7.
The MLA Expense Scandal:
The Honeymoon Ends
On February 3, 2010, the auditor general released his report on MLA expenses.
This was the pivotal moment at which the Dexter government’s downward slide began. The honeymoon dissolved in the daily drip of news about bad behaviour by politicians. The inappropriate spending was spread across all parties. When criminal charges came, much later, they were directed at two Liberals, one Conservative, and one New Democrat. But Darrell himself had made some expense claims that didn’t sound right. He compounded the problem with a slow, defensive response.
The auditor general report on MLA expenses was when the destruction of Darrell’s public image started — the destruction that ended in our calamitous defeat in 2013 and Darrell losing his own seat.
Every detail in the auditor general’s report — every sordid one —had occurred before we were sworn in. The audit covered the period ending at the election call in 2009. In a fair world, the previous government would have been blamed for fostering the culture of entitle-
ment that was exposed by the auditor general. For ten years, the Conservatives had set the rules. It was under the Conservatives that the rules had gone crazy. But in the end, it wasn’t the Conservatives who took the hit, or the Liberals. It was Darrell Dexter and the NDP.
Back in 2005, I had publicly complained about the craziness of MLA expenses. That was the cause of my big blow-up with Darrell. Unfortunately, my rebellion had a limited impact. The rules were essentially frozen, but there was no attempt to roll them back.
Over the years, both before and after my rebellion in 2005, I had privately encouraged the auditor general to audit MLA expenses. I saw him most weeks at the public accounts committee, and from time to time I would bring it up. By the time the auditor general finally selected MLA expenses as an audit target, there had been expense scandals in Newfoundland and Labrador (2006) and the United Kingdom (2009). It is more likely that those events spurred our auditor general, rather than anything I might have said. But I wonder.
We were in government when the report was ready. As finance minister, I had an automatic spot on the Internal Economy Board, the committee that managed the legislature’s finances. The IEB members saw a draft of the report, and we had a couple of group meetings with the auditor general before the report was released.
The MLAs on the Internal Economy Board did not recognize the impact the report would have. We knew some of the specific examples would be embarrassing, but we all thought it would be manageable. In the draft we saw, individual names were not used, so there was no direct link from a particular MLA to any of the examples given. We thought the focus would be on improvement of the expense system, rather than a spotlight being shone on individual MLAs. We could not have been more wrong.
The auditor general’s report came out on February 3, 2010. It was a political bombshell. Reporters loved the story, because it kept on giving. There was the back-and-forth with Speaker Charlie Parker about whether questionable expenses would be matched with the names of individual MLAs. There was Richard Hurlburt, the MLA for Yarmouth and former Conservative minister, denying any wrongdoing, followed by his resignation on February 9th. There was the auditor general’s press release on February 12th, saying that he had received additional information that he would be investigating. There was Glace Bay MLA Dave Wilson’s resignation in early March, which at first was unexplained. In May the auditor general informed the Speaker that he believed four former members and one current member may have committed illegal acts, but he did not name them. The story kept going and going.
Almost immediately, part of the focus was on Darrell’s own expenses. There was an expensive camera and two laptops, as well as a briefcase. Why did an MLA need a camera to do his job, never mind an expensive one? Why wasn’t one laptop enough? Maybe an MLA needed a briefcase, but why should the cost be picked up by taxpayers?
Later, there was the question of why the provincial government was paying Darrell’s law society fees, which amounted to a few thousand dollars per year. It’s always a bit of a mystery about what will catch the public’s attention, but Darrell’s fees definitely did. These fees were remembered by regular folks long after the rest of the scandal’s details faded. On the doorsteps in the 2013 election, over three years later, the fees were still top of mind as an example of why people had turned on Darrell.
I have heard Darrell recount the story behind the fees. Michael Baker had his law society fees paid by the province when he was justice minister. Darrell and Michael spent time together as executive members of the eastern regional conference of the Council of State Governments organization, and during one of those trips Michael offered Darrell, as a courtesy to the opposition leader, to pay his bar fees from the justice budget. Darrell accepted and thought little of it. By the time the bar fees became a focus of the expense scandal, Michael Baker had passed away. I don’t think I’ve ever heard Darrell recount this background publicly. To me, it explains everything. But maybe it doesn’t matter.
Darrell was out of the province when the auditor general’s report was released and did not return for several days. A premier has any number of reasons to be on the road, but I know his absence was a deliberate choice. Like the members of the IEB, he thought the whole thing would blow over within the week. In hindsight, his absence was ill-advised. It meant his personal response to the emerging scandal was slow, and when it came, it did not match the depth of the public’s anger.
Our government’s response, strictly on a policy level, was as good as could be hoped for. The old expense system was swept away. Every single non-receiptable allowance was eliminated. All furniture and equipment would have to be returned to the province or purchased when the MLA left office. The per diem was dropped to the same level available to civil servants. Expense reports would be posted online for all to see. The Internal Economy Board was abolished and replaced by a new, more accountable House of Assembly management commission — which would meet in public. But it didn’t matter. The damage was done. We got no credit for the repairs.
The auditor general’s report in February 2010, and the ensuing scandal, was a disaster for the Dexter government. The real tragedy, from a political point of view, is that it didn’t have to happen. It should have been obvious when I spoke up in 2005, and well before, that the expense system was out of control. It could so easily have been corrected, but leadership was lacking on all sides. The system was cozy and everybody liked it that way.
I respect Darrell, as a person and as a politician. I supported him for the interim leadership in 2001 and at the leadership convention in 2002. I supported him throughout our time together in opposition and in government. But MLA remuneration was Darrell’s blind spot. He didn’t understand the public reaction. His public image never rebounded. Our government never recovered.
Maybe if I had played along with the petty corruption of MLA expenses, there would have been no audit, no report, and no scandal. Darrell’s image might have survived, and the NDP might have been re-elected in 2013. Could that really be the political lesson of the expense scandal: that I should just have kept my mouth shut back in 2005?
The very last act in the expense scandal — the sentencing of former Dartmouth North MLA Trevor Zinck, once our colleague in the NDP caucus — took place on October 9, 2013. It was the day after voters had delivered their crushing verdict on the Dexter government. The expense scandal was a done deal when we walked onto the Holiday Inn stage on election night of 2009, and it hounded us to the very end.