Episode #17: It’s about Corruption and Coverup – not E-gaming

Cover for Episode 17

Preamble

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 A.JPG

Schedule B

Schedule A

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”).

+++++++++++++++++++++++++

(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 Report about 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 ever find 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:

Neil Stewart Email

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”

Coady.jpg

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.”

bloyce.jpgHon. 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.

“Lawyer of the year” in any given field of professional expertise is laudable, and something special to put on a resume for sure. When I read that Eighty-six lawyers from Stewart McKelvey alone were acknowledged at the same time by Best Lawyers in Canada© as “leaders in more than 40 practice areas” I wondered if there were any Stewart McKelvey lawyers who didn’t get a designation. Wouldn’t want to be that guy.

If you stick with this series, stop and ask yourself after each of the next couple of episodes – and this one as well – whether you would consider the facts surrounding the breaching of the Rules of Court with both disclosure and non-disclosure of materially–relevant documents in this major CMT vs Government legal action, as the standard that legal “peers” should use to evaluate their fellow lawyers when making their nominations to Best Lawyers in Canada©?

+++++++++++++++

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.

Posted in E-gaming, Provincial Politics | Tagged , , , , , , , | Leave a comment