Alison Redford chose last-ranked legal consortium for Alberta's $10B tobacco litigation

The “independent” process through which Alberta chose a legal consortium for a $10-billion lawsuit against the tobacco industry was manipulated, allowing former premier Alison Redford the opportunity to select a consortium with close personal and political ties, a CBC News investigation has found.

Internal documents show ‘independent’ selection process manipulated

A CBC News investigation has found the process which led to Alberta choosing a legal consortium to represent it in a multi-billion-dollar lawsuit against the tobacco industry was manipulated. Former premier Alison Redford, who chose the consortium while justice minister, said she was never told the winning consortium had been ranked last by a government review committee. (CBC)

The "independent" process through which Alberta chose a legal consortium for a $10-billion lawsuit against the tobacco industry was manipulated, allowing former premier Alison Redford the opportunity to select a consortium with close personal and political ties, a CBC News investigation has found.

Internal Alberta Justice documents obtained exclusively by CBC News show that a week before the legal consortium was personally selected by Redford as the "best choice" to represent Alberta, it had been ranked last of three by an independent review committee and effectively eliminated from consideration.

The documents show the review committee had eliminated International Tobacco Recovery Lawyers (ITRL) due to its "lack of depth." The committee instead recommended Redford choose between two other consortiums: Bennett Jones, and the paired firms of Field Law and McLennan Ross.

But internal briefing notes reveal the review committee's decision was effectively overruled, shortly after it was sent to a Redford staffer. ITRL was inexplicably inserted back into the competition, its last place ranking was removed, and within a week Redford chose ITRL, which is led by JSS Barristers, a small Calgary boutique law firm with close ties to Redford.

There is nothing in the documents which indicates Redford saw the first briefing note.
University of Manitoba professor Arthur Schafer, an expert in ethics, says internal government documents obtained by CBC News reveal a “betrayal of the public trust.” (CBC)

"We are talking about the people of Alberta being represented in this litigation by a [consortium] that was judged merely adequate, instead of by one of two other [consortiums] that were judged to be superior," said Arthur Schafer, director of the University of Manitoba's Centre for Professional and Applied Ethics.

"That seems like a betrayal of the public trust."

Redford did not respond to an interview request but instead issued a brief statement through her lawyer to CBC News.

"Any allegation that the department informed me that ITRL was ranked last among the three firms bidding is false," Redford said, adding that the matter had been thoroughly investigated by Alberta's ethics commissioner.

Redford resigned as Alberta's premier in March 2014 and as a member of the legislature in August of the same year after a series of scandals involving her travel expenses, misuse of government airplanes and the revelation she had secretly ordered construction of a private penthouse suite in a government building.

Alberta's $10-billion lawsuit against the tobacco industry — the largest in the province's history — is an attempt to recoup some of the health-care costs associated with smoking.

If successful, it could provide a multibillion-dollar windfall for the province's depleted coffers — and potentially hundreds of millions of dollars in contingency fees for ITRL.

Alberta is one of 10 provinces with tobacco lawsuits.

On Nov. 28, 2012, CBC News first revealed Redford had personally chosen ITRL and JSS Barristers to conduct Alberta's tobacco litigation.

The story was based on an internal government memo, obtained through freedom of information, in which Redford stated ITRL and JSS Barristers were the "best choice."

Consortium lacked 'depth'

In the memo, Redford referred to Briefing Note AR 39999, which was essentially the report of the independent review committee, comprising senior justice and health ministry lawyers, which had assessed the three competing legal consortiums.

Citing legal privilege, Alberta Justice has fought the release of AR 39999 to Alberta's freedom of information commissioner, CBC News and lawyers representing tobacco companies. The matter is now before Alberta's Court of Queen's Bench.

CBC News has obtained two leaked versions of AR 39999: an unsigned version and a second, significantly modified version signed by Redford. Both are generically dated December 2010.

"All three are capable of adequately conducting the litigation," states the first unsigned version of AR 39999. "No one consortium stood out above the others.

"However, after considerable discussion the review committee ranked International Tobacco Recovery Lawyers (ITRL) last, primarily due to their lack of depth and the lack of any presence in Edmonton." 

(Leaked document)

In the first briefing note, the review committee effectively eliminated ITRL and instead focused on an analysis of the comparative "strengths and weaknesses" of Bennett Jones and the paired law firms of Field Law and McLennan Ross.

