Nfld. & Labrador

Ousted NLC CEO says he didn't break the law — but the AG says the law itself is broken

The auditor general slammed the former NLC CEO in a report yesterday — but even though Winter's public spending benefited his son, it wasn't against the law.

Legislation doesn't address financial conflicts with adult children

Former Newfoundland and Labrador Liquor Corporation CEO Steve Winter, seen here in January 2018, says nothing he did broke provincial law. (Ted Dillon/CBC)

A former Newfoundland and Labrador Liquor Corporation CEO claims his actions have been distorted by a report that condemned him for conducting business that benefited his own son.

One day after a report from Auditor General Julia Mullaley said Steve Winter "may have breached his fiduciary duty to the NLC," the former CEO said nothing he did contravened provincial conflict of interest legislation.

"If you look at the legislation for the province it says I can't do business with family — my spouse or related to my spouse, children living under the roof," Winter said, referring to the province's Conflict of Interest Act. 

"That was not the case in this instance ... I did not commit any kind of breach," he said. "Whether she likes the act or not, the act is the act. And that's what governs my behaviour."

Mullaley on Thursday released her report on an investigation of Winter, who headed the Crown corporation from 2003 to 2018 and spent millions of dollars as part of a temporary program to buy high-end French wine.

A large portion of that wine, according to Mullaley's investigation, was purchased through a company Winter's son represented and received commission from — one of the reasons Winter was fired in 2018, according to Finance Minister Tom Osborne.

"To say that I started this with any intent of filling anybody's — that's crap," Winter said Friday morning.

Winter, who helped design the NLC's wine purchasing program — called "Bordeaux Futures" — was allowed to personally decide which producers to buy wine from. Normally, the corporation's CEO wouldn't have that power.

One of the producers Winter did business with — and bought $4.6 million in product from — was linked to his son.

Somewhere along the way, somebody has decided they wanted to make Steve Winter look bad​​​.- Steve Winter

Mullaley told reporters Thursday that the act does permit — by omission — a public employee to have a financial conflict with a child that wasn't dependent on them. She suggested the act should be amended.

"There were some deficiencies in the legislation," she said. "It's an adult child, and an adult child is not addressed in the act."

Mullaley said the province committed to reviewing the act in 2017, and amendments are now being drafted.

Although Winter technically doesn't appear to have broken the law, the report did find that he violated the NLC's internal code of conduct, which prevents employees from making decisions that benefit family or friends. 

'This is not a big deal'

Winter also said in his own defence Friday that he didn't buy through his son, but dealt with the supplier in Bordeaux, France, directly.

That's despite an email cited in Thursday's report showing an exchange between Winter and his son that shows Winter was not only aware of his son's link to the company, but was buying from them because of that link.

The report said his son, Greg Winter, was the "largest known single agent" representing those exporters.

Winter downplayed that significance, saying over a six-year period his son would have received a commission for the sales not exceeding $5,000 per year. 

"This is not a big deal," said Winter, who suggested the report has an ulterior motive.

"Somewhere along the way, somebody has decided they wanted to make Steve Winter look bad."

The leftover wine from the program, as of spring of last year, includes about 42,000 bottles with an average cost of $128, according to the report. (Peter Cowan/CBC)

Winter also took issue with the accusation that he circumvented conflict of interest rules that prevent nepotism by running the program himself.

"I did run the fine wine program, I did," he said. "Nobody at the NLC at the time knew enough about it to run it."

Winter said he began the program because he had knowledge of fine wine that others lacked. 

"I'd been a wine collector since about 1980. We wanted to broaden the business scope of the NLC, so somebody had to do it."

He said at the beginning of the program he "did it all," but others joined the program as it progressed.

NLC stuck with millions in high-end wine

The report said the program had no financial justification and did not perform well, and left the NLC with thousands of bottles it's having trouble selling.

Winter blamed the NLC for "mismanaging" the wines he purchased, suggesting they could easily be auctioned off.

"They don't have the knowledge, they don't have the skill, and they don't have the contacts to make it work," he said. 

"And that's why they're panicked over this inventory."

Prices of fine wines have been slashed at Sobeys on Elizabeth Avenue and other NLC locations. (Peter Cowan/CBC)

A spokesperson for the NLC previously said someone from the corporation would be available on Friday to speak on the issues in the audit.

But on Friday, the NLC said in fact no one would speak "due to ongoing litigation against the NLC, and potential future litigation," according to an emailed statement from spokesperson Darrell Smith.

Smith said the NLC accepts the findings and recommendations of the auditor general , and that steps have already been taken to address the issues that were flagged.

"We are committed to responsible stewardship of public funds," said Smith.

Read more from CBC Newfoundland and Labrador

With files from Peter Cowan and The St. John's Morning Show


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