Report to the Speaker Re: Mr. Fred Schell
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Legislative Assembly of Nunavut Report to the Speaker Re: Mr. Fred Schell, MLA October 18, 2011 Norman Pickell Integrity Commissioner RE: MR. FRED SCHELL, MLA Request for a Review: This is a review pursuant to section 36 of the Integrity Act of Nunavut (herein referred to as the “Integrity Act”). Ms. Janet Slaughter has asked me to review the conduct of Mr. Fred Schell. Complainant and Respondent: The Complainant, Ms. Janet Slaughter, is the Deputy Minister of Justice for the Government of Nunavut. The Respondent, Mr. Fred Schell, is the Member of the Legislative Assembly (herein referred to as “MLA”) for South Baffin, which includes the communities of Cape Dorset and Kimmirut. At the time that the complaint was made in June 2011, Mr. Schell was a Regular Member of the Legislative Assembly. His election to Cabinet on September 28, 2011 does not play any role in this review. The Allegations: Ms. Slaughter alleges that Mr. Schell contravened the Integrity Act and specifically the following: 1. The conflict of interest provisions of the Act; 2. The influence provision of the Act; and 3. The blind trust provisions of the Act. To be more specific, Ms. Slaughter alleges that Mr. Schell committed 4 breaches of the Integrity Act as follows: 1. She alleges that Mr. Schell improperly attended a meeting which included officials from the Government of Nunavut on June 22, 2009 on behalf of Polar Supplies, a company which Mr. Schell owns. 2. She alleges that Mr. Schell improperly sent an email on June 23, 2009 to an official in the Government of Nunavut regarding the meeting of June 22, 2009. 3. She alleges that Mr. Schell improperly asked a question in the Legislative Assembly on October 29, 2010 that had a connection to his own business, which he had placed in a blind trust. 2 4. She alleges that by doing the first 3 things, Mr. Schell breached the provisions of his own Blind Trust Agreement. The Procedure to Initiate a Review under the Integrity Act: Section 36 of the Act allows any person to ask the Integrity Commissioner to review the conduct of an MLA. There are certain requirements in the Act that must be met before the Integrity Commissioner can conduct such a review. If the request is coming from someone other than the Premier or the Legislative Assembly, 1. the person requesting the review must have reasonable grounds for believing that there has been a contravention of the Act; 2. the request to the Integrity Commissioner must be in writing; and 3. the facts to support the allegations must be in an affidavit. Conduct of Review under the Integrity Act: Section 41(2) of the Act states that the Integrity Commissioner may conduct the review in private or in public at the Integrity Commissioner’s discretion. I have decided to conduct this review in private. Accordingly, I will not be releasing copies of the affidavits, letters and other material which were provided to me for this review. Background: On June 9, 2011, I received three emails from Ms. Margaret Hollis, Legal Counsel with the Department of Justice, Government of Nunavut. Attached to her emails were the following: 1. A letter dated June 7, 2011 from Janet Slaughter, Deputy Minister of Justice; 2. The affidavit of Janet Slaughter which was sworn June 7, 2011; 3. Copies of Exhibits A through I to the affidavit of Janet Slaughter; 4. A copy of Polar Supplies v. Cape Dorset (Hamlet), a decision of the Nunavut Court of Justice dated March 22, 2011; 5. A copy of an article dated March 24, 2011 entitled “Nunavut judge rejects bid from MLA-owned company” which appeared in the Nunatsiaq News; and 6. A copy of a news story dated March 23, 2011 entitled “Lawsuit by Nunavut MLA’s firm winds through court” that appeared on the CBC.ca website. 3 The originals of the above items arrived in my office by regular mail on June 13, 2011. Ms. Slaughter’s letter stated in part as follows: “I hereby request that the Integrity Commissioner review the facts and give a written report on the following apparent contravention of the Integrity Act … that has come to my attention. The Member of the Legislature concerned is Fred Schell, the owner of Polar Supplies Ltd.” “… the material attached to my affidavit shows that Mr. Schell has used his office to attempt to influence a decision in contravention of section 10 of the Integrity Act, …; it also shows that Mr. Schell has remained actively involved in the business of Polar Supplies Ltd., which may well be a contravention of his [blind] trust under the Integrity Act …. In a community as small as Nunavut, where his status as an MLA is well known, his presence