Episode #7: LaVie on Accountability for Wasting Taxpayer’s Money

Episode 7 Cover

PREAMBLE

The previous episodes in this series have all focused on CMT’s claim of spoliation. A different PC MLA – all currently Cabinet Ministers in the King Government – has starred in each episode. The PC MLA from the former Official Opposition featured in this episode is the PC MLA for Souris-Elmira, Colin LaVie.

PC MLA Colin LaVie was voted Speaker of the House by secret ballot in the First Order of Business under the newly-elected King Government. While a member of the Official Opposition, LaVie only raised questions on egaming-related issues on one occasion in the House – November 15, 2016, the first day back in the House for the Fall Sitting following the release of the E-gaming Report by the Auditor General, Jane MacAdam.

Colin
Credit: Sarah MacMillan/CBC

The Speaker of the House has a neutral role in the Legislative Assembly under the Westminister system of parliamentary democracy we follow, so NOW that LaVie is the Speaker of the House, I don’t expect him to speak out publicly or challenge the Government to nullify the hypocrisy and defend his integrity as the other PC MLAs should.

Still, back THEN our current Speaker was also demanding openness, transparency, and especially ACCOUNTABILITY from the Premier and Liberal Government.

As you’ll see from (1) LaVie’s questions, (2) MacLauchlan’s responses, and (3) the additional background information provided, LaVie not only admirably called the Premier to clarify the ethical and legal foundation upon which he was standing with respect to the issue of “public servants breaking laws and wasting tax dollars.” On that, he stood solidly with his PC MLA colleagues.

Providing contextual information is especially important for this episode. It’s important, for example, to know what the PC MLAs “knew” or “didn’t know” about the deletion of records or other breaches of policies, Treasury Board directives or provincial laws. Real Estate agents say the three most important things to consider when buying a house are: location, location, and location. Investigators say context, context, and context. Without properly understanding the facts and events within the two-fold matrix of “time” and “place” it is impossible to tell a story that people will understand. Not to get off-track too far, but I love a story I once read that illustrates this point beautifully, so bear with me.

Back in the days of steamships, it happened that two shoe company salesmen were both attempting to “out-compete” each other and bring new waves of customers to their respective companies from the colonies. Word hit both of them that there were potentially huge marketing opportunities in a certain African country, especially in the main city. Both landed on the same steamship en route to this new opportunity. They arrived – each carrying their shortwave radio kits to get word back to head office as quickly as possible – and checked into the same hotel near the city square.

One salesman was lucky enough to secure a posh hotel room overlooking the town square. He set up by the window and started doing calculations on how many people had shoes or didn’t have shoes. After a short time, he set down his pen, fired up the shortwave, and connected with the boss back in the head office: “Double production immediately – there’s unlimited potential!”

The other salesman got stuck in a dingy hotel room with no view so he decided to go down to the public square and mingle with the locals. When he returned to his hotel room he connected with his boss: “Cancel all production – wearing shoes is against their religion.” Understanding context is indeed everything, and without concrete, first-hand knowledge you’re likely to fall victim to believing abstractions are real.

The 5 clips from Brad Trivers in a previous episode were actually the last questions on the AG report asked of the Premier just before LaVie rose to his feet on that same day. Trivers had focused mostly on MacLauchlan withholding information from the AG which contravenes the Audit Act. He also addressed the “illegal deletion of records. Being the last to speak for the PC Caucus that day, LaVie drilled MacLauchlan on what he understood by “accountability” and what penalties he had in store for senior officials who wasted taxpayer dollars after breaking rules and laws.

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Setting the Stage

As the interim leader of the PC Party at the time, Jamie Fox was the first to ask questions on November 15, 2016. He listed a few of the key revelations that had “scandal” and “crime” written all over them from the AG report, then demanded accountability from Premier MacLauchlan.

Everyone was looking for signs from MacLauchlan that he intended to exercise the kind of leadership that he promised from the day he first informed Islanders that he had accepted the challenge to lead the Liberal Party in a bid to clean up the mess left by his predecessor, Robert Ghiz, and the former Finance Minister under Ghiz, Wes Sheridan.

