest for them to have a discussion prior to him leaving for the SIBOS conference.”
Campbell would have presented a far more accurate picture of Jessop’s communication with Dow if he had cited him in true context. Jessop had listed a number of serious concerns in his lengthy letter to Dow – including the Securities Investigation – but noted that it was Brad Mix attending SIBOS on his own steam that was most concerning, since he had no expertise and went without sharing that information with Trinity Bay (FMT) and SIMPLEX. The potential damage that could easily have been caused to the business relationship between FMT and the PEI Government was a legitimate worry since many of the companies at SIBOS knew about the potential deal with PEI and CMT/Simplex. As Jessop explained:
“Trinity Bay and SIMPLEX had invited the Province to attend the SIBOS conference held in Toronto last year but were told that SIBOS was not a conference the province usually attends. If Brad has plans to attend this conference for several months, we have a concern as to why we were not advised during our meetings over the summer, especially that we openly discussed the importance of SIBOS to us. If the decision to attend SIBOS has only recently been made, we have a concern that Brad may be approaching the wrong people, including our competitors.” [Gary Jessop to Billy Dow, October 23, 2012].
Why all the stealth?
Of even greater interest is the fact that Cheryl Paynter did not know Brad Mix had registered for SIBOS in May, yet Mix noted in his communication with HBC that he had decided to attend “after several recommendations.” If his boss didn’t know about it until mid-August when Mix sought approval to travel to SIBOS, who gave Mix the recommendations?
Also, notice that the dates on all the SIBOS-related documents which Campbell referred to in his ruling are outside the time when the MOU was in effect:
[Paragraph 280] The exhibits attached to his affidavit included an email exchange in May 2012, with the organizers of the SIBOS conference in which they asked Mix for the name of his SWIFT contact person in order to gain approval from SWIFT for his registration to be processed.
[Paragraph 282] The MOU had fully expired on October 10, 2012. On October 23, 2012, Jessop wrote to Dow…
[Paragraph 283]: On October 24, 2012, in the week prior to the SIBOS conference, Walsh emailed Mix saying:
[Paragraph 288]: Mix also addressed the content of an email sent on October 15, 2012, from Simon Kalfon CEO of Sterci, to Walsh.
Campbell is clearly aware that Mix would have had ongoing communications with the UK matchmaking company during the time of the MOU, but also rules that as not relevant, relying not on documents, but Mix’s sworn claims, and the absence of any documentary evidence or first-hand sworn testimony to refute those claims:
Paragraph 281: Mix used the services of HMC Global, a corporate matchmaking service, for the purpose of arranging meetings for Mix to introduce PEI as a near-shore location in North America for business investment. Neither Mix or anyone else at Innovation disclosed any information regarding CMT, 764, Maines or Walsh to HMC Global when it was arranging meetings for Innovation.
New documents now provide, I believe, incontrovertible evidence that the exclusivity clause of the MOU was indeed breached by Mix in his recruiting efforts during the MOU regarding his planned attendance at SIBOS.
I also believe Campbell would have been a lot more compelled to come to that same conclusion if he had the documents related to SIBOS dated within the MOU period, two of which are of particular significance: (1) An August 22 email from Brad Mix to the UK company exec; and (2) the September 18th contract signed between Innovation PEI and HMC Global.
Before examining those documents, it will be helpful to take another look at exactly what the “exclusivity clause” says, and why the Auditor General referred to it as having an undefined and very broad legal meaning and significant negative repercussions if breached.
3. Revisiting the “Exclusivity” Clause
Reading Campbell’s ruling on CMT’s claim that it has sufficient reason to believe Brad Mix breached the exclusivity clause of the MOU to go to trial can actually make you forget what it actually says, given Campbell’s propensity to ignore what it actually says, so it’s worth restating that particular clause and discussing what exactly it means:
(b) provided TBT is not in breach of its obligations hereunder, PEI nor any of its employees, officers, contractors, agents, representatives and/or professional advisors agrees not to discuss with any entity its interest and/or capabilities in hosting or creating a financial services centrein the Province.
Let’s unpack the meaning of what’s in red. “Not to discuss with any entity….” I think we can all agree that a UK company with extensive previous experience and knowledge of financial services companies attending SIBOS constitutes an “entity” as intended by the word in the clause.
The only remaining issue is whether Brad Mix, as an employee and agent of the PEI Government, had discussions with representatives of the Matchmaking company regarding its interest in“…hosting or creating a financial services centre in the Province” during the time of the MOU.
We’ve already noted above how Judge Campbell goes out of his way to note how discussions, or setting up meetings, or Mix attending SIBOS all happened outside the time when the MOU was in force. Well, consider the exclusivity clause in light of the following documents withheld from Campbell dated when the MOU was in effect.
4. The Smoking Gun
One of the new FOIP documents only released to Maines on December 18, 2019 was a contract that Brad Mix signed, on behalf of Innovation PEI, hiring a company in the UK to set up meetings at the SIBOS conference in Japan. That contract was signed and put into effect on September 18, 2012, when the MOU with FMT/Trinity Bay was still legally in effect. Mix’s communication with that UK company began much earlier.
On August 22, 2012, Brad Mix sent the following email to Gerard McCann at HMC Global in the UK.
Of special importance in this communication is that Brad Mix clearly identified the PEI government’s interest in enlisting support to set up meetings at a Global SWIFT conference – meetings scheduled during the MOU – with companies who were “…gateway providers using the SWIFT platform.” He goes on to say that he wants 8-10 meetings with these SWIFT based companies to provide “…a North American near-shore solution” in PEI.
This is evidence that Mix did indeed discuss PEI’s interest in hosting and creating a financial services centre in PEI. With more and more documents now becoming public – documents withheld from Campbell by Coady – what we’re witnessing isn’t a simple case of a couple of minor indiscretions or misunderstandings about the precise meaning of “financial services centre” in the exclusivity clause.
No, what we’re seeing is a growing paper trail documenting a well-orchestrated (but secret) effort to bring as many financial service companies to PEI throughout 2012 in a virtual “financial services company” recruiting frenzy that was already in high gear before the MOU was signed, and continued “full-steam ahead” both during, and following, the period the MOU was in effect.
Paynter – Mix’s boss – stated on a couple of occasions that the MOU was not legally-binding (without further explaining that the exclusivity and confidentiality clauses were, indeed, legally-binding) which may have led Brad Mix to believe he was free to carry on doing what Campbell referred to as Innovation PEI’s “normal course of business” of recruitment, while all the while ignoring the “spirit and letter” of the exclusivity clause, not to mention the good-faith intention of the MOU.
If you’re scouting on the other side of the world to recruit as many different global SWIFT-based financial services transaction companies in a vigorous and costly recruiting mission, then you are both selling PEI as a financial centre and attempting to build a financial services centre, and achieve more of that goal with the addition of every new successful financial services company recruited to PEI.
What is a Financial Services Centre exactly? Here’s what an online Business Dictionary offers by way of simple, straightforward definition of a Financial Centre:
“Financial Centre: City or its district (1) that has a heavy concentration of financial institutions, (2) that offers a highly developed commercial and communications infrastructure, and (3) where a great number of domestic and international trading transactions are conducted. London, New York, and Tokyo are the world’s premier financial centers.”
It is ridiculous to say that an attempt was made to target at least 8-10 SWIFT-based global financial services companies (with a high-end target of 15 meetings, 5 meetings per day at the 3-day SIBOS conference) to establish a “near-shore” presence in PEI, without at the same time admitting that such efforts require a disclosure of interest in establishing a financial services centre in PEI.
And this recruitment work was at one and the same time consistent with, and in addition to, many other similar efforts Mix was involved with to recruit financial services companies to PEI in 2012, including those discussed in previous episodes (Laslop/Newco; and RBC).
Not to get side-tracked, but another recruitment pursuit planned during the MOU that has never before been mentioned involved then Consul General Pat Binns. A trip was planned for October 2012 to Boston. This was revealed serendipitously in the same Brad Mix documents about the SIBOS conference.
Mix initially sent the same email request he sent to HBC Global for proposals for the SIBOS matchmaking contract to another company, Mark Healy Consulting. Healy did submit a proposal for the SIBOS work, but the SIBOS contract ended up going to HBC Global. However, Mix offered Healy another matchmaking contract for another recruitment mission to Boston, providing him with a list of 40 financial services companies for possible meetings.
No documents mentioning these recruitment efforts to Boston were produced by Coady.
What was suspected, but covered-up, is now crystal clear: although Innovation PEI signed an MOU that was supposed to, and legally-required to, end all discussions with other financial services companies about PEI’s interest in hosting and/or creating a financial services center, recruitment efforts that were underway at Innovation PEI continued, and even intensified, as meetings were sought with Global SWIFT companies at SIBOS, and North American financial service companies in Toronto and Boston as well.
The August 22nd email from Mix to the two companies he invited to submit proposals to do company matchmaking at SIBOS authorized HBC Global to contact companies for the purpose of communicating a PEI interest in having them establish a near-shore SWIFT-based financial services company in PEI. That is exactly what the exclusivity clause said the PEI government could not legally do during the time the MOU was in effect, and that’s exactly what Mix did.
Look at the graphic which the PEI Government used in its own 2015 promotion webpage concerning its understanding of “near-shore”.
Notice the “hub-like” nature of PEI sitting at the centre of the spokes.
Campbell somehow wants us to believe that Mix actively recruited numerous SWIFT-based companies to establish in PEI, in secret, but was able to do so without letting those companies that he was meeting with know that PEI was interested in hosting financial services companies, in fact, was interested in attracting numerous financial services companies, and thereby, with each successful “recruit”, would be further building a financial services centre in PEI for exporting near-shore financial services? That’s the exact language used in the targeted offer made to RBC financial (See Episode #21):
I’m sure similar terms would have been offered to the SWIFT-based Global financial services companies Mix was meeting at SIBOS if they had shown interest in locating to PEI. What he specifically wrote into “Schedule A” of the Contact with HBC Global as “guidance” for the Matchmaking work in Japan, was to focus on the “…highest potential financial services firms that are considering a business location in North America.”
Summary
Would Campbell have read these new documents from within the MOU period in the same way that I have if they had been produced by Coady? How could he not have?
To me, the Auditor General was bang on – the legally-binding exclusivity clause was meant to shut down all financial services company recruitment until the finalization of a good-faith agreement with FMT. That agreement would have provided the SIMPLEX Global Transactions Platform and Claimatrix technology as the platform through which other financial service companies, gaming companies, loyalty card customers, etc. would then sign-on, with mutual benefits accruing to both FMT and the PEI Government.
The services FMT would have offered as a near-shore service platform based in PEI, and being negotiated as terms of the agreement almost completed before the bogus Securities Investigation – were the same kind of SWIFT transaction services, reconciliations services, message transformation, trade confirmation, and delivery services, and claims management services being provided by the companies Mix was recruiting at SIBOS – and PEI’s interest in recruiting those SWIFT-based companies happened during the time the MOU was in effect.
Episode #21: Covering up the Breach of the MOU (Part III)
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PREAMBLE
The last two episodes have focussed on claims made by CMT that the PEI Government violated the legally-binding “exclusivity” clause within the Memorandum of Agreement (MOU).
Episode #19 provided background information on how the MOU came to be; what the four legally-binding provisions of the agreement entail; and how Wes Sheridan, Chris LeClair, and other members of the secret gaming committee breached the MOU in dealings with Keith Laslop, the CEO of another company, “Newco”.
On September 20, 2019, Jonathan Coady servedtwo key documents dealing with Sheridan’s interactions with Laslop on CMT’s lawyer, John MacDonald. Coady did not provide those same documents to Judge Campbell. Five days later, Campbell issued his ruling without having considered those critically-important documents.
One of those documents proves that Wes Sheridan lied when he swore in cross-examination that he had no further contact with Laslop after a September 5 2012 email. The other document proved that Sheridan not only “solicited” a proposal from Keith Laslop, but choreographed when and how that proposal would arrive, in two ways: (1) Laslop was to wait until September 6, 2012, the date everyone thought the MOU with FMT was expiring, and (2) Laslop was instructed by LeClair, who Sheridan told to have Laslop direct the proposal to himself, and copy it to Cheryl Paynter and Allen Roach, so that way it would, as Sheridan put it, “…lead into a conversation” between the three of them.
Imagine a little domain about the size and shape of PEI wanting a train system. There is only room for one track and one train. For two years leading up to that fateful week in September 2012, the company that was to deliver that train track was FMT, and the train was the CMT/Simplex Global Transaction Platform.
Then, all of a sudden, and unbeknownst to Maines or CMT, Keith Laslop and his company “Newco” is back on the Island to implement a plan discussed with the secret gaming committee a year earlier, to set up a company to do transactions through the PEI Credit Union. In other words, Laslop was also proposing to deliver a “train,” only that train was Laslop’s payment processing company partnered with the PEI Credit Union able to process those financial payments.
Campbell says there was always only one train on the track during the MOU period, FMT, and argued in his ruling that the plaintiff failed to produce any evidence of another one (e.g., evidence of a breach of the MOU).
Notwithstanding Campbell’s opinion, given the “fresh evidence” obtained from FOIPs on this matter, documents withheld from the Court by Coady, I’m confident even Campbell would agree that to get to the truth of exactly what happened with Laslop and Newco, people need to be questioned at trial under oath.
My research revealed that there was a THIRD TRAIN in the “mix” at the time, and it was indeed Brad Mix who was pushing that option as the lead business recruiter for the province.
The evidence previously presented about Laslop strongly suggests a violation of the MOU. This episode explores another situation not dealt with in the lawsuit to date – but most definitely will be on a go-forward basis – which, I believe, also constitutes a breach of the MOU by the PEI Government. Nothing about this has ever been made public before this article.
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It was previously mentioned (Episode 19) that the “exclusivity” clause in the MOU required that all work prospecting financial companies stop from the date the MOU was signed on July 6, 2012, for 60 consecutive days.
However, because the secret gaming committee was working with key staff at Innovation PEI [Melissa MacEachern, Cheryl Paynter] – but apparently not involving the Board of Directors in decision-making, it is uncertain whether Innovation PEI staff recruiting financial companies were ever properly informed about the exclusivity clause in the MOU, as I noted in episode #19:
“Regardless of whether the Board approved – or were even aware of – the MOU, it impacted Innovation PEI’s work. Once the MOU was signed on July 6, 2012, all recruiting and prospecting work by the Prospecting & Innovation Programs Division of Innovation PEI had to stop. That was problematic since some of those financial services recruitment efforts had commenced long before the signing of the MOU.”
“Given the secrecy and unusual way the MOU came into effect, it’s unclear whether other government staff who may have been working on prospecting financial services companies to PEI were even made aware of the MOU. Were they informed that the PEI Government was to have absolutely no discussions with any other financial companies, or even mention that the Government had an interest in establishing a financial transaction hub in PEI? Nothing about the companies, the plan to bring a financial transaction hub to PEI, or the MOU with FMT, was mentioned in Innovation PEI’s 2012-13 Annual Report.”
As it turns out, Brad Mix had indeed been communicating with a financial services company prior to the MOU being signed attempting to recruit the company to PEI to establish a financial services centre, and he kept communicating after the MOU was signed. We’ll get into all of that shortly, but first a bit about how Paul Maines came to know about RBC [the THIRD TRAIN] – given the fact that Jonathan Coady withheld all those documents from the Court, and would not agree to have them entered into the record even after CMT acquired them through a FOIP.
The Rules of Court require both Parties to consent to new material being submitted to the Judge after Motion Hearing, so even though CMT’s lawyer had the documents, he was blocked by Coady from having Campbell consider them, just as he was prevented from providing Campbell with the damning documents Coady served him on September 20, 2019, which just so happened to be the same day the Information Commissioner issued Orders compelling the Government to produce those records, so Coady may have learned the Government would not be able to withhold them much longer.
