Prince Edward Island AG issues damning report on abortive online gambling venture

The now years-old and eminently unsuccessful attempt by the Canadian provincial government of Prince Edward Island to form an online gambling regulatory jurisdiction hit the local headlines again this week with the release of the provincial Auditor General’s damning report on the almost Cdn$1 million debacle.

Our readers will recall that in attempting to set up a tribal online gambling licensing jurisdiction the government gave the First Nation Mi’kmaq Confederacy a loan which was to be repaid from revenues generated by the jurisdiction once it was operational.

That day never came; the project failed but the money was spent….and the PEI taxpayer took the hit.

Auditor General Jane MacAdam found the venture was “riddled with inappropriate secrecy and an overall disregard for taxpayers’ interests.”

MacAdam also took local legal firm McInnes Cooper to task for its refusal to cooperate in the investigation despite its close involvement in the project.

The legal firm has claimed solicitor-client privilege in not releasing information, but the AG has challenged that position, pointing out that McInnes Cooper was part of a working group that met secretly between 2010 and 2013 to develop the e-gaming project.

The working group members comprised former finance minister Wes Sheridan, McInnes Cooper lawyers Gary Scales, Kevin Kiley and Mike O’Brien, and Don MacKenzie of the Mi’kmaq Confederacy.

MacAdam notes in her findings that her investigation was hampered and limited by the legal firm’s refusal to cooperate despite its key role in the project; she considered issuing subpoenas on the firm and individual witnesses but ultimately concluded that this would delay her report and waste more taxpayer money.

“Our requests for project information on the e-gaming initiative were denied, including the arrangements made with third party contractors engaged by the local law firm (McInnes Cooper) to work on the initiative,” MacAdam says in her report.

“At the end of our work, the local law firm sent correspondence to our office indicating they disagree with our position and were not acting for government on the e-gaming initiative. The local law firm would not discuss this file with our office citing solicitor/client privilege with their client, MCPEI.
“However, project management services are not protected by solicitor/client privilege.”

All this resulted in a limit to the audit trail and “a lack of transparency on this file,” MacAdam says.

See the full Auditor General’s report here:

https://admin.unis.transcontinentalmedia.com/media/flying/7758/report__2016.pdf