Inquiry vital to provide answers

Oct 16, 2004 Forum Page A16

by: MURRAY MANDRYK

Saskatchewan News Network

There are two big questions that only a public inquiry into Spudco will answer. Actually, there are dozens and dozens of questions – mostly in the form of yet-to-be-answered questions of who knew what and when, and who approved what and why. But, really, it boils down to these two questions: Did the government have the proper legislative authority to proceed with Spudco and did it break its own laws in the process? Was there any merit at all in the government’s countersuits that it (and thus, taxpayers) was badly mislead and misinformed by everyone from investors to potato growers to accountants? Given the government’s obvious attempts Friday to avoid answering either, it’s obvious that Spudco’s $34.7-million loss needs a public inquiry. Not surprisingly, SaskWater Minister Peter Prebble begs to differ. According to him, it’s been established that no one received personal gain and there are no grounds for criminal charges. As well, Prebble says, there have been four reviews of this case already: an internal Ernst & Young study forwarded to the Crown Investments Corp. in June 1998; the provincial auditor’s review; an RCMP investigation based on a complaint by the taxpayers’ federation; and the report by Premier Lorne Calvert’s deputy minister, Dan Perrins, that led to the government’s first apology for Spudco in February 2003. With all due respect to the minister saddled with worst individual investment loss a Saskatchewan government ever has suffered, the above are the most feeble justifications we’ve ever heard from an NDP government that specializes in excuses. To begin with, the loss to taxpayers – by the way, you’ll be happy to know the $7.9 million settlement ultimately will come out of the general revenue fund instead of going to schools, hospitals and roads – must be put in perspective. Saskatchewan Party Leader Brad Wall actually did a good job of that on Friday, when he compared the $34.7-million Spudco loss to the $100-million loss Canadian taxpayers have endured in the sponsorship scandal. On a per capita basis, Spudco actually is 10 times larger. You may recall that the sponsorship scandal resulted in a public inquiry. One can only wonder how this government sees it appropriate to hold an inquiry into the 36-year-old case of David Milgaard’s wrongful conviction but not into the biggest investment boondoggle in provincial history. The Ernst & Young report – an internal CIC review that none of us would have heard about were it not for the lawsuit – cited by Prebble provides the best reason why a judicial inquiry is needed. That report raises the question whether the government had the requisite legislative authority to proceed with Spudco. It stated: "There are lapses in obtaining the requisite legislative authorities necessary to permit SaskWater to proceed in certain areas of business they have undertaken." Why those "lapses" occurred was certainly not addressed in the Perrins report or the work of the provincial auditor. As well, other questions raised by Ernst & Young, the Opposition and even the media have never been answered: Did the government embark on a deliberate strategy to put out of business a company called MicroGro that SaskWater had contracted to grow seed potatoes? Did SaskWater improperly take $3.9 million in trust funds associated with Rafferty Alameda and Ducks Unlimited to pay for its Spudco losses? Was the ownership structure of the storage sheds designed to avoid an international trade investigation? Did the government knowingly violate its own union-preference trade policy by misrepresenting the nature of the 51-49 private-public partnership? What about the fact that taxpayers were mislead for six years on the nature of this deal? Who in the SaskWater bureaucracy was responsible? Why was no one fired for cause? Frankly, why should we believe there has been no criminality or personal gain in Spudco without an inquiry to make those very determinations? And what of the politics in the Spudco decisions? Who in cabinet made the decisions? Why was there a mad rush to make initial investments prior to the 1999 election? Might it have had something to do with the fact that the Spudco investment was in then CIC minister Berny Wiens’s seat – a riding contested by then Opposition leader Elwin Hermanson? Even if there was no personal gain, wasn’t there some political gain? This actually takes us to the second important question that relates to those damning allegations raised by government lawyer Fred Zinkhan in the $10-million countersuit. If any of the allegations of fraud and misrepresentation in Zinkhan’s countersuit are true, they are grounds for an inquiry. But if they aren’t, they raise further disturbing questions about politics in this process. It’s worth noting that during last fall’s election campaign, the government lawyer filed information that suggested the plaintiffs and the Saskatchewan Party had cut a deal to settle the suit if the Opposition forms government. If that’s true, we should get to the bottom of this. But if this isn’t true, it would certainly support Wall’s contention Friday that the whopping $1.8 million legal bill was part of a deliberate stalling tactic to ensure Spudco remained "before the courts" until after last November’s vote. Was politics at work here? What might that do to investor confidence in a government that already has a bad reputation (see: Broe, Atco, the aborted deal with EDS Canada)? Frankly, the government hasn’t answered any of these little questions, let alone the two big ones. An inquiry is the only place where those answers will be found.