Episode #20: Covering up the “Breach of the MOU” (Part II)

Episode 20 pic

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.

Appeal Court Judges
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:

Roach's answer to Myers

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:

Email on 7 title.JPG

August 7 1

Wes Sheridan’s Administrative Assistant sent the following email in response:

Credit union contact info

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”):

Mystery shopped.JPG

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:

From 11 to 1pm

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:

Payments Technology

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 withan 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.

Chris to Cheryl - Overview

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.”

Cheryl to Brad after August 29th meeting

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:Maines FOIP page 13

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):

Laslop to Sheridan October 1

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:

Chris to Wes, September 5, 2012

Sheridan’s response?

Address it to me.JPG

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.

Laslop email to Wes with proposal

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.

Kevin J. Arsenault

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