How Paul Maines Came to Know about RBC Dexia
Absolutely nothing was produced by Jonathan Coady regarding what you are about to read. Maines and his lawyer were, until recently, kept completely in the dark about the PEI Government’s recruitment efforts with RBC Dexia, a 100%-owned subsidiary of the Royal Bank of Canada.
Maines had submitted a FOIP request to the Department of Economic Growth, Tourism and Culture on May 14, 2019, for the following:The Department started processing the request on May 23rd and delivered responsive records to Maines on July 23, 2019.
Armed with both (1) the July 10th letter from Deputy Minister Erin McGrath-Gaudet proving that Coady failed to disclose information about 2 years of missing records from Mix, and (2) new FOIP documents confirming that ongoing recruitment efforts attempting to bring RBC to PEI were happening when the MOU was in effect, CMT’s lawyer immediately sent a letter to Jonathan Coady requesting his consent to have these new documents disclosed to Judge Campbell. MacDonald also asked Coady to remove himself from the case, for failing to produce those records and information about Mix’s missing records: Coady declined to either remove himself from the case or to bring the “…breach of various disclosure rules…” to the attention of Justice Campbell. As a result, Campbell never considered any of the documents recently filed with the PEI Court of Appeal as a Fresh Evidence Motion by CMT.
No mention of this major new revelation (that goes to the very heart of the coverup of the breach of the MOU by the PEI Government and the Justice system) has yet been made by any of PEI’s so-called “mainstream” media (CBC, Guardian, Journal Pioneer, and Eastern Graphic).
Given the legal implications of this new evidence, I again want to let the documents speak for themselves as much as possible, with only a minimum amount of commentary to fill in some gaps, or further explain what is said in the various email documents.
I’ve taken all the relevant emails and organized them chronologically, so you will be able to see clearly how the recruiting efforts with RBC pre-dated the signing of the MOU with FMT, and how it continued through both the initial 60-day MOU (signed July 6, 2012) and 30-day extension of the MOU (signed September 10, 2012).
Brad Mix’s Recruiting Efforts with RBC Dexia
Prior to the MOU signing on July 6, 2012, Brad Mix had been working on what I’m sure he was hoping would be the recruiting “score” of his prospecting career – RBC Dexia.
When it comes to large-scale corporate recruitment schemes, there’s been no shortage of boondoggles and white elephants in PEI’s history. When Brad Mix suddenly caught the attention of a reputable and “low-risk” financial company in early 2012, RBC Dexia, it must have seemed to Brad Mix that he had struck the recruitment “motherlode” with his efforts to prospect a major financial sector company to PEI. RBC Dexia was being solicited by Mix to establish a Financial Services Center in PEI to “export” financial services globally, with a projected staff of up to 600 employees.
Maine’s FOIP had requested documents from May 1, 2012, but somehow was also provided several emails in the thread from March 2012. The first email had a subject line reading: “Re: Follow up to PEI presentation to RBC Dexia,” however, I don’t have access to what that presentation entailed. Mix was responding to an email he had received earlier that day from Karl Barrow, who was handed the file from Joanna Meager, the person Mix had been dealing with at RBC Dexia: Mix responded the same day with the following: The following week, Mix sent Barrow this email: We here learn that Mix had met with Joanna in London on March 2, where RBC Dexia locating in PEI was discussed, with a projection that the number of positions created could possibly be 600 after 3 years. There was some back-and-forth communications between Barrow and Mix, with a clarification of the recruitment offer with more details from Mix, including an updated presentation based on significantly increased numbers (e.g., 600 after 3 years):Barrow responded three days later saying “that’s fine,” and also informed Mix that he was going on vacation for two weeks:Mix counted the days until Barrow’s vacation was over, then contacted Barrow to see if he needed any further information concerning what RBC could expect by way of labour rebates, tax benefits, etc. to locate on PEI. Barrow’s response came the same day: Maines obtained another email from a different FOIP request dated June 2, 2012 (also included in CMT’s Fresh Evidence Motion) with some redactions. It was an email that Brad Mix had sent to Neil Stewart about his upcoming scheduled meetings with 10 different financial services companies in Toronto in June 2012, one of which was RBC Dexia: Whatever that “program” was, Mix believed it was “needed to attract a financial services opportunity to PEI.” This recruitment escapade to Toronto happened a couple of weeks before the MOU was signed. As you will soon see, the meeting that Mix had with RBC Dexia in June 2012 wasn’t the last communication he had with RBC Dexia, even after the MOU was signed.
The next email mentioning RBC Dexia comes – ironically – on July 6, 2012, THE SAME DAY THE MOU WITH FMT WAS SIGNED BY CHERYL PAYNTER! That July 6th email from Brad Mix didn’t mention the MOU with FMT, nor the exclusivity clause in the MOU forbidding any discussions with any other financial services company regarding PEI’s interest in hosting a financial services centre. Brad was providing an “RBC Dexia Status” update to Wes Sheridan, Allen Roach, Melissa MacEachern, which was also copied to Cheryl Paynter, ON THE SAME DAY SHE SIGNED THE MOU WITH FMT. Wes Sheridan was planning to meet with John Lockbaum at RBC in meetings scheduled in Toronto in mid-July. RBC Dexia was in the process of being acquired by RBC, so Mix was providing Sheridan with background information, informing him that RBC acquiring RBC Dexia shouldn’t be a problem (since Mix had been assured by Joanna Meager that RBC Dexia would be making the decisions on the PEI deal).
Perhaps more importantly, Mix wanted Sheridan to know that Lockbaum may not know anything about the possible PEI deal with RBC Dexia and that it might be prudent for Sheridan to get a sense of whether RBC is envisioning a different future for Dexia. Wes appreciated the advice:
On July 10, 2012, just 4 days after the MOU was signed, Cheryl Paynter forwarded an email to her boss, Melissa MacEachern, that Brad Mix had sent to her on February 24, 2012 – the same day the Government supposedly ended the e-gaming project. That email raised concerns about Simplex’s CEO, Philip Walsh, which Mix had apparently heard from someone claiming to have founded Simplex: What prompted Paynter to dig up that old email and send it to MacEachern? That is not clear. Two days later, and just hours before Sheridan’s meeting with RBC in Toronto, he contacted Mix asking whether there had been any further communication or new information on RBC Dexia that he should be aware of before his meeting with Lockbaum: Mix’s response? On July 18, 2012, Mix sent the following email to Cheryl Paynter:Mix is obviously referring to the meeting Paynter had with FMT on the 6th when the MOU was signed – Paynter did not meet with Simplex. Paynter responded with the following totally unbelievable comment, telling Mix that an agreement was signed but that it was “non-binding.” Paynter mentioned nothing about the very strict legally-binding “exclusivity” clause: The following day, Mix provided an RBC Dexia update to his own Minister (Allen Roach) and Cheryl Paynter (CEO of Innovation PEI at the time), with very favorable and hopeful comments about the prospects of RBC locating in PEI:Mix indicated that “PEI is still being considered for a nearshore location” by RBC Dexia. The last sentence in his update makes it clear that RBC was being actively “solicited” to come to PEI: “Full package to be completed within 3 weeks in anticipation of a site visit.”
After RBC Dexia issued a News Release about its successful corporate rebranding as a subsidiary of RBC, Mix expressed his excitement with the prospect that RBC Dexia might be coming to PEI, and immediately forwarded that News Release to Roach, Sheridan, Paynter, and MacEachern with the enthusiastic proclamation: “Our number one prospect…..introducing RBC Investor Services….” like he was the Master of Ceremonies at a “Recruits of the Year” awards ceremony.
Number one prospect? So much for the promise made in the Recruitment Package to grant FMT “first-mover advantage” by establishing a financial transaction platform other corporate clients would then rely on for transaction services.
One paragraph of the News Release clarified that RBC Dexia – renamed “RBC Investor Services” – was a “…premier provider of investor services to asset managers, financial institutions and other institutional investors worldwide.” Mix completed the details of the recruitment package sent to RBC; scheduled a “site visit” with RBC Investor Services for September 20, 2012, and prepared a PowerPoint Presentation for the meeting, a copy of which was included in the FOIP documents obtained by Maines: The total offered to RBC at that presentation by way of rebates and financial incentives was significant ($19, 350,000): Mix calculated the benefits to RBC over a ten year period as well ($78, 990,000): But to show just how committed (and ambitious) the PEI Government was to have RBC establish a Financial Services Centre in PEI, it offered a brand new building that was still in the “dream” stage. Although the ground hadn’t yet been broken, the “availability” date for the new complex was listed as December 1, 2012, just a little more than two months after the date the offer was made:
Do I have to state the obvious from the documentary evidence? The PEI Government appears to have broken the MOU not once (with Keith Laslop/Newco) but at least twice (with RBC Dexia). Jonathan Coady refused to consent to have any of these RBC documents provided to Judge Campbell. In the September 6, 2012, Case Management Conference Call meeting, when CMT’s lawyer argued he had new materially-relevant documents that should be considered, Judge Campbell indicated he didn’t want to see them and ruled he would accept no more documents.
Why Three Trains for one Hub?
I don’t usually venture into the realm of “speculation” in my writings about the e-gaming scandal and CMT lawsuit. When I do, I’m very careful to point out the distinction between documentary evidence and possible scenarios that – although not yet proven with documentary evidence – are strongly suggestive. If nothing else, such exercises often open up new avenues for further investigation.
It took me a while to figure out why the Provincial Government would be simultaneously “recruiting” two different companies (Newco and RBC) to fill the space that was to be occupied by FMT. I have previously argued that unlike some economic sectors, there isn’t space for two “financial transaction hubs” in PEI. That’s why Jessop wrote the “exclusivity clause” so broadly to include any “financial services centre.”
Was RBC Dexia a “financial services” company being recruited to establish a financial transaction “hub” or centre in PEI? Of course, it was. It wasn’t looking to service local customers in PEI, the vision of 600 employees confirms a financial transaction “hub” venture serving global clients.
And here’s my theory. When Rory Beck was Clerk of Executive Council, prior to his sudden and untimely death, he was obviously excited about the prospects of bringing a financial services centre to PEI. He seems to have had, on the other hand, no interest whatsoever in the “gaming” side of that plan, especially the secrecy side of it.
Beck’s reputation for “doing things by the book” jeopardized the secrecy status of the entire gaming initiative, so it wasn’t uncommon for those involved in the gaming initiative, like Neil Stewart, to avoid Beck and find other ways to achieve their ends. For example, when Mix was going to meet financial companies in June 2012 in Toronto, Neil Stewart was trying to get clarification on what Mix could offer by way of a “tax holiday”. There are some redacted parts to the email, but read what Stewart says about Rory “deferring to Policy Board” (aka “doing the right thing”):
Wes Sheridan and Neil Stewart avoided Rory Beck because they knew he was a person who would follow Treasury Board policy and not skirt the law, which was a secret e-gaming committee “no-no”, operating as it was “outside the normal oversight framework of Government” as the Auditor General stated several times throughout her special e-gaming report.
At any rate, the documentation clearly shows that Wes Sheridan, Chris LeClair, Billy Dow, Melissa MacEachern, and others, were hoping to get in on the ground floor of a “local” company delivering the financial transaction platform services for gaming clients.
At first, the plan was clearly to have CMT become FMT, with local investors and local people on FMT’s board. I suspect that after local investors like Billy Dow and Chris LeClair, etc., realized that CMT was never going to give up anything close to controlling interest in FMT (which CMT owned 100% of the shares) they figured they had learned enough about the industry by that time – mostly from 2 years of dealing with CMT/Simplex – that they believed they could cut FMT out of the picture and create their own local company to do the “gaming” side of the financial transactions. But Newco was not SWIFT-certified to handle financial payment transactions for gaming, so it would have to work out an agreement with the PEI Credit Union if that plan was to go forward.
Newco could get its own gaming transactions handled through the PEI Credit Union, but couldn’t offer the same SWIFT-certified platform that FMT could. Not only could it not take over that part of the “space” left vacant by removing FMT from the picture, but Newco would also have had to partner with a financial institution to acquire those transaction services for its own gaming purposes. How to fill that other space? Enter RBC Dexia.
The “one track” that the FMT Global transaction platform was going to occupy, suddenly became “two tracks”, with Newco (Train #2) handling the non-financial platform for payments processing and gaming, and RBC Dexia (Train #3) handling financial transactions.
Recall that Billy Dow was approached by Gary Evans – both of whom were investors in CMT – with news that CMT/FMT was considering establishing the Global Transaction Platform in another Atlantic Province. Dow responded by offering a MOU that gave FMT “exclusive” rights to negotiate with the PEI government to establish the financial hub in PEI. That MOU was signed on July 6, 2012, but the following week Cheryl Paynter tells her colleagues actively recruiting another financial services company that the MOU was “non-binding.” Subsequently, Mix and Sheridan carried on with work to recruit RBC to establish a financial services centre in PEI.
If PEI had honoured its promise made to FMT that it would have a “first-mover advantage” once a major gaming client for the hub was secured (which Maines delivered in the Spring of 2011 when he recruited “Virgin Gaming”) then the PEI Government would not have been recruiting RBC even before the MOU.
As far as CMT/FMT knew, things seemed on track with that promise being fulfilled, especially after the MOU was signed on July 6, 2012. We can now see from the documents that were hidden and kept from the Court, that the PEI Government never stopped recruiting RBC, nor paid any serious attention to the legal requirement to deal exclusively with FMT.
In the above email from Mix to Paynter, you wonder if either of them really grasps what’s going on – Cheryl put “Simplex” on the email subject line, but Simplex had nothing to do with the MOU. You also have to wonder what Billy Dow really told MacEachern and Paynter about the MOU. It’s starting to look like he totally downplayed the “risk” to the PEI Government with the four binding clauses in the MOU. Even the Auditor General drew attention to the fact that Dow said those legally-binding provisions were “relatively benign” just before she proceeded to explain why they were very risky, not typical for the Government to enter into with companies, and would potentially be very costly for the province if the MOU was breached.
I now believe I understand what was most likely going on behind the scenes. The ‘gaming’ group (Sheridan, LeClair, MacEachern, Paynter, Scales, Kiley, O’Brien, Stewart, and Mix) worked together to get both Newco and RBC. They planned to let the MOU with FMT expire and (a) had already done the prep work with Keith Laslop and Chris LeClair to have a proposal submitted on the same day they thought the MOU was expiring on September 6, 2012, and (b) had prepared a recruitment package for RBC with an on-site visit and presentation scheduled for September 20, 2012.
Everything would likely have transpired as planned if Paul Maines had not become aware of the Laslop/Newco part of the plan, which forced Innovation PEI to grant an extension of the MOU. There were no legitimate reasons for Innovation PEI not to have concluded that deal with FMT, and that would have happened if not for the Securities Investigation that derailed the FMT train. Keep in mind, once a deal was inked with FMT, RBC Dexia would have had to have been a client on the Global Transaction Platform.
The next episode will revisit the issue of how the PEI Securities Commission investigation initiated by Dowling came to happen, with some shocking new revelations that should put the final nail in the coffin for the PEI Government Defendant’s claims that they did not act with misfeasance.
Episode #20: Covering up the Breach of the MOU (Part II)
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Preamble
The revelations in the last two episodes provide ample grounds for CMT’s case to go to trial. The evidence before Judge Campbell was sufficient for a fair and impartial Judge to have made that determination. The fact that Jonathan Coady withheld crucially-important documents, that refute the sworn testimony from Wes Sheridan that Judge Campbell accepted as true and relied on, now makes a decision to allow a trial an absolute “no brainer”.
Personally, I believe our Court of Appeal judges have integrity and are not unaware of the problems Campbell’s ruling has created for the Court. I attended the Appeal Court’s hearing of CMT’s motion not to have to put up additional security costs last January. I also read the Appeal Court’s decision denying CMT’s Motion. Although I believe there was no need for Campbell to demand CMT put up that kind of unprecedented security costs, which clearly seemed designed as a punitive and prohibitive measure, I nonetheless felt the Appeal Judges interpreted the law correctly in their ruling.
