Liberal party, association stand by response
Liberal Leader Zach Churchill and former presidents of the Liberal Association of Nova Scotia don’t see any wrongdoing in how they dealt with a former association employee who misappropriated funds over several years, which led to her resignation.
At Province House on Wednesday, the public accounts committee grilled the current and former presidents of the association, former Liberal Leader Iain Rankin and Churchill over decisions made after the discovery of the misuse of funds in 2020.
The decisions made in light of a former employee’s misuse of travel claims and a party credit card were scrutinized by the province’s auditor general Kim Adair in her report released in late February.
Adair took issue with the association’s decision to not go to the RCMP with criminal charges. Instead, the association claimed its focus was on the recovery of the roughly $130,000 in misused funds, as well as $60,000 in legal and professional fees.
She said that from her perspective “when public funds go missing in a significant amount over many years, the right thing to do is file a complaint with the RCMP.”
Adair filed a complaint with the RCMP after completing her investigation.
Churchill said he also contacted the RCMP within 24 hours of receiving Adair’s recommendation to do so on Feb. 13.
‘MAY OR MAY NOT REOPEN THE INVESTIGATION’
An RCMP spokesman said the force received a new request to look at unauthorized disbursements in February 2024.
“We’re in the process of doing that, and may or may not reopen the investigation,” Const. Dominic Laflamme told The Chronicle Herald at the time.
Churchill said he still isn’t aware if the RCMP are pursuing an investigation.
Margaret Miller, current president of the Liberal Association of Nova Scotia, and Churchill said they will be fully co-operative with the RCMP if they choose to investigate the incident.
But Nolan Young, PC MLA for Shelburne, took exception to the fact that it took Churchill 19 months after he
became leader of the Liberal party to report the issue to police.
“Nova Scotians expect that if a theft were to happen, Nova Scotians expect that one would call the authorities. They wouldn’t call in lawyers. They would call authorities in immediately for an investigation,” Young said.
Joseph Khoury, who was president of the Liberal Association of Nova Scotia at the time of the finding of the employee’s misappropriation of funds, said the association’s actions were based on recommendations made by legal counsel.
“Legal counsel said in most such circumstances, it’s very difficult to recoup the money when charges are laid, so you need to try to pursue to get the money because that’s what you said your priority is,” Khoury said.
However, Khoury stressed that charges being laid by RCMP has always been a possibility.
He said while the former employee signed a settlement agreement, the association never said there was no chance of reporting the incident to the police.
“That is illegal and we certainly were not going to break the law,” Khoury said.
INFORMATION REQUEST
Young also took issue with how things played out between the association and the auditor general.
Adair previously said the association didn’t provide certain information as requested on numerous occasions between July and October 2022.
Paul Doucette, president of the Liberal Association of Nova Scotia from March 2022 to Feb. 10, 2024, admitted Churchill “made it clear” that the association should comply with Adair’s requests to turn over the necessary documents.
However, he said some parties had concerns about client-solicitor and clientadviser privilege, so the association was “following legal advice by external legal counsel while doing as much as they could to comply with AG request.”
That prompted Young to question Churchill’s leadership.
“You’re the head of the party. When things are sent out, the buck stops there at the leadership. So who’s in control here?” asked Young.
Churchill said while he can give advice to the association, bylaws prevent him from having the authority to direct the association president or the board.
‘IT CAN HAPPEN TO ANY PARTY’
Both Churchill and Rankin said they believe the appropriate steps were taken by the association, which followed advice from legal counsel and an independent auditor.
“This is an unfortunate situation that happened to our party, our party’s association. It can happen to any party,” Churchill said.
“There was a trusting staff that misappropriated money and we believe that having more oversight from Elections Nova Scotia can prevent this from happening to another party in the future.”
Dorothy Rice, chief electoral officer of Elections Nova Scotia, said her office has been in contact with the Justice Department.
Rice said they are also working with its advisory committee on bringing forward amendments to the Elections Act which would give the CEO of Elections Nova Scotia the authority to deal with any similar issues in the future. She didn’t have a specific timeline but said the target is to have something tabled and passed before the next general election is held on or before July 15, 2025.
Near the end of the committee meeting, PC MLA for Colchester North Tom Taggart put forward a motion to call on more witnesses, including Churchill and Khoury, to speak on the misappropriation of funds before the public accounts committee at a future meeting.
Braedon Clark said the move was absurd.
“I know the opposite side is on a fishing expedition on this for some reason. We had a two-hour meeting that just concluded,” Clark said.
The meeting ran its course, however, and a vote to extend the meeting was rejected, therefore there was no vote on the motion.