Tory Minister Penashue offers to talk to ethics watchdog

Intergovernmental Affairs Minister Peter Penashue is offering to sit down with the federal ethics watchdog following questions over his ties to businesses in Labrador.

Federal Conservative MP under fire for spending, donations and now business links

Intergovernmental Affairs Minister Peter Penashue, with Prime Minister Stephen Harper, is offering to sit down with the federal ethics watchdog after questions over his ties to businesses in Labrador. (Adrian Wyld/Canadian Press)

Peter Penashue is offering to sit down with the federal ethics watchdog after questions emerged over his ties to businesses in Labrador.

The federal intergovernmental affairs minister has been under fire since October over his 2011 campaign spending, as well as over donations to his campaign by executives at Pennecon Ltd., a St. John's construction firm.

Yesterday, an APTN report raised questions about Penashue's family and business ties to the $7.4-billion Muskrat Falls hydroelectric project, leading critics to call for the ethics commissioner to look into the matter.

According to a filing published on the website of Conflict of Interest and Ethics Commissioner Mary Dawson, the former Innu leader co-owns Penashue Group Inc. with his wife, a private company with interest in three other companies: Iglutek Computers Inc., Miskus Construction Ltd. and Miskus Avani Construction Ltd.

Those companies are linked with Pennecon, which is doing work on the Muskrat Falls project on the Churchill River. Also, Pennecon and Max Penashue, Peter Penashue's brother, are listed as partners for Liannu, a construction company that received a contract last May to build an access road to the site.

Liannu is also bidding on the contract to build accommodations on the site.

Prime Minister Stephen Harper will be in Labrador on Friday to announce the finalized federal loan guarantee for the project.

'All in the family'

In a letter today to Dawson, Penashue says he consulted her when he was appointed to cabinet and she ruled he didn't have to make any changes.

"You provided a ruling indicating that no additional measure was required at the time beyond disclosure to your office of my prior involvement with the Labrador Innu treaty negotiations," he wrote.

"Should additional information be required or should you wish to follow up directly, I am available to you or your office."

NDP ethics critic Charlie Angus pointed to Max Penashue's company's contract for the road, calling it "all in the family when it comes to the embattled minister from Labrador."

Penashue's campaign also received a $25,000 loan from Innu Development Limited Partnership, which at the time was run by his brother-in-law, Paul Rich.

"And despite the family ties, he was the political point man on the project. So now that the loan guarantees are being finalized, has that member recused himself from the cabinet discussions about the Muskrat Falls project?" Angus said.

Conservative MP David Anderson said the government has no role in awarding contracts for the Lower Churchill project.

Commissioner reviewing letter

Interim Liberal Leader Bob Rae says Dawson has the power to clarify the file.

"She may be getting some new information that she didn't have before," he said. "It's a little strange to be saying, I'd like you to have another look at my file."

A spokeswoman for Dawson said she couldn't comment on the Penashue case because communications with clients are confidential.

"The office can confirm that a letter was just received and the commissioner is reviewing it," Jocelyne Brisebois said in a statement.

"She will clarify what, if any, follow-up is required. The commissioner is always available to meet with any public office holder who requests a meeting."

With files from Terry Milewski