N.S. auditor slams NDP for 'pervasive secrecy'

[jd1]

Government breaking law by refusing to turn over certain documents, Lapointe says
By DAVID JACKSON Provincial Reporter The Herald Wed. Jun 2 - 10:23 AM

The NDP is continuing "government's pervasive policy of secrecy" in refusing to turn over all documents related to hundreds of millions in taxpayer assistance to businesses, auditor general Jacques Lapointe reported this morning.

Lapointe also says the Dexter government is breaking the law by withholding the documents, something the government denies.

Lapointe had attempted to audit the cabinet-controlled Industrial Expansion Fund, and the Crown corporation Nova Scotia Business Inc.

But the NDP and NSBI have refused to turn over more than 200 documents, saying the information must stay confidential because they're cabinet documents or fall under solicitor-client privilege.

Lapointe says the Auditor General Act allows him access to whatever information he requests to do his work, and the NDP has contravened the act.

"The reasons being given are legal technicalities, and I feel that the broader principle is one of public accountability," Lapointe told the legislature's public accounts committee this morning.

"There's no good reason for denying information to the auditor general, or any auditor, trying to provide reports to the House of Assembly, and so regardless of technicalities, the basic principle of public accountability is what's being violated here."

The total amount of assistance and guarantees through the Industrial Expansion Fund in 2009-10 was $221.7 million, and in 2008-09, it was $61.6 million.

At NSBI, the amount in 2009-10 was $33.8 million, and $22.8 million in 2008-09.

In the written response to Lapointe, the executive council office says denying cabinet documents was based on "long-standing parliamentary traditions in protecting the confidentiality of cabinet deliberations."

The office points out that there are no provisions in the current law, unlike elsewhere in Canada, for a limited waiver of privileged documents.

Finance Minister Graham Steele said that will change this fall. He said his government plans wide-ranging updates of the Auditor General Act, something the NDP had hoped to do this spring.

He said the cabinet should have identified the access to documents issue as something to deal with more quickly.

"There's no question that we did make a mistake on this," Steele said this afternoon.

"In hindsight, we should have plucked this issue out of the general revisions and said this one needs to be dealt with in an expedited way, and we didn't."

Steele and Lapointe were at a stalemate over whether the auditor general could get a look at documents protected under solicitor-client privilege.

Steele pointed to a December 2000 Nova Scotia Supreme Court decision that said, "...the auditor general's power to compel production of documents does not extend to those protected by solicitor-client privilege."

"With the greatest of respect to the auditor general, on this particular point, we are puzzled by his statement that the law is different than what it is stated to be by a judge," Steele said.

Lapionte said the legal advice he received was that he should be able to see the documents.

Lapointe noted in his report that there was an audit of NSBI's payroll rebate program, and his predecessor had access to all documents.

He said the issue of problems with access to documents has been ongoing since 2005. The Progressive Conservatives were in power then. The NDP has been in power since last June.

However, Lapointe says in the report that the Auditor General Act is clear in giving him access to documents: "...every officer, clerk or employee of an agency of government shall provide the auditor general with such information and explanation as the auditor general requires...," the act states.

Lapointe appealed to Premier Darrell Dexter in an Oct. 30, 2009 letter to provide the documents, to no avail.

The lack of documents resulted in Lapointe denying audit opinions on the two organizations, which he said is the "most severe audit sanction available to us."

Lapointe also said his office was denied documents in its audit of mental health services, though the issue was peripheral, and he was still able to offer an audit opinion.

The opposition blasted the NDP for not releasing the information, with Tory Chris d'Entremont calling it a "difficult day for democracy."

Steele had complained about Lapointe's lack of access to such documents two years ago.

The previous Progressive Conservative government hadn't given him access to documents regarding a troubled immigration program.

In June 2008, Steele said that withholding the documents was simply an attempt to protect then-premier Rodney MacDonald, and suggested Lapointe look at taking the province to court to get the documents.

Lapointe eventually got to see the documents after the public accounts committee of the day issued subpoenas for the documents.

(djackson@herald.ca)

[jd1]

Seems there is a new Facebook Group for this issue
http://www.facebook.com/group.php?gid=127025583993468

[jd1]

Sounds like the government is using two arguments Cabinet privilege and solicitor-client privilege.

