The law was broken, but nobody broke the law.
That’s the Justice department’s conclusion following its review of the Finance department’s $36.5-million investment in third-party asset-backed commercial paper.
Government lawyers found no Finance official broke the law by investing $36.5 million in the non-guaranteed trusts, even though it admits the law was broken.
Justice lawyers determined there was no “willful intent” to defraud the public in association with the now-frozen investments, said assistant deputy minister, legal services, Tom Ullyett at media briefing Tuesday.
Lawyers based their opinions on a report by auditor general Shelia Fraser, which found that the Financial Administration Act had been breached.
“While the auditor general found the investment was not in compliance with the act, no offence was committed that would lead to an investigation or charges,” said Ullyet.
Fraser’s report served as a “factual foundation” for Justice’s review.
Fraser did not investigate the question of intent, said Ullyet.
“The auditor general was not looking at whether an offence was committed,” he said.
“That’s clearly the responsibility of the minister of Justice. The conclusion of the department is that no offence has been committed.
“If the department of Justice believed there was evidence to show that they had possibly committed an offence, then the department would recommend an investigation be undertaken.”
Justice officials were not involved in the auditor general’s report and had no contact with Fraser or her officials, said Ullyet.
Justice officials did not speak to Finance officials as part of its review.
The review relied solely on the auditor general’s nine-page report.
Justice found no Finance official committed an offence under Section 69.1 and 77 of the Financial Administration Act.
Section 69.1 states: “If public money is lost or is not collected through the misconduct, neglect of duty, or negligence of a person responsible for handling public money, the person is liable for the money and it may be recovered from them as a debt due to the government.”
Section 77 states a Finance official commits an offence if he or she willfully falsifies records or fails to report information or knowledge of a violation of the act or fraud committed against the government.
Fraser made no finding of willful conduct of the type described in Section 77, and found officials believed they were in compliance with the act, said Ullyett.
“There’s no evidence before us that Finance officials believed they were in violation of the act,” he said.
“The auditor general found, of course, that they were, but that isn’t the test. The test is a public officer has knowledge that they’re violating the act.”
But the actual report makes no mention of intent. Fraser made no conclusions in her report, and only speculated about intent during a media conference following the report’s release.
Interview requests to Fraser or her officials were not returned by press time.
Either the auditor general is right or wrong, said Liberal Justice critic Don Inverarity.
“On one hand, if her statements are not valid and she’s not credible and the premier has better opinions, then he turns around and says, ‘We love the auditor general,’” said Inverarity.
The Justice review is a non-investigation investigation, he said.
“They didn’t actually ask anybody questions, but came to conclusions about willful intent,” he said.
“But the question that needs to be asked is, was there a neglect of duty by the Finance minister? If they haven’t asked the premier any questions, then what they’ve done has no real value.”
Justice refused to release copies of the opinion and only discussed its conclusion.
“It’s not our practice to release our legal opinions to the public and lawyers have a legal obligation to protect their legal opinions because they’re covered by solicitor-client privilege,” said Ullyet.
“I’ve provided you with the conclusions from the opinion, but we’re not planning to release it.”
Willful intent might not have been present, but negligence does not factor into the legal review, said Ullyett.
“The law of negligence does not come into the inquiry,” said Ullyet.
“We have to work with the words that have been provided by the Legislative Assembly.”
Section 69.1 doesn’t apply because the money is in limbo, said Ullyett.
“The money is not lost,” he added.
Deputy Justice minister Dennis Cooley asked his officials on February 25 to prepare a legal opinion.
“Reviewing a report and providing legal advice is a routine matter,” said Ullyet.
Fraser released her report February 7.
On Monday afternoon, Ullyet spoke to Minister Marian Horne about the legal review’s conclusions.
Until Tuesday, Justice officials refused to answer questions about investigations or legal reviews.
Finance Minister Dennis Fentie confirmed an investigation was underway in a taped interview with the News on Thursday.
He now publicly denies that he confirmed there was an investigation.
An investigation would clearly be linked to “willful intent,” said Fentie.
The premier’s comments would be linked to Section 77, but no investigation has taken place, said Ullyet.
“The department of Justice has not done an investigation,” said Ullyett.