I trust the three judges will rule fairly and will write a decision that begins to restore some faith in our PEI justice system, given this embarrassing excuse for due process and access to justice that’s soon to become another national shame for us all. I won’t say more about that right now, for fear of infringing on an “exclusivity” clause.
Left – Right: Honourable Michele M. Murphy, The Honourable David H. Jenkins, Honourable John K. Mitchell
The revelations in this episode should motivate the three Judges on the PEI Supreme Court of Appeal to make a bold ethical declaration to the people of Prince Edward Island that they will not stand idly by and allow an Island citizen, who has been treated so badly for so long, be denied his day in court. They need to stand up against the way our justice system is being compromised.
Judges have to rule according to the law, even if the laws are bad laws; but even bad laws are subservient to the truth – and when Judges don’t want to see the truth, they shouldn’t be asked to judge. How can Judges rule fairly when the principles of natural justice are trampled upon so blatantly without consequence? Campbell is a former partner with one of the defendant’s in the case, close friends with most of the other defendants, and a former leader of the Liberal Party of PEI. How was he ever given this case to adjudicate?
Given the egregious series of violations of the fundamental principles of justice enshrined in our Canadian Constitution, there needs to be consequences for those who broke laws, evaded oversight, destroyed government records, withheld materially-relevant documents from the court, participated in the coverup of wrongdoing and corruption, wasted taxpayers money, and seriously compromised our democratic and judicial systems in PEI by colluding together to do all of that, all the while working diligently to keep everything far from the eyes of Islanders paying their bills. When you finish this one – if you have the stomach and time (this is another long one) remember this: we (PEI taxpayers) paid for the entire Laslop endeavour orchestrated by LeClair and Sheridan and the secret gaming committee, and those public dollars came from a fraudulent grant Sheridan also orchestrated with Neil Stewart and McInnes Cooper AFTER the PEI government had supposedly ended the e-gaming project in February 2012! You can read about that here. There are “principles of natural justice” that we are all guaranteed as Canadians when engaged with the Courts. The following summary definition for the phrase “principles of natural justice” is provided by our very own Federal Government website:
The principles of natural justice exist as a safeguard for individuals in their interactions with the state. These principles stipulate that whenever a person’s “rights, privileges or interests” are at stake, there is a duty to act in a procedurally fair manner.
The Federal Government then goes on to explain that:
The principles of natural justice and procedural fairness are based on the theory that the substance of a decision is more likely to be fair if the procedure through which that decision was made has been just. While the principles of natural justice embody several important rules of procedural fairness, the twelve most common rules are the following:
The evidence I’ve already seen gives reason to believe that at least 4 of those 12 rules have been violated in this case, including:
(1) “Evidence Disclosure: Depending on the nature of the case, all evidence to be used against an applicant must be disclosed.” [Conversely, all materially-relevant evidence that will assist the applicant must also be disclosed. Coady failed to disclose materially-relevant evidence];
(2) “Duty to consider all of the evidence: The decision-maker is required to consider all of the relevant evidence and information pertaining to a specific case.” [Despite being made aware that there were materially-relevant documents being withheld by Counsel for the Defendant (as well as documents being withheld by the PEI Government in several FOIP requests), Judge Campbell nonetheless ruled that he would not entertain any new evidence before making his ruling].
(3) “Delay.The premise is that unreasonable delay may cause prejudice toward the applicant and may, therefore, breach procedural fairness.” [Despite having to put up $1 Million as Security with the Court (with no interest), no trial date has been set, with a pending Appeal of Campbell’s Decision to end the legal action]. (4) Right to an impartial decision-maker and freedom from bias: Procedural fairness is violated when the decision-maker is biased or their conduct or statements raise a reasonable apprehension of bias.” [What I already said about Campbell’s connections to the Liberal Party and his friendships and past partnership with one defendant clearly raises “reasonable apprehension of bias.” Why Campbell was allowed to handle this case in the first place baffles me. Aside from the obvious, never before has “bias” been so evident in a ruling – it reeks. I’m dedicating one of my final 5 episodes to explaining why I can make that statement so emphatically. There are also countless examples of very unprofessional (and unnecessary) negative personal comments made against Paul Maines by Judge Campbell, impugning his character and reputation. Is there no one else within the Justice system concerned about this? Not only is “bias” rampantly evident throughout the ruling, Campbell continually chastises Maines for presenting nothing but “hearsay” evidence; then continually relies on Dowling’s “sworn” testimony which Campbell refers to as “direct evidence,” as opposed to “hearsay.” He does that even though almost everything Dowling swore was based on HEARSAY from people he interviewed – three of whom had to later swear their own affidavits to correct Dowling. On April 11, 2018, Judge Lipson in Ontario sentenced David Livingston [the former Premier of Ontario’s (Dalton McGuinty’s) Chief of Staff] to 4 months in jail, 1-year probation, and 100 hrs of community service for destroying government records on a couple of computers. In his Written Sentence, Lipson noted that the most serious “aggravating” factor prompting him to give a jail sentence was how Livingston’s actions “thwarted” government accountability, and undermined our Canadian system of parliamentary democracy. Here are two statements from his Sentence:
“This offence is very serious because it involves an attempt by the defendant to thwart the core values of accountability and transparency that are essential to the proper functioning of parliamentary democracy.Mr. Livingston’s plan was to deny the public its right to know about government decision-making with regard to the gas plant controversy.” (para. 49, p. 8). [My emphasis].
“Mr. Livingston attempted to frustrate the operation of the mechanisms of government accountability. A denunciatory sentence is required to reaffirm society’s legitimate expectation that those holding senior government positions conduct themselves with integrity and within the law. It was not for Mr. Livingston to unilaterally decide what the public should or should not know about the steps taken by government in its decision-making on the gas plant controversy.” (para. 57, p. 10). [My emphasis].
Yes, lots of records were also destroyed in PEI, but the breadth and width of this cover-up involve more than one individual, it encompasses countless people, and it is continuing to happen with Court-Enforced Orders from the Information Commissioner compelling release of materially-relevant documents from the current Government.
Sometimes I wonder if we haven’t contracted some cultural variant of “Munchausen Syndrome” in PEI, numbing our collective moral consciousness when it comes to getting rid of corruption in Government. Sure, we all despise self-serving slugs and secretive deals where insiders dip into the public purse. We all say it’s disgusting and deplorable and demand something should be done about it. But unfortunately, we identify and sympathize with those engaged in corruption, who also happen to be members of our families, friends, and neighbours and, well, politeness always seems preferential to prosecution when it comes to proffering perks to prominent public people, especially politicians, in PEI. Shhhh!!! You’ll embarrass us!
It really makes me sad when people tell me – and a lot do – that they appreciate my research and read all my articles, but can’t “like” or “share” them because they work for the government, or they’re married to someone who works for the government, etc.
What a crippling way to live! We do indeed live in a “free” society, with Charter rights guaranteeing those freedoms, but if we’re too timid to “like” and “share” a post we think is important, well, perhaps finding a way to overcome that timidity is the first and most radical step we can take towards changing such a stifling and oppressive culture, so we can then make claim on the freedom the law affords us.
Sometimes a writer has to rant! Now down to business. This is the “big one” as they say.
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Did the PEI Government breach the legally-binding exclusivity clause in the MOU by engaging with Keith Lapslop and Newco?
CMT’s Claims about Keith Laslop and Newco
As I noted in the previous episode, CMT did not mention Newco or Keith Laslop in its original Statement of Claim because there were no documents. After the PC Opposition Party received FOIP documents that mentioned Laslop/Newco, and tabled them in the Legislative Assembly, CMT added a series of paragraphs in its Amended Statement of Claim, filed on June 14, 2018.
This matter is dealt with in 6 consecutive paragraphs and is presented as being chronologically connected to the launch of the Securities Commission investigation against Maines and CMT initiated by Steven Dowling.
Paragraph 124: On September 6, 2012, the same day that 764 received the extension to the MOU, Maines obtained information that certain members of the Government of Prince Edward Island were undermining the MOU.
Although the MOU extension was actually signed on the 10th, Melissa MacEachern had indicated to Tracey Cutcliffe on the 6th that Innovation PEI intended to proceed with an extension. She put that in writing on the 7th. That was Innovation PEI’s initiative, not Wes Sheridan’s and the gaming committee’s, who seemed set on moving forward with Laslop.
Paragraph 125: While the MOU was in effect, Sheridan and LeClair were attempting to source financial services corporations in Europe to provide the services contemplated to be provided by 764 under the MOU.
You may recall that CMT’s lawyer, Gary Jessop, and Simplex’s CEO, Philip Walsh, were in Charlottetown for three days in early September 2012 to wrap up those negotiations. That deal was on the cusp of being finalized as the first 60-day MOU was coming to an end. That’s when Cutcliffe got wind of the Newco proposal making the rounds:
Paragraph 127: Maines immediately contacted Cutcliffe, a government relations consultant hired by CMT who, in turn, contacted Paynter at Innovation PEI protesting the violation of the MOU by Sheridan and LeClair and demanded from Paynter a copy of the report that Sheridan and LeClair had made to Innovation PEI.
I dealt with this matter in a previous episode on the Securities Investigation – Maines’s Voluntary Statement – but will revisit this evidence later in the article.
Paragraph 129:MacEachern confirmed to Maines that there was a proposal being passed around, but refused to provide Maines with a copy.
The plan to formally move Laslop/Newco into the space freed-up by the expiring of the MOU with FMT was put in jeopardy when Cutcliffe informed Maines and he approached government demanding answers. Once the scheme was exposed and made known to Maines, it immediately became too risky to do anything but extend the MOU. That’s when the Securities Investigation was initiated by Dowling:
Paragraph 130: Maines began to receive telephone calls from various members of the business community that they had been contacted by Dowling, a lawyer in the Office of the Superintendent of Securities, who had said to them that he was investigating forms of illegal trading and fraud on the part of Maines and CMT.
Rather than being left free to conclude the agreement, which could have happened within days, that space was once again about to become open for Laslop on the 6th, when he sent his proposal. It then closed again when the MOU 30-day extension was formally signed on the 10th, but that space was fortuitously once again freed up for Laslop/Newco once the Securities investigation suspended the FMT/Innovation PEI talks, preventing a deal, and allowing the clock to run out on the 30-day extension.
Paragraph 131: Maines telephoned Dowling several times on September 6, 2012, and the next day Dowling returned his call at which time Maines asked Dowling why he was stating to members of the financial community that he was being suspected of fraud. Dowling indicated to Maines that he had nothing to discuss with Maines at that time. Maines volunteered to meet with Dowling at any time and to provide any information to Dowling that he required.
Dowling’s Securities Investigation was launched on September 6th, the same day everyone believed the MOU was expiring, and the same day Laslop sent his business proposal to Wes Sheridan to establish a financial transaction hub in PEI .
Did the new documents uncovered by the PCs discussed and tabled in the Legislative Assembly prove a “breach of contract”? as Hon. Stephen Myers and the PC Caucus vehemently argued at the time?
Let’s see how Campbell interpreted those documents.
Judge Campbell’s Reading of the Keith Laslop/Wes Sheridan Emails
Campbell makes the following statement about the plaintiffs’ claims for breaches of the MOU:
Paragraph 200: The major thrust of the plaintiffs’ claims for breaches of the confidentiality and exclusivity articles of the MOU relate to three areas of alleged activity by the defendants. Those are 1) contact with Laslop of Newcourt Capital and Tobin of Continental 8 Technologies; 2) attendance by Mix at the SIBOS conference in Japan in 2012 and related or similar contacts with others for business recruitment or development purposes; 3) disclosure of confidential information by various defendants.
This episode deals only with part of #1, “contact with Laslop of Newcourt Capital and Tobin of Continental & Technologies.”
In Paragraph 204, Campbell considers the email communications on August 1 and 2, 2012 and he says that CMT’s claim is that “…the email exchanges of August 1 and 2, 2012…constitute proof of the breach of these two articles of the MOU [Exclusivity and Confidentiality clauses].”
Paragraph: 204: The MOU was in effect from July 6, 2012 to September 4, 2012, and again from September 10, 2012, to October 10, 2012. It is the plaintiff’s submission that the email exchanges of August 1 and 2, 2012, between LeClair, Sheridan and various others who had worked with Simplex on the e-gaming project, constitute proof of the breach of these two articles of the MOU. The defendants deny there was any breach of either section of the MOU.
In paragraph 246, Campbell goes on to note that just because Government officials decide to have month-long communications and a “series of meetings” with the CEO of a company wanting to establish a financial transaction platform in PEI – when only one such platform can be established – that doesn’t necessarily constitute evidence that “…any discussion about the PEI Government’s interest or capacity in hosting or creating a financial services centre…” happened. He concluded that the plaintiffs failed to provide such evidence:
Paragraph 246: The fact that Government officials such as Campbell and Paynter had introductory meetings with Laslop is not evidence of a breach of the MOU provisions relating to establishing a “financial services centre”.There simply was no evidence to show there was any discussion of the Government’s “interest or capacity in hosting or creating a financial services centre” on PEI. Nor would it be reasonable to draw an inference that such a proposal was discussed. On the contrary, specific, direct evidence was presented stating that no specific details of any business were discussed at the introductory meetings. Further, the defendants in question were aware that an agreement had been entered into with another company and that until such an agreement expired, they were required to honour the agreement and refrain from discussing their interest in a financial services centre. Comments from MacEachern, Paynter and Sheridan confirmed their intention to honour that agreement. (My emphasis)
Campbell’s position is that: (1) because MacEachern, Paynter and Sheridan “confirmed” their intention to honour the MOU, and (2) swore (“direct evidence”) that “no specific details of any business were discussed” and (3) confirmed that they were all aware that they were “required to honour the agreement and refrain from discussing their interest in a financial services centre,” then there was no breach of the MOU.
What did Campbell say about the in-person meeting that took place between Laslop, Sheridan, LeClair and others on August 29th?
Paragraph 232: LeClair confirmed that he and Laslop met with Sheridan on August 29, 2012 during which he [LeClair] introduced Laslop to Sheridan. LeClair stated the meeting was general in nature and “No specific business proposal was discussed.” Sheridan declared on cross-examination that he never saw Laslop again after that meeting on August 29, 2012, and with the exception of the email received on September 6, 2012, he never heard from Laslop again.
Campbell ignores the obvious here. As you’ll see subsequently, Laslop met for two hours in the morning, then again in the afternoon. And what does “the meeting was general in nature” mean? What the heck were they meeting for in the first place? What did they discuss? That’s the question Campbell should have gotten an answer to, rather than accepting it was “general in nature”.
The wording of the exclusivity clause has left no room for ambiguity saying the PEI Government was: “…not to discuss with any entity its interest and/or capabilities in hosting or creating a financial services centre in the Province.” So it strains credulity to believe that this major get-together was anything other than a breach of the MOU. Laslop’s only interest in PEI was establishing a financial transaction hub, and that is the only topic of interest he had with the government.
Also, Campbell’s statement “….during which time he [LeClair] introduced Laslop to Sheridan…” creates the impression that Sheridan didn’t know Laslop; however, Sheridan had previously worked with Laslop in conjunction with the secret gaming committee and already knew him, which will be discussed subsequently.
That’s pretty much all Campbell had to say about the Laslop/Newco documentation he had in front of him. He concludes by boohooing the idea that there was any breach of the MOU, with what he considers solid evidence of “good faith” intentions with the signing of the MOU extension.
Paragraph 249: First, the MOU was renewed on September 10, 2012, after the securities investigation was commenced. There was no obligation on Innovation PEI to renew or extend the MOU. Paragraph 11 of the MOU included the statement, “However, for the avoidance of doubt, neither Party is obliged to enter into further agreements.” If by September 10, 2012, there was a plan to replace 764 with another company, or put them out of business, or invent a Securities Act investigation against Maines, CMT, and 764, or terminate the MOU, the MOU would simply not have been renewed.