at certain meetings may be, in itself, an attempt to use his office to influence a decision.” Ms. Slaughter’s 15-paragraph Affidavit set out certain allegations in support of her request for the review. After reading the material I received from Ms. Slaughter, I concluded that there were sufficient grounds to warrant commencing a review in accordance with section 40 of the Act. On June 12, 2011, I sent Mr. Schell copies of: 1. The letter dated June 7, 2011 from Janet Slaughter; 2. The affidavit of Janet Slaughter which was sworn June 7, 2011; and 3. Copies of Exhibits A through I to the affidavit of Janet Slaughter; I asked Mr. Schell for his response to what I sent him. I did not send Mr. Schell copies of the following: 1. A copy of Polar Supplies v. Cape Dorset (Hamlet), a decision of the Nunavut Court of Justice dated March 22, 2011; and 2. Copies of the news articles from Nunatsiaq News and CBC.ca. My reason for not sending copies of those three items was because I was concerned about giving Mr. Schell too much information about his company, Polar Supplies Ltd., which Mr. Schell has placed in a blind trust. 4 Later I received further material from the Complainant, copies of which were provided to Mr. Schell. Initially Mr. Schell was going to prepare his response himself. But at the beginning of August, Mr. Schell advised me that he had hired a lawyer to represent him. By the end of August, I received word that another lawyer, Mr. Patrick Smith, was acting for Mr. Schell. Both Mr. Schell and Mr. Smith provided me with material in response to the allegations made against Mr. Schell. Mr. Smith’s Submissions on behalf of his client were the final piece, which I received on October 11, 2011. Mr. Schell’s Blind Trust Agreement: At the time that he was elected to the Legislative Assembly of Nunavut, Mr. Schell owned all of the shares of Polar Supplies Ltd. Polar Supplies Ltd. has carried on business in the Hamlet of Cape Dorset for a number of years. The company owns and operates facilities and assets which do quarrying, gravel work, construction and demolition. Polar Supplies Ltd. also provides transportation, storage and accommodation in Cape Dorset. Pursuant to section 16 of the Integrity Act, Cabinet Ministers are not allowed to manage or carry on a business through a corporation. There is no similar restriction on Regular MLAs. (Mr. Schell was a Regular MLA at the time relevant to this review). However, a Regular Member is able to place his business interests in a blind trust if he chooses to do so. That is what Mr. Schell did. Here is a list of dates as they relate to Mr. Schell’s Blind Trust: October 27, 2008 - Mr. Schell was elected to the Legislative Assembly November 7, 2008 - the Integrity Commissioner conducted an orientation session with all MLAs (including discussing blind trusts) September 8, 2009 - the first communication the Integrity Commissioner received from anyone on behalf of Mr. Schell regarding setting up his blind trust January 1, 2010 - the effective date of the Blind Trust Agreement pursuant to which Mr. Schell put all of his shares in Polar Supplies Ltd. into a Blind Trust 5 January 1, 2010 - the date on which Mr. Schell’s Trustee, Mr. Garth Wallbridge, effectively took control of Polar Supplies Ltd. in place of Mr. Schell Generally once an MLA puts his assets into a Blind Trust, the MLA: 1. gives up the right to information about those assets; and 2. cannot participate in any decision-making regarding those assets. There are some exceptions to this rule. But none of them are relevant in this review of Mr. Schell. Issue: This review is to determine if any or all of the allegations made by the Complainant against Mr. Schell are true. If any of them are, Mr. Schell has contravened the Integrity Act. Burden and Standard of Proof: Generally a person who alleges that an MLA has contravened the Act must establish the allegations by clear and convincing evidence. The standard of proof is high. Allegation # 1 – Improperly Attending the June 22, 2009 Meeting: This allegation is that Mr. Schell improperly attended a meeting which included officials from the Government of Nunavut on June 22, 2009 on behalf of Polar Supplies Ltd., a company which Mr. Schell owns. Most of the facts concerning this allegation are agreed upon as follows: 1. A meeting took place on June 22, 2009 between Polar Supplies Ltd. (herein referred to as “Polar Supplies”) and representatives of the Government of Nunavut’s Department of Community and Government Services (herein referred to as “the Department”). 2. Mr. Schell attended the meeting. 3. Ms. Cheryl Constantineau, the Operational Manager of Polar Supplies, also attended the meeting.