What would convince Islanders that his government was different? “We’re doing things differently” and “That’s not the way we do business,” were daily mantras of the Premier at the time. With mounting evidence of laws being broken, especially with all the attention locally and nationally, Islanders were waiting to see how Premier Maclauchlan would hold senior public officials responsible (perhaps “irresponsible” is a better word) for breaking laws and wasting tax dollars “accountable”.

When the Speaker signaled the beginning of Question Period and Fox rose to his feet, it’s important to keep in mind that this was the very first time the PC Opposition could publicly confront the Premier with questions on the revelations in the AG’s Report. Fox kicked things off with a passionate (almost angry) demand that the senior bureaucrats illegally deleting thousands of government records and wasting millions of dollars of taxpayer dollars be held accountable and receive appropriate penalties and legal consequences.

November 15 cbc pic

Premier MacLauchlan had considerable time to prepare for the barrage of questions he knew would be coming at him on the opening day of the House. He settled with the following strategy and game plan: No matter what, hold to an absolute and complete denial that any public servant did anything wrong “notwithstanding allegations to the contrary” as he put it. Well, some of those “allegations to the contrary” came from the Auditor General’s Report, so that was problematic for the Premier.

Mind you, the details about deleted records were not known on November 15, 2016. Like which senior bureaucrats had destroyed the records, or even whose records had been destroyed. The only thing that was known at that time was that the records of three senior government officials had all been deleted. The PC MLAs only learned “who” destroyed “whose” records “when” a couple of months later, when the Auditor General answered those questions PC MLAs asked at Public Account Committee meetings in early January 2017.

I mentioned in the last episode that the practice has been that the Auditor General doesn’t “name names” in reports. This should change. The kerfuffle that ensued for the 2 months following the release of the AG’s report as a result of her not naming the people involved with the deleted records is a good example of why it is so important to provide those names from the outset. That 2-month distraction was entirely unnecessary.

The Liberals refused to answer questions about whose accounts were deleted from the PC Opposition MLAs almost daily, wasting precious time in the Legislative Assembly that could have been used productively. Not providing names generated needless speculation about who the people who had their records destroyed – as well as who did the destroying – might be, generating unfounded rumours. Those names were certain to come out eventually, so in the future, names should be provided along with titles or government positions in AG Reports.
With Fox’s opening bevy of questions, it was all about the need for a concrete display of “accountability” from the Government, with actions resulting in consequences for those public servants breaking laws and wasting tax dollars:

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Fox’s mention of MacLauchlan’s “lecture” was a comment on MacLauchlan’s response to his first question, which I didn’t present. Too painful. MacLauchlan rhymed off a carefully-scripted, well-rehearsed and quite a lengthy list of things his government was going to do – or had already started to do – to fix all the problems identified in the AG’s Report to ensure this kind of stuff never happens again. Doing things differently.

As the last PC MLA to speak to the Auditor General’s report, LaVie returned to the theme of accountability to sum things up. He also directed all his questions to the Premier. LaVie’s questions followed an exhausting pummeling by his PC Colleagues. It appeared everyone – even the Premier – had tired of that “list” of good news items and finally wanted to hear what kind of ethical and legal foundation he relied on when responding to law-breakers within the public service within the government.

This context is important to understand LaVie’s focus on accountability for how taxpayer dollars were spent. He hadn’t mentioned two serious incidents where laws were broken, but his colleagues just had, so he returned to Fox’s opening call for penalities (once those elusive individuals who destroyed documents could be identified) responsible for illegal acts, and in the case of Neil Stewart, which the PC MLAs already knew at that time illegally authorized the $950,000 e-gaming loan: in fact, that was the “subtext” for the focus on the loss of taxpayers money resulting from breaking rules and laws.

