Parker Commissioner
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AccEss cooE Ar:c-s CODE D'ACCES --- COPY /ISSUE EXEMPLAidt: / /J NUMERO _.___ _ I Commission of ~~~: C5 Inquiry into '~c• ___ l~aa) the Facts of . Allegations of Cont lict of Interest Concerning the Honourable Sinclair M. Stevens Commissioner The Honourable W.D. Parker ©Minister or Supply and Services Canada 1987 Available in Canada through Associated Bookstores and other booksellers or by mail from Canadian Government Publishing Centre Supply and Services Canada Ottawa, Canada KI A 0S9 Catalogue No. CP 32-53/1987 E Canada: $17.50 ISBN 0-660-12649-4 Other Countries: $21.00 Price subject to change without notice COVER DESIGN Banfield-Seguin Ltd. Creative Design & Advertising 887 Richmond Road Ottawa, Ontario Commission of Inquiry Commission d'enquete into the Facts of Allegations of sur les faits relies a des allegations Conflict of Interest Concerning de conflit d'interets concernant the Honourable Sinclair M. Stevens !'honorable Sinclair M. Stevens CANADA Commissioner Commissaire The Honourable W.D. Parker L"honorable W.D. Parker Counsel Conseiller juridique David W. Scott, o.c. David W. Scott, c.r. Adminislrator Administrateur T.R. Webb T.R. Webb TO HER EXCELLENCY THE GOVERNOR GENERAL IN ~UNCIL MAY IT PLEASE YOUR EXCELLENCY By Order in Council PC-1986-1139 dated May 15th, 1986, I was appointed Commissioner to inquire into the matter of alleged conflict of interest. I now beg to submit the attached Report. Respectfully Commissioner C.P. I P.O. Box 7075. Succursale Adelaide Station Toronto. Canada MSC 2K7 P.C. 1986-1139 Certified to be a true copy of a Minute of a Meeting of the Committee of the Privy Council, approved by Her Excellency the Governor General on the 15th day of May, 1986. l'HI\'• l.l lUtJC/l The Committee of the Privy Council, on the recommendation of the Prime Minister, advise that pursuant to section 37 of the Judges Act, the Honourable William Dickens Parker, be authorized to act as a Commissioner and that a Commission do issue under Part I ~f the Inquiries Act and under the Great Seal of Canada appointing the Honourable William Dickens Parker, to be a Commissioner to inquire into and report on (a) the facts following allegations of conflict of interest made in various newspapers, electronic media and the House of Commons, with respect to the conduct, dealings or actions of the Honourable Sinclair M. Stevens; and (b) whether the Honourable Sinclair M. Stevens was in real or apparent conflict of interest as defined by the Conflict of Interest and Post Employment Code for Public Office Holders and the letter from the Prime Minister to the Honourable Sinclair M. Stevens of September 9, 1985: and The Committee do further advise that the Commissioner be authorized, (a) to adopt such procedures and methods as he may consider expedient for the proper conduct of the inquiry and to sit at such times and at such places as he may decide: .•. /2 P.C. 1986-1139 2 (bl to engage the s8rvices of such staff and counsel as he may consider necessary or advisable, at such rates of remuneration and reimbursement as may be approved by the Treasury Board; (cl to ~ngage the services of such experts and other persons as are referred to in section 11 of the Inquiries Act who shall receive such remuneration and reimbursement as may be approved by the Treasury Board; and (dl to rent office space and facilities for the CoMmission's purposes in accordance with Treasury Board policy; and The CoMlllittee do further advise that the Commissioner be directed to submit a report in both official languages to the Governor in Council as soon as possible, and to file his papers and records with the Clerk of the Privy Council as soon as reasonably may be after the conclusion of the inquiry. CERTIFIED TO BE A TRUE COPY - COPIE CERTIFIEE CONFORME CLERK OF THE PRIVY COUNCIL - LE GREFFIER DU CONSEIL PRIVE Commissioner and Commission Staff Commissioner Chief Justice William D. Parker Commission Counsel David Scott, Q.C. Edward Belobaba Marlys Edwardh Administration Assistant Hearing Officer Thomas R. Webb Norman Savage Kathleen Cornwall Mary Ann Allen Secretaries Francine Bulley Assistants to Commission Counsel Marie Dionne Judy Goacher Peter Doody Peak-Choo Hew Roger Horst Yvonne Kisielewski Douglas B. Watters Joan Lea Iris Penman lnnstigator Editors (English) Doug Ormsby, O.P.P. Dan Liebman Forensic Accountants Mary McDougall Maude Rosemary Shipton Tedd Avey (Shipton, McDougall Maude Donald Holmes Associates) Robert Lindquist Ross Hamilton Editors (French) Jerry Ruth Fran~ois Patenaude (Peat Marwick Lindquist Holmes) Margot Cote Researchers Legal Adviser (French) Mark Gannage . Paul Ollivier Catherine MacDonald Arthur Lee Security Guards Mimi Singh Florence Roberts Al Bowden Don Kelly Technician Bruce