Yesterday, federal auditor general Sheila Fraser confirmed Yukon Finance officials broke the law when they sunk $36.5 million of the territory’s surplus funds in asset-backed commercial paper.
Fraser has an opinion on the matter, but there are others, said Dennis Fentie while commenting on Fraser’s findings in radio interviews yesterday.
It’s a remarkably bold statement from the territory’s Finance minister. Especially given the circumstances.
The auditor general’s job is to examine and to report on how government spends its citizens’ money. She’s the country’s top watchdog.
And Fraser is arguably the most trusted civil servant in the country.
She chose to investigate the government’s substantial investment in asset-backed commercial paper.
The focus of the audit was to determine if the government was following its Financial Administration Act. The law.
Fraser had access to all documents.
After examining those documents, she concluded government officials broke the law.
Fentie is the Finance minister. As such, he’s responsible for his department.
His department put $36.5 million at needless risk.
The government has not received any payment of principal and interest from these two trusts, which were supposed to mature on August 31, noted Fraser.
So the government has already incurred a significant loss through its investments in these funds.
The government has not determined the ultimate financial impact of its investment in these trusts, said Fraser.
An extremely complex restructuring deal of billions in asset-backed commercial paper — of which the Yukon is but one investor — is in the works, but has not yet been finalized.
It is not yet certain such a deal can be successfully brokered.
In the legislature, Fentie said the banks guaranteed the government’s investments.
Fraser has determined they had not.
In fact, she determined that prior to making the investments, the government sought no legal opinion on whether they would comply with the act. It just spent the money.
Fentie and deputy premier Elaine Taylor told the house that Fraser had examined the books and determined that everything was kosher.
That wasn’t the case.
On November 7, defending the investments in the legislature, Fentie said his officials were making millions through their work.
“It is working, and it is building a better future for all Yukoners.”
He suggested the investment practices would not change.
Last week, to head off criticism in advance of Fraser’s report, Fentie reversed that decision. He announced the government would no longer invest in asset-backed commercial paper.
That decision came five months too late.
Now, following Fraser’s report, Fentie has effectively dismissed her findings. They are simply an “opinion.”
He says he has other legal opinions that say otherwise — but he won’t make a big deal about them.
Then he shouldn’t have made the remark.
Now, we suggest he’s obligated to produce the opinions. Immediately.
Or, as the minister responsible for the debacle, he should resign. (RM)
The Yukon’s Financial Administration Act deals with loss of public funds “through the misconduct, neglect of duty or negligence of a person handling the money.”
Section 69 (1) states: “the person is liable for the money and it may be recovered from them as a debt due to the government.” (RM)