CANADA

Sensational paper-chasing

MICHAEL POSNER July 28 1986
CANADA

Sensational paper-chasing

MICHAEL POSNER July 28 1986

Sensational paper-chasing

The tensions and the stakes were clear from the start. For one thing, David Scott, chief counsel for the judicial inquiry into the affairs of former federal cabinet minister Sinclair Stevens, declared that federal civil servants were setting aside important government documents—to protect secret cabinet correspondence from public disclosure. Then, Stevens’s lawyer, John Sopinka, delivered a series of unsuccessful arguments against allowing live television coverage of the public hearings. Declared Scott after the first day of testimony last week: “It is going to be a dogfight the whole way.”

The commission, chaired by Ontario High Court Judge William Parker, was appointed by Prime Minister Brian Mulroney on May 15. Stevens himself had asked for the inquiry in the wake of allegations that he had breached conflictof-interest guidelines while serving as industry minister from 1984 until the furore forced his resignation from the cabinet on May 12.

Last week Scott and his staff began sifting through thousands of documents—including 3,000 five-inch-thick files from the industry department alone—that have already been submitted. Then, when the proceedings opened, Scott distributed to 14 lawyers representing accredited parties to the inquiry a 29-page list of allegations against Stevens.

At the heart of those allegations was a $2.6-million loan to one of the former minister’s family companies. The loan, negotiated by Stevens’s wife and business partner, Noreen, was from Anton Czapka, co-founder of Magna International Inc., the Markham, Ont.-based auto parts company that last year received $13.9 million in grants from Stevens’s department. Other charges claimed that Noreen Stevens, vice-president of the real estate arm of the family-owned York Centre Corp., had approached several Toronto investment dealers last year to raise funds for the financially troubled company—just

before those firms were about to receive lucrative contracts from Stevens’s ministry.

With a view toward his client’s political future, Sopinka’s objective last week was clearly to safeguard Stevens’s privacy and narrow the scope of Parker’s investigation. Scott seemed equally eager to broaden the inquiry. One of

his concerns: that Ottawa bureaucrats were using a “broad brush approach” in designating potentially relevant papers as privileged—and secret—cabinet confidences. But the federal government’s lawyer, Ian Binnie, pledged to provide lists of any documents that are witheld from commission investigators, and provide an opportunity for arguments for their release. That concession appeared to satisfy Scott. “I wanted to get his attention,” he said, “and we got it.” In addition to the legal jousting, the first week of testimony revealed several new facts. Among them: Shirley Walker, a longtime employee and officer of Stevens’s companies who resigned her

directorships in 1984 to become his government-paid special ministerial assistant in Toronto, continued to act on behalf of companies in Stevens’s blind trust. Although senior ministerial staff members are prohibited from such activity under the conflict code, Walker was apparently still involved in managing Gill Construction Ltd., the Stevens family holding company, and the York Centre Properties subsidiary. During a , dramatic day of proceedings Scott produced letters signed by Walker on company letterhead in 1985, months after she had ostensibly relinquished her role in Stevens’s corporate activities. In one letter dated Feb. 8, 1985, Walker gave instructions to Hanil Bank Canada’s Toronto officers about paying down $250,000 of York Centre’s $1.45-million loan with the bank.

In testimony, Walker denied writing the letters, but she could not recall who gave them to her for signing. Said Walker: “I can only conclude it was something I was asked to do.” As well, she continued to use York Centre’s office, receptionist and telephone services, although the conflict guidelines also required her to sever those business connections when she joined the minister’s staff.

The federal conflict-of-interest i rules, in effect in 1985, required all I ministers and senior aides either to sell personal business holdings or place them in a blind trust. The rules did not require spouses to take similar actions, but a letter from Prime Minister Brian Mulroney told ministers “to prevent conflicts of interest, including those that might arise out of activities of their spouses or dependent children.”

Robert Boyle, Ottawa’s assistant deputy registrar general and the man charged with verifying compliance with the guidelines, acknowledged that a wife who managed companies in a minister’s blind trust “could be a problem.” But, said Boyle, Stevens had complied with existing rules because the minister had stated that he was unaware of Noreen Stevens’s activities on behalf of York Centre Corp.

Stevens, meanwhile, was working on his farm outside Aurora, Ont. Outwardly in good spirits last week, Stevens refused to speculate on his chances of ever resuming his place in cabinet. He told Maclean's that he was more interested in farming than in watching the proceedings on TV. But before Judge Parker completes his inquiry, Stevens will get an opportunity to watch the commission up closetestifying as a witness in his own defence.

MICHAEL POSNER

MICHAEL ROSE