Justice officials are investigating the Finance department’s $36.5 million investment in third-party asset-backed commercial paper.
Finance Minister Dennis Fentie confirmed the probe in an interview Thursday.
Justice officials will be looking for any willful intent to defraud the public or to cover up the wayward investment into asset-backed commercial paper.
“It would clearly be linked to (whether) there was any willful contravention of any legal mechanism. And we already know, even from the auditor general’s report, that this is not the case,” said Fentie.
“They were making investments in good faith.”
Last month, Sheila Fraser, Canada’s auditor general, reported the $36.5 million investment violated the Yukon Financial Administration Act, adding there was no malicious intent behind the breach.
Finance officials broke the law when they invested in third-party asset-backed commercial paper that wasn’t guaranteed by a bank, said Shelia Fraser.
Now, because the investment lacked those guarantees, $36.5 million in public funds is in limbo.
Justice Minister Marion Horne did not make the decision to investigate, said Fentie.
It was made at the bureaucratic level, he added.
“Deputy ministers and other officials charged with this responsibility are doing their work as they should, and we abide by that,” he said.
“We have every faith in our officials to carry out this work and make sure all government departments and agencies are operating as they’re required to do.”
In the Department of Justice Act, the minister is responsible to “advise heads of the several departments of the government of the Yukon on all matters of law connected with those departments.”
Someone who breaks the Financial Administration Act could be fined $1,000 and jailed for up to six months.
Calls to the deputy ministers of Finance and Justice were not returned by press time.
The Justice Department will not be commenting, said spokesperson Dan Cable.
He refused to confirm or deny an investigation is underway.
“No comment on anything to do with the asset-backed commercial paper investment,” he said.
“The Department of Justice will not be commenting at this time,” repeated Cable.
“There’s no freaking way that I’m … the Department of Justice is making no comment at this time.”
The investigation was triggered by public questions about Finance officials’ roles and responsibilities in the investment, said Fentie.
“A lot of this is stemming from the misguided view — and it comes from your editor, for one — that there should be an investigation into (whether) this was a willful act,” said Fentie.
“That’s clear already. However, we’ll let the officials to do their work.”
Fentie could not confirm if the probe’s finding would be made public.
The investigation is comprehensive, he said.
“(Justice) is looking into all other possible connections to other legislative requirements here that may be in the act or any other act,” said Fentie.
“They’re doing the work they should.”
Justice is clarifying what responsibilities the Finance department has under government law, he said.
“There’s been no demonstration of any willful conduct to contravene any legislative mechanism, and that’s where it’s at,” said Fentie.
“The issue now is to determine what will be the outcome of restructuring these trusts.”
Contact Jeremy Warren at: jeremyw@yukon-news.com