What this line of reasoning fails to take into consideration is that Tracey Cutcliffe informed Maines of the MOU breach just as Laslop was submitting his proposal thinking the MOU had expired, which prompted Maines to immediately confront Government with the claim that they had violated the exclusivity clause in the MOU. The extension may have been a sign of “goodwill” on the part of Innovation PEI to Campbell; however, it looks a lot more like good old-fashioned “ass-covering” to me.
Notwithstanding the fact that Innovation PEI signed a 30-day extension – which would have allowed the agreement for the financial hub with FMT to be signed within days – the Securities Commission investigation serendipitously commenced the very same time – as crippling defamatory rumours circulated about Maines defrauding a little old lady with cancer, rumours that were later proven to be completely bogus – just as the extension was being verbally agreed upon. That investigation resulted in Innovation PEI suspending the talks, and any prospects of an agreement being reached evaporated all the same, just as if the extension had never been signed.
The Truth According to the Documents
Because Judge Campbell ignored so much of the evidence presented to him on Laslop/Newco, the best way to deal with his “conclusions” on the matter, as presented in various statements and claims above, is to present a comprehensive and accurate chronological review of the materially-relevant events and facts that disprove particular beliefs or claims Campbell made. Whenever that happens – and it happens a lot – I’ll point it out. All of his most important claims should be dealt with by the end of this section.
Given the extreme importance of the central issue of this episode – e.g. whether or not the evidence supports the claim that the PEI Government breached the MOU – I don’t want to express any opinions, offer any conjecture, or speculate. I want the facts as evidenced in official government records to speak for themselves.
Laslop was Chris LeClair’s “client,” but so was McInnes Cooper law firm, who was offering project management services to the Provincial Government on the gaming/financial transaction platform project file. LeClair’s interest in promoting Laslop dovetailed with the gaming committee’s interest in establishing a gaming payments processing centre (aka “financial transaction platform” or “hub”) by bringing Laslop back into the picture – he was an old friend of the secretive gaming committee, as you’ll see – by establishing a new local company (Newco) to run a financial and gaming payment centre.
For anyone who may not have read previous episodes, LeClair became an investor in RevTech (raising money for CMT/FMT) while he was Chief of Staff for Premier Ghiz. He left Government in October 2011 but continued on with the gaming file working with Sheridan and the secret gaming committee as a consultant to McInnes Cooper. His communications and involvement with Sheridan was never interrupted when he left Government.
On August 1, 2012, LeClair emailed Sheridan about Laslop:
Sent: 8/1/2012 8:00:34 AM Subject:Payments processing
Wes, I am doing a bit of work for keith laslop… you met him before. He is still interested in opening up a payments processing company in partnership with a credit union. He wants to process offshore canadian play — no need for setting up a regulatory regime. Would you meet with he and I on pei… I told him mike tobin might be here and there might be synergies? Here [sic] can come to pei on the either August 21-22 or August 28-30. Can you give us a time to meet. Also, who is the best bet to speak with from thr [sic] credit union side?
Thanks wes
Notice that he says “he is still interested”. That’s important. He also says “you met him before.” That’s also important. Remember that Judge Campbell said that “Leclair introduced Sheridan to Laslop”, creating the impression they didn’t know each other. Laslop was connected to the gaming committee a year or so earlier when it was still considering options. Note that LeClair asks Sheridan, “Who is the best to speak with from the Credit Union side?” That’ll come up again in a minute.
What Laslop was “still interested” in was setting up a financial transaction hub in partnership with the PEI Credit Union (because unlike FMT with the SWIFT certified Global Transaction Platform, Newco would not have been able to process financial transactions without partnering with a financial institution).
You may remember, from a previous episode, that $10,000 was paid to Patrick Mason (who Campbell never mentioned) to undertake a “feasibility study”. Well, there’s a connection between Sheridan and Laslop’s interest in working with a Credit Union in PEI.
Sheridan responded to LeClair’s August 1st email the very same day. With no hesitation – and no mention of the MOU Exclusivity clause – and proposed a meeting date:
2012-08-01, at 7:10 AM
The 21st in the afternoon would work Chris, let’s discuss details such as a CU contact later today, TB this morning
You can see how Laslop/Newcom was entirely a secret gaming committee initiative from who was involved in the communications that took place:
O’Brien to Kiley, Scales, LeClair
Date: Wed, 1 Aug 2012 07:40:16 -0300
Subject:
Hi Guys. It looks like the best day for the golf and dinner is August 21st. Wes is available on that day and I believe we should extend the invitation to others (Alan Campbell, Premier, Neil Stewart). Please provide your thoughts on this and how any costs are to handled.
Mike
What’s clear from this email is that the Lapslop/Newco option for a financial transaction hub in PEI was an initiative of the secretive gaming committee and Wes Sheridan, not Innovation PEI.ALL of the core members of the secret gaming committee were included in the above email, except for Don McKenzie with the Mi’kmaq Confederacy (who only seems to be mentioned in the documentation when e-gaming grant proposals or cheques had to be signed).
What must be grasped here is the magnitude of the plan in place to meet and confer with Laslop. This was not just some random unsolicited proposal that came to Government, as Allan Roach tried to convince the House:
The “connection”, Mr. Roach, was that Wes Sheridan had “married” the gaming and financial transaction platform projects into one, and the gaming committee was planning a day-long gathering between members of the gaming committee (Gary Scales; Kevin Kiley; Mike O’Brien; Chris LeClair; and Wes Sheridan) to have discussions with LeClair’s client, Keith Laslop, who was interested in establishing a financial payments processing “hub” in PEI, during the time when the MOU’s legally-binding exclusivity clause was in force.
A literal reading of the Exclusivity clause should have precluded a simple “not interested right now” response from Sheridan; not excitement, scheming, a planned day of golfing and meetings, etc. What additional evidence would a person need to determine the MOU was breached? But there’s more.
There is also evidence that Sheridan actually assisted Newco with laying the groundwork for the proposal Sheridan invited Laslop to then submit to him – but not until the MOU expired on September 6th. When the MOU was still in effect, Chris LeClair contacted Sheridan’s office about setting a date and time to meet with Laslop, but also requested advice from the Minister for his client regarding contacts with the PEI Credit Union, apparently following up on his inquiry from August 1st:
Wes Sheridan’s Administrative Assistant sent the following email in response:
The first phone number (892-4107) is the Provincial Credit Union on University Avenue in Charlottetown; the second number is for Sheridan’s former place of employment, the Malpeque Bay Credit Union in Kensington. Prior to getting elected to the PEI Legislature on May 28, 2008, Sheridan was Assistant Manager at Malpeque Bay Credit Union, and Manager of Commercial Lending, working with Marc LeClair, who has been the Manager of the Malpeque Bay Credit Union for the last 35 years.
How is it that some guy in Toronto knows enough to create a new company in PEI with an unknown number of local PEI investors to do business with Wes Sheridan’s long-time friend and former boss at the Credit Union in Kensington?
Sheridan clearly had inside contacts with the Credit Union and, as hinted above, had previously explored that relationship with Laslop and the secret gaming committee many months earlier. All of a sudden he gets a call from LeClair saying Laslop is “still interested” in doing the deal with the Credit Unions and setting up the payments company, and the next thing Sheridan is sending him Credit Union contact information. His “promising” meetings he had with two Credit Unions then gets mentioned as a “selling point” in the business proposal he sends Wes Sheridan on September 6th – what’s the expression? Too cute by half?
If Laslop “was still interested,” that means he was interested before. Some digging revealed that when Patrick Mason was doing the “feasibility study” for the gaming/transaction project in early 2011, Sheridan sent him to the Credit Union to get information, but apparently told him to wear a disguise and use a foreign accent (“mystery shop”):
As it turned out, the first-proposed date for Laslop to meet on September 21st didn’t work out, and the 29th was settled upon. The meeting time for the 29th was still being decided, and LeClair proposed the following:
It was LeClair who facilitated the communications and arranged the meeting between Laslop and various other individuals within the PEI Government. On Tuesday, August 28, LeClair emailed Laslop for Company Info. That same day Laslop replied to LeClair with the following intriguing information that never came up in Campbell’s Decision:
I wonder why we don’t see “payment technologies” in any of the documents, despite Laslop’s direction to be referred to as with “Payment Technologies” – That name sounds a lot like a “financial services” company, so it appears they settled on “newco” because newco sounds like nothing – other than “new company”.
The following email from Chris LeClair to Cheryl Paynter reveals that the “purpose” of the meeting actually wasn’t for Laslop to make a pitch to the PEI Government, it was for the PEI Government to provide Laslop with “an overview of the initiative“.
What “initiative? I suspect that overview was to brief Laslop on what he should put in his “Financial Hub Business Proposal,” which he was asked to hold off submitting until the FMT MOU expired on September 6, 2012.
The only way to truly get to the bottom of what was intended by those words “overview of the initiative” is to question people under oath in Court. What it does tell us is that (1) the PEI Government had some kind of “initiative” related to payment processing of which they had made Laslop aware; and (2) whatever that initiative was exactly, Laslop expected to get more information about it at the meeting on August 29th.
Note the timestamp as well as the handwritten note on the following email, along with the opening sentence: “Brad….met with Keith and Chris today.”
The first thing to notice about this communication is Paynter’s information about Laslop’s prior involvement with the secretive gaming committee. She says, “Keith was to PEI back in the time tunnel re: processing online gambling transactions. File, as you know, has gone quiet since then.” “Quiet since then,”….but apparently no more.
If what was going on with Laslop was not a breach of the MOU, why did Paynter feel it necessary to deal with him in stealth mode? The second last paragraph in her email to Brad Mix – immediately following the meeting with Laslop on August 29th, when the MOU was still in effect – states:
“Do you have a general financial service sector prospecting package we can send Keith to tie him over for the next few weeks? I don’t want to send it out until mid-week next week because of that other MOU – due to expire on the 6th.”
If everything was legit and above board, why the clandestine subterfuge?
The Documents on Lapslop/Newco that Coady Kept from Campbell
From all appearances, the PEI Government broke the exclusivity clause with the MOU. Given the refusal of Coady to disclose materially relevant documents, Paul Maines submitted a FOIP looking for additional documentation Coady had not disclosed. The following is from the “fresh evidence” motion recently filed with the PEI Court of Appeal:
Those two documents that Maines obtained, dated September 05, 2012 and October 1, 2012, are the other two documents Jonathan Coady’s included with his Second Affidavit of Documents which he served on CMT’s lawyer on September 20, 2012, but didn’t provide to Judge Campbell. Would it have made a difference? It should have. Cambell stated in his ruling:
Sheridan declared on cross-examination that he never saw Laslop again after that meeting on August 29, 2012, and with the exception of the email received on September 6, 2012, he never heard from Laslop again.
Once again, Campbell accepted Sheridan’s “direct evidence” as truth. It wasn’t. It was just that Coady had withheld the document that would have shown that Sheridan was, once again, lying under oath. Sheridan swore that the last email communication with Laslop was on September 6th, but he received the following communication from Laslop on October 1 (Note: It is unclear whether there were further communications – the end-date for Maine’s FOIP for Laslop records with Sheridan was October 1, 2012):
Note the subject line: “Payment Processing in PEI.” And keep in mind that THE SECOND MOU WAS IN EFFECT on October 1, 2012. When Laslop asks whether “…there is anything Newcourt can do to progress things in PEI…” he reveals that despite the MOU with FMT being in effect, there is another plan operating behind the scenes. As well, the fact that Laslop was in discussions with “potential customers” shows the extent of his confidence that the PEI Government was on board to move forward with his company establishing a hub. He wasn’t even supposed to know that the PEI government had an interest in doing such a thing, according to the Exclusivity clause.
Campbell made a big deal of the fact that the Government can’t be held accountable for receiving an “unsolicited” proposal from someone contemplating doing business in PEI. Perhaps he would have recognized the extent to which that submission was indeed solicited by Government if he had seen the following document Coady failed to produce:
Sheridan’s response?
“Lead into a conversation” about what?
You might say that the above e-mail doesn’t absolutely prove Laslop’s business proposal was solicited, but just consider the logical sequence of events: (1) meeting happens on August 29th where Laslop is given an overview of the “government’s initiative” (not specified), (2) receives a recruitment package that is not “personalized” because, as is explicitly stated, the MOU with “that other” company was still in effect until the 6th; then (3) submits a proposal on the 6th talking about how the province had “rightly identified” financial services as a priority sector and offers to establish a transaction hub.
The proposal proposed exactly what FMT was to provide, offering PEI “first-mover opportunity” to establish itself as a “payments processing hub” as stated in Laslop’s proposal. Notice the last sentence in the last paragraph: “It is the company’s intention to explore other payment verticals beyond gaming once operational.”What is meant by “verticals”? Think Loyalty Card Program as an example. But of course, to satisfy Sheridan and the gaming committee, gaming had to come first.
What will happen now?
If the PC Government believed the MOU was breached, based on the documents they had in their possession at the time they were in opposition, I wonder what they believe now with further insight and fresh evidence? More importantly, I wonder what they’ll do about it.
In episode #18, I provided documentary evidence that the Minister of Finance (for former Premier Robert Ghiz) Wes Sheridan, lied under oath about knowing Paul Maines and CMT/FMT, just as he had earlier lied about that same thing to both the Legislative Assembly and National media. Campbell, unfortunately, accepted Sheridan’s false testimony, arguing that CMT’s lawyer, John MacDonald, had not provided any evidence disproving Sheridan’s claims.
Those two Wes Sheridan/Brad Mix documents that I obtained in a targeted FOIP request, and dealt with in the previous episode, completely disprove Sheridan’s claims. They also invalidate the conclusions Judge Campbell derived from those false claims.
In bold defiance of the Rules of Court, Jonathan Coady withheld documents that could have resulted in a completely different ruling from Judge Campbell. Here’s the chronological sequence of those events.
September 2: I submitted a FOIP Request for Wes Sheridan/Brad Mix Records.
September 6: Judge Campbell informed the Parties in a Case Management Conference Call meeting that he would not accept any more documents.
September 20: Coady sent those same two documents to CMT’s lawyer as a formal “Second Affidavit of Documents,” but did not bring them to the attention of the Court.
September 25: Judge Campbell issued his ruling, dismissing the case with maximum costs against the Plaintiffs (CMT).
Why didn’t Coady provide those documents to Judge Campbell for his consideration? True, Campbell had indicated on September 6th that he wouldn’t entertain any more documents prior to issuing his ruling; however, the fact that they were deliberately withheld represents a totally different situation. Coady clearly had an ethical obligation to bring those documents to Campbell’s attention before he issued his ruling. If he was worried about violating Campell’s decree that he’d already seen enough documents and wouldn’t accept any more, thenCoady clearly had an obligation to seek guidance from the Chief Justice of the PEI Supreme Court in advance of Campbell issuing his decision. Why didn’t he?
Those documents also prove that Wes Sheridan knew about FMT, as well as the plan to have FMT become the local company delivering the CMT/Simplex Global Financial Transaction platform. And he knew all of that more than a year before the MOU was signed on July 6, 2012! This alone constitutes more than sufficient grounds for CMT’s case to at least be allowed to go to trial and be properly adjudicated. If CMT hasn’t earned it’s day in court after all of this, it will be a sad day for our Island Justice System.
I mentioned that Coady’s “post mortem” affidavit had 4 Exhibits. The other two records were Wes Sheridan/Keith Lapslop emails. The next episode (Part II) will deal with those two Sheridan/Lapslop documents.
This episode provides the background information needed to properly explain and understand: (1) the breach of the MOU, and (2) the coverup of the breach of the MOU.
Careful attention must be given to the chronology of dates and events during the MOU period to accurately interpret the facts. Understanding those facts in context is the only way to determine whether the legally-binding provisions of the MOU were breached.
