Minister of justice red-flagged potential conflict of interest in 1st GTH land deal
Gordon Wyant exposed problems with government’s oversight and due diligence of land deals
Minister of Justice Gordon Wyant says he's the one who spotted the potential for conflict of interest in the first Global Transportation Hub land deal submitted to cabinet back in 2012.
In November of that year, then-GTH Minister Bill Boyd and Crown Investments Corporation Minister Donna Harpauer submitted a request to cabinet.
They wanted authorization for the GTH to immediately purchase that controversial 204 acres of land on the east side of the GTH.
The GTH agreed to pay 139 Land Corporation $78,000 an acre, which was four times more than government appraisals said it was worth.
Boyd and Harpauer sent the documentation to cabinet in the evening of Nov. 27 2012 for the Nov. 28 cabinet meeting.
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Wyant wary of about potential conflict of interest
Wyant said when he read Boyd and Harpauer's proposal he was drawn to one startling fact. It wasn't clear who actually owned 139 Land Corporation.
139 Land Corporation was listed in the corporate registry under the name of Saskatoon based lawyer, David McKeague, who worked at the McDougall Gauley law firm. The name of the real owner was absent.
It's important for us to know who we're buying the land from so as to ensure that there was no conflict of interest.- Gordon Wyant
As a former corporate lawyer of more than 20 years, Wyant knew how to recognize a company with an anonymous owner. And as the attorney general he knew the risks government faced when dealing with companies where the real owner's name is concealed.
"It's important for us to know who we're buying the land from so as to ensure that there was no conflict of interest," said Wyant.
He said the matter was discussed by cabinet in its Nov 28 meeting and it was then he raised his concern.
A concealed identity remains concealed
As a result, cabinet agreed to commission further research.
Wyant asked his officials to ask McKeague, 139 Land Corporation's lawyer, for the name of the real owner.
McKeague didn't provide that information.
"That's exactly the reason why we didn't proceed with the transaction," said Wyant. "Because we couldn't determine who the beneficial owners of the land were."
That's exactly the reason why we didn't proceed with the transaction. Because we couldn't determine who the beneficial owners of the land were.- Gordon Wyant , minister of justice
It was later, after cabinet killed the deal, that Wyant learned Robert Tappauf was the real owner of 139 Land Corporation. Tappauf's family has business connections to Boyd. For years, Boyd has rented thousands of acres of farmland from the Tappaufs. Both men say they have never met the other.
When asked what he thought of the fact that McKeague didn't disclose Tappauf's name Wyant said "he's got an obligation of confidentiality with his client."
Wyant said breaching that confidentiality would be a breach of the law society's rules of conduct.
"So he made that decision not to disclose the name notwithstanding the fact that the transaction was in the balance."
McKeague has not responded to CBC's request for an interview.
Rushed, incomplete due diligence approved by Boyd and Harpauer
When asked how two seasoned ministers, Boyd and Harpauer, could submit a multimillion dollar land deal to cabinet without knowing who they were buying from, Wyant said he couldn't answer that question.
The auditor's report and documents obtained through access to information show that government officials were only given a few days to slap this deal together.
Harpauer's chief of staff described the process as "a bit of a goat show." The CEO of the GTH asked officials to proofread the cabinet request "at breakneck speed."
The lack of due diligence alarmed officials in Crown Investments Corporation, which is the province's holding company for Crown corporations.
They asked the GTH to justify the premium it was offering 139 Land Corporation — paying $78,000 an acre for land that appraised at $15,000 to $20,000 an acre.
Wyant acknowledges this deal exposed "deficiencies" in the government's due diligence process. He says he went to the premier after the deal collapsed and asked for a fix.
"I think that's the whole reason why we've established a subcommittee of cabinet so that we can make sure that we do have the proper oversight and due diligence," said Wyant. "I think that we recognize the fact that there were some challenges with this transaction at least in terms of how it got to cabinet."
CBC has asked to interview Boyd and Harpauer but the government hasn't made them available.
Wyant's version differs from provincial auditor's
We first learned of this failed 2012 GTH land deal from the Provincial Auditor's June report, which examined the controversial transactions.
Wyant's description of how the deal was killed, and who killed it, appears to differ from the version of events offered in that report.
Wyant said the proposed deal was discussed in cabinet.
Ferguson's report says "request was withdrawn before cabinet meeting."
Wyant said he flagged the fact that the cabinet document failed to identify the real owner of 139 Land Corporation.
"I can't recall anyone bringing it to my attention," said Wyant. "I came to that conclusion as result of reading the material that was being brought forward."
But Ferguson's report says "during its due diligence and subsequent to the submission to cabinet, the GTH could not satisfy itself as to the identity of the owners of [139 Land Corporation]. As a result, it did not seek cabinet's approval."
It's not clear why the accounts differ and Wyant didn't offer an explanation.