Last Wednesday Premier Redford defended herself against the Opposition’s allegation of conflict of interest with this bold statement: “I was not the Justice minister at the time that the government made that decision.”*
Some of us are wondering whether Ms Redford just painted herself into the same corner that Bill Clinton found himself in after his dalliance with Monica Lewinsky.
It took less than 10 minutes for Ms Smith to set up the conflict of interest allegation and for Mr Anderson to spike it across the aisle. It took less than 2 minutes for the Premier to explode.
Her display of righteous indignation did nothing to assuage the Opposition who’ve demanded an ethics investigation (with the NDP insisting that the Premier step down until it is completed).
What the heck happened? Did the Wildrose fabricate a crisis or is there something seriously amiss with Ms Redford judgment?
Two Allegations of Misconduct
The conflict of interest allegation rests on the argument that Ms Redford made the decision to award the Tobacco litigation case (legal fees expected to be $2 billion if the lawyers win or settle) to the JSS Barristers consortium. JSS Barristers is a Calgary law firm that includes her ex-husband and political advisor, Robert Hawkes.
This allegation morphed into something more serious—that Ms Redford “misled” the House when she insisted that she did not make the decision to award the Tobacco litigation to JSS Barristers and that the decision was made by Verlyn Olson six months later.
A Litigator’s Perspective
This mess will be hashed out in the court of public opinion long before the Ethics Commissioner makes his ruling, so let’s analyse from a litigator’s perspective. (Just give me a moment to slip into my barrister’s robe and charming horsehair wig.)
A litigator would ask the two questions: Did Ms Redford make the decision to award the contract to JSS Barristers? If the answer is yes we can move on to the second question—was her decision a conflict of interest?
Note: If the answer to the first question is yes, the Premier has a serious credibility problem. But if the answer is no, her credibility is intact, the allegation of conflict of interest is irrelevant and we can all go home.
A “Smoking Gun” memo
The Opposition is relying on a Dec 14, 2010 memo from Ms Redford, then Justice Minister, in which she refers to a committee’s assessment that all three of the law firms bidding for the Tobacco litigation contract would be up to the task.
Ms Redford says: “Considering the perceived conflicts of interest, actual conflicts of interest, the structure of the contingency arrangement and the importance of a “made in Alberta” litigation plan, the best choice for Alberta will be the International Tobacco Recovery Lawyers.” The International Tobacco Recovery Lawyers consortium includes her ex-husband’s firm, JSS Barristers.
The Opposition says the memo is evidence that Ms Redford made the decision to award the contract on Dec 14, 2010.
Ms Redford vehemently disagrees, both in the House (see above) and in the media: “I did not select any law firm…There was no decision…until well into June…I stand by what I said”.**
Unfortunately for Ms Redford the Justice Department disagrees:
- A Justice Department briefing note from Jan 2011 says: “Shortly before Christmas, Minister Redford selected the International Tobacco Recovery Lawyers”***
- Last Wednesday Justice Minister Denis said “There was a rigorous process it went through. She did make the final sign-off on it.”****He later back-tracked: “[Ms Redford] agreed to begin negotiations, [Justice Minister Olson] finalized the contract after months of negotiations…”***
In true Clintonesque fashion we can now start squabbling over what the words “the best choice will be”, “Redford selected” and “final sign-off” mean, and whether commencing negotiations on a formal contract comes before or after the decision is made to award the contract.
Or we can use our common sense. Did Ms Redford make the decision to award the tobacco contract to the JSS Barristers consortium? Yes. Does she have a serious credibility problem? Yes.
Conflict of Interest?
Forget the ex-spouse angle; nothing prevents Ms Redford from sending work to an ex-spouse. However the Conflicts of Interest Act does prohibit her from “improperly” furthering his “private interest”.
The Tobacco litigation contract could further Mr Hawkes’ private interest as a partner at JSS Barristers because all partners will get a share of the $2 billion Tobacco litigation fee (assuming that JSS Barristers compensates its partners the same way as other law firms). Further Mr Hawkes could be up for an additional bonus if the firm views him as a “rainmaker” for bringing in the file.