This episode will provide background information on the following:
The Origins of the MOU.
Was the MOU a Legally-Binding Agreement?
The Negative Impact on Innovation PEI from the “Exclusivity” Clause
The “Real” conflict of interest with Melissa McEachern
CMT’s Claim of an MOU Breach with Keith Laslop/Newcourt
Laslop/Newco” Breach of Contract” discussed in the Legislative Assembly
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1. The Origins of the MOU
The Auditor General noted, in her Special Assignment on E-gaming, that the “idea” for the MOU did not come from CMT, but rather originated with Innovation PEI’s outside legal counsel, Billy Dow. Why would Billy Dow want Innovation PEI to sign a MOU with FMT?
Billy Dow
Billy Dow was an investor in CMT, and when he learned from another investor that CMT was considering establishing the Financial Transaction Platform in another Atlantic Province, he wanted to provide FMT with the legal assurance that the PEI Government was fully on board with FMT establishing a financial transaction hub in PEI. That was the plan all along, to give FMT “first-mover advantage” in the financial services sector in PEI, as stated in the recruitment package provided to FMT, something Judge Campbell never mentions in his ruling.
To keep CMT/FMT in PEI, Dow knew he would need to make some substantial concessions. In fact, he allowed CMT’s lawyer, Gary Jessop, to “draft” the entire agreement, then send it back to him for review. Jessop put very carefully defined clauses in the MOU agreement that absolutely forbid any discussions or communications with other companies or individuals, and Billy Dow was apparently OK with that provision binding the PEI Government to work exclusively with FMT.
It makes sense that if CMT/FMT was going to abandon opportunities that had emerged in other provinces, it needed full legal protection ensuring the original commitment in the Recruitment Package would be honoured. The expectation at the time was that 60 days would be sufficient time to conclude a formal agreement and launch the Financial Transaction Hub. With no reason to think things wouldn’t transpire as planned, Dow didn’t apparently have a problem with that very broad legal protection afforded CMT in the form of a legally-binding “Exclusivity” clause.
The Auditor General makes it clear that it was “Billy Dow the Investor in CMT,” who first negotiated the MOU with CMT’s lawyer Gary Jessop, and then presented it to Innovation PEI (Cheryl Paynter) for a signature:
Technically, it wasn’t “investors in CMT” (plural) who approached the Department, it was just one CMT investor, Billy Dow, Innovation PEI’s outside legal counsel. The AG actually confirmed that fact elsewhere:
Section 5.7: We noted, through interviews conducted and review of e-mail documentation, that the concept of the MOU agreement was initiated by Innovation PEI’s external legal counsel [Billy Dow] based on his discussions with a local CMT investor…
Although the MOU was signed with Innovation PEI, it wasn’t associated with anything Innovation PEI was initiating within the Agency, it was entirely the brainchild of Dow and the secret gaming committee, who were “tapping into” Innovation PEI’s resources as required, but operating secretly and outside the normal framework of government. The AG noted anomalies with the way the MOU came about:
As an investor in CMT, Billy Dow was a “client” of sorts in the business arrangement and stood to personally benefit handsomely if the project went forward. Of course, as convenience would have it, he was also the lawyer for Innovation PEI, and close personal friend to Premier Ghiz. Dow could apparently walk into an office without an appointment, plunk a document in front of someone working at Cheryl Paynter’s paygrade, and get a signature simply by asking.
This MOU idea originated with Billy Dow, the MOU agreement was drafted by Gary Jessop, authorized by the Deputy Minister, Melissa MacEachern, and signed by the CEO of Innovation PEI, Cheryl Paynter. No changes were made by anyone in Innovation PEI to the MOU agreement brought to them by Billy Dow.
2. Was the MOU a Legally-Binding Agreement?
Although the MOU did not “bind” either party to sign an agreement when all was said and done, it did indicate that the purpose of the MOU was to work diligently toward signing a formal agreement. During the 2 month term of that initial MOU agreement, both parties were legally-bound by four provisions within the agreement, as noted by Judge Campbell in his Ruling:
Paragraph 153: The MOU signed July 6, 2012 between Innovation PEI and 764 is the agreement in relation to which the plaintiffs are pursuing claims of breach of contract. 764 signed the agreement “operating as” (“O/A”) Trinity Bay Technologies. The relevant portions of that MOU, with emphasis added throughout, are as follows:
4. EXCLUSIVITY
The Parties agree as follows for a period of sixty (60) days following the signing of this MOU (the “Exclusivity Period”): a) provided PEI is not in breach of its obligations hereunder, TBT nor any of its employees, officers, contractors, agents, representatives and/or professional advisors agree not to discuss with any other Canadian provincial government the opportunity and know-how for a financial services centre to be created; and: (b) provided TBT is not in breach of its obligations hereunder, PEI nor any of its employees, officers, contractors, agents, representatives and/or professional advisors agrees not to discuss with any entity its interest and/or capabilities in hosting or creating a financial services centre in the Province.
Paragraph 3: The breach of contract claims relate to a Memorandum of Understanding (MOU) which contained articles relating to maintaining confidentiality and dealing exclusively with the plaintiffs during the course of the MOU. The plaintiffs claim the defendants breached the terms of the MOU by approaching competitors, recruiting them for the same services, and otherwise dealing with them in ways contrary to the confidentiality and exclusivity articles.
The Auditor General discussed the legal status of the MOU as well. She singled out Dow’s opinion that the MOU was “fairly benign.” She listed those 4 legally-binding clauses, then raised a number of concerns about the potential negative consequences for both Innovation PEI and the PEI Government that could arise from that MOU:
Section 5.7: …..Innovation PEI‘s external legal counsel advised that the MOU was fairly benign and outlined 4 clauses that were binding:
agree to meet and make reasonable efforts to conclude an agreement;
agree to a 60-day window to deal exclusively with TBT on the concept of a financial services center for PEI and likewise, they agreed to do the same;
agree that each party bears their own expenses; and
agree to keep the matter confidential and any information received as confidential.
Billy Dow may have characterized those “binding” exclusionary and confidential clauses in the MOU as “fairly benign”; however, the AG and others in the Department recognized that the MOU effectively forced an immediate “halt” to a significant part of the work that was underway within Innovation PEI; or I guess should say, IT SHOULD HAVE FORCED AN IMMEDIATE HALT.
That Exclusivity clause may end up deciding the outcome of the lawsuit. Read what the AG said about “the potential repercussions of breaking the terms of the agreement,” and her remark that the MOU wasn’t approved by the appropriate authority.
Section 5.6: We expected that prior to entering into the MOU agreement, adequate due diligence would be conducted on TBT, its owners, and affiliates. In addition, we expected an assessment of the terms and conditions in the agreement, the legal obligations of entering into such an agreement and the potential repercussions of breaking the terms of the agreement. We also expected that the MOU and subsequent extension were approved by the appropriate authority. These basic control measures are important in order to minimize the risks to government.”
As the AG noted in her somewhat obscure manner, the MOU wasn’t approved by the appropriate authority, which raises an issue in my mind as to whether the Board of Directors of Innovation PEI may not have authorized, or possibly even known about, the MOU.
3. The Negative Impact on Innovation PEI from the “Exclusivity” Clause
The MOU only happened because a number of people within the Department of Innovation were taking their marching orders from Wes Sheridan, the Minister of Finance, (Brad Mix, Cheryl Paynter, Melissa MacEachern, and Neil Stewart) and others associated with the secret gaming committee.
Innovation PEI is a Crown Corporation that can enter into agreements. The Innovation PEI Act states:
Section 15(2) outlines the “Powers” granted Innovation PEI, and includes 15(2)(1)(d): “develop programs, strategies and partnerships that encourage the creation, maintenance and expansion of business activity in Prince Edward Island,” and section 15(2)(1)(e):“enter into agreements for the performance, on behalf of the corporation, of research projects or the conduct of investigations and studies, as it considers advisable.”
Was the Board of Directors required to approve a decision of such magnitude? There has never been, to my knowledge, any mention of Innovation PEI’s Board of Directors, so it’s unclear whether they were involved in the MOU decision that immediately shut down a significant portion of Innovation PEI’s mandated work.
There is no mention of the MOU in Innovation PEI’s 2012-13 Annual Report, nor any reference to FMT, CMT, Simplex, or to the protracted efforts to establish a financial transaction hub in PEI during the 2012-13 fiscal year period.
This is a perplexing omission, given that “financial services” was one of the targeted sectors of special interest to Innovation PEI for 2012-13. Yet, from July 6, 2012 until October 10, 2012 (presuming the exclusivity clause in the MOU was being honoured) FMT was the only company in the entire world involved with the PEI Government with respect to prospecting financial services companies. Judge Campbell accepted that the PEI government honoured that agreement. We’ll see in the next episode if his conclusion holds up against the “fresh evidence” withheld by Coady.
I’m hoping to get some more information about what was discussed at Innovation PEI Board meetings back in those days, and I’m currently waiting for responsive government records to the following FOIP:
“Innovation PEI Board Minutes. All communications between the CEO of Innovation Paynter at the time, Cheryl Paynter, and the Board of Directors pertaining to Board meetings (agendas; preparatory notes; etc.) as well as all communications between board members and the CEO that make mention of the MOU signed with FMT/Trinity Bay Technologies on July 6, 2012, from June 1, 2012 to May 31, 2013.”
Regardless of whether the Board approved – or were even aware of – the MOU, it impacted Innovation PEI’s work. Once the MOU was signed on July 6, 2012, all recruiting and prospecting work by the Prospecting & Innovation Programs Division of Innovation PEI had to stop. That was problematic since some of those financial services recruitment efforts had commenced long before the signing of the MOU.
The MOU is consistently described by everyone as an initiative of Innovation PEI. It really wasn’t. It may have been adopted by Innovation PEI, but it was Billy Dow’s baby.
The Auditor General was aware that Innovation PEI had a mandate that made it “…responsible for growing the strategic sectors of…..financial services…” yet was suddenly legally obligated to cease all financial services recruitment efforts underway and not undertake any further activity in this sector:
Section 5.11: Further, clarification on the terms and conditions in the agreement was not obtained. This was particularly important for Innovation PEI because the wording of the exclusivity section was very broad. Financial service was a key sector identified by Innovation PEI for economic development in the province. Innovation PEI senior officials advised that they were concerned about the exclusivity clause and how it would impact their work.
Given the secrecy and unusual way the MOU came into effect, it’s unclear whether other government staff who may have been working on prospecting financial services companies to PEI were even made aware of the MOU. Were they informed that the PEI Government was to have absolutely no discussions with any other financial companies, or even mention that the Government had an interest in establishing a financial transaction hub in PEI? Nothing about the companies, the plan to bring a financial transaction hub to PEI, or the MOU with FMT, was mentioned in Innovation PEI’s 2012-13 Annual Report.
4. Preferential Treatment? Or Cover-up of CMT’s Recruitment to PEI?
The AG drew attention to the fact that the Deputy Minister of Innovation [Melissa MacEachern] was in a conflict of interest situation when she authorized both the MOU and Loyalty Card programs with CMT/FMT and Simplex:
Section 6.19: Section 9 of the Conflict of Interest Policy in place at the time, which applied to Deputy Heads, outlines the concept of preferential treatment. Specifically, it states that “employees must not accord preferential treatment in relation to any official matter to family members, friends, other persons or organizations in which the employee, family members or friends have a financial or other interest”. There is an appearance that the former Deputy Minister of Tourism and Culture, who was also the former Deputy Minister of Innovation and Advanced Learning, provided preferential treatment to CMT and Simplex which involved both the loyalty card program and the Memorandum of Understanding signed with TBT, a subsidiary of CMT.
There was a very big personal conflict of interest with Melissa MacEachern and the MOU. Her husband at the time, Shane MacEachern, was a broker at RBC and was handling investments in CMT/FMT via a shell company named RevTech. That is an important piece of this entire story that needs to be told and will be one of my remaining episodes.
Melissa MacEachern’s personal conflict of interest aside, the MOU essentially put into writing what was first promised to FMT by the PEI Government to establish the Global Financial Transaction platform. Again, the AG noted that the MOU showed, as she put it, “preferential” treatment.” However, if she had full access to documents revealing the dealings the PEI Government had with FMT a year earlier, with the feasibility study, and the recruitment package offering FMT an “exclusive deal” to establish the financial transaction platform in PEI, I’m sure her assessment would have been quite different. Unfortunately, the documents (like the recruitment package and feasibility study) were withheld by the MacLauchlan Government.
What the Auditor General referred to as CMT/FMT receiving “preferential treatment” with both the MOU and the Loyalty Card Program – although a fair assessment from her perspective – was, in hindsight, simply the PEI Government honoring its promise to give FMT first advantage in the sector on a go-forward basis. Maybe that’s why Billy Dow allowed the broad legal protection for CMT in the MOU.
5. CMT’s Claim that the MOU was Breached with Laslop/NewCo
You may recall from Episode #9 that Maines was asked by the Securities lawyer from St. John, N.B., Jake Van Der Laan, if he would provide a Sworn Voluntary Statement, which Maines provided the day after the Motion Hearing was canceled.
Maines explained that Tracey Cutcliffe – who previously worked for Innovation PEI – who CMT had contracted to do government relations work – was the source of his information about Newco:
Maines was only going on what Cutcliffe had told him at the time, and had no documentary evidence to support his claim. By the way, the “day it was expiring” in Maine’ s answer refers to the first 60-day MOU period.
Throughout the documentation, I’ve noticed that whenever the “expiration date” for the initial 60-day MOU was cited, it was September 6th. Most people apparently just figured two months from July 6th, the date it came into effect, was September 6th. However, as Judge Campbell correctly noted, 60 days was actually September 4th and that’s when the MOU first expired. Keep this in mind for further episodes. With everyone thinking the MOU expired on September 6th, that’s the day when too many coincidences happened to make them coincidental events, which will be explained in a future episode.
Mr. Van Der Laan, had expressed total “disbelief” that Paul Maine would allege a conspiracy, which he shared with CMT’s Securities Investigation lawyer, Ms. Biggar. I found out about that indirectly from a letter dated April 12, 2013 from Mary Biggar, sent in response to Van Der Laan’s previous communication, indicating that the source for Maines’ belief was actually government officials:
I wonder if a lot of pain could have been avoided if Wes Sheridan had been summoned? Maines clearly believed what Cutcliffe told him to be true, he just didn’t have any documents, so CMT did not make any specific claims about Newco in its original Statement of Claim.
It was only after new documents came to light as a result of FOIP requests by the PC Opposition Party, that Maines received some validation of the truth of what he was told by Tracey Cutcliffe, which makes for a good segue for the final section of this episode.
6. Laslop/Newco “Breach of Contract” Discussed in the PEI Legislature
When a number of PC Cabinet members were in the official Opposition, they submitted several FOIP requests for e-gaming documents. One of them produced emails between Keith Laslop, the CEO of Newco, and various government officials, including Allen Roach. On November 21, 2017, those emails dominated Question Period, with Steven Myers leading the charge for the PCs:
Mr. Myers: “Thank you, Mr. Speaker.”
Copy of document from NewCo company: “I have here today, and I’ll table it for all the House, an email from this minister’s very [own] account, it was dated September 6th, 2012. It was from Keith Laslop and it says: Please find an attached letter with our proposal to the Government of Prince Edward Island. It was to you, Minister. Why have you never mentioned this before, that you were sent a direct copy of a document from this NewCo scheme company?”
Some Hon. Members: “Hear, hear!”
Roach’s response attempted to create confusion, since it was known by that time that the Government had formally ended the E-gaming project in February 2012:
Mr. Roach: “Thank you, Mr. Speaker. At that time that would have been a staff
member who advised me that there was a group that were going to have discussions about a financial platform and that there was an MOU in place.
Thank you, Mr. Speaker.”
Mr. Myers: That’s it right there.’
Speaker: The hon. Member from Georgetown-St. Peters.
