E-gaming emails deleted, text messages not provided to AG

P.E.I.’s auditor general Jane MacAdam said she didn’t set out to conduct a review of government’s records management procedures when she began her investigation into the province’s e-gaming initiative.

'We are not confident that we received all relevant government records related to e-gaming,' says Jane MacAdam

Auditor General Jane MacAdam on Wednesday released her much-anticipated report into the province's e-gaming plan. (CBC)

P.E.I.'s auditor general Jane MacAdam said she didn't set out to conduct a review of government's records management procedures when she began her investigation into the province's e-gaming initiative.

But difficulties in obtaining key documents — including some emails which were improperly deleted — led her to conclude she was "not confident that we received all relevant government records related to e-gaming."

In a further review of government policy regarding the storage and management of records and whether those are being followed, MacAdam concluded "management of government records has not been a priority of government."

Between 2009 and 2012 the P.E.I. government and the Mi'kmaq Confederacy were involved in a plan to set up a system to license internet gaming sites.

More than $1.5 million spent

Government spent more than $1.5 million on the initiative, but it was scrapped in 2012.

Questions were raised about how the plan came about and whether taxpayers were protected in the process.

On Wednesday, the auditor general released her special report into e-gaming.

MacAdam said through the course of her review, she determined some government emails had been deleted which should not have been.

Email accounts 'removed'

"We noted instances where the email accounts of senior government officials, who were key participants in the e-gaming initiative … were removed after leaving government."

It became evident that some of the public bodies involved in these files were not adhering to the requirements of the Act.– Auditor General Jane MacAdam

MacAdam concluded, based on emails provided by others, including sources external to government, that some emails which should have been retained according to the province's Archives and Records Act, had not been.

Thus, she concluded "it became evident that some of the public bodies involved in these files were not adhering to the requirements of the Act."

Refused access

The auditor general cited other problems obtaining information from government. She said her office was initially refused access to records from the Office of the Superintendent of Securities, a division of the Department of Justice and Public Safety.

Eventually she said the records were provided but the delay set back her investigation.

MacAdam said she also requested but did not receive government text messages or PINS, even though her office had "evidence that some government business relevant to these files was conducted through these forms of communication."

She also asked government for all e-gaming related expenses. "We were not provided with information on any additional relevant expenditures from this request beyond the grants and loans provided to [the Mi'kmaq Confederacy of PEI]."

Additional expenses uncovered

So MacAdam did her own tally, uncovering more than $60,000 in additional expenses for things like travel, consulting and legal fees paid by various government departments in support of the venture.

Yet even after that search she concluded "we expect there were other costs associated with e-gaming that we were unable to obtain."

A key player in the e-gaming initiative external to government, the law firm of McInnes Cooper, refused to provide any information for the investigation or to meet with the auditor general, MacAdam said in her report. She said she considered using her power to issue a subpoena but decided that could result in a lengthy and costly court battle.

McInnes Cooper cites 'Solicitor-Client privilege'

In a statement to CBC News, the law firm said:

"McInnes Cooper acted as legal counsel solely to the Mi'kmaq Confederacy of PEI ("MCPEI") with respect to the online gaming initiative considered by MCPEI and the Government of Prince Edward Island.  Government retained a separate law firm to represent its interests in the matter. While the matter was being considered by MCPEI, there were a number of communications between and meetings involving McInnes Cooper and representatives of Government and third parties. In all such communications and meetings, McInnes Cooper was representing the position of MCPEI and acting upon the instructions of MCPEI. McInnes Cooper is bound by Solicitor-Client privilege."

In her report, the auditor general said she didn't believe client-solicitor privilege applied because she said McInnes Cooper was providing project management services.

'Questions to be asked'

Opposition MLA James Aylward, who is also chair of the Standing Committee on Public Accounts, said he'll ask the auditor general about the problems she had obtaining information when she presents her report to the committee.

"I want to know why she wasn't provided with information when she was asking for it," he said. "There are so many questions to be asked. I have a suspicion that this government is going to want to make this go away fairly quickly. But as chair of Public Accounts I feel it's my responsibility to do due diligence and to ensure that we get the answers that Islanders are asking."

'Full co-operation,' says premier

But Premier Wade MacLauchlan said "there was certainly full co-operation on the part of government in providing everything that was asked for" by the auditor general. He said government would act on all of the auditor general's recommendations, including that government enforce the Archives and Records Act, so important government documents are maintained.

"There has to be a record that people can go back to, and I might say future historians can go back to," he said. "This is something that we take to heart, recognizing the importance of it, and will indeed be implementing."