Canada

Flaherty cleared of conflict of interest

Finance Minister Jim Flaherty has been cleared of conflict of interest over a $122,000 contract awarded to a former campaign worker.

Finance Minister Jim Flaherty has been cleared of conflict of interest over a $122,000 contract awarded to a former campaign worker.

The federal ethics commissioner said Flaherty did not violate conflict-of-interest rules when his office awarded the untendered contract to write the 2007 budget speech

Mary Dawson said in a report released today that officials confirmed Flaherty did not ask them to hire Hugh MacPhie.

MacPhie worked on Flaherty's campaign for the leadership of the Ontario Conservative party.

However, Dawson said a "lack of rigour" in ensuring the contract process followed the letter of the law left Flaherty "vulnerable" to concerns that MacPhie benefited from preferential treatment.

She said Flaherty has assured her that steps have been taken to prevent a similar situation from recurring.

Dawson started the investigation after New Democrat MP Thomas Mulcair complained to her last February.

"The witnesses interviewed, including both ministerial staff and departmental officials, all confirmed that Mr. Flaherty had not pressured them to engage this firm and had not, in fact, even specifically requested that the firm be engaged," Dawson wrote in her 20-page report.

"I am satisfied that Mr. Flaherty did not engage in any of the activities prohibited under the Conflict of Interest Act."

Flaherty has acknowledged his staff broke government rules when it awarded the contract untendered. Under Treasury Board guidelines, contracts worth more than $25,000 normally must be subject to competitive bidding.

Opposition parties had called for Flaherty's resignation over the matter.

MacPhie told a Commons committee that his Toronto-based communications firm had won about $320,000 in federal government contracts since October 2006, most from the Finance Department.

Seven of the eight contracts had been awarded without tenders. He said he had not worked for the federal government before Flaherty became finance minister.

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