Mr. Myers: Thank you, Mr. Speaker. That is, in fact, what happened. I have more emails that have come to light about this insider scheme that was going on. On August 29th, Wes Sheridan had a lunch meeting with Chris LeClair and Keith Laslop from NewCo. Minister: Would you agree that this meeting broke the exclusivity contract of your MOU?
Some Hon. Members: Hear, hear!
Speaker: The hon. Minister of Finance.
Mr. Roach: Thank you, Mr. Speaker. I don’t have the dates or the MOU with me here today, but I’ll gladly go and have a look at that and try to confirm the dates of that. Thank you, Mr. Speaker.
Some Hon. Members: Hear, hear!
Speaker: The hon. Member from Georgetown-St. Peters.
Mr. Myers: Thank you, Mr. Speaker. So it very much broke the exclusivity contract of the MOU – very much.
Myers went through the same questioning with the other two meetings mentioned in the documents, concluding that they were all strong evidence of a Breach of the MOU.
….coming up in Part II:
Hopefully, you now have a little better understanding of the MOU. A lot hinges on whether the MOU was in fact “breached” by the PEI Government. PC Party MLAs Steven Myers; James Aylward; Brad Trivers; Matthew MacKay and Jamie Fox, when in Opposition, were absolutely convinced that what they dubbed the “Newco scheme,” was a breach of the MOU. They are now Cabinet Ministers.
If the Government was acting on the strongly-stated public views regarding a breach of the MOU previously made by these Cabinet Ministers, then an out-of-court settlement negotiations process would have been commenced; but, of course, that hasn’t happened.
The next episode will look at how Judge Campbell stick-handled around the Lapslop documents uncovered by the PCs while in Opposition. I’ll dissect how he concluded that there was no breach of the MOU. But of course, there’s more, the “bomb” before the storm you could say – those two new Sheridan/Laslop documents – or perhaps I should say, the bomb that’ll “cause” the storm.
In Episode #17, I provided a link to the Fresh Evidence Motion that CMT filed in the PEI Supreme Court of Appeal last Friday (December 1, 2019). I dealt with just one of the 68 new documents in episode #17, and indicated I would deal with more in this episode:
“My next episode relies on another key document CMT filed last Friday – that Jonathan Coady failed to disclose – only that story comes with a bizarre twist I haven’t, to be honest, fully figured out yet….but it’s another shocker! It will shed a whole lot more light on just what Wes Sheridan knew or didn’t know about CMT/FMT.”
If the last episode rattled the slats and loosened the rafters,
this one should blow the roof off!
++++++++++++++++++
I’ve yet to figure out why Jonathan Coady did what he did, but it’s likely to go down in the history of Canadian Jurisprudence as a landmark civil legal strategic maneuver resulting in a win with damages. Never before has Counsel for the Defendant submitted a Second Affidavit with just four (4) attached documents to Counsel for the Plaintiff, AFTER the judge had ruled that he would entertain no further documents prior to making his ruling,.Since Coady’s bizarre disclosure came after Judge Campbell’s “death blow” decision against CMT, I’ve dubbed it the Jonathan Coady Post-mortem Document Disclosure legal strategy that can be summed up in three words and a punctuation mark: win, then disclose.
Although I’m not sure why Coady served those documents to CMT’s lawyer, I’m pretty sure he did it because of me. Two of those four documents are Government records that I’ve been hunting down for months and just received near the end of October 2019.
It appears that Coady somehow became aware that I was about to get a couple of really important documents from a FOIP request, documents which I came to know about little-by-little as a result of three previous, but strategically-connected, FOIPs.
I’m guessing Coady wanted to be able to say that he had provided a copy to the Plaintiff’s lawyer before I made the documents public. We’ll get to that, but first; it’s important to know a bit more about how I became aware of these documents and obtained them.
Following Brad Mix’s Bread Crumbs
When people are hiding things, and working diligently to keep them secret, they sometimes get nervous, go overboard in their denial, and leave clues suggesting pathways for further investigation. That’s how the story in this episode came about.
Step #1: FOIP for Brad Mix Records and Information Commissioner Review
I first suspected that Brad Mix had no records when the PEI Government told me they had none to give me for the specific time within the e-gaming period for which I was asking for records. I filed a Review of that FOIP with the Information Commissioner last January 2019. I eventually discovered from a July, 2019 letter [from the new Deputy Minister of Economic Growth, Erin McGrath-Gaudet, sent to the Information Commissioner] that Brad Mix and the PEI Government had been keeping me in the dark since I first asked for those records back in October 2018, knowing since 2015 they didn’t exist. But I also learned about an Incident Report.
Step #2: FOIP for Brad Mix “Incident Report”
Mix had sent an “Incident Report” to Information Technology Shared Services (ITSS) in March 2015, so I submitted a FOIP for that document. When it arrived, I read the following note:
“Summary: Missing emails in his GW archive…missing between June 2011 and March 2015. Description: He is trying to find a message from November 24, 2011. User has 2 archived files…Unable to remote to PE-10640…”
Mix didn’t seem particularly concerned about all the other records; he was only requesting ITSS’s help to find that one particular email from his sent archive. Another breadcrumb.
Step #3: FOIP for Mix-Malone-MacDonald Records
The person Mix was dealing with at ITSS was Ed Malone, the Director of Business Infrastructure Services, who answered to the Director of ITSS at the time, Norm McDonald. I decided to submit a targeted FOIPP request to see if there might have been other communications between Mix and Malone about that November 14, 2011 document:
I received a few documents and discovered that Mix had exactly the same idea as me about where he might find a copy of that important email (likely with attachments) – the inbox of the recipient.I – unfortunately – didn’t have enough detail about what document Mix was searching for, just that it was in the November 2011 time period. It made me think it must be a pretty important document for Mix to get ITSS folk to get him a copy of the document from the recipient’s inbox, well, he’d have to tell them who the recipient was……and bingo!
Step #4: FOIP for Wes Sheridan emails to and from Brad Mix
The documents from the Malone FOIP came in and revealed exactly the detail I was looking for. On April 20, 2015, Mix emailed Edmund Malone with the following request:
For whatever reason, Mix seemed extremely anxious to locate that particular email that he had sent to Wes Sheridan on November 24, 2011. I was getting anxious to get my hands on it as well, so I filed a FOIP request on September 2, 2019, for:
“All emails and email attachments either sent to Brad Mix from Wes Sheridan, or received by Wes Sheridan from Brad Mix from November 1, 2011, to December 15, 2011.”
In late October 2019,I received several incredibly important documents from that FOIP. Still, I was not provided all the documents, and I have three such records from other sources to prove it. As well, some of the documents I received were heavily redacted for which “solicitor-client” privilege was claimed, yet neither Mix nor Sheridan is a lawyer. Let’s just say I wasn’t surprised when the Information Commissioner accepted there were grounds to undertake a review of the matter. Her investigation is underway.
Before getting to those two new documents that Judge Campbell never saw, first, just two examples of what Wes Sheridan said about Paul Maines, CMT or FMT: one from a statement he made in the Legislative Assembly, and the other from a statement he gave the National media. Notice the dates when he made these statements, then also note the dates on the documents further on in the article.
What Wes Sheridan Said he Knew About CMT/FMT
Back when e-gaming was a hot topic in Question Period, and the PCs were the Official Opposition pounding away at the MacLaughlan Government on e-gaming almost daily, there were a lot of questions directed at the Minister of Finance. Keep in mind, the following Hansard statement from Sheridan was a full 2 years before the Auditor General’s E-gaming Report, so not a lot was known about the secret e-gaming project at the time. This was Sheridan’s response to a question about CMT:
“What the hon. member is mixing up is a company called CMT, Capital Markets Technologies, which has no affiliation with Simplex International whatsoever,no affiliation with our gaming initiative…” [Hansard, November 21, 2014].
So much for upholding the Honour of the House. When an award-winning reporter for the Globe and Mail, Robin Dolittle, published her February 27, 2015 article Small Island, Big Bet, she received the very same line from Sheridan that he gave the House a few months earlier:
“In a December interview with The Globe, the finance minister said he had no idea CMT and Simplex were connected. “I to this day do not know that Paul Maines and Philip Walsh had a business relationship. And he wasn’t part of any of our work,” Mr. Sheridan said.”
Sheridan resigned days after the Globe article was published.
What Wes Sheridan “Really” Knew About CMT/FMT
On October 24, 2011, an opportunity presented itself to CMT/Simplex to acquire the 51% shares of Simplex owned by another financial company in Europe called Sterci. Back up a couple of steps.
The plan was for the PEI Government to establish CMT/FMT as the local company offering Simplex/CMT’s global “SWIFT” certified financial transaction platform [See Episode #13: “Why Did Brad Mix go to Osaka, Japan?”].
That plan was already well underway by the fall of 2011. Paul Jenkins and Paul Maines had already incorporated FMT (100%-owned by CMT) a year earlier in a strategy to transition CMT to becoming a “local” and Canadian-incorporated company [CMT was registered as a business in Florida, US]; and Paul Maines had already recruited Virgin Gaming to PEI. There was clearly growing excitement about establishing the Financial Transaction Platform with CMT/FMT in PEI. Philip Walsh, the CEO of Simplex was aware of the stage things were at with the financial transactions platform with the PEI Government, and he was concerned that if CMT/Simplex did not acquire the 51% of Simplex shares from Sterci, then another company that did might not have the same interests as the PEI Government:
“As I’ve previously mentioned my biggest concern is that if control of the disposal of Sterci’s stake is lost (based on an agreeable period of time being passed after which Sterci will execute the right to sell to whomever they choose), then Simplex may see a new shareholder at the table whose interests and priorities are not aligned with PEI.”
Walsh proposed that the PEI Government buy those 51% shares from Sterci, and then FMT (CMT) would buy back those shares after two years, so as not to miss out on the opportunity. As Walsh put it:
“Simplex and FMT have the right of first refusal for the disposal of Sterci’s 51% stake. This unusually provides us with an opportunity to bring in a new shareholder for their 51% stake at a good price. I have listed below some of the benefits to both PEI and Simplex of this transaction but I want to make sure we all understand the need to execute (or at least be fully engaged with the process) quickly….In terms of our approach to the transaction, PEI would simply be dealing with Simplex and FMT who in turn will deal with Sterci. “
When I used this same quotation in a previous episode, I wanted to draw attention to the fact that it stated: “Simplex and FMT” – not just Simplex. Why no mention of CMT? Because FMT was CMT? I was driving home the fact that Simplex was aware that FMT was “CMT” on it’s way to becoming “rebranded” as a local PEI company that would provide the Financial Transactions Hub in PEI.
Simplex was CMT’s “technology partner:” however, CMT also held 100% ownership of FMT, as well as 100% ownership of the internationally-recognized “Claimatrix” software that was a key part of the CMT/Simplex’s Global Transaction Platform. But most importantly, CMT had exclusive North American rights to deliver that Global Transaction Platform. Again, that’s why the MOU was signed with FMT, not Simplex.
Like two companies building and selling cars – with one providing the chassis, the other the engine – customers weren’t buying “engines” from Simplex and “chassis” from CMT, they were buying cars from CMT/Simplex, and those customers included some of the biggest banks in the world. Yet Judge Campbell says CMT/FMT had nothing whatsoever to do with any of this “so-called” e-gaming, and nothing to do with the PEI government before the MOU in 2012. Sheridan said the same.
During Cross-examination, Sheridan offered the following answer – under oath – to a question whether he had a discussion with Walsh on the possible purchase of shares in Simplex:
What were those November 2011 Documents Mix and I were Chasing?
Brad Mix sent a final draft of a letter addressed to Philip Walsh saying that the PEI Government was onboard to move quickly to see if the Sterci shares could be purchased by the PEI Government. He sent that letter to Sheridan for approval and he got it. The response from Wes was definitive: “Well done Brad, Thanks…..please send it off and copy me for my files.”
On October 24, 2011, Walsh had written DIRECTLY to Wes Sheridan with the following opening paragraph, indicating a prior meeting where it seems an “agreement in principle” had already been made to proceed with the plan, which was more formally confirmed on November 23/24:
Notice that FMT’s Director (Paul Jenkins) and former Chief of Staff Chris LeClair are also recipients of that email. Those critically-important FMT/PEI Government documents were not disclosed by Coady, as required by the Rules of Court using Schedule “A”, and they were never considered by Judge Campbell. Would they have made a difference? You bet they would have!
Coady’s “Post-Mortem” Disclosure of those Wes Sheridan Records
Those November 2011 documents between Brad Mix and Wes Sheridan prove that Wes Sheridan was not telling the truth when he said he knew nothing about CMT/FMT. That’s the truth, and there are no consequences.
In fact, Campbell has accepted that “sworn testimony” from Sheridan, ignored requests to assist with full document disclosure, then ruled in favour of all defendants, awarding “substantial indemnity” costs which have already been paid out. He also forbid CMT to file another case.
As the Minister of Finance at the time, Sheridan gave a big thumbs up to Brad Mix sending a letter to Walsh expressing enthusiastic approval to proceed expeditiously with Walsh’s plan for the PEI Government to purchase 51% of the Simplex shares from Sterci, then them sell back to FMT. It would have been impossible for Judge Campbell to have concluded, as he did, that CMT/FMT had absolutely nothing to do with e-gaming or the PEI Government if Coady had produced those records. It was only on September 20 that Coady provided them to CMT’s lawyer, 2 weeks after Campbell said NO MORE NEW records:
Paragraph 646: Despite that, I considered the nature of the information counsel wanted to submit and the fact it had not been available to plaintiffs’ counsel prior to the completion of the hearing. After hearing from all counsel on the conference call on September 6, 2019,I concluded I would accept the additional documentation referred to in McDonald’s five-page letter of August 29, 2019. I also stated that apart from accepting the letters I had already received from McDonald and each of the defendants’ counsel, I would accept no further submissions on these motions prior to making my decision.
So I put in a request for those Wes Sheridan Documents on September 2, 2019, and Campbell rules four days later he won’t consider any more documents. Then on September 20th, just 5 days before Campbell’s ruling was released, Jonathan Coady served CMT’s Counsel with a newly sworn Affidavit with four documents, two of which were these November 2011 Wes Sheridan emails.
Why didn’t Coady disclose those “smoking gun” documents when they would have counted? Did he just become aware of them as a result of my FOIP request?
I don’t think so; it’s not like the documents just mysteriously appeared out of nowhere.
Brad Mix would have been contacted about producing records shortly after CMT filed a January 2015notice that a lawsuit was being commenced by CMT. In hindsight, we can now see why Mix was frantically looking for that particular document. He obviously knew it was materially-relevant and key to the legal action. I’m assuming that if I had been provided copies of those documents from Wes Sheridan’s email inbox in 2019, and Mix went looking in the same inbox back in March/April 2015, then Brad Mix must also have had a copy of those documents. So why didn’t Coady file them with the Court? Is that how he became a civil litigation Lawyer of the Year in PEI? Winning a major civil case by revealing the most important documents to the Plaintiff’s Counsel only after they can no longer be filed for the court, but before I make them public?
Would Judge Campbell have ruled there was no issue for trial if those Sheridan Government Records had been produced? It would have been impossible for him to have dismissed the case. Absolutely impossible!
Last Friday (December 1, 2019) Capital Markets Technologies (CMT) filed a Fresh Evidence Motion with the PEI Supreme Court of Appeal. The document is 519 pages, comprising an Affidavit sworn by Paul Maines, President of CMT, and 68 Exhibits.
Those attached documents were either obtained through various Freedom of Information and Privacy (FOIP) requests, or are documents associated with those FOIP requests, or Reviews on those FOIPs undertaken by the Information and Privacy Commissioner, Karen Rose. The next few episodes deal with shocking revelations from that new documentary evidence.
This is not a Netflix “Who Done It?” crime series like “The Making of a Murderer,” where the line between real life and being entertained gets completely blurred. This is really serious stuff, and it’s happening on our Island, right now.
