Premier's ties to Atcon questioned

The Opposition Conservatives are raising questions about Premier Shawn Graham's links to the Atcon Group and whether he was in a conflict of interest position last June when cabinet approved $50 million in loan guarantees for the financially troubled company.

The premier's brother once worked for Atcon, which is now in receivership.

And Graham's father sat on the board of an Atcon subsidiary, Vanerply, in Sweden.

But Graham's brother Andrew left the Miramichi-based construction company before the Liberals took office in 2006, said Business New Brunswick Minister Victor Boudreau.

And the relationship between Graham's father and the company ended before the loan guarantee, he said.

'This goes back to what kind of discussions occurred between board members, former or present, former or sitting, and the premier, and what kind of pressure was put on the premier to go forward with this $50 million loan guarantee.' —Opposition MLA Bruce Fitch

"I'm told Alan Graham has resigned from that board in the spring of '09 and has not had any interest, and not sat on any boards for any Atcon companies here in North America."

Opposition MLA Bruce Fitch said regardless of when the ties were cut, relationships may have influenced the government's loan guarantee decision.

"We don't have any evidence as to when he left the board, but again, that shows there was a connection, a very close connection, between the Atcon group of companies and the premier's father," said Fitch.

"This goes back to what kind of discussions occurred between board members, former or present, former or sitting, and the premier, and what kind of pressure was put on the premier to go forward with this $50 million loan guarantee."

Court hearing Monday

Atcon is scheduled to be back in court in Miramichi on March 15 after its biggest creditor, Scotiabank, called in its loans last month.

If Atcon hasn't sold enough assets to save itself, the court could order the liquidation of some of the company's assets to pay creditors.

New Brunswick taxpayers stand to lose $70 million in loans and loan guarantees if Atcon Group can't pay its creditors.

Most of that is from three loan guarantees worth a combined $50 million that Business New Brunswick handed out only nine months ago.

Atcon's financial troubles started in October 2007, according to documents filed with the court.

The company owes a total of $250 million in debt, including $99 million to Scotiabank, the documents show.