CHARLOTTETOWN, P.E.I. — Former P.E.I. Premier Robert Ghiz has denied interfering in a securities investigation of a firm that was involved in the province’s failed e-gaming initiative.
Ghiz also denied knowing that the e-mail account of his former chief of staff would be deleted by government IT staff, even though he signed off on a form ordering this to be done.
The lengthy cross-examination, which took place in January according to court filings, was part of the ongoing e-gaming lawsuit.
Capital Markets Technology Inc., a company that sought to establish a financial services platform related to the e-gaming initiative, is currently suing the province, as well as 14 named defendants, for $50 million.
Between 2009 and 2012, the province and the Mi’kmaq Confederacy of P.E.I. attempted to establish P.E.I. as a regulatory hub for online gambling. The initiative was eventually scuttled.
Jutice Gordon Campbell is currently reviewing a motion for summary judgment of the lawsuit.
During the cross-examination, Ghiz was asked by John W. MacDonald, a lawyer for CMT, about the securities investigation into CMT that began in the fall of 2012. Filings from CMT suggest the investigation was part of a malicious campaign by various officials to discredit the company.
The investigation was partly fueled by a rumour, of which no evidence was ever found, of CMT defrauding a woman with cancer.
“Did you think that it might have been time for you to step in?” MacDonald asked Ghiz, in relation to the securities investigation.
“Let me just make my point crystal clear,” Ghiz replied. “The Securities Commission is totally separated from the Office of the Premier. It would be against the law for me to try to get involved. So, what you were just asking me is, did I try to break the law, and that answer is no.”
In June of 2013, CMT signed a settlement agreement with the Island’s Superintendent of Securities and paid fines totalling $15,000 related to sale of securities.
MacDonald also asked Ghiz about a form, bearing his signature, that requested the deletion of the email account and desktop files of Chris LeClair, his former chief of staff. LeClair resigned in October of 2011.
MacDonald asked Ghiz why he had not indicated that the records should be retained on the form, which was prepared by government IT staff.
“Because I didn’t do the selecting. I just signed the document,” Ghiz said.
“So you didn’t look at the document before you signed?” MacDonald asked.
“No. I might have perused it, but this was just standard paperwork,” Ghiz said.
Court documents filed on behalf of CMT have suggested Ghiz and other public officials may have erased government records and emails in order to make them irretrievable under Freedom of Information requests.
In another cross-examination, LeClair admitted his wife purchased $1,500 in convertible debentures for Revolution Technologies in 2011. Revolution Technologies was a firm CMT had been attempting to acquire through a reverse takeover.
“I had information that it was an investment opportunity. I mentioned it to my wife. We agreed to do it. It is a small sum of money,” LeClair said.
In an affidavit, LeClair stated no financial benefit was received from this investment. The purchase, if undertaken with knowledge derived from LeClair’s previous role in government, could be considered a conflict of interest.
Despite this, LeClair stated neither he nor his wife were interviewed as part of the 2012 securities investigation into CMT’s practices.
During another cross-examination, former finance minister Wes Sheridan denied having any knowledge of