Testimony | Former business minister to testify in alleged case of conflict of interest

A1

By STEPHEN LLEWELLYN
llewellyn.stephen@dailygleaner.com

Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

5 Comment(s)

Dana Clendenning testified Monday that he received no payments from Fredericton businessman Barry O'Donnell after he became president and CEO of NB Liquor in the fall of 2006.

Clendenning, the former executive director of the provincial Liberal party and co-chairman of the Liberal election campaign in 2006, didn't deny previously having a business relationship with O'Donnell that included payments of $2,500 a month.

But he testified that money was part of the sale of a Bathurst call centre to O'Donnell in 2005 and for consulting work.

He said he didn't violate the province's Conflict of Interest Act.

The hearing into whether Clendenning violated the legislation is being held before Justice Thomas Riordon of the Court of Queen's Bench after a complaint was filed by O'Donnell.

Clendenning said he met with O'Donnell on Nov. 20, 2006, after he became president and CEO of NB Liquor and talked about O'Donnell's Fredericton-based call centre Connect North America.

He said O'Donnell was looking for financial support from Business New Brunswick. He said he told O'Donnell support would be difficult to get because the business was in poor financial shape.

He testified that he also said because he was now a civil servant, there wasn't much he could do to help.

"I didn't commit to anything," said Clendenning. "I said I could not intervene on his behalf. I said I could not lobby the minister."

The business minister at the time was Fredericton MLA Greg Byrne, a close friend of Clendenning's who has at times acted as Clendenning's lawyer.

But O'Donnell told the hearing a different story.

He said he and Clendenning couldn't agree on the sale price for the Bathurst call centre in 2005 until Clendenning promised to help lobby Business New Brunswick for money if the Liberals came to power in the 2006 election.

O'Donnell said the deal was he would pay Clendenning $2,500 a month and that would increase to $4,000 after the Liberals won the 2006 election as an advance commission for millions of dollars from Business New Brunswick.

The Fredericton businessman had tried to get financial assistance from the former Conservative government without success.

He said Clendenning said a Liberal government would be more helpful and he would get $4,000 for each existing employee and $7,500 for each new employee Connect North America hired. That would have been worth nearly $4 million to the company.

In his testimony, Clendenning denied that allegation about how much O'Donnell could get for each employee.

"I don't recall ever having that type of discussion," he said Monday.

Both men agreed that the deal for the $2,500 a month for 60 months was struck verbally with no written contract.

Lobbying government is legal in New Brunswick but not if a person is a senior civil servant.

Clendenning said the amount was supposed to increase to $4,000 a month after he resigned as executive director of the Liberal party, when he would have more time to do extra consulting work for O'Donnell.

He said the invoices for $4,000 a month were prepared by his wife Colleen, who owns 50 per cent of his consulting company, Stellaris Communication, and who did the bookkeeping.

But Clendenning also said the higher invoice was an error because after he resigned as executive director of the Liberal party he was too busy running the election campaign and winding it down in the fall of 2006 to do the extra work that would justify the extra payment.

The invoices from Stellaris for $4,000 a month continued well into 2007. But the last payment from O'Donnell was Nov. 1, 2006, two days after Clendenning became head of NB Liquor.

But Clendenning said that was for work done in October, before he became a civil servant. He said invoices were always prepared for work done the month before.

O'Donnell never received any money from Business New Brunswick and acknowledged he never submitted a formal application. He said he expected Clendenning to do that.

Connect North America's operation in Fredericton closed in August 2007 because of the rising Canadian dollar, said O'Donnell. His American client paid in U.S. funds.

During his cross examination of O'Donnell, Al Whitehead, a lawyer for Clendenning, said witnesses scheduled for today - including Byrne and senior civil servants at Business New Brunswick - would testify that Clendenning never tried to lobby them on behalf of Connect North America.

Whitehead said that would make Clendenning a pretty poor lobbyist if he didn't talk to anyone.

"How do we know he didn't," answered O'Donnell. "I find it pretty hard to believe that there was no contact."

In the summer of 2007, O'Donnell's lawyer sent Clendenning a letter threatening to sue him for $3.9 million for breach of contract if he didn't get financial support from Business New Brunswick in a few weeks.

O'Donnell testified he decided not to sue Clendenning because he was told the legal fees would be anywhere from $250,000 to $400,000 and that Clendenning didn't have millions of dollars to pay him.

Instead, he eventually filed the conflict of interest complaint.

The hearing is expected to wrap up today.