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Legislature Spent $3m Questionably: Report - Frost__2001 - 06-28-2006
N.L. legislature spent $3M questionably: report
Updated Tue. Jun. 27 2006 5:25 PM ET
Canadian Press
ST. JOHN'S -- A spending scandal in Newfoundland's provincial legislature widened Tuesday with a report questioning nearly $3 million spent by the house of assembly on novelty items and the credibility of the suspended finance director Bill Murray.
John Noseworthy, the province's auditor general, said Tuesday his report outlines that there may have been "misappropriation of public money" along with a conflict of interest and breach of trust by the legislature's director of financial operations, Bill Murray.
Noseworthy called on the provincial Justice Department to look into the legitimacy of $2.7 million in payments made to Zodiac Agencies, JAS Enterprises Ltd., and Cedar Scents International between April 1998 and December 2005.
The three companies received $2.7 million from the house of assembly for low-cost novelty items that included lapel pins, fridge magnets and key chains.
Members of the legislature received 79 gold rings at a total cost of $69,000.
"This is unprecedented," Noseworthy told a news conference in St. John's. "I've never seen anything like this during my career and I hope never to see it again."
The auditor general said the three companies appeared to have a connection since two of the companies share a bank account and all three used similar invoices. Between March 2002 and December 2005, payments to the companies increased 282 per cent.
"No tenders were called and no quotes or other reasonable basis were documented to support prices being charged on company invoices," the report said.
More than half of the money, $1.4 million, was charged to various house of assembly accounts.
Noseworthy also identified another company, Unique Keepsakes, suggesting that they received $170,401 in "inappropriate payments" between April 2001 and December 2005. He also noted that Murray and/or his wife owned the company.
"The former director of financial operations basically could do what they (sic) wanted to do without detection," Noseworthy said. "One person seems to be at the centre of all this with regards to the ordering, receiving, approving, paying -- everything."
Two unnamed members of the legislature directly purchased $48,003 worth of goods from the company during the April 2004 and December 2005, the report says.
The government has suspended Murray from his position based on the allegations.
The report comes as Premier Danny Williams has asked for a judicial review of how Newfoundland's politicians spend their constituency allowances after an expense account scandal that has so far cost natural resources minister Ed Byrne his job.
A report from Noseworthy last week showed Byrne spent $326,642 from his tax-free, constituency allowance between 2002 and 2004. That figure is more than 10 times the legally permitted limit but there are no details as to where the money went.
Normally, constituency allowances pay for office expenses including rent, equipment, supplies, flags, pins and advertising.
The review, which will not assess previous spending practices or lay blame for misspending, will investigate overall compensation packages awarded to each politician.
With a report from NTV and files from The Canadian Press