That information about Neil Stewart signing off on the egaming loan with no security – that MacLauchlan had to write off entirely as a loss – had already been made public months earlier. I cited both Peter Bevan-Baker and PC Opposition Leader in a previous article asking for Neil Stewart’s job. This was brought up earlier by other PC MLAs and lies behind both Fox’s (opening) and LaVie’s (closing) call for the names of public servants who broke the law and the imposition of penalties in the interest of ensuring government accountability.

LaVie wanted to know what the Premier considered was his ethical responsibility in terms of responding to these illegal acts by his public servants. The picture in the CBC story reporting on the opening day of the House gives you the ‘conclusion’ from MacLauchlan’s answer to LaVie. Those were the “optics” and Public Relations message the Premier gave that opening day. But not everything of importance he said was reported in the media, perhaps one of the most important things actually.

On the official record, the Premier gave the correct answer – like good lawyers and intellectuals – but I suspect no one unpacked what he said to realize the implications. I’m going to try to do that in this episode.

I’ll follow the same format as the last episode for the most part. I’ll present the questions and responses from Premier MacLauchlan separately. I’m not presenting all 5 of LaVie’s questions simply because a couple of them were simple “yes-no” answers that didn’t really add anything other than putting the Premier on the official record saying what LaVie obviously wanted to hear him say, like: “Mr. Premier, do you believe Ministers should act ethically when making decisions about spending taxpayer’s money?” You can guess what the Premier answered.

What LaVie was able to elicit from MacLauchlan – speaking with his patented down-to-earth sincerity echoing the sentiments of Islanders – was a public commitment to make “Ministerial Responsibility” the “Ultimate Rule” of his Government deciding how he would respond to law-breaking public servants.
Given the factual evidence that was available to the PCs at that precise moment [egaming loan] (and shortly-thereafter [deleted government records]) the latter of those two serious breaches of the law by Neil Stewart should have resulted in the resignation of Liberal Cabinet Minister Allen Roach. But it didn’t. I’ll explain this later on in the article after you get through the clips and commentary.

Question #1: Have Your Views Changed on Openness & Transparency?

It had been a long Question Period for Maclauclan but there was no immediate break in store. When LaView got to his feet, he also directed his questions to the Premier.

“Standing up for Islanders – ALL ISLANDERS”“…the Government has to look after taxpayer’s money..” These are the words that resonate with Islanders. They put the Premier on the defensive just a tad, especially after everything else that had just been said by a barrage of PC MLAs about the egaming fiasco and Government coverups – supported with findings from the AG report.

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Once again MacLaughlan lists some of “the plan” to fix everything he highlighted previously – he did that a lot that day, it being the fall-back response to any number of questions for which a more honest and direct answer would be problematic.

That didn’t satisfy LaVie, so his next question was a simple “Yes-No” one: “Does accountability include the ethical use of taxpayer’s dollars?” Of course, the one-word response was “yes.” LaVie might have expected that response from the Premier given what MacLauclan said previously said in a March 4, 2015, CBC Interview confirming that he was asking the Auditor General to investigate egaming.

MacLauchlan was Premier then but hadn’t gotten there by being elected. He was coronated Liberal Leader in the late Fall of 2014 and then appointed Premier when Robert Ghiz resigned in February 2015. He made the following statement a month after his appointment as Premier. They’re wonderful words, but then again there was a provincial election coming up in another couple of months where Machlauchlan would have to win the support of voters to keep his seat and the right to be Premier:

“I will ask the auditor general to look into this and I will clearly express that this is not the way I do business and that I’m looking, as a premier, to put in place a number of measures that will ensure, as we move forward, everything that government does will be on a highly ethical basis and will build the public’s trust and confidence.”

LaVie then asked the Premier a more pointed question about the consequences for public servants who break rules and high ethical standards. Perhaps because there were no consequences for Neil Stewart despite cries from both the Greens and PCs for consequences, the question was phrased as if to say: “If it was REALLY important Mr. Premier, well there would have been consequences….”

Question #2: Is it Important to Ensure High Ethical Standards?

