Danny Williams's blind trust acquired 550 acres of land from NLHC during term as premier

The blind trust for Danny Williams made two significant additions to his Glencrest land holdings on the outskirts of St. John's while he waspremier, including a 225-hectare (550-acre) acquisition of land from the Newfoundland and Labrador Housing Corporation in 2007.

Until now, the results of that NLHC land sale in which Williams's son-in-law acted as trustee for a numbered company in his blind trust do not appear to have been publicly revealed.

A lot of people, whether they are media or others, kind of think that Williams can't be that squeaky clean. He must have done something wrong. He must have been at it to fill his own pockets. Well, my pockets were pretty full before I got into politics and I didn't need to go into government in order to benefit from government.- Danny Williams

The sale was not registered until this summer, eight years later.

Williams is defending the acquisition, and how it was handled, saying all rules were followed.

"A lot of people, whether they are media or others, kind of think that Williams can't be that squeaky clean. He must have done something wrong. He must have been at it to fill his own pockets," the former premier said in an interview.

"Well, my pockets were pretty full before I got into politics and I didn't need to go into government in order to benefit from government."

Williams says he is disappointed this land acquisition is being raised as an issue now.

"You're out there trying to do something good, and rather than carry the good news story the amount of jobs, and the amount of spinoff that will be out there, the good community that will be developed people just continue to dig to try and find something wrong. You know, that's really sad."

Multi-billion-dollar development

There have been questions raised about how Danny Williams acquired the land for the Glencrest development some of which has since been rechristened Galway since the former premier publicly revealed in late 2011 that he was behind the potential multi-billion-dollar project.

He actually bought most of the land roughly two-thirds of it, in fact in the late 1990s, before entering politics.

But his blind trust added to those holdings during Williams's term as premier.

A Dec. 14, 2011, story in the St. John's Telegram quoted Williams as saying his blind trust did acquire some land while he was in office from two private developers, as well as some other small parcels of land.

"But for me, from my perspective, I had no involvement whatsoever in that," Williams told The Telegram at the time. "The project was on hold until I finished politics."

That Telegram story did not reference any acquisition of 550 acres of land from the NLHC in 2007 a parcel that comprises roughly 25 per cent of the entire Glencrest/Galway development.

Asked why he hasn't spoken about that acquisition until being asked about it now, Williams said: "Well, there's no need to. Basically, a blind trust is exactly what it's named. It's a blind trust."

He says he followed the applicable legislation during his time in public office.

"In order to go into politics, I had to convert everything that I owned and worked for 50 years over into a blind trust, and that's not without significant risk from a personal perspective," he said.

"So I was actually concerned when I had to do it, but I had to do it, because those were the rules and I complied by the rules."

Call for proposals publicly advertised

The call for proposals for the 550 acre parcel of land called Water Crest was publicly advertised in the fall of 2006, through newspaper ads and on the NLHC website.

There is no evidence there was anything improper about the process.

However, the circumstances of the land sale raise questions about oversight and accountability.

The key players in the deal were all close to Williams.

The trustee representing Williams's numbered company was his son-in-law, Trevor Morris.

"He would have been approved by the commissioner for members' interests, so there would be no conflict there," Williams said.

The commissioner of members' interests acts as ethics watchdog for MHAs and cabinet ministers.

On the date of the sale, that job was held by Paul Reynolds, aformer Progressive Conservative party president.The appointment of Reynolds as chief electoral officer and commissioner of members' interests a post that is normally non-partisan sparked intense criticism at the time.

• No apologies on putting Tory in electoral office: Williams

And the CEO of the housing corporation who signed off on the sale was Len Simms, the former Tory leader who played a senior role in Williams's successful re-election campaign.

• Critics decry 'obscene' patronage in Simms reappointment

Williams dismissed any concern about the optics of those connections.

"If you're not looking at that project as a great project for Newfoundland and Labrador, but you're going to look at it as possibly something that was underhanded or something, well that's just simply not the case," he said.

"This was a transaction that was done with a public offering. So anybody in the world could have bid on that property."

According to documents obtained from NLHC, a total of 17 information packages were picked up by interested parties.

But only one bid was entered from a numbered company in Williams's blind trust.

CBC News obtained those documents through access to information requests to the housing corporation.

In the past, Williams has refused to publicly disclose who acted as trustee for his business interests while he served as premier.

He now says the choice of his son-in-law made sense because of Morris's familiarity with the holdings in question.

"In this particular instance, actually, my son-in-law actually knew this property out there, because he actually was working for me at the time," Williams said.

"He was aware of the properties. He knew it, and he understood it. And there was no better person to be in charge of probably the largest asset in the portfolio at that time."

While blind trust guidelines brought in during the Tobin era specifically prohibit family members from acting as trustee, the definition of family in that 1997 directive does not include son-in-law.

