News article: NDP seeks conflict of interest probe into MLA loan

FREDERICTON – New Democrat Leader Dominic Cardy says Tory MLA Greg Davis has violated the province’s conflict of interest act by failing to report a loan he received from his own party to the New Brunswick conflict commissioner.

Cardy said he will request in writing Thursday that the conflict commissioner’s office conduct an investigation into the alleged breach.

The NDP leader said that he will also call on the commissioner to launch a detailed examination into the expenses of all MLAs in each of the last two governments, citing broader failures and a lack of oversight of the expense reporting system.

Public disclosure documents obtained by the Telegraph-Journal from the Office of the Clerk do not make mention of the Davis loan from the Progressive Conservatives.

But the party’s own executive director says a loan was made to bail out the Campbellton-Restigouche Centre MLA after thousands of dollars in constituency office rent went unpaid.

That loan should have been reported, according to conflict rules.

Mistakes by the party were also made in reporting the loan to Elections New Brunswick.

The New Democrats now say the fact that the Progressive Conservative party’s financial returns mislabelled the loan to Davis, coupled with new knowledge that the loan seemingly wasn’t disclosed to the conflict commissioner is troubling.

“We don’t exactly know what that money was spent on as well, which is another question that even the government has now recognized has to be answered,” Cardy said Wednesday.

“It also shows a broader problem with the way we handle MLA expenses in New Brunswick.”

Details of how Greg Davis spent his constituency allowance funds will be released next week after a legislative committee called on Tuesday for a complete review of the Tory MLA’s office expenses dating back to the 2010 election.

Questions persist as to exactly how Davis spent his constituency office funds in the wake of news his party bailed him out in 2012 after he fell $5,125 short on rent payments.

Davis also fell more than six months behind on payments this year, a fact revealed after the equipment inside his Campbellton office was seized last week as a result of unpaid rent.

Why that happened remains unclear as an annual report from the provincial comptroller’s office shows that Davis received the maximum allotment of $40,000 for constituency expenses in 2012.

The newest allegations stem from disclosure statements MLAs must make to the conflict commissioner.

Every year, each MLA has to individually meet with the commissioner and disclose their personal assets and liabilities, including any loan over $2,500.

More specifically, “any salary, financial assistance or other benefit the member has received from a registered political party or a registered district association during the preceding 12 months, or is likely to receive during the next 12 months” must be disclosed, according to conflict legislation.

That information is then publicly released.

Legislation also requires any MLA who changes their financial circumstances to make a statement of material disclosure within 60 days of the change.

In Davis’ public disclosure statements for the last three years – signed by former commissioner Patrick Ryan – the Tory loan isn’t listed.

Current Conflict of Interest Commissioner Alfred Landry was unavailable for an interview on Wednesday, but his office did state that interviews are conducted annually to ask questions of disclosure to MLAs directly.

The development that the loan seemingly wasn’t reported to the conflict commissioner comes after it also wasn’t properly reported by the Progressive Conservative party.

Executive director JP Soucy said last week that the party’s 2012 financial return should have listed a loan to Greg Davis, but doesn’t.

The return, available publicly from Elections New Brunswick, instead lists under accounts payable $5,125 to “Peter Woltens” – which Soucy said is another error.

Soucy said when he relayed the story of Davis’s situation to the party’s accountants he spoke of “Peter Wolters,” director of finance and human resources within the office of the clerk.

The clerk’s office is in charge of approving members’ expenses.

“It should have been Greg Davis,” Soucy said. “A correction has been made with Elections NB and us in the 2013 report that it is a Greg Davis loan.”

Soucy did not return a request on Wednesday asking if Davis was advised to disclose the 2012 loan to New Brunswick’s conflict of interest commissioner.

Cardy said that Davis’ expense questions reveal that MLA expenses are not being scrutinized.

“The problem we have right now is that the system is not designed to monitor what the MLAs are spending their money on,” Cardy said. “It’s a protection of how much money the MLAs are going to get, that’s it.”

Cardy said the system sees MLAs submit expenses and if they meet the criteria in place, the member is then reimbursed.

There is no verification to ensure that money was properly spent.

“There is nothing in there right now, for example, from stopping me giving you $20,000 to buy a new car and you then submitting a receipt to me saying ‘I did consulting services,’ ” Cardy said.

The New Democrats are now reaffirming a call for New Brunswick to follow the Nova Scotia example, which sees line-by-line expenses from every MLA released publicly.

The NDP is also calling for MLAs to be housed in government offices.

“When MLAs change, the offices don’t need to change, so we don’t have to have a separate bureaucracy and all these potential conflicts come up,” Cardy said.

He added that party loans must be exposed publicly.

“MLAs are not suppose to be just partisans, they are suppose to be representing everyone in their community, so having a political party subsidizing an office is a serious infringement in the independence of the member,” he said. “The cost for them of going against their party and sitting as an independent is also that they are going to be evicted from their office because they needed their previous party’s support to pay the rent.

“That’s exactly the sort of thing that conflict of interest guidelines are supposed to prevent.”