The committee found Bennett Jones, which was already representing New Brunswick, had the most depth and experience while Field Law and McLennan Ross had a clear plan for Alberta's litigation and a better contingency fee. Bennett Jones now represents six provinces.

"In a nutshell, the choice is: depth plus experience versus Alberta focus and a better fee," the first briefing note stated.

There was no discussion of the comparative strengths or weaknesses of ITRL, because the committee had already eliminated the consortium due to its "lack of depth."

(Leaked document)

The review committee prepared the first version of Briefing Note AR 39999 for Redford sometime between Nov. 30, 2010, and Dec. 7, 2010, directly after it completed its assessment.

Other documents, including email strings obtained by CBC News, show the first version of Briefing Note AR 39999 — which recommended she choose between Bennett Jones and Field/McLennan Ross — was sent to Redford's staffer on Dec. 7, 2010.

Assessment changed

There is nothing in the documents that indicates why the original briefing note was modified, or who made the dramatic reversal to the original version. But within a day of the first version of the briefing note being shared with Redford's staffer, the committee's recommendation and assessment changed significantly.

The briefing note's second version inserted ITRL and JSS Barristers back into the competition, and removed the fact that it had been ranked last. It still stated the consortium lacked depth and had no Edmonton presence.

(Leaked document)

But the briefing note now included a list of strengths, including that ITRL had a clear plan for Alberta's litigation, would not represent other jurisdictions without the province's consent, and had the lowest contingency fee.

In the briefing note's first version, the committee eliminated ITRL and recommended Redford choose between the other two consortiums which were equal, but clearly superior to ITRL.

In the second briefing note, however, the committee now inexplicably recommended she select the "appropriate" of the three competing consortiums. There is no explanation as to why the committee had completely changed its recommendation.

(Leaked document)

Less than a week later, in a Dec. 14, 2010, memo, Redford advised Alberta Justice deputy minister Ray Bodnarek she had made her decision after reading Briefing Note AR 39999;  presumably the second version of the briefing note, which she had signed.

"I note that the review committee considers all three firms interviewed to be capable of adequately conducting the litigation and believes that while no consortium stood above the others, all three have unique strengths and weaknesses," Redford wrote.

"Considering the perceived conflicts of interest, actual conflicts of interest, the structure of the contingency arrangement and the importance of a 'made-in-Alberta' litigation plan, the best choice for Alberta will be the International Tobacco Recovery Lawyers."

Conflict of interest allegations

In May 2012, CBC News first revealed the consortium chosen by the Alberta government was led by JSS Barristers. A partner in JSS Barristers is Redford's former husband Robert Hawkes.

Redford and Hawkes divorced more than 20 years ago, but Hawkes remained a strong political supporter. He led her transition team when she won the Progressive Conservative leadership campaign and became premier in 2011.
Duff Conacher of Democracy Watch says Elections Canada must investigate the third parties funded by the Manning Centre. (The Canadian Press)

The next CBC News story, on Nov. 28, 2012, revealed Redford had personally chosen ITRL and JSS Barristers.

The story detailed how ITRL had hired a lobbyist to lobby the Alberta government even before the tobacco litigation legislation was tabled in the legislature. It also detailed tens of thousands of dollars in political donations to the Tory party, Redford's riding association and her leadership campaign by lawyers from ITRL and its lobbyist.

The revelations caused one of the most acrimonious debates in the history of the province's legislature, with opposition parties accusing Redford of blatant conflict of interest.

Redford denied the allegations, claiming she had not made the decision to hire ITRL and JSS Barristers. New Democrat member of the legislature Brian Mason, now the infrastructure minister, accused Redford of lying. An investigation by Alberta's ethics commissioner cleared Redford of the conflict allegations, but confirmed she had made the decision.

"Virtually everything [Redford] said to defend her decision was deceptive, false, and profoundly misleading," ethics expert Arthur Schafer said after viewing the briefing notes.

Governance expert Duff Conacher said the new documents show an investigation and an independent inquiry are needed.

"The public is going to be learning, finally, the full truth," said Conacher, co-founder of Democracy Watch and visiting professor at the University of Ottawa. "And it will raise many, many questions."

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