Since the audit scandal erupted onto the Newfoundland and Labrador political scene in late June, the province has been shaken by stunning allegations involving millions in misused public dollars and representatives of all three parties in the house of assembly.

John Noseworthy (CBC)

Sparking the scandal were Auditor General John Noseworthy's investigations into spending at the house of assembly, which dealt with two things – MHA constituency allowances and questionable payments made to companies by the legislature.

In his reports, Noseworthy said four politicians misused approximately $1 million from their constituency allowances – money given to members of the provincial legislature to pay for items such as office rentals, supplies and miscellaneous services.

Noseworthy also reported that more than $2.6 million was paid to three companies for trinkets like lapel pins and fridge magnets over a seven-year period, while an additional $170,000 went to a company owned by the legislature's now-suspended director of financial operations, Bill Murray.

Four reports, four politicians

The first public signs of scandal occurred on June 21 when Premier Danny Williams unexpectedly announced that Ed Byrne, a senior member of the provincial Tories, had stepped aside as natural resources minister because of a review by the auditor general's office.

Ed Byrne resigned his post as Newfoundland and Labrador's natural resources minister in June. (CBC)

The announcement rocked political circles because Byrne, 43, had been one of Williams's most trusted colleagues. In 2001, Byrne stepped down as leader of the Progressive Conservatives to make way for Williams to lead the party. He has also served as government house leader in the legislature.

However, Byrne's decision to leave cabinet in June was sparked by Noseworthy's first report, which dealt exclusively with Byrne. In it, the auditor general reported that Byrne had signed and submitted claims for $358,142 during the 2003 and 2004 fiscal years – or more than $326,000 above his $31,500 limit. All the money allegedly came from Byrne's constituency allowance, and Noseworthy claimed to have a paper trail of receipts and cancelled cheques showing the money was deposited into Byrne's personal bank accounts.

Noseworthy said the overspending could not have happened without accounting staff from the legislature knowing about it.

Wally Andersen, who represents the northern Labrador district of Torngat Mountains, has confirmed he has been contacted by Auditor General John Noseworthy. (CBC)

The auditor general also announced he had found similar problems with the constituency allowances of three other politicians and, on July 4, he released three more reports identifying New Democrat MHA Randy Collins, Liberal MHA Wally Andersen and former Liberal cabinet minister Jim Walsh as overspenders.

Noseworthy said Collins received $295,418 more than he was entitled to between 2003 and 2006. He also said that Andersen received $243,244 above his constituency allowance during the same time period, while Walsh received $228,169 above his $61,000 limit over two years – 2003 and 2004.

The total for the constituency allowance investigation of all four politicians comes to more than $1 million.

All that bling

Randy Collins, NDP member for Labrador West, confirmed he had sought legal counsel after he was contacted by the Auditor General's Office. (CBC)

On June 27, Noseworthy released another report that dealt with questionable spending at the house of assembly – a report that did not deal directly with constituency allowances.

Noseworthy's office reported that payments totalling $2.8 million were made between 1999 and 2005 in untendered contracts to buy low-cost promotional materials items – including lapel pins, fridge magnets and key chains – as well as a number of more expensive items, including 79 gold rings for MHAs that cost $750 each, plus tax.

Payments were allegedly made to four companies: Zodiac Agencies, JAS Enterprises, Cedar Scents International and Unique Keepsakes.

Noseworthy's staff also identified a possible conflict of interest when they reported Unique Keepsakes was tied to Bill Murray, who was suspended in June as the house's director of financial operations. Between 2001 and 2005, Unique Keepsakes received $170,000 of public money, Noseworthy found.

The legislature paid for 79 gold rings for MHAs at a cost of $750 each, plus tax, the N.L. Auditor General's Office has reported. (CBC)

The gold rings were purchased from Zodiac Agencies, and Noseworthy's audit reported that no tenders were ever issued for the goods.

While Noseworthy's staff could not find proof that the trinkets ever existed, some of the rings have since been found. Some politicians say they were unaware the rings even existed until after the scandal broke.

Still, all of the items were paid for with public money that came out of various budgets at the house of assembly, including the constituency allowances of MHAs.

One-man operation

It is possible that the rings and the novelty items were bought without the knowledge of many MHAs, even if they were charged to the MHAs' budgets, or if the rings ended up on their fingers, because there was only one man managing the legislature's finances – Murray.

Bill Murray, pictured in 1990, has been suspended from his post at the Newfoundland and Labrador legislature. (CBC)

Before being suspended as the legislature's director of financial operations, Murray managed the constituency allowances that are the subject of Noseworthy's first investigation, involving Byrne, Collins, Andersen and Walsh.

According to Noseworthy's report, Murray also placed the orders and paid the bills to the companies that are the focus of the auditor general's second investigation into questionable payments.

However, while Murray may be a common factor, there is no evidence that the two investigations are connected.

Although the four politicians in the constituency allowance investigation dealt directly with Murray, there is no evidence they had dealings with each other, or that they had any direct dealings with the four companies involved in the second investigation.

On July 4, Noseworthy said he has finished his investigation into spending at the house of assembly and will no longer talk publicly about the expense scandal. The Royal Newfoundland Constabulary is now investigating the matter.

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