Notice that LaVie says “…especially leaders…” when he asks about Government accountability. LaVie gets to the main issue here on a level Islanders can understand.

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Question #3: What is the Penalty for Errant Senior Public Officials?

What LaVie really wanted to know was what action Premier MacLauchlan was going to take with senior public officials who broke the law. Laws like the Financial Administration Act where nearly a million-dollar loan was approved without legal authorization then all lost to someone’s pocket with no explanation or anything of any value to show for it. LaView tries his best to nail the seriousness of all that down for the Premier in simple and precise terms.

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Note that MacLauchlan says it’s the Minister of Finance who is principally responsible for ensuring all public servants are doing what they are supposed to do with regard to following rules, obeying laws and ensuring work with the highest possible ethical standards. Of course, the person who actually works on those files and makes those decisions is not the Minister, but the Deputy Minister.

Premier MacLauchan appointed Neil Stewart Deputy Minister of Finance less than a year after this exchange with LaVie. Not only were there not to be any consequences, but Neil Stewart was not only granted more trust and greater access to taxpayer’s money, but he was also [and it hurts to type this] given the oversight responsibility to “police” with the entire public service of the PEI Government.

Notice as well that MacLauchlan carefully avoids saying the word “law” in his response. He has no problem saying that public servants are “expected” to abide by “all the rules, all the policies,” but stops short of saying “laws“.

Departments have the authority to deal with breaches of rules and policies – breaking provincial laws is something entirely different. When Treasury Board approval is deliberately circumvented the legal requirements of the Financial Administration Act are broken resulting in a couple of million of taxpayer dollars disappearing with nothing to show for it, nothing to recover [there was no security on the loan agreement Stewart signed off on], and nothing left to do but “write off a bad debt”…there absolutely has to be consequences. That’s where Ministerial Responsibility kicks in, as you’ll see later.

Question #4: What Rules Apply to Officials who Waste Money?

This was a straightforward question.

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MacLauchlan’s answer was just as straightforward:

“The ultimate rule….and the one we live by….is Ministerial Responsibility”

The brevity and lack of detail or explanation resulted in a global failure to grasp the full significance of what MacLauclan committed his government to do. That’s why I want to wind things up by taking a closer look at exactly what Ministerial Responsibility really is, and why it should have resulted in the resignation of the Minister of Finance, Allen Roach, who was the Minister responsible for Neil Stewart at the time he illegally authorized the destruction of the Deputy Minister’s (Melissa MacEachern’s) electronic and paper files, breaking numerous provisions of the Archives and Records Act.

Although the information that it was Neil Stewart who authorized the destruction of Melissa MacEachern’s government records, that was not known at the time but was known by early January.

What exactly is Ministerial Responsibility?

If you live in PEI, you may think that Ministerial Responsibility involves standing in front of a microphone every so often to take the blame for the latest scandal or catastrophe in your department. This tepid feigned political confession is never volunteered – but compelled by some untimely scandalous revelation that usually catches Ministers off-guard.

The “confession script” is standard: (1) You confess you didn’t know anything about it. (2) You promises to do things differently in the future and announce some type of amendment to rules or laws you’ll be putting into place; (3) You give assurances that stern reprimands were delivered to the guilty parties (but no names again) and you wind up; (4) questions are never taken after the statement is read; (5) You thank everyone for coming, smile, and say it’s time to get back to work. End of Ministerial Responsibility.

A clip was provided in a previous episode with a response by Premier MacLauchlan to Aylward’s question on why there were no consequences for Neil Stewart breaking the law. MacLauchlan assured Aylward there would indeed be consequences, but then went on to list a bunch of changes he planned to make to policies, new laws, etc. as if he hadn’t heard the question. The idea of disciplining Neil Stewart apparently never even crossed his mind, and little wonder: consequences for public servants breaking the law in PEI are about as rare as Moose sightings in Malpeque.

Ministerial Responsibility has a number of aspects, but of special importance here is Individual Ministerial Responsibility which includes the following:

• Ministers are individually responsible for the work of their departments and are answerable to Parliament for all their department’s activities.