However, Ms Redford’s conduct would only be “improper” if Mr Hawkes was her political advisor on Dec 14, 2010–the day she decided to award the contract to his firm. Given that Ed Stelmach did not announce his resignation until Jan 25, 2011 it looks like Ms Redford is in the clear.
The Redford’s Clintonesque predicament
The evidence so far supports the allegation that Ms Redford was indeed the “decider” (to borrow a phrase from George Bush Jr) notwithstanding her protestations to the contrary. The evidence does not support the allegation that Ms Redford put herself in a conflict of interest when she awarded the Tobacco litigation to Mr Hawkes firm, JSS Barristers.
Regrettably Ms Redford was so focused on clearing herself of the conflict charges that she painted herself into a corner by denying that she’d made the decision to award the litigation contract to JSS Barristers.
Ms Redford has no recourse now but to follow in Bill Clinton’s footsteps and argue that what she said is not what she said and the meaning of plain English words are not what they seem. This will be a tough slog because while she might have Mr Clinton’s chutzpah, she certainly doesn’t have his charm.
*Hansard, Nov 28, p1109
** Calgary Herald, Nov 30, 2012, A4
***Calgary Herald Nov 29, 2012, A4
****Calgary Herald Nov 28, 2012, A4
Thank you for your analysis, Susan. You’re right, the threshold issue of “Who made the decision?” has completely drowned out the main original question of “Was there a conflict?” – a question which might very well be answered “No”, depending on what set of rules applies.
I want to raise a separate but related point, and that is the role of the civil service in making decisions such as this. At what point do the elected politicians become the “deciders” instead of the purchasing experts employed by the government to review tenders and select the best bid? Why can a minister make a better decision than a civil servant?
Good point Jill. I’m reading Donald Savoie’s book “Power: Where Is It?”. He says that politicians don’t respect the fact that the political world is separate from the bureaucratic world and have wrestled power away from the bureaucrats because politicians want “responsive competence” not “neutral competence”. This translates to “do it my way”, which eventually becomes “forget it I’ll do it myself”. The result is politicians making decisions that are well outside their experience and competence. Not good.
Well spoken! How do we get this to ‘go viral’ and generate the change we need?
Thank you Jane! One thing people can do is click on the social media buttons (facebook, twitter, linkedin, or email) at the bottom of the post. That will fan it out into the ether. Emailing it to your friends is good, but emailing it to your MLA is even better. The PC MLAs need to see that Albertans aren’t buying Ms Redford’s story and the Opposition MLAs need to see that we support them in their call for an investigation by the Ethics Commissioner. The Legislature is sitting from Dec 3 to 6…it’s going to be an interesting week!
Jill: I certainly agree that the Wildrose and LIberal attacks on civil servants (such as Premier Redford’s sister) are totally beyond the pale and defamatory. In any other jurisdiction, they would have been the subject of civil, if not criminal, charges. The Alberta government treats its civil servants very well but our new Opposition (and, alas, the Sherman-led Liberals) seems to see them as nothing but targets. This behavior is shameful.
Her ex husband working on her election campaign and giving funds then brings up the question “was there divorce a arrangement so that in the case Alison gained a position in the Gov’t, then there could be no suggestion of hanky panky. Furthermore I would think a individual guilty of moral terpitude should not have influence in politics.
Well, I really can’t speak to the Premier’s relationship with her ex-husband, but I do agree with you Tom that the award of the most lucrative litigation file Alberta has ever seen to Ms Redford’s ex-husband’s firm raises eyebrows; especially when you consider that the competition included Bennett Jones, a law firm that includes Jack Major, a top notch litigator and a former Supreme Court of Canada judge. Makes you want to give your head a shake, doesn’t it? Thanks for your comments Tom and welcome to the soapbox!
Susan another episode on the 41 year old run of ‘Clueless Arrogants’, sponsored by Alberta CONSUMERS.
Of course the speaker cleared Alison Redford’s name. Anyone had any doubt about that?
Another stab at our confidence and at the so called democracy. No wonder in the last Calgary Centre by-election 29.4 of the people voted! The other 70.6% stayed at home watching much better gossip.
Hopefully very soon we will have our own Spring.