No one in our current Government – which came into power promising to address corruption, and which has the responsibility to respond to this situation in an ethical manner – is doing anything about it so far.
Absolutely nothing has been said about the following aspects of the e-gaming scandal; (1) the costs of the lawsuit (which the PCs repeatedly demanded the Liberal Government disclose when in Opposition) have not been disclosed; (2) that most of the people involved in the scandal are still working in senior-level positions in Government; and (3) why, in an unprecedented denial of Access to Information, the Government has refused to release countless e-gaming documents in multiple FOIPs, resulting in four Orders from the Information Commissioner, which have since become four Supreme Court Enforcement Orders.
The CBC, the Guardian, and the Eastern Graphic have said nothing about any of these recent disturbing events as if they weren’t even newsworthy, while both Opposition Parties have said even less. How many times was e-gaming mentioned in the Legislative Assembly during the first two House sittings? Zero times. Yet, the last major interview that CBC did with Party Leaders before the election was on what they would do about corruption and scandals if elected Premier, with the focus on the e-gaming scandal: [See: Will the PEI Election be haunted by ghosts of Liberal’s Past? Yet here we are.
Some Background on Supreme Court Document Disclosure
Islanders have been hearing about the e-gaming scandal since 2013. We’ve witnessed countless lies from Government officials in the Legislature and Media, and countless occasions where Government policies were ignored, laws were broken, and officials were found in a serious conflict of interest situations.
PEI’s Auditor General conducted an 18 month investigation reviewing over 10,000 documents, but the Liberals denied her access to key documents and used their majority status to vote down the witnesses who the Opposition wanted to question at the Public Accounts Standing Committee.
For the entire time, up until today, the Government, and the Government’s lawyers have denied any misfeasance by any Government actors and agents, despite the fact that most Islanders know that there was a very major and very “secret” scandal, we’re still trying to figure it out. The secrecy was protected for years by denying, lying and either hiding or destroying documents. But things have changed now that information is coming into the light of day, and in due course, I believe there are going to be serious consequences.
The difference between lying in the Legislature vs. lying in Affidavits and Cross-examination in a lawsuit is that you can’t be held accountable when you’re “inside the rails” (as they say) with the protection of the Legislature. But when you lie in Affidavits and Cross-examination under oath in a civil litigation lawsuit, well, that’s really frowned upon (in other provinces at least) and is regarded as an offense for which there are serious repercussions (ie. possible disbarment for a lawyer, or possibly jail time for government agents). Of course, the tricky part is “proving” someone lied and/or deliberately misled the Court.
The interesting thing about the e-gaming lawsuit is that the longer it goes on, the more sworn documents are submitted to the Court. For example, the Government has filed two sworn Affidavits, both approved by Jonathan Coady (Legal Counsel for the PEI Government). Those affidavits require that all three document-disclosure “Schedules” be attached to the Affidavit. This episode takes a look at how Coady dealt with two of those Schedules.
All materially-relevant documents must be identified in one of three ways. There is a separate “Schedule” for each of those three categories of documents, with the following information at the top of the page for each Schedule:
Schedule “C” is of particular interest to me because it refers to Government documents that are no longer in Government’s possession.
In the interest of not making these episodes too long and convoluted, I’ll deal with just one of those new documents filed last Friday in this episode – a document that Coady kept from Judge Campbell’s eyes (not produced under Schedule “A”). I’ll also examine Coady’s failure to disclose information to the Court concerning Brad Mix’s missing records (as required under Schedule “C”).
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(1) Failure to Disclose that Materially-relevant Documents once in the Possession of the PEI Government but no longer with Government
When I first submitted a FOIP Request in October 2018 for Brad Mix’s e-gaming records, I was looking for answers to questions about e-gaming and the Financial Transaction Platform. Instead, it opened a Pandora’s Box. It led to the exposure of a depth of Government corruption that shocked me.
After 9 months of seeking those Brad Mix records, and challenging Government, the Department finally admitted that they had known since early 2015 that Brad Mix had no emails for the entire e-gaming time period, in a Letter from Deputy Minister Erin McGrath-Gaudet to the Information Commissioner.
In fact, Mix also sent an Incident Reportabout those missing records to Information Technology Shared Services (ITSS) in March 2015, around the same time the CMT lawsuit began.
So how is 9 months of lying to me and the Privacy Commissioner to be understood in any other way than a cover-up? Did they want me or anyone else to everfind out that Brad Mix’s records were gone? Obviously not. But now that we know about those two years of missing records, we also know that the Government’s “Schedule C” disclosure was woefully incomplete. Information was provided for Rory Beck’s, Melissa MacEachern’s and Chris LeClair’s deleted emails in Schedule “C” [That information had been made public by the Auditor General in 2016]; however, BRAD MIX’S 2 YEARS OF MISSING RECORDS WERE NOT MENTIONED ON SCHEDULE “C” !
One of the things about destroying emails is you can’t control what happens to the ones you send. CMT produced some emails from Brad Mix from that 2 year e-gaming period, but suspected there were many more, and went hunting for them, first by asking Brad Mix about his record disclosure during Cross-examination.
It’s insightful to review Brad Mix’s sworn Cross-examination transcript with the knowledge that he knew at that time that all of his emails for that two year period were gone.
Consider the following exchange between CMT’s lawyer John McDonald, Brad MIx, and Jonathan Coady during Brad Mix’s Cross-examination held January 19, 2019, starting on page 9 of the transcript. Remember, FMT (Financial Markets Technology) was 100%-owned by CMT:
MR.McDONALD: So we are at Exhibit D.
MR. COADY: So we are at tab number D which is an e-mail from Patrick Mason to
Paul Jenkins, copied to Paul Maines, 17 January 30, 2011.
MR. McDONALD: Q. All right. And in the body it says “…I met Chris again yesterday over FMT. He has lined up a meeting with Brad Mix. Brad will approve doing an analysis for FMT, the benefits of moving to PEI. As well, how FMT fits into the payment chain and should be the province’s favourite claims adjudication engine for new business. This should include how Bomark, Sterci, RBC, along with CA and others can form the basis of a service industry focused on tech such as gaming…” And I will say it now, it’s Paul Jenkins. Now, I am sort of curious. Have you disclosed all the e-mails that would exist between you and Paul Jenkins to your counsel?
McDonald directed that question to Brad Mix; however, Coady jumped in and answered for him, notwithstanding the fact that it was impossible for Coady to know whether Mix had disclosed all the e-mails or not, especially if Mix was hiding that fact from Coady. What was Coady’s response?
MR. COADY:I believe so, Mr. McDonald.
MR. McDONALD: Q. Right. And the reason that this is extremely important, Mr. Jenkins has no e-mails at all because his computer system was hacked. So I have got nothing more to say on that, but we are going to explore the fact there were a lot of emails between the two of you [Brad Mix and Paul Jenkins] that weren’t disclosed.
Coady’s statement “I believe so” was not only misleading, it was a full-blown lie. Both the Government and Coady were aware that the emails didn’t exist, and they kept that secret to themselves, misleading the Court with false sworn testimony, just as they misled me and the Information Commissioner. How could Coady say he believed he had received all relevant records when there were no records to receive? For that critical two years e-gaming period, he received no documents to inspect!
CMT’s lawyer, John McDonald, didn’t believe Coady and filed additional FOIPs looking for Mix’s emails in “inboxes” of other Government employees who Mix had dealt with on the CMT/FMT file. These FOIPs led to the new “Fresh Evidence” Motion filed last Friday and attached as a PDF in the link above.
I’ll deal with just one of those 68 Exhibits in this episode to give you some inkling of the width and breadth of the cover-up. If Brad Mix’s records had not been destroyed, this document would have been produced years ago by Coady.
(2) Failed to Produce Materially-Relevant Documents
I have frequently mentioned in previous articles that many more materially-relevant documents are about to see the light of day as a result of a number of FOIP Requests. Some of those documents are records that Judge Campbell refused to consider before filing his decision; documents that would certainly have made it more difficult for him to have drawn the following false conclusion; a belief he mentions several times throughout his ruling as the main reason to either deem certain issues and events irrelevant, and presumably why he completely ignored many other key issues in CMT’s Statement pf Claim, but situated in the pre-MOU period.
Paragraph 17: Neither CMT nor 764 were ever involved in any way with the so-called e-gaming project. However, some of the statements in the amended statement of claim referred to events during that time period.
Paragraph 256:…As I set out earlier in this decision, CMT and 764 [FMT] were not involved in the e-gaming project. The engagement of the working group was with Simplex, not CMT.
Notice that Campbell notes that there were parts of CMT’s Claim dealing with events in the pre-MOU period:
Paragraph 652: The issue regarding non-archived sent emails relates to a period …between June 2010 and April 2012. The claims against Mix do not relate to matters in 2010, 2011, or prior to July 6, 2012. No relevance has been shown to Mix’s emails from earlier periods.
After concluding that CMT/FMT had absolutely nothing to do with e-gaming, Campbell doesn’t deal with the pre-MOU period, but simply dismisses those matters as irrelevant, despite strong evidence to the contrary. There was already some documentary evidence before his eyes indicating that FMT was involved with the Government, but no real “smoking guns,” so he could choose to ignore, misinterpret or downplay those documents.
If Jonathan Coady had disclosed to the Court what he was both legally and ethically required to disclose, perhaps Judge Campbell would have concluded CMT/FMT obviously did have something to do with e-gaming and the PEI Government after all (whether he would have wanted to admit that or not) because the documentary evidence would simply be too strong to dismiss or ignore.
What if, for example, there was a document more than a year before the MOU that Coady had not disclosed to the Court with Subject “FMT” which is identified as “…a company that is part of the secret gaming file”? That’d be hard to ignore. Well, fasten your seatbelts and feast your eyes! The following is one of the documents CMT filed last Friday:
This email speaks for itself. The PEI Government has known for the entire time since May, 2011that CMT/FMT was recruited to set up a Financial Transaction Hub. Because all that was kept a secret, it appears when the lawsuit started, they denied everything, probably thinking Maines would never have been able to put up a million dollars in security with the Court. When he did, and they had already filed a Statement of Defence full of denials about knowing anything, it appears a decision was made to never fess up, and nothing about what they really knew about CMT/FMT was shared with the Court. John Eden sent that email, and also signed the “Recruiting Package” provided to FMT as a Senior Investment Officer with Innovation PEI. Eden is working on this file with both his Supervisor (Neil Stewart) and Brad Mix.
My next episode relies on another key document CMT filed last Friday – that Jonathan Coady failed to disclose – only that story comes with a bizarre twist I haven’t, to be honest, fully figured out yet….but it’s another shocker! It will shed a whole lot more light on just what Wes Sheridan knew or didn’t know about CMT/FMT.
Jonathan Coady Appointed “Queen’s Counsel”
and Named “Lawyer of the Year”
Jonathan Coady
Jonathan Coady’s peers have been doing all they can to elevate his stature lately. Stewart McKelvy law firm has issued two News Releases in the last three months announcing esteemed designations recently bestowed upon Coady.
On Monday of this week (December 2, 2019) Coady was awarded the Queen’s Counsel, which, according to that Stewart McKelvey News Release, is a designation “…given to experienced lawyers in recognition of their commitment to the legal profession and contributions to their communities.” TheNews Release noted that Coady “…will be formally recognized for the Queen’s Counsel designation at Government House by Her Honour, the Honourable Antoinette Perry, Lieutenant Governor of Prince Edward Island.”
Hon. Bloyce Thompson, PEI’s Attorney General, congratulated Coady, saying “Jonathan’s many contributions in the field of law and to communities in Canada and Prince Edward Island will have a positive, enduring impact for generations to come.”
Just a few months ago (August 22), Stewart McKelvey issued another News Release announcing that Jonathan Coady had just been named “Lawyer of the Year” in his field of “civil litigation” by “Best Lawyers in Canada,” which, according to the News Release, is “…. a designation given to the lawyer in each practice and metropolitan area with the highest overall peer-feedback.“
PostScript: My good friend, and leader of the PEI New Democratic party, Joe Byrne, sent out a great News Release last week asking tough questions, which he sent to the Eastern Graphic, Guardian, and CBC. None published it. Nor has there been any mention of the Fresh Evidence Motion. If you’re concerned about this refusal of those who get paid to report the news or represent our interests in the Legislative Assembly not doing so, why not send a short letter to the editor expressing your concerns and asking some questions? And if you think this information should be available to other Islanders, please be courageous and share on social media.
You never hear a peep about Aquabounty if you live in PEI. But PEI gets mentioned a lot in places around the Globe as the incubator for the world’s first “marketable” genetically-modified animal – a salmon. It’s actually made us quite famous…in a transylvania kind of way.
Islanders were never given a say about growing genetically-modified animals in PEI. Nor were we consulted when the American Billionaire – Randall J Kirk – received money from the PEI Government. Kirk owns 64% of the shares in Aquabounty and has controlling interest.
I published an article titled “Aquabounty Swims to the Bottom” on December 4, 2017 with very concerning financial information about how Aquabounty’s stock share price had plummeted from over $30 a share to around $4. [FYI – The stock closed on Friday at $2.25 a share.] In that article, I asked that no more loans or grants be provided Aquabounty given it’s very risky financial status:
In a May, 2017 article titled “PEI Must Say No to GE Salmon” I offered some background on the corporate structure and money behind Aquabounty:
“AquaBounty’s parent company is Intrexon, controlled by American bio-tech billionaire Randal J. Kirk (Forbes puts his worth at $4.1 billion). Intrexon is the majority owner of AquaBounty, and Kirk personally owns 60% of Intrexon. Intrexon holds patents on GE mice, rats, monkeys chimpanzees, cattle, goats, pigs and sheep; owns numerous companies cloning livestock (and pets); recently purchased UK-based Oxitec (which produces genetically-engineered insects) and Okanagan Specialty Fruits (which developed the GE “Arctic” apple).”
Aquabounty got what it wanted in the decision – some GE products need to be labelled as “Genetically-engineered” in Canada, but Health Canada decided that Aquabounty’s GE Salmon wouldn’t be one of them:
“Health Canada requires labelling for food products, including genetically modified foods, where clear, scientifically established health risks or significant changes to the nutritional qualities of the food have been identified and can be mitigated through labelling,” concludes the agency. “In this case, given that no health and safety concerns were identified, there are no special labeling requirements for AquAdvantage Salmon.” See Health Canada News Release, May 19, 2016.”
In September, 2019, the US Department of Agriculture awarded $494,000 to AquaBounty to study technologies that would make their genetically engineered Atlantic salmon sterile. This is interesting, given that when the Salmon was approved in 2016 the claim was being made that the salmon were sterile. Many see the grant as a “bailout” given Aquabounty’s dire financial situation. [See: “USDA Bails Out AquaBounty for Genetically Modified Salmon“].
Read what the Intrafish article says about the current financial state of Aquabounty:
“As of Sept. 30, AquaBounty’s cash balance totaled $6.4 million (€5.8 million). According to the financial report, currently, the company does not have sufficient capital to continue its operations after the first six months of 2020.”
The article went on to quote from Aquabounty’s recently released Third Quarter Report:
“If we are unable to generate additional funds through financing, sales of our products, government grants, loans or from other sources or transactions, we would exhaust our resources and be unable to maintain our currently planned operations and continue as a going concern,” the report said.
So, to wrap up, a short letter to the leaders of the three political parties forming the current Minority Government:
DON’T GIVE ANOTHER PENNY OF PEI TAXPAYER’S MONEY TO AQUABOUNTY!
Welcome back to the Sheridan Centre for E-gaming Excellence in beautiful downtown Charlottetown. The crowd is anxiously awaiting the return of our two contenders as the halftime show comes to end.
You’re probably wondering: “Halftime show after 5 rounds in a 12 round bout? What’s up with that?” Well, you’re not alone. We just returned from the Boxing Federation booth with the scoop.
