23 May 2013

Beth and Expenses #nlpoli #cdnpoli

All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.

Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish.  She was barred from the House by the legislature’s internal economy commission.  The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.

But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go.  While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.

That’s important because of Marshall’s record once she got into the House herself as a member in 2003.

Her successor as Auditor General – future Tory candidate John Noseworthy – issued a special report in 2007 on members’ expense claims.  He covered the period between 1989 and 2006. 

After 1996, members were able to spend public money originally intended to cover their expenses as members of the legislature on pretty much anything they chose.  One common practice was to use the money to make donations of various kinds.  Some members made donations to registered charities and, as Noseworthy noted, may well have received a personal benefit on their income tax forms from public money.  No one has ever investigated that.

They also gave money to groups and individuals often without receipts.  One former Speaker stated publicly that he often covered some costs out of his own pocket so he could spend more of his public money on these hand-outs to constituents. 

If the whole thing smells a little odd to you, it should.  Chief Justice Derek Green condemned the practice in no uncertain terms after his investigation into the spending scandal.  Green said that it supported the notion that political success came from buying support with favours.  He said that the practice “demean[ed] the role of the elected representative and reinforce[d] the view that the standards of the politician are not grounded in principle.”

Green also condemned the practice of using public money in this way since it gave incumbents an unfair advantage over challengers.  Green said that the fact members were allowed to spend the money based solely on their own discretion allowed for accusations of favouritism.

Noseworthy totalled up the donations – as he called them – and gave the figure as a share of total constituency allowance.  If you look at those figures, something truly fascinating stood out, as SRBP noted in a 2007 post, “The lure of soft money, redux”.

Here’s the table from that post showing the top 10 members of the House for handing out public money in donations as a share of the total allowance available:

Rank Name Party Percentage

  1. Diane Whelan PC 49.05
  2. Shawn Skinner PC 46.96
  3. Kathy Dunderdale PC 46.90
  4. Bob Ridgley PC 38.21
  5. Elizabeth Marshall PC 34.23
  6. Tom Osborne PC 30.16
  7. Hubert Kitchen Liberal 30.10
  8. Sheila Osborne PC 26.30
  9. David Denine PC 25.96
  10. John Ottenheimer PC 25.49

Others may have given larger amounts mostly because they spent longer in the House.  But these 10 topped them all for the amount as a share of what they had available to spend. 

Number 11, by the way, was Danny Williams.  He handed out 24.26% of the money he got to run a constituency office and so forth and handed it out as “donations”.  That’s on top of his entire salary while he was in office, which he handed over to his personal charity to use for other donations.  Williams and his supporters claimed for many years that he never took a salary  - supposedly at all – but it wasn’t until well after 2007 that the truth emerged.

But that is digression.

Every single one of the Top 10 spenders represented districts in the metropolitan St. John’s area. Former natural resources minister Shawn Skinner and current Premier Kathy Dunderdale tied for second, spending almost half their constituency money on “donations”, as Noseworthy called them.

And right there in the middle is former Auditor General Elizabeth Marshall at about 34%.

Marshall had no problem with allowing members of the House to spend an essentially unlimited amount of money as they saw fit, without receipts.  She told a CBC interviewer in September 2007 that the donations were ‘appropriate” and likened the set-up to the use of discretionary funds anywhere in government.

As SRBP noted in 2007, though, “Green document[ed the original Morgan Commission recommendation in 1989 on allowances and the manner in which discretionary funds were restricted until that specific type of fund was eliminated by Marshall and her colleagues on the House management committee in 2004.”


You didn’t know?

Marshall was a member of the House of Assembly internal economy commission in 2004.

“Had donations in fact been treated like discretionary funds,” as SRBP noted in 2007, “…members would have been limited to a maximum of $4800 per year. But Marshall [knew] that donations were not treated like discretionary funds. In the period after Marshall and her colleagues eliminated discretionary funds - and as the AG documented - gifting by Marshall and her colleagues increased compared to previous years. Marshall's colleague the deputy Premier handed out one gift of $5,000 in a single go in 2007.”

That increase is something most people never noticed, by the way, including either Marshall and Noseworthy as auditor general.  Green did.  There’s a neat little chart showing the budgeted House allowances versus actual spending.  By the time Beth went gunning for Paul Dicks, the whole House was so far out of whack it would have been hard not to notice.

But evidently she did.

And after 2003, when Marshall and her Conservative colleagues made the rules, the gap between the budgeted allowance and actual spending widened.

green chart