No openness, no audit, no credibility

Thu. Jun 3 - 4:53 AM The Herald

DARRELL Dexter probably doesn’t think he’s an obstacle to open and accountable government after just one year in office.

But when you square right up to Auditor General Jacques Lapointe’s scathing report yesterday, what other conclusion can you reach?

The premier’s office isn’t just throwing up the usual tired excuses (cabinet confidentiality and solicitor-client privilege) in preventing Mr. Lapointe from seeing what he needs to see to evaluate a quarter of a billion dollars worth of business loans approved by cabinet. Mr. Dexter is actually taking the province backwards by giving the auditor-general less access to confidential documents than his office has had in the past.

Mr. Lapointe lays out this "pervasive policy of secrecy" in disturbing detail.

Last fall, he tried to audit the effectiveness and financial controls of loans and subsidies provided by Nova Scotia Business Inc. and the Industrial Expansion Fund (IEF).

A lot of public money is handed out here: $221.7 million by the IEF last year and $33.8 million by NSBI. All IEF funding and any NSBI aid greater than $3 million is approved directly by cabinet, with no public scrutiny of the process – an arrangement Finance Minister Graham Steele castigated as a "slush fund" and "anything goes" when he was in Opposition. So the case for having the auditor review all supporting documents on the public’s behalf is obvious.

But not for the NDP since their move to the government benches. Mr. Lapointe says NSBI and IEF staff, acting on orders from the cabinet office, withheld files until dozens of "cabinet submissions and other cabinet-related documents" were removed or redacted on grounds of confidentiality. NSBI also withheld 143 documents, claiming solicitor-client privilege. Justice lawyers withheld IEF documents on the same grounds, but then relented on some, suggesting judgments are being made pretty arbitrarily.

Last October, Mr. Lapointe wrote to the premier requesting his staff get the documents they needed. He was told by cabinet "senior management" a way of providing the information was under discussion. It didn’t happen. Mr. Dexter’s deputy minister denied Mr. Lapointe access to the requested documents and NSBI stuck to its guns on lawyer-client privilege.

Yesterday, Mr. Lapointe fired his big gun in reply. He refused to provide an opinion on the two loan programs. In the auditing world, this is the equivalent of excommunication. If a public company’s management were damned by an auditor for such obstruction, its shares would quickly be in the toilet.

Mr. Steele said yesterday the government will provide Mr. Lapointe "more access" to privileged documents this fall by passing legislation to ensure other parties can’t claim these documents are public. Sounds like damage control. Mr. Dexter knew the problem last fall and legislation could have been passed this spring if the government were serious. In any case, the government can’t excuse its failure to respect an existing law, the Auditor General Act, which provides no exemption for cabinet documents. It’s also backsliding from the practice in a 2004 audit, when the AG had unrestricted access to NSBI files.

This coddling of IEF secrecy is breathtakingly hypocritical. When Health Minister Maureen MacDonald chaired the public accounts committee in 2006 and led the fight to see IEF documents the Tories deemed privileged, she stormed a different tune: "It’s not rocket science that this should be in the public domain. It’s shocking really. It makes my blood boil when I see that stuff not there."

Now the public blood will have to boil because NDP fervour for transparency has gone cold. Come on, Mr. Premier. Mr. Lapointe took this to you directly. Give him the access he needs.

( edits@herald.ca)

[jd1]

Atlantica Party Leader Jonathan Dean calls on the government to give complete access to the Auditor General and his staff.

"Why is taxpayer money falling under solicitor-client privilege to begin with? No disbursement of taxpayer's money should ever fall under any conditions that preclude public disclosure. " said Dean.

The Atlantica Party proposes, as part of its reform of government, that all government departments regularly make public their finances.

"Where is the Legislature on this? Why aren't they sitting so they can compel the government to abide by the Auditor General Act? It is the Legislature's job to oversee the government. Why must the Auditor General go it alone? With a subverted legislature it is possible for a 'pervasive policy of secrecy' to flourish."

[JKP]

I understand the client privacy issue. In the course of attracting businesses here or helping them grow, the businesses are required to submit business plans. Those plans contain trade secrets and confidential information that should not be made public.

What I don't undertand is why the AG can't review those and still respect any non-disclosure (unless there is impropriety). The AG is checking for fraud and waste. Reviewing these deals should be a no-brainer, releasing any trade secret components publicly should not be permitted if it's under NDA / etc.

These seems easy and I don't understand the issue...