Cook Rose Morreale Norman Savage (Peat Marwick Lindquist Holmes) Clerks Hearing Officer Alex Napier Edward Salem Robert McBey Steve Clarke CONTENTS Abbreviations xiv Preface xv Part One Introduction Chapter 1 The Inquiry, the Allegations, and the Terms of Reference 3 The Inquiry 3 The Allegations 3 The Scope of the Terms of Reference 5 Chapter 2 Conflict of Interest Rules: Guidelines, Code, and Letter 13 The Applicable Conflict of Interest Regime 13 Requirements of the Guidelines and the Code 14 Chapter 3 The Definition of Conflict of Interest 25 Real Conflict of Interest 25 Apparent Conflict of Interest 30 Definitions 35 Part Two Business Interests Chapter 4 Mr. Stevens' Background and Ministerial Responsibilities 39 Personal Background 39 Ministerial Responsibilities 42 Chapter 5 The York Centre Group of Companies 47 Direct Holdings of Sinclair Stevens: Gill Construction Limited and Stevens Securities Limited 47 Indirect Holdings of Sinclair Stevens: York Centre Corporation and Other Companies 49 Officers and Directors 57 Other Relationships among the Companies 62 Summary 66 Chapter 6 Financial Condition of the York Centre Group of Companies 69 The Consolidated Financial Statements of York Centre 69 Chronology of Events Relating to Financial Condition 70 Conclusions 84 Chapter 7 Mr. Stevens' Role in the York Centre Group of Companies to September 1984 87 Role in Financial Intermediaries 88 Role in York Centre 89 Role in the Oil and Gas Companies 91 Role in the Real Estate Companies 92 Role in the Strip Bond Companies 93 Conclusions 94 Chapter 8 Compliance with the Guidelines, Code, and Letter 97 The Guidelines 97 The Code and Letter I 00 Summary 106 Part Three Mr. Stevens' Involvement in Private Business Matters while a Minister of the Crown Chapter 9 The Meetings with Mel Leiderman 109 Meeting of March 16, 198 5 110 Meeting of April 13, 1986 112 Chapter 10 Involvement in the La Rouge Goldplay 117 Meeting and Conversations with Mr. Donald Busby 117 Conversation with Mr. Robert Callander 121 Conversation and Meetings with Mr. Ronald Netolitzky 122 Conclusions 124 Chapter 11 Involvement in the Christ Coin Proposal 127 Background 127 Development of the Christ Coin Proposal 128 Discussions with Chase Manhattan 131 Conclusions 133 Chapter 12 The Meeting with Angus Dunn of Morgan Grenfell 135 Description of Events 135 Conclusions 137 Chapter 13 The Approach to Tom Kierans of McLeod Young Weir 139 Description of Events 139 Conclusions 142 Chapter 14 The Call to Ken Leung of Olympia & York 145 Description of Events 145 Conclusions 146 Chapter 15 York Centre Group Financial Materials Found in the Minister's Office 149 Description of Events 149 Conclusions 151 Chapter 16 The Meeting with Ron Graham 153 Description of Events 153 Conclusions 154 Chapter 17 The Role of Shirley Walker 157 Nature of Role 157 The Diaries 162 Conclusions 182 Chapter 18 The Role of Noreen Stevens 185 Nature of Role 186 Communication between Mr. and Mrs. Stevens 198 Chapter 19 General Conclusions about Mr. Stevens' Knowledge of or Involvement in Private Business Matters while a Minister of the Crown 207 Part Four The Allegations of Conflict of Interest Chapter 20 The Allegations Relating to Magna 211 Nature of the Allegations 211 Magna and ORIE 211 Transaction with Anton Czapka 232 Findings Regarding Conflict of Interest 257 Magna's Interest in Canadair 259 Chapter 21 The Allegations Relating to CDIC and Bay Street 265 Brascan and CDIC Assets 266 Award of Contracts to Burns Fry and Dominion Securities 278 Award of the Contract to Gordon Capital 286 The CDC Share Sale 288 Conclusions Relating to CDIC and Bay Street 296 Chapter 22 The Allegations Relating to Hyundai 299 Newmarket Parts Plant 300 FIRA Commitment and the Memorandum of Understanding 300 Bromont Automotive Assembly Plant 303 Evidence Relating to Links between Hyundai and the Hanil Bank 306 Con cl us ions 307 Chapter 23 The Allegations Relating to the Mingling of Private and Public Business 309 The Meeting with Chase Manhattan Bank Officials 309 The Meeting with Mr. Dunn of Morgan Grenfell 312 The Meeting with Mr. Kierans of McLeod Young Weir 313 The Telephone Call to Mr. Leung of Olympia & York 315 Visit to the Hanil Bank in Seoul, South Korea 317 Chapter 24 The Allegations Relating to Compliance with the Guidelines, Code, and Letter 327 The Blind Trust Was Not Blind 327 The Blind Trust Was Not Appropriate for a Family Business 330 Part Five Conclusions and Recommendations Chapter 25 The Inquiry Process 333 Chapter 26 Conclusions about Mr. Stevens' Conflict of Interest 339 Allegations Not Pursued in this Inquiry 339 General Conclusions about Conflict of Interest 340 Chapter 27 Recommendations for Reform 343 Disclosure, Divestment, and the Role of the Blind Trust 344 Declaration of Interest and Withdrawal (Recusal) 353