• They are expected to accept responsibility for any failure in administration, any injustice to an individual or any aspect of policy that may be criticized in parliament, whether personally or not. [Taken verbatim from: “Ministerial Responsibility,” LawTeacher.net]

So what does “accept responsibility” mean in the “Individual Ministerial Responsibility” Constitutional Convention? This is what Wikipedia says about it relying on what seem to be reputable source materials that correspond with other sources I’ve read on the subject:

“If waste, corruption, or any other misbehavior is found to have occurred within a ministry, the minister is responsible even if the minister had no knowledge of the actions. A minister is ultimately responsible for all actions by a ministry because, even without knowledge of an infraction by subordinates, the minister approved the hiring and continued employment of those civil servants. If misdeeds are found to have occurred in a ministry, the minister is expected to resign. It is also possible for a minister to face criminal charges for malfeasance under their watch. The principle is considered essential, as it is seen to guarantee that an elected official is answerable for every single government decision. It is also important to motivate ministers to closely scrutinize the activities within their departments.

Individual Ministerial Responsibility has two components: – a resignation component and answerability component. So why do resignations of Ministers never seem to happen?

In a paper from the Federal Government’s Task Force titled, “Ministerial Responsibility: Interpretations, Implications, and Information Access.” the following insightful information is provided:

“It is extremely important to distinguish between these two components [Answerability and Resignation] because emphasis on the first component to the total or relative neglect of the second explains in large part the view that the doctrine of individual ministerial responsibility is dead or at least severely weakened.”

How can this be? The report goes on to say that despite the expectation that Ministers will resign because Ministerial Responsibility is a long-standing Constitutional Convention, it is nonetheless not a law.

The only thing that would bind a Premier to follow this Convention is a public declaration that under the leadership of his or her Government, Ministerial Responsibility would be recognized to ensure government accountability. What exactly is the “Resignation Component”?

“The resignation component requires that each minister answer to Parliament, in the form of resignation, for serious policy or administrative mistakes made by the minister personally or by his or her public servants. Ministers bear a “vicarious” responsibility for all of the acts of their department, even if they have no personal knowledge of these acts. For many critics of the doctrine of ministerial responsibility, this resignation requirement constitutes the whole of the doctrine. They then argue that ministerial responsibility is a myth because in practice ministers do not resign to atone for the errors of public servants.”

Premier MacLauchlan made such a public declaration. He just never acted on it.
“The ultimate rule….and the one we live by….is Ministerial Responsibility”

Which immediately gives rise to the next question.

Why Did MacLauchlan Not Force Allen Roach to Resign?

In the earlier response to Brad Trivers, MacLauchlan had indicated that the accounts of two senior bureaucrats had been deleted, insisting that such a thing would never happen, again. There were actually three bureaucrats who had records deleted, but only two of them were from the Premier’s Office. The other was Melissa MacEachern, Deputy Minister of Innovation Advanced Learning.

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When MacLauchlan cited the somewhat vague and abstract Constitutional Convention of “Ministerial Responsibility” as the appropriate response to the situation – he knew that it was Robert Ghiz who had authorized the deletion of those two accounts, and Ghiz was already gone from the government. There really wouldn’t be any need for further action on his part regarding exercising Ministerial Responsibility in that case.

The same thing with the illegal egaming loan – MacLauchlan excused (actually praised and applauded) Neil Stewart, and employed the “Ministerial Responsibility” approach in doing so by essentially throwing the Minister at the time, Wes Sheridan, under the bus. I suppose that doesn’t really suit in this case. Sheridan had already safely seated himself on a shuttle to Halifax to start a new job in Halifax with a long-standing corporate Insurance Company client he had been working with while Finance Minister in the PEI government. That caused a bit of a stir in the media: [See: Wes Sheridan’s new job raising a few eyebrows on P.E.I., Guardian, January 16, 2016].