• External link: 1997 ministerial statement on conflict of interest guidelines

Asked how a blind trust can be blind when it's run by a family member, Williams said: "Because the whole concept of a blind trust is that there's a Chinese wall. That they basically go out, they act in the best interests of the trust, and that's the trust and good faith that you place in them."

Asked if his connections helped him get this land, Williams replied: "Absolutely not. Absolutely, categorically not."

Part of process dating back to 1997

In an email to CBC News, the housing corporation says the Water Crest land sale was part of an ongoing process that began in 1997, when the then-Tobin government directed the corporation to divest of its land holdings.

According to documents obtained through access to information, the sole bid received was $1,045,000, from the company in Williams's blind trust.

An internal NLHC memo written a day after that bid came in put the value of the land slightly above that, at $1.1 million, or $2,000 an acre.

The sale went through eight months later, in June 2007, according to a conveyance now on file at the registry of deeds. The sale price was slightly higher than the initial bid $1,058,700, according to that document.

But the purchase was not registered in the provincial registry of deeds until this summer, on June 23, 2015 eight years later.

Williams says that was an oversight on the part of his blind trust.

The deed was kept at his old law firm, he says. Those offices were gutted by fire in 2010.

• Fire guts St. John's law office

Williams says the NLHC deed was discovered earlier this year, when he began assembling documents as part of the process to borrow up to $120 million from the Bank of Nova Scotia. He used his Glencrest and Galway land holdings as security for that debenture.

The deed was found in a box that had been damaged by water during the fire and put into storage, he says.

Williams stresses that deeds don't have to be registered, and he had nothing to do with the transaction in 2007.

From my perspective at the time, this was all handled by my blind trust.- Danny Williams

"From my perspective at the time, this was all handled by my blind trust," Williams said. "I was in public office. Whether a deed was registered, or a deed was not which is not really significant but whether it was registered or not was none of my concern, because I absolutely had nothing to do with."

Williams's blind trust did make another land acquisition during his term as premier.

In October 2007, the same numbered company bought another block of nearby land from Cabot Development Corporation.

The 160-acre parcel of land carried a price tag of $880,000, or $5,500 per acre, according to a conveyance filed at the registry of deeds.

In contrast with the NLHC conveyance, the Cabot acquisition was registered one day after the actual sale.

"I can't apologize for my trustees at the time as to why or why not it was registered, or whether it was left in a file at the law office," Williams said of the NLHC conveyance.

"But from a general perspective, this was sold by a public body, in a public transaction, at an auction an auction of sorts, whereby people had to bid on it and this was either the highest or the only bid that was placed by my blind trust."

In an emailed statement to CBC News, the housing corporation says there is no requirement to publicly announce the successful proponent of a proposal call for land sales.

But NLHC says it can reveal a proponent's name and how much was paid for the property, if anyone asks.

Biggest acquisition in late 1990s

The overall Glencrest/Galway project is comprised of about 882 hectares (2,179 acres), according to a City of St. John's planning memorandum written in 2013.

Williams acquired most of the land before he entered politics. In 1998, he paid $425,000 for 557 hectares (1,377 acres) of land offered by the NLHC, or roughly $308 per acre.

That deal has been in the news before.

In 2001, Williams then the Tory Opposition leader defended the purchase in an interview with The Telegram.

NLHC had appraised it at $1,377,000, that Telegram story noted, but ultimately accepted Williams's offer of less than one-third that amount.

He said he paid a fair price, and stressed that much of the land could not be developed.

Williams used some of the land to build what was originally called The Woods golf course, now known as Glendenning.

The day before he was sworn in as premier, a conveyance was registered at the registry of deeds for an adjacent 45 hectares (110 acres) from NLHC. The purchase price was $64,030, which works out to just over $580 per acre.

Glencrest and Galway projects significant

In total, between 1998 and 2007, Williams or his blind trust paid about $1.55 million for roughly 2,000 acres of NLHCland an area about 10 times the size of Bowring Park in St. John's.

His blind trust added to those holdings by paying $880,000 for another 160 acres from a private company in 2007.

The planned Glencrest and Galway projects will be significant, with residential, commercial and industrial components.

The land is bordered by Pitts Memorial Drive in the north, the Trans-Canada Highway to the west and Southlands to the east. It runs all the way down to Cochrane Pond in the south.

In late 2011, St. John's Mayor Dennis O'Keefe said the overall development could be worth $5 billion.

• Danny Williams backs $5B land plan in St. John's

Williams says questions about how the land was acquired are part of the "lobster in the pot" theory about dragging others down.

"One lobster is trying to claw out of the pot, others try to claw him back in. So I take exception to that, on the sense that it's unfortunate that happens, but I guess that's life, and I guess that's part of doing business. But when you're trying to do something really good, and someone tries to find a flaw in the fact that someone didn't register a deed, that's too bad."