'Broad-based' failures found in N.L. legislative finances

A judge who reviewed spending at Newfoundland and Labrador'slegislature found a "broad-based systemic failure" in financial controls, according to a report released Thursday.

Derek Green, chief justice of the Newfoundland Supreme Court's trial division, laid out top-to-toe problems with spending at the house of assembly, from poor training, to shoddy oversightto a political culture that stifled accountability.

"A confluence of factors served to create an environment where protection of the public interest which should always be the prime concern was often lost sight of and subordinated to other concerns," Green wrote.

Green's report offers 80 recommendations, as well as a new act intended to clean up myriad problems that Green says have diminished public trust in politicians.

Premier Danny Williams asked Green to review the system last June, in the midst of a spending scandal that upended politics in the province and involved all three of the main political parties.

That month, Auditor General John Noseworthy began tabling a series of reports that showed poor financial controls at the house of assembly.

The findings included that five politicians had received about $1.6 million more than their entitlement through their constituency allowances, which are intended to pay fora district office, promotional material, on-the-road expenses and other things.

Green found a range of serious problems, including deficient administrative practices, a "broad failure" in management responsibility, ineffective internal audits and "inaction" by the public accounts committee.

Green also criticized the culture at the legislature, and "an improper reliance on the notion of legislative independence as a justification for implementing unsafe financial practices."

Report marks a turning point in accountability: Williams

Williams, in releasing Green's report on Thursday, promised action onthe chief justice's1,300-page report and its 80 recommendations.

"Despite some of the negativity surrounding the commissioning of this report, this is a very proud day for our government," said Williams, adding he was disturbed by"very disconcerting statements and revelations" in Green's report.

The legislative spending scandal has captivated politicians and voters alike since last June, when Noseworthy's first report named Ed Byrne at the time the natural resources minister, and one of Williams's closest confidants as having received 10 times his allotted allowance over a four-year period.

Over the following months, Noseworthy named four other present and past politicians: Liberals Wally Andersen, Percy Barrett and Jim Walsh, and New Democrat Randy Collins.

Byrne was forced to resign his cabinet seat immediately, and in the fall left politics altogether while insisting his name will be cleared. Collins resigned his seat in February to take a union job in Ontario.

Noseworthy also found that taxpayers, through the house of assembly, had paid about $2.6 million for things like fridge magnets, commemorative pins and gold rings intended for politicians, even though there were few receipts to show for the expenditures.

The Royal Newfoundland Constabulary opened a criminal investigation last summer.

Noseworthy began his investigation of legislative finances after being given permission to do so after the Progressive Conservatives took office in 2003. In 2000, former auditor general Elizabeth Marshall was barred from looking at the legislature's finances.

Greenfound that problems at the house escalated in the years since, peaking just before Noseworthy began his review.

Marshall, now a PC backbencher, will oversee implementation of Green's report.

New act already under review: premier

A cornerstone of Green's report is a draft of legislation entitled the House of Assembly Accountability, Integrity and Administration Act, which enshrines proposed reforms under law.

The proposed act which Williams said is already under staff review would clean up controls at the legislature, provide greater oversight and reduce the chances of questionable claims passing with little, if any, scrutiny.

Williams said the bill will be debated in the legislature soon. He said he would like to see it pass before the end of the summer.

Many of Green's recommendations are directly connected to Noseworthy's findings of the last 12 months. Theyincluded a report on double billing of constituency allowances and a revelation that the Internal Economy Commission, a bipartisan group that governs the legislature, approved a $2,875 bonus for each member in 2004, and wrote minutes "so vague" that no one could know the bonus had ever been approved.

Watchdog role recommended for new body

Green recommends replacing that committee with another body, whichwould have greater control over legislative finances and serve as more of a watchdog.

As well, he recommends overhauling the constituency allowance system, with tight limits put on what an MHA may receive. As well, Green recommends bringing the house of assembly under the Freedom of Information Act.

"There's not going to be much wiggle room," Williams told reporters Thursday. At the same time, Williams said, it could prove impossible to stamp abuse out altogether.

"Now, obviously, if a system is flawed because people are dishonest, for want of a better term some of that you can't plug."

Green recommends forbidding MHAs from being discretionary about use of their allowances. For example, they would not be able to make donations to charities or community groups through public money.

As well, use of their own money for donations will be significantly limited, and if an MHA submits wrongful claims, the politician is solely responsible.

Williams is comfortable with the strictness of the recommendations.

"It is appropriate that government officials are correspondingly held to codes of conduct, which for an ordinary person would be quite severe," Williams said.