“Opposition finance critic Darlene Compton says this news will raise a few eyebrows among Islanders. ‘Morneau Shepell worked with minister Sheridan throughout his eight years as finance minister, so it does raise some questions as to how he’s now employed with them,’ Compton said. ‘It’s too cute by half to see a major government vendor that has now employed a former cabinet minister, especially so close to his political career ending and given their previous business relationship.’

The article went on to cite MacLauclan’s statement about Neil Stewart, Michael Mayne and Doug Clow “giving professional advice” for which we have to “…defend and encourage and recognize”.

During a presentation to the province’s Standing Committee on Public Accounts, Green Party leader Peter Bevan-Baker asked MacAdam to name anyone still with government, “who knowingly violated the Financial Administration Act,” with regards to approving the loan used to finance e-gaming. MacAdam provided the names of three senior civil servants who were on the board of one of the province’s Crown lending agencies at the time. But it was former finance minister Wes Sheridan who was ultimately responsible for what took place, MacLauchlan said Tuesday, adding the three bureaucrats in question advised against the actions the auditor general has said were in violation of the Financial Administration Act as well as against Treasury Board rules. “These people gave advice … it was or wasn’t followed. But ultimately they gave professional advice. And I think that’s what you have to defend and encourage and recognize,” MacLauchlan said.

The idea that Neil Stewart “advised” anyone not to sign that loan is ridiculous. He went out of his way to hide things from Treasury Board on a quire regular basis, entirely on his own initiative, and his participation in the egaming loan scheme was no different.

With Wes Sheridan and Robert Ghiz both gone from government, MacLauchan’s response to LaVie’s passionate plea for an ethical response – where those who were taxpayer’s money or otherwise break the law are held accountable – was adequately managed by MacLauchlan. The news that Stewart destroyed records while under Allen Roach’s term as Minister of Stewart’s department broke in January 2017 and both these individuals were still working in Government. There was never mention of exercises Ministerial Responsibility.

Does Ministerial Responsibility Apply to Illegal Record Destruction?

That “third” bureaucrat that MacLauchlan may not have been aware of initially (Neil Stewart) was still the Deputy Minister of Innovation and Advanced Learning. Allen Roach was not the Minister responsible for Innovation and Workforce when the E-gaming Loan was signed by Neil Stewart, Wes Sheridan was the Minister. However, Allen Roach was the Minister of Innovation and Workforce responsible when Neil Stewart illegally authorized the destruction of the Deputy Minister under Roach at the time, Melissa MacEachern.

When MacLauchlan invoked Ministerial Responsibility in his response to LaVie, he either didn’t know that in a few months the Minister he made responsible for managing the response to the whole egaming crisis (Allen Roach) should have been asked to resign – by MacLauchlan’s own stated parliamentary, ethical standard – but of course that didn’t happen. Roach told the Public Accounts Committee that the first he really heard about the whole egaming affair was from the 2015 Globe and Mail article. To avoid having to hold Minister Roach accountable under Ministerial Responsibility, MachLauchlan would have had to have disciplined Stewart himself. He promoted him instead.

A few months after it was learned that Neil Stewart was behind the destruction of all Melissa MacEachern’s emails and documents, Premier MacLauchlan appointed Neil Stewart Deputy Minister of Finance. I wrote a Guest Opinion about that at the time that was published in Island newspapers challenging the appointment: “Premier Exercises Poor Judgement,” Eastern Graphic, October 4, 2017.

Now Premier King has appointed Stewart running the Charlottetown Area Development Corporation (CADC)…and Brad Mix is chugging along like always in the same position he’s had since the turn of the Millenium (not kidding) had under MacLauchlan: Senior Director, Innovation PEI, Business Attraction.

So much for Ministerial Responsibility with the Liberals. I wonder will Premier King makes the same commitment to ask for the resignation of Ministers if anything like what happened under the Liberals happens under his watch….oh wait…Brad Mix’s missing records were discovered under the King government’s watch. Were there consequences? Maybe there will be after the Information Commissioner finally makes her Order on that review public in April or May 2020.

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