Lawsuit patronage scandal threatens Redford's moral authority to lead:Wildrose

EDMONTON – Wildrose Leader Danielle Smith says Alberta Premier Alison Redford must publicly admit misleading the legislature on the selection of her ex-husband’s law firm to be part of a multibillion-dollar government lawsuit.

Smith and Wildrose house leader Rob Anderson say the scandal has grown to the point it now strikes at the heart of Redford’s moral authority to govern and the premier needs to apologize.

“Let’s face it, this is something that could likely defeat the premier either before the election or by the next election,” Anderson told reporters Thursday. “We’re talking about $10-billion in litigation to her ex-husband’s law firm.”

Smith and Anderson point to a paper trail of memos released under freedom of information rules to the CBC this week.

The documents indicate that Redford, while serving as justice minister in 2010, picked a consortium of law firms that included her ex-husband’s to pursue a $10 billion lawsuit for the province against tobacco companies.

On Wednesday, Redford told the house during question period that while she weighed in on the issue in favour of her ex-husband’s law firm at the time, her successor at the department, Verlyn Olson, made the final decision in June 2011.

However an internal Justice Department memo shows the final decision was made by Dec. 22, 2010 — about two months before Redford left the justice job and just over a week after Redford wrote a memo saying the consortium was the best choice.

“Call made to Karsten (sic) Jensen at the successful consortium,” reads the email between senior justice department bureaucrats. Carsten Jensen is a partner in the firm with Redford’s ex-husband.

The Wildrose also pointed to a followup internal Justice Department briefing document on Jan. 13, 2011, that states, “Shortly before Christmas, Minister Redford selected the International Tobacco Recovery Lawyers.”

Other emails show the winning firm being congratulated and the losing bidders being officially informed they had lost, all while Redford was still the justice minister.

Redford, however, was unequivocal on the issue in the house Wednesday.

“I was not the justice minister at the time that the government made that decision,” said Redford.

“The opposition can stand up every single day and say that I was, but I wasn’t. It is simply not the case. It is not true.”

Redford’s ex-husband, Robert Hawkes, is part of a Calgary-based law firm that has joined forces with other law firms in Ontario and Florida to fight such lawsuits as a consortium titled International Tobacco Recovery Lawyers, or TRL.

Despite their divorce, Hawkes has remained close to Redford professionally as a political adviser. He headed the transition team when she became premier in the fall of 2011.

TRL was one of three shortlisted competitors to pursue the lawsuit on behalf of the province.

On Dec. 14, 2010, then justice minister Redford sent a memo to her top department bureaucrat on the three competitors.

“I note that the review committee considers all three firms interviewed to be capable of conducting the litigation and believes that while no consortium stood above the others, all three have unique strengths and weaknesses,” wrote Redford.

“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 will be the International Tobacco Recovery Lawyers.”

Current Justice Minister Jonathan Denis also said in the house Wednesday that TRL was chosen by Olson because, among other factors, it wasn’t suing Big Tobacco on behalf of a number of applicants or other provinces.

Denis said they didn’t want Alberta’s interests to be lumped in with other litigants against the tobacco companies.

“We want a consortium that acts solely for Alberta taxpayers,” Denis told the house.

“It’s not the same interest as another province’s like B.C. or Saskatchewan. We need a made-in-Alberta solution.”

Denis also told the house that Hawkes is not directly involved in the case and that the lawsuit is being pursued on a contingency basis, meaning if TRL fails to win any money for the province, it doesn’t get paid.

Smith noted that, in government terms, the decision was made with lightning speed — just seven weeks from announcement to selection.

She noted that Redford announced the lawsuit on Oct. 25, 2010. A week later, the Justice Department invited several firms to bid for the job as lead litigator with a deadline to follow in two weeks on Nov. 15.

The three firms then made bids

On Dec. 7, Redford received a memo from her officials saying all three applicants were capable. A week later, she wrote a memo urging TRL be picked, and just over a week after that TRL was told it won the competition.

Then, noted Smith, the process grinds down to a glacial pace.

The details were not signed for another six months, by Olson. The decision was not announced to the public until a year after that, in May 2012.

Both the Liberals and the Wildrose are urging Ethics Commissioner Neil Wilkinson to investigate the matter.

However, NDP Leader Brian Mason says that’s a mistake.

Mason says while Redford used poor judgment to step in on a lucrative contract that benefits someone close to her —in this case Hawkes — it’s not a technical breach of ethics rules because Hawkes is not a spouse, but an ex-spouse.

Mason said the result would be Wilkinson finding in favour of the government and Redford dodging questions on it until then by saying the matter is before an independent officer of the legislature.

It’s been a difficult two weeks for Redford.

Last week, freedom of information documents showed Redford’s sister, Lynn, used her position as a Calgary health executive to bill taxpayers for about $3,400 to buy liquor, tickets and bug spray for PC party events.

The premier has declined to comment on that case and Lynn Redford continues to work as a senior health executive.

Health Minister Fred Horne has said Lynn Redford’s expenses were run up for a health region that no longer exists and that the province is moving on with tougher expense rules.

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