More questions will be asked as Charlottetown councilmen keep the forensic review under wraps

The report of a forensic audit examining financial concerns at Charlottetown City Hall would already be in the hands of townspeople if it had concluded there was nothing wrong, a former councilman claims.

“When the audit report informs the council and the city of all observations made by Mr. [Scott] Messervey, the report would have been published long ago,” said David MacDonald, who served as a Charlottetown councilman for eight years and is now a private investigator.

Messervey, a chartered accountant and former deputy chief administrator for the city, sent a list of 18 concerns to councilors in January 2019.

At the time, Messervey told the council he had been fired by his boss, the city’s former CAO Peter Kelly, in retaliation for raising the concerns. Kelly denied the claim.

Within weeks, city councilors voted to take no further action on the matter. But after details of Messervey’s letter emerged last spring, the Charlottetown City Council first fired Kelly without reason and then commissioned a forensic investigation from firm BDO Canada.

City Hall has not said how much the BDO exam cost, but Mayor Philip Brown has clarified that the number will be in six digits. Some city councils have put the cost at around $300,000.

Review by Legal Counsel

The report of this audit was submitted to the Council on February 6 but has not yet been published.

First, Brown said the city “is having our legal counsel reviewed [the report] and then we’ll come back to it to release hopefully in the next few days or within a week.”

At the time, Brown said it was necessary “to determine the potential for legal liability against the city from an individual [or] from a company.”

This week, a city spokesman told CBC News it will be another two weeks before the audit report is released in any form.

“The BDO report is still being reviewed by our legal counsel and we hope to bring this matter back to the Council within the next two weeks,” the spokesman said via email. “The matter before us primarily concerns our obligations to [the Freedom of Information and Protection of Privacy Act].”

The story goes on

City councilors spent hours in closed-door meetings debating what to do with the forensic audit, well before the city received the report.

The democracy advocate has questions

Duff Conacher, a former law professor and co-founder of the group Democracy Watch, said the PEI should have legislation that would force local councils to release the report of each audit, much like reports are released by the province’s auditor general.

He said the city needn’t worry about being sued for defamation over the audit because the report and any resulting conclusions are protected as fair comment in any defamation lawsuit “so long as the findings are based on solid evidence.”

Conacher said he believes there would be multiple levels of conflicts of interest if Charlottetown Council members were allowed to participate behind closed doors in decisions about which parts of the BDO audit should be made public.

“Any councilman who has carried on from the previous council has a clear conflict of interest, especially if it makes them look bad in the first place,” Conacher told CBC News.

All but one of the councilors who ran for re-election in last year’s local elections were successful. Brown and six of the 10 current council members who served on the previous council.

Conacher said there was also a “systemic conflict of interest” in the council deciding what to do with “a report that would make the council look bad because it would cause the public to demand reforms for more accountability and transparency.” . “

Bad looks are something politicians at all levels try to avoid, Conacher said.

“You can’t let politicians decide what kind of information comes out of their own governments regarding allegations of wrongdoing, especially not.”

When CBC News asked if conflicts had been declared by Charlottetown council members or what steps had been taken to avoid them, a city spokesman responded via email and said, “There is no conflict or perceived conflict within our business.”

Issues raised by Messervey

Messervey initially provided councilors with a list of 18 concerns in January 2019, but that list grew when he filed harassment and whistleblower complaints with the city, along with a small claims case seeking an extension of his severance pay.

Some of his concerns have been reported in the past, but many have not.

Below:

• Messervey alleged that some council members had a conflict of interest and violated the Local Government Act over spending on paving, which exceeded the bid amount approved by city councils by almost a million dollars.

• He said the city had granted the owner of a private apartment in the core downtown area access to a property tax rebate for commercial development, and the rebate would continue to be granted even after he told Kelly the property’s eligibility should be reviewed.

• He said former elected officials and staff left the city without returning laptops, cellphones and, in the case of one former official, several tablets. Messervey said in some cases people are allowed to buy their devices; in others they simply were not retrieved by the city. Anyhow, Messervey said the moves violated city policy and in some cases posed a security risk, as data was not wiped on some devices.

• Messervey said the city was offering free snow removal and salting services for a private company without a written agreement and in possible violation of the Local Government Act.

• He said the city agreed to provide the Charlottetown Islanders with proceeds from naming rights and concession sales at the Eastlink Center, but without first letting the money go through City Hall and then posting it as grants to the hockey team. That’s an arrangement he said lacked transparency and accountability to residents, who he said “should be aware of the amount of taxpayer money being given to the sports team.”

“Disappointed… Not Surprised”

In a written statement to CBC, Messervey said he was “disappointed that residents are still waiting for the final BDO report to be released, but I’m not surprised”.

Messervey said he found it “very concerning” that it took more than four years to investigate the issues he had raised, but said he was confident the results “will underpin the concerns I had during my brief employment with the city”.

Messervey also said his attorney requested an unredacted copy of the report.

Vote ‘should never have happened’

MacDonald, the former council member, said that if any of Messervey’s concerns are supported by the audit findings, it will cast doubt on the previous council’s actions, including those members who were re-elected.

In particular, he cites how councilors voted in February 2019 not to take any further action on Messervey’s list of issues.

“If any of the concerns he raised turns out to be valid, then that vote was – well, the vote shouldn’t have happened that way at all. It just shouldn’t have happened,” MacDonald said.

“To agree not to act on the advice of a professional bringing a concern of this magnitude to the Council – I just don’t get it.”

If you have information related to this story or a news tip you’d like to share with CBC Prince Edward Island, please email [email protected] or [email protected]