The Judge was hurting pretty bad after the 5th round, and the Ref was just about to call the match – arguing the Judge couldn’t see straight with his bad eye – but the Judge apparently found a loophole in the Boxing Federation Regulations allowing him to call an emergency halftime after 5 rounds. Way to stay alive Judge! Only seven more rounds.
And just when I thought the night couldn’t get any weirder, when I got back to the broadcast booth Howard Cosell had disappeared. While I sat there looking around whispering “Howard?” (hoping no one saw me talking to myself like a lunatic, wondering what I was going to do for a fill-in as the Judge and General reentered the ring) my cell phone suddenly rang with “private number” beside a vibrating purple grape – like I said, “weirder”:
Me: “Hello! Whose this?
Me:“Don Cherry!” You’re kiddin me….Don Cherry? “
Cherry:“I was live streaming the first 5 rounds and I was sending you a big donation and noticed your phone number, and just wanted to call and tell ya “You’re doin good kid….that’s some pretty entertaining writing about something that seems pretty darned important to you guys down there….so thumbs up!”
Me: “Well Thanks Don…that means a lot to me.” Then without really thinking, I blurted out: “Cosell’s disappeared/” Before realizing what I’d done, Cherry jumped in…
Cherry:“Coach’s E-corner! Coach’s E-corner! – ya know I’m lookin for a new gig.”
Me:“Well that’s a generous offer Don, but what d’ya know about e-gaming in PEI?”
Cherry: “It’s some kind of traditional PEI word game isn’t it, where ya… ya know… ya try to find slots or spaces to create words you can stick a letter “e” on the end of or something …..it’s got some connection to Anne of Green Gables…ahh…don’t get me going on “Anne with an ‘e’ “. I always said there’s something’s wrong with that girl…scared to death someone might spell her first name without an “e” – constantly reminding people “It’s Anne with an ‘e’ — It’s Anne with an ‘e’ ” I’m tellin ya….that’s not normal. Listen – I don’t want to offend anyone, but that last letter “e” is totally silent and everyone was illiterate back then in PEI and didn’t write anyhow so what’s the big deal. But hey, don’t get me wrong, “e” is one of my two favorite sounds – the other one’s “hock” . I’m just saying….. there’s TWO WAYS to spell Ann(e) and they both sound EXACTLY THE SAME! If you people want to sit around playing “e” games before the altar of your fictitious, neurotic little redheaded folk hero – well, by all means….knock yourselves out.”
Me: “Hmm” I thought. “This could be fun.”
So I transferred remote keyboard access to Cherry, wished him luck, and called it a day. I’ll check in tomorrow – I don’t have the nerve to watch!
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Well, the Judge and the General probably never thought they’d be dukin it out in the public square when they were penning those respective e-gaming reports in the solace of their private offices…but here we are! And there’s the bell.
ROUND #6. Both CMT and Simplex worked on the Loyalty Card Program – which company had the “Contract” with the PEI Government?
O.K….Let me get this straight. The General says there never was a contract for the Loyalty Card Program. The Judge says there was a contract with that British company but not CMT.
Does the Judge have that contract? Hold on, hold on – someone’s talkin in my ear. They’re telling me the Judge DOES NOT have a copy of any contract on the Loyalty Card Program.
You’ve gotta be kiddin me! You’d think this guy was a former President of the PEI Liberal Party or something……”what’s that?”…..Geez Louise…..now they’re telling me he actually was! DING DING DING. Round 7.
Round #7. Was Gary Scales a Government “Agent” & “E-gaming Project Manager”?
O.K., what the hell is going on with you people? Just because you live in the “cradle on the waves” doesn’t mean you have to be asleep all the time.
I first heard of e-gaming 30 minutes ago and I can see what’s going on! Look … the Judge doesn’t want to see documents. That’s obvious. The General wanted to see lots more documents and was denied access on bogus legal grounds. The General wanted to find out the truth – the Judge doesn’t. That tells you a lot right there folks!
The Judge is thinking to himself: “Sure, I know….Islanders paid for everything, but you know what? I think I’m gonna let Gary and the boys keep things secret. They worked so hard to set it up so they could.”
The General is absolutely right: SOLICITOR/CLIENT PRIVILEGE DOESN’T EXTEND TO PROJECT MANAGEMENT. – I’m a hockey coach and even I know that.
Hold on a sec….they’re yappin in my ear again. Now they’re telling me the Judge used to be Partners with Gary Scales in the same law firm. Am I being “pranked”? Ron MacLean better not be hiding in back? {nervously looks around searching for cameras}…And there’s the bell!
Round #8: :That’s All She Wrote!”………or “She Wrote it All.”
I gotta tell ya….that was a thing of beauty: a double one-two, one-two establishing some interesting conflict of interest situations with what looks like two of the main e-gaming secret society buds: Chris LeClair and Billy Dow. And…the….judge….said….. nothing. Just stood there, arms dangling by his sides, taking the blows.
That’s what can happen when you let your guard down – you say absolutely nothing about a few important issues that might get your friends in trouble, hoping no one will notice. Then you challenge someone like the General to a public fight and – lo and behold – you suddenly realize at least one person noticed. You get a one-two, one-two…..and you’re down for the count.
[ONE} Look, I’ve only got a couple of minutes left while the Ref counts it out – he’s not getting up from that in 9– so I’m gonna let you guys know what I think you’re dealing with here: [Two]A few goons thought they’d make a killin from e-gaming and set up a “secret” file” outside the normal framework of your provincial government, [Three] paid the law firm 100% of their project management “fees” from the public purse,then screwed up big time by getting caught,then the government got sued, [Four] and now the Government and the Judge are obviously both trying to keep the bodies buried. [FIVE] If the Judge was playing hockey he’d be “benched”[SIX] but since he’s already on the bench, you’re going to have to find another place for him [SEVEN]. Screw up in hockey, you get taken off the ice; [EIGHT] Screw up in the Supreme Court, you get put on ice. [NINE}. Nice touch General. Freezing him out like that!
AND THE WINNER IS, BY UNANIMOUS DECISION, THE GENERAL!
EPILOGUE: The Judge has crawled up the ropes and is back on his feet, shaking his head in disbelief. He’s pacing back-and-forth demanding a rematch. The General has just announced her retirement from the ring. The Judge may not have long to wait for another crack at Liberal fame and glory. He has a match on the books soon-to-be scheduled with three PEI Supreme Court of Appeal Judges relying on the same Ruling.
Special thanks to Don Cherry for filling in on such short notice for this episode.
Welcome to the Sheridan Centre of E-gaming Excellence!
Two of PEI’s most successful and prominent intellectuals are about to square off in a 12-round bout putting their e-gaming investigative skills on the line.
IN CORNER #1: Jane MacAdam, PEI’s Auditor General – aka“The General”– comes to this match with an impressive resume. She has published countless investigative reports over the years without a public challenge. Government implemented all recommendations from her egaming report . Although denied access to records by the PEI Government who asked her to do the investigation – as well as McInnes Cooper law firm – she nonetheless produced a stellar report.
IN CORNER #2: No stranger to the ring, Gordon “The Judge” Campbell has punched the face of a prominent public official or two in his day (e.g., Geoff Hussey, CBC Manager) and is obviously not afraid to take on a strong woman yet-to-be defeated in the public domain.
NOTE:All quotations in the Charts are “verbatim” – taken from Judge Campbell’s Ruling and the Auditor General’s Special Assignment on e-gaming. The entire paragraphs and sections were not provided in all instances in the interest of reducing length.
I know you’re going to find this hard to believe – I know I would – but legendary Boxing Commentator Howard Cosell – God rest his soul – appeared to me while I was writing this, and he offered to do a bit of play-by-play commentary. How d’ya say “no” to Howard Cosell? Have at it Howard!
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Round #1 – The Purpose of the Auditor General’s E-gaming Investigation
Well e-gaming enthusiasts! It looks like we’re in for an evening. The Judge comes out swinging with a few intimidating digs at the General’s investigation, clearly attempting to curtail and minimize her efforts. Good luck with that Judge. The General poured over 10,000 e-gaming documents for five years and interviewed countless people involved with e-gaming. She’s not going to be denied tonight: the General delivers a good slap to the side of the Judge’s head the very first round reminding him that her “focus” was also on “arrangements with third parties” and a lot more! It looks like we’ve got a match on our hands folks! And there’s the bell….
2. Capital Markets Technology (CMT) and E-gaming
Never in my career has it been easier to decide a round – con – grat – u – lations General! What was the Judge thinking to even suggest CMT was never involved with e-gaming? The General saw the opening and pounced on the poor Judge like a cat on a mouse; then played with him, slobbered in saliva, for the rest of the round. Ouch! The General’s confident explanation of how CMT and Simplex were each involved in both the e-gaming and the financial transaction programs landed like a gut-punch to the Judge, leaving him wobbling lik
It’s hard to know what’s going on inside the hallowed halls of government these days. After the Guardian published a front-page article informing the public that the King government must appear before the PEI Supreme Court on February 6 to explain why it first broke the FOIP Act, and then ignored a Supreme Court Order to turn over those e-gaming documents to Paul Maines, as per the terms of a Consent Order signed by Paul Maines, the Information and Privacy Commissioner (Karen Rose) and the Deputy Minister of Economic Growth, Tourism and Culture, Erin McGrath-Gaudet, well, you’d think things would be improving. They’re not.
But first, we have to understand why there was a need for money. To grasp that, we need to recall how and when CMT/FMT first became engaged with the PEI government.
Garth Jenkin’s “bio” certainly would have given Maines a sense of confidence, given Jenkin’s past success in pulling off major financial deals such as was being considered with locating the CMT/Simplex Global Platform in PEI:
There was growing enthusiasm about the prospect of getting an internationally-recognized SWIFT-accredited financial services platform established in PEI and “all systems were a go” for FMT to establish the Financial Transaction Platform.
In yesterday’s post about the new filing against the King government for a contempt order Maines is hoping to obtain on February 6th, the date set for the Motion Hearing, I mentioned there is now a “5th” deemed refusal by the King government, and that one is one of my e-gaming investigative FOIP requests seeking records that 
What’s happening here is not a “flip-flop” on one issue, but rather, a core betrayal on a global scale, something comprising so many individual “flip flops” that the only way to properly express that visually is to imagine 
Apparently, all you need to get a Flip Flop Shops Franchise license is $100k. When Cheryl Paynter, Neil Stewart, David Arsenault, and Wes Sheridan needed $100k to pay off an old debt with McInnes Cooper [for work allegedly done AFTER the government canceled the e-gaming project] all that was required was an email saying “…send 100k for a 
I’ll eventually be provided a copy of the Deputy Minister’s final submission, so that should be interesting.
Coady declined to either remove himself from the case or to bring the “…breach of various disclosure rules…” to the attention of Justice Campbell. As a result, Campbell never considered any of the documents recently filed with the PEI Court of Appeal as a Fresh Evidence Motion by CMT.
Mix responded the same day with the following:
The following week, Mix sent Barrow this email:
We here learn that Mix had met with Joanna in London on March 2, where RBC Dexia locating in PEI was discussed, with a projection that the number of positions created could possibly be 600 after 3 years. There was some back-and-forth communications between Barrow and Mix, with a clarification of the recruitment offer with more details from Mix, including an updated presentation based on significantly increased numbers (e.g., 600 after 3 years):
Barrow responded three days later saying “that’s fine,” and also informed Mix that he was going on vacation for two weeks:
Mix counted the days until Barrow’s vacation was over, then contacted Barrow to see if he needed any further information concerning what RBC could expect by way of labour rebates, tax benefits, etc. to locate on PEI.
Barrow’s response came the same day:
Maines obtained another email from a different FOIP request dated June 2, 2012 (also included in CMT’s Fresh Evidence Motion) with some redactions. It was an email that Brad Mix had sent to Neil Stewart about his upcoming scheduled meetings with 
Whatever that “program” was, Mix believed it was 
Wes Sheridan was planning to meet with John Lockbaum at RBC in meetings scheduled in Toronto in mid-July. RBC Dexia was in the process of being acquired by RBC, so Mix was providing Sheridan with background information, informing him that RBC acquiring RBC Dexia shouldn’t be a problem (since Mix had been assured by Joanna Meager that RBC Dexia would be making the decisions on the PEI deal).
What prompted Paynter to dig up that old email and send it to MacEachern? That is not clear. Two days later, and just hours before Sheridan’s meeting with RBC in Toronto, he contacted Mix asking whether there had been any further communication or new information on RBC Dexia that he should be aware of before his meeting with Lockbaum:
Mix’s response?
On July 18, 2012, Mix sent the following email to Cheryl Paynter:
The following day, Mix provided an RBC Dexia update to his own Minister (Allen Roach) and Cheryl Paynter (CEO of Innovation PEI at the time), with very favorable and hopeful comments about the prospects of RBC locating in PEI:
Mix completed the details of the recruitment package sent to RBC; scheduled a “site visit” with RBC Investor Services for September 20, 2012, and prepared a PowerPoint Presentation for the meeting, a copy of which was included in the FOIP documents obtained by Maines:
The total offered to RBC at that presentation by way of rebates and financial incentives was significant ($19, 350,000):
Mix calculated the benefits to RBC over a ten year period as well ($78, 990,000):
But to show just how committed (and ambitious) the PEI Government was to have RBC establish a Financial Services Centre in PEI, it offered a brand new building that was still in the “dream” stage. Although the ground hadn’t yet been broken, the “availability” date for the new complex was listed as December 1, 2012, just a little more than two months after the date the offer was made:
Was RBC Dexia a “financial services” company being recruited to establish a financial transaction “hub” or centre in PEI? Of course, it was. It wasn’t looking to service local customers in PEI, the vision of 600 employees confirms a 
Wes Sheridan and Neil Stewart avoided Rory Beck because they knew he was a person who would follow Treasury Board policy and not skirt the law, which was a secret e-gaming committee “no-no”, operating as it was “outside the normal oversight framework of Government” as the Auditor General stated several times throughout her special e-gaming report.
As an investor in CMT, Billy Dow was a “client” of sorts in the business arrangement and stood to personally benefit handsomely if the project went forward. Of course, as convenience would have it, he was also the lawyer for Innovation PEI, and close personal friend to Premier Ghiz. Dow could apparently walk into an office without an appointment, plunk a document in front of someone working at Cheryl Paynter’s paygrade, and get a signature simply by asking.
Hon. Bloyce Thompson, PEI’s Attorney General, congratulated Coady, saying 
You never hear a peep about Aquabounty if you live in PEI. But PEI gets mentioned a lot in places around the Globe as the incubator for the world’s first “marketable” genetically-modified animal – a salmon. It’s actually made us quite famous…in a transylvania kind of way.
O.K….Let me get this straight. The General says there never was a contract for the Loyalty Card Program. The Judge says there was a contract with that British company but not CMT.
O.K., what the hell is going on with you people? Just because you live in the “cradle on the waves” doesn’t mean you have to be asleep all the time.
[ONE}
Well e-gaming enthusiasts! It looks like we’re in for an evening. The Judge comes out swinging with a few intimidating digs at the General’s investigation, clearly attempting to curtail and minimize her efforts. Good luck with that Judge. The General poured over 10,000 e-gaming documents for five years and interviewed countless people involved with e-gaming. She’s not going to be denied tonight: the General delivers a good slap to the side of the Judge’s head the very first round reminding him that her “focus” was also on “arrangements with third parties” and a lot more! It looks like we’ve got a match on our hands folks! And there’s the bell….
Never in my career has it been easier to decide a round – con – grat – u – lations General! What was the Judge thinking to even suggest CMT was never involved with e-gaming? The General saw the opening and pounced on the poor Judge like a cat on a mouse; then played with him, slobbered in saliva, for the rest of the round. Ouch! The General’s confident explanation of how CMT and Simplex were each involved in both the e-gaming and the financial transaction programs landed like a gut-punch to the Judge, leaving him wobbling lik