Origins of e-gaming probed by legislative committee

Opposition MLAs took advantage of a rare majority on the province's standing committee on public accounts this week to pass a motion calling on a number of witnesses to appear before the committee to discuss the origins of the province's e-gaming initiative.

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The province's failed bid to become a regulator of online gambling was the subject of a special investigation by Auditor General Jane MacAdam. She concluded government's pursuit of the plan "demonstrated a lack of due regard for transparency and accountability."

The legislature's public accounts committee is now holding meetings, going through the document.

Two of the witnesses to be called are former senior government staff members identified by the auditor general as having been involved in "apparent conflict of interest situations," as outlined in her e-gaming report.

Senior staff in 'apparent conflicts"

One of those is Robert Ghiz's former chief of staff Chris LeClair. In her report the auditor general said LeClair's spouse purchased $1,500 in shares in a company called Rev Tech in the spring of 2011.

At the time, Rev Tech was subject to a reverse takeover bid by CMT, a company involved in dealings with government over e-gaming.

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In her report MacAdam said Rev Tech was a shell company the average investor wouldn't know about. She said the potential existed for substantial gains for anyone investing in CMT and its related companies if the takeover was successful. The takeover never occurred.

The other staffer is former deputy minister of tourism Melissa MacEachern.

MacAdam wrote "there is an appearance the former deputy minister … provided preferential treatment to CMT and Simplex" with regards to a government plan to develop a tourism loyalty card program. For a period of time between 2010-2011, MacEachern was married to the local investment advisor for CMT.

In an email, MacEachern told CBC News "I respect the work of the auditor and fully cooperated with her during this process."

PCs looking for push that got e-gaming started

Besides LeClair and MacEachern, PCs on the public accounts committee also voted to bring forward Paul Jenkins and Garth Jenkins, two business people named as co-defendants in a lawsuit brought against the P.E.I. government by CMT. 

That lawsuit was tossed out of court, but the judge left an opportunity for the company to re-file, which the company said it would do.

PC MLA Brad Trivers insisted the committee needs more information on where the initial push behind the project came from.

"Was it the [Mi'kmaq] Confederacy that came in and were they the ones driving it? At what point did government start driving it? … These are the things the auditor general has alluded to but may not have all the details on." 

While the four will be asked to appear before the committee, the committee did not use its power of subpoena to compel them to appear.

MCPEI, law firm asked to provide documents

The committee also voted in favour of asking the Mi'kmaq Confederacy of PEI and its law firm McInnes Cooper to provide documents related to the e-gaming initiative.

Two weeks ago both parties said the Mi'kmaq Confederacy would waive its right to client-solicitor privilege to provide documents the auditor general has been seeking.

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But yesterday MacAdam told the committee she hasn't received the documents, nor has she been contacted by either the Confederacy or McInnes Cooper.

The Mi'kmaq Confederacy was the recipient of a controversial government loan for $950,000 used to finance development of the e-gaming initiative.

The loan was approved in November 2011. Three months later, in February 2012, government decided to scrap e-gaming.

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