Agreed. Hansard (Dec 3, p 1206) sets out the Speaker’s reasons for his decision. He painstakingly reviews the 3 elements that must be established in order to hold a member in contempt: (1) the statement must be misleading, (2) the member knew at the time she made the statement that it was “incorrect”, and (3) in making the statement the member intended to mislead the house. He admits that this is a pretty high hurdle to meet (no kidding) and that the Wildrose had failed to meet them because.three MLAs (Ms Redford, Mr Denis and Mr Olson) “vehemently denied” that the statement was misleading and there was a distinction between a “process” to make a decision and the decision itself. Ms Redford’s comment was the start of a “process” and not a decision. He admitted that this is a “case of semantics” but ultimately hung his tricorn hat on the June 2011 press release announcing Alberta is going to launch a lawsuit against Big Tobacco as evidence that the decision had not been made until June 2011. (If the government had issued the press release in July 2011 would that have meant that the decision took place a month later?)
So stack that up against the paper trail: Dec 22, 2010 email from the ADM Grant Sprague attaching rejection letters sent to the other 3 bidders and confirming his phone call to Carsten Jensen who he refers to as the “successful consortium”. Jan 6, 2011 email from Carsten Jensen saying he’s looking forward to working with the government on the case. Jan 22, 2011 email from ADM Grant Sprague saying that Redford had “selected” Jensen’s firm.
If all this happened on the basis of Ms Redford’s non-decision about a $10 billion law suit that would yield fees of $2 billion (or maybe less in deference to Kevin) then Ms Redford’s denial that she made the decision amounts to an admission that everyone in the Justice Department is utterly incompetent.
Congratulations on a very fair summary of this issue that effectively isolates the issues in a way that I have seen nowhere else (and offers a litigator’s argument on some). If I could add a few opinions from the ex-press gallery:
1. Those who think public servants and their advice were ignored seem to be willfully overlooking that a committee (which I am assuming included knowledgable bureaucrats) found three consortia to all be qualified, setting up a short list for the “politicians”. I do find it strange that those who want to hold politicians accountable also seem, when it suits their convenience, to not let them make a decision. We elect them to make decisions — the bureaucrats did their screening job but in our system the final choice is not theirs. (What if the deputy minister who “selected” the winner chose a firm where his ex-wife was partner? Conflict exists not just in elected political situations.)
2. With you litigator’s wig on, and given you concise review of the available facts, I think you would agree that “selected”, “began negotiations” and “signing a contract” all represent stages in the process of a decision. Any business leader can remember “selecting” a person or firm with whom to open negotiations only to find that no contract was reachable for a myriad of possible reasons and conditions. Redford’s successor did the negotiating and signed the contract — surely it was in his power to declare the process at a standstill and make another selection at any point in the process. You have to admit that the “other side” in the courtroom at least has an argument — “selection” marks a decision stage in the process but effectively only opens another stage.
3. The anti-government forces appear to be willfully distorting the potential benefit. Let’s face it $2 billion in fees is a “best case” scenario — you know contingency legal fees better than I do, but how much would the government have to be awarded if that was the fee earned.? Any numbers in any statement of claim are pure fantasy, as is current speculation about legal fees (I am delighted to report that as Herald publisher we were once sued for $2 billion and settled for $5,000 to avoid the costs of discovery and a trial). I am also intrigued that the “selected” preference was a consortium of firms but no one seems to want to tell us just how many were involved and what part of the consortium the firm where Hawkes is a partner represented. (I would speculate that some firm with international ties to others with experience is this field is in line for the biggest share, much of which will go to that international firm, but unlike Wildrose I speculate rather than stating that as fact.) My guess is that the “$2 billion” is going to be far, far, far less whenever an outcome is reached — but misleading the public seems to be a feature of Wildrose performance. Please note that you repeat this fallacy — in your post the selected International Tobacco Recovery Lawyers consortium becomes the JSS Barristers consortium. I don’t think opposing counsel (or the judge for that matter) is going to let you get away with that withoout introducing supporting evidence.
Despite those concerns, I have to agree with your conclusion that there is a case to be argued here — and that the Conservative response has not made their case any easier. Alas, this is politics not a court of law. Many of your commenters, like Wildrose, don’t appear to be willing to listen to the government’s case — it is hardly surprising that the government’s response is also a political one. Having said that, if this was headed to a court of law, I’d sure rather be on the government’s side at this point — based on the available data, the stronger arguments at this point certainly are with them.
Finally, on a more playful side, given Alberta’s small size, I can’t help but wonder whether similar conflict charges would not have been raised on similar skimpy evidence whatever one of the three was chosen. You mention Bennett Jones — I’m sure Ms. Smith would have been high on her “soapbox” denouncing the biased selection of a firm that happened to be that of former premier Peter Lougheed (who was still with us when the decision was made). I don’t know what firms were involved in the third consortium, but I’d guess they too feature some prominent Tories. And all three, I am sure, have Liberals involved as well. Law firms are great at covering their “interest” bases.
Kevin, interesting points…let me address them in the order they’re presented:
1. Should politicians allow knowledgeable bureaucrats to make the decision? Fair question. No doubt the government has a spending limit protocol that specifies when a decision is above a bureaucrat’s pay grade. Given the value of this contract it was likely well beyond the spending authority of even the Deputy Minister and hence fell to the Justice Minister to make the call. Depending on the expertise of the Justice Minister this may or may not be a good idea. Given Mr Olson comment that he asked the ADM to consider whether they should manage this litigation internally I seriously question his judgment (but that’s a topic for a different blog).
2. Do the words “selected”, “began negotiations” and “signing a contract” signify that the decision had not yet been made? No, because all of this activity took place after the completion of the bid process. (Incidentally lawyers refer to a bid process for legal services a “beauty contest”). The purpose of a beauty contest is to pick the best law firm for the job. The decision of who is the best depends on the firm’s responses to questions about the firm’s experience, which litigators they’ll assign to the file, their litigation strategy and the government’s role in directing strategy, who they’ll hire as expert witnesses, who’s paying for disbursements including expert fees, and their contingency fee–20%? 30%?) and whether the government will backstop some of these expenditures. The second stage is the “pitch” where the finalists bring their heavy hitters to a meeting with the decision makers to convince them they should be hired. At the end of this process the decision makers award the contract to the “best” law firm and get to work drawing up the final contract. So assuming that Redford’s “beauty contest” followed the same process that I’m familiar with, it appears that the government committee went through all these steps and decided that all 3 of the finalists could do the job. They turned it over to Ms Redford for the final decision. I think she made the decision when she said the consortium was the best choice. This is borne out by subsequent correspondence in Dec 2010 and Jan 2011, namely the ADM’s letters giving the unsuccessful firms the bad news and the ADM’s call to Carsten Jenson telling him that he got the file. Yes, the relationship could have fallen apart anytime between Dec 2010 and June 2011, but that doesn’t take away from the fact that the decision had been made in Dec 2010…in my humble opinion.
3. Is $2 billion in fees a “best case” scenario? Quite likely. The beauty of class actions is that they almost always settle. The cost to the defendant in legal fees and damage to reputation is very high. And plaintiffs who have a contingency deal have no real costs other than time spent with lawyers (yes yes I know, that’s a high price to pay). Your second point is also valid. JSS Barristers is a part of a consortium and we don’t know what JSS’s cut will be. And yes, I did switch from the International Tobacco Recovery Lawyers consortium to the JSS Barristers consortium as a form of short hand. I don’t think it matters what the consortium is called as much as who gets paid what…that was your original point and it’s well taken.
4. If this went to court which side would win? I’d side with the opposition, which in this case includes the NDP, Liberals and the Wildrose. But as you said Kevin, this is a political dispute, not a legal one so the “winner” will be decided by the public not a judge. .
5. Alberta is small, conflicts are unavoidable. You’re bang on. Every major law firm in Alberta contributes to the PCs and a good number of them contributed to the WR. That’s why I think that Ms Redford could have skated past the conflict allegation (Neil Wilkinson has yet to rule against the government on anything), that’s why I’m mystified that she didn’t just bite the bullet instead of getting embroiled in this bizarre non-decision controversy.
I would underline your fifth point. You and I only really disagree on what stage “decision” becomes concrete rather than directional — so I can’t for the life of me understand why the Premier and her party did not just state straightforwardly what they had done. They seem to have set up a fair process to evaluate potential litigators and, given that three met the standard, were bound to disappoint two. The issue of the premier’s ex-husband is an obvious red herring, so why get defensive about it?
Here is another “journalist” response, separate from my earlier one which attempted to be reasonable questions based on your litigator’s case.
Today’s political journalists are very lazy (and over-worked) so they tend simply to delight in becoming a part of the mud-slinging. Some decades back, in my day, we considered ourselves a “fifth estate” not a voice of the Opposition. And if I was still a reporter, I would be wondering about the following phrase in the alleged “decision” memo:
“Considering the perceived conflicts of interest, actual conflicts of interest, the structure of the contingency arrangement and the importance of a “made in Alberta” litigation plan…”
All of that suggests to me that the other two bids, while they might have met the criteria, did have signifciant issues: Actual conflicts of interest? Structure of the contingency arrangement? Looks to this skeptical journalist as if some questions should be asked.
And while I was doing that, if I was going to be reporting that Redford made the decision — and actually believing that — I would be self-critical enough that I’d like to know what her successor was doing that meant it took him six months to sign off on what she had agreed to. After all, if I am to believe Ms. Smith, the decision was already made.
Is it any wonder that Danielle Smith was an editorial writer and not a reporter? Jump to a conclusion, damage as many individuals as you can and never, ever, let the facts get in the way of a good rant.
Valid questions. My question revolves around the “made in Alberta” litigation plan. What does that mean? Why is it important? It would be foolish to disqualify an exceptional national law firm in order to throw work to an Alberta firm, but I worry that that’s what Ms Redford did when she decided (yes I’m not persuaded that she didn’t) on JSS Barristers. I compared their website with that of Bennett Jones.* and couldn’t help but notice that BJs as many lawyers (27) in its class action practice area that JSS has in the whole firm. Also BJs has 43 lawyers practicing Health Law (although not all of them full time) while JSS has zero. I’m not saying that JSS isn’t good, I’m just questioning whether they are good enough.
*In the interest of full disclosure I articled and worked at BJs before I moved inhouse.
I’m only speculating, but here goes.
I too googled JSS since I had never heard of them — they describe themselves a a “boutique” litigation firm. So I am presuming they are almost on the UK solicitor/barrister model where the client (which may well be another law firm) brings them the data and structure of the case and their involvement is pretty much limited to action in court. My guess is that in this case they are the “front” for an American-based firm which has successfully taken on Big Tobacco in a number of states. They are going to bring the same suitcases full of data here and JSS will repeat the arguments in Alberta court that worked elsewhere. (It reminds me of the old days as a journalist when Public Utilities Commissions actually set gas/electric rates after hearings — the same “experts” and lawyers would pretty much trundle from state to state, province to province, repeating exactly the same arguments they had put forward the previous week in another jurisdiction).
If that speculation is even remotely correct, I suspect BJs problem may have been that they were “too Alberta” — i.e. the selected bid is more cost efficient because it is based on data, etc. that is already in hand whereas BJs (and their partners) were starting further up the track. Whatever, I’m guessing the “made in Alberta” aspect was that the government didn’t want to be seen to be signing up some American cowboy litigation firm (even though I suspect that is exactly what they ended up doing with this consortium — which is why I’m guessing JSS’s share is going to be quite small in the end).
My curiosity actually is more about the first three concerns listed in the statement. It does seem to me that if the government had been more interested in a level of transparency rather than harsh defensiveness, explanations of how these “concerns” weighed in the decision would have been both legitimate and well received.
All of which makes your original Clinton metaphor quite appropriate. On the basis of the available evidence, none of this need have happened. But it did.
(And if I had been advising the cabinet on communications strategy, I would have opted to give that explanation because that would leave a massive political “rock” in hand to drop on Ms. Smith and Wildrose. Once the explanations were out, I would then have started pointing out that the Opposition Leader had no compunction at all in putting a potential $10 billion of Alberta taxpayers’ money at risk (by weakening the case) to serve her petty personal political needs. It is interesting that that seems to have got lost in the pointless argument that is going on — let’s face it, whatever the settlement might be, experience in other jurisdictions suggests it is likely to be significant, And, from my own considerable experience as a defendent, pissing off your own lawyers before you even get to discovery is never a good thing.)