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Alberta ethics commissioner won't review controversial $905K sole-source contract

Alberta’s ethics commissioner said Friday she has no jurisdiction to investigate a controversial $905,000 sole-source contract awarded by public inquiry commissioner Steve Allan to a law firm in which his son is a partner.

NDP formally asks Alberta Energy deputy minister to investigate

Alberta’s ethics commissioner says she has no jurisdiction to investigate a controversial $905,000 sole-source contract. (Manuel Carrillos/CBC)

Alberta's ethics commissioner said Friday she has no jurisdiction to investigate a controversial $905,000 sole-source contract awarded by public inquiry commissioner Steve Allan to a law firm in which his son is a partner.

On Thursday, NDP MLA Heather Sweet wrote to Ethics Commissioner Marguerite Trussler, asking her to investigate whether Allan broke any rules by granting the contract to Calgary law firm Dentons, after CBC News revealed Allan's close personal connection to the firm. 

But in a response letter sent to Sweet on Friday, Trussler said Allan is not considered a designated office holder under the Public Service Act.

"There is no order-in-council so designating him," Trussler wrote. 

Allan was appointed commissioner of the $2.5 million Public Inquiry Into Funding Of Anti-Alberta Energy Campaigns through a July 4 order-in-council.

He was recommended by Justice Minister Doug Schweitzer, who was a partner at Dentons in Calgary.

The $905,000 contract with Dentons for legal services was issued on July 15.

In her letter, Trussler added that while Allan's contract states he must abide by the public service's Code of Conduct and Ethics, she does not ensure compliance with that code.

At a Friday news conference, Sweet said the fact that Allan is technically exempt from the Public Service Act is troubling.

"The way the contract has been written for Steve Allan has created loopholes, that this government will not allow any of the independent officers to be able to look into it," she said.

Sweet said the accountability for ensuring Allan followed the government's Code of Conduct and Ethics now rests with Alberta Energy's deputy minister, Grant Sprague, who signed Allan's contract.

"It is my belief that this matter requires your attention in order to assure Albertans that their tax dollars are being spent in an ethical and transparent way, that serves their interests rather than being used to potentially further the private interests of any individual," Sweet told Sprague in a letter Friday.

Sweet told reporters Sprague "needs to show Albertans that they did their due diligence to make sure there is no perceived conflict."

Not aware of any conflict: justice ministry

Despite repeated requests, Allan has not made himself available for an interview over the past several days.

In a text, he said his son will not benefit in any way from the contract, and said it was "vetted with government and Dentons before engagement was finalized."

Steve Allan, who is heading Alberta’s public inquiry into allegations of foreign-funded reputational attacks on the province’s oil and gas industry, granted a sole-source contract for legal advice to inquiry to a law firm in which his son is a partner. (Evelyne Asselin/CBC)

He did not respond to the specific issue of whether his son, as partner in the firm, would share in any of the profits from the contract.

Earlier this week, a press secretary for Schweitzer said in an emailed statement that the minister severed his relationship with Dentons in April and has no relationship with the firm.

As for what critics allege was a clear conflict of interest in Allan awarding this contract to his son's firm, the press secretary said "we have been advised by (Justice Ministry) officials that they are not aware of any conflict that would prohibit the Inquiry from contracting with Dentons for services."

Deputy minister involved in tobacco-litigation controversy

This contract controversy has drawn comparisons to another high profile 2015 conflict of interest case that involved former premier Alison Redford and senior justice officials — including Sprague, who was then an assistant deputy minister of justice.

The case involved Redford's selection of a law firm with close personal and political ties for a potentially lucrative tobacco-litigation contract. 

CBC News obtained internal Alberta Justice documents that showed senior bureaucrats in the ministry, including Sprague, significantly altered an assessment of one of the competing firms, which allowed Redford the opportunity to choose it.

The internal documents revealed the legal consortium chosen by Redford — led by JSS Barristers of Calgary — initially had been ranked last and was effectively eliminated from further consideration by an independent review committee.  

But the documents — drafts of memos — show the review committee inexplicably reversed its initial decision and placed JSS back in contention for the $10 billion lawsuit against the tobacco industry.  

Two ethics investigations cleared Redford of conflict of interest allegations.

Redford resigned as Alberta premier in March 2014 and as an MLA in August of the same year after a series of scandals. 

"If Mr. Sprague has a history of being involved in some of these activities, then the government needs to be open and transparent about that, and explain why they feel that he has the capacity to now do this," Sweet told reporters.

On Friday, CBC News also revealed Steve Allan made a $1,000 cash donation to Schweitzer's 2017 UCP leadership campaign, and two separate donations totalling $750 to the UCP in 2018.

"Albertans have the right to donate to political parties. That does not preclude them from serving their province at a later time," Schweitzer said in an emailed statement.

"It's frankly ridiculous to suggest that donating one-fourth of the maximum annual allowable amount over two years ago somehow secures an appointment. Again, Mr. Allan was chosen solely based on his professional experience." 

Democracy Watch co-founder Duff Conacher said Schweitzer is in a clear conflict of interest for several reasons, and so was Allan for awarding the contract to his son's firm.

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About the Author

Jennie Russell

Investigative reporter

Jennie Russell is a reporter with CBC Investigates, the award-winning investigative unit of CBC Edmonton. Jennie specializes in accountability journalism and her work has been widely credited with forcing transparency and democratic change in Alberta. Contact Jennie at jennie.russell@cbc.ca and follow her on Twitter @jennierussell_.

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