New Brunswick's conflict-of-interest commissioner has concluded former premier Shawn Graham was in a conflict-of-interest during his handling of the Atcon loan guarantee in 2010 and has fined him $3,500.
The commissioner, Justice Patrick Ryan, released his long-awaited report on Monday. The report took more than two years to write.
The $3,500 fine Ryan is calling for is not automatic, and must be approved by the legislature.
The Atcon controversy started when the former Liberal government offered the Miramichi-based manufacturing company three loan guarantees worth $50 million.
Civil servants recommended against giving the company the loan guarantees, but the Graham government pushed forward with the bailout against their advice.
Atcon subsequently went bankrupt and taxpayers have recovered a fraction of that investment.
Ryan said in his report the government’s decision to ignore the advice of civil servants was only one of the problems with the Atcon file.
Shawn Graham's father Alan Graham, a former cabinet minister, was a director with a Swedish subsidiary of Atcon, called Vänerply.
Shawn Graham told Ryan that he assumed his father was no longer involved with Atcon but never asked him, because they had decided not to discuss Atcon.
Alan Graham told Ryan that he figured his son knew of his ongoing involvement.
Ryan said then-premier Graham should have asked his father about his dealings with Atcon to make sure there was no conflict.
"I agree with the premier’s argument that there is no evidence before the inquiry that he benefited directly or indirectly due to his participation in presiding over the numerous meetings of the executive council in granting guarantees to the Atcon Group in 2008, 2009 and 2010. Even to argue that he might benefit indirectly on a father-son basis is tenuous and unconvincing," he said.
Ryan said Alan Graham's role may have been incidental to the Atcon loan guarantee decision but it still represented a conflict for his son.
"It was incumbent upon Premier Graham to honour his duty not to put himself in a situation where interests might conflict with duties," Ryan wrote.
"Given the knowledge in his possession of the history of his father with Mr. Robert Tozer and his Atcon interests, it was incumbent on him to observe the import of the cautionary but exacting words in s. 4 [of the act] 'reasonably should know' and simply to have checked with his father where, presumably, he would have been alerted to the advisory role as consultant and on retainer that his father held in several Atcon companies plus his directorship in Vänerply."
"A discreet inquiry by any representative on his behalf, at least, would have raised a red flag and he could have removed himself from any conflictual situation."
The Progressive Conservatives complained to Ryan's office in 2010 that Graham was in a conflict of interest.
They pointed out that Graham's father, Alan, sat on the board of Vänerply, which is an Atcon subsidiary.
The province's conflict commissioner is also recommending an ethics code for MLAs.
Graham issued a statement on Monday, saying he was pleased the commissioner's report had been finally released.
"I acknowledge that as premier, I had a lot on my plate at the time. In hindsight, I should have checked to ensure there was no potential for anything to give rise to an allegation of conflict in relation to my participation in government decisions as head of the executive counsel," he said in a statement.
"Judge Ryan has suggested that I ought to have been more vigilant and I accept his ruling. It has been a long process and I am thankful it has been brought to a conclusion."
Graham said he looks forward to continuing in his role as MLA for Kent.
Liberal Leader Brian Gallant said in a separate statement on Monday that he accepts and respects Ryan's findings.
"The mere possibility of the public perceiving that there is a conflict should be avoided when making decisions as an elected official," Gallant said in a statement.
"Members of the Legislative Assembly should be particularly careful to ensure they do not place themselves in either a position of conflict or a position where the perception of a conflict may exist."
Gallant said his party would work with the government to strengthen the Members' Conflict of Interest Act in the ways called for by Ryan's report.
Gallant's statement did not mention any penalties or sanctions against Graham from the Liberal party.
NDP calls for public inquiry
The Atcon controversy may not be over, however. Ryan’s report suggests the provincial government should hand the file to Auditor General Kim MacPherson.
"Consideration [should] be given to requesting the Auditor General to conduct an audit of the financial assistance given by the province of New Brunswick to Robert Tozer and his Atcon Group of companies including recommendations on how to improve the performance of Business New Brunswick," he said.
The province's New Democrats issued a statement on Monday calling for a public inquiry to follow up on questions raised by Ryan's report.
NDP Leader Dominic Cardy said the royal commission should be called to "fully investigate these questions."
"Justice Ryan’s report makes it clear that Shawn Graham is responsible of a serious conflict of interest. New Democrats call on the government to create a royal commission to investigate the broader dealings between the Atcon group and the government of New Brunswick, to include an examination of the work of Business New Brunswick," Cardy said.
The NDP leader also asked Gallant in a statement whether he would expel Graham from the Liberal party's caucus in the legislature.
Progressive Conservative MLA Claude Williams, who first filed the complaint against Graham that led to Monday's ruling, said Graham should apologize to the people of New Brunswick
"This would be the honourable thing to do for the MLA for Kent, but if Brian Gallant the Liberal Leader, doesn't make that happen, he should expel the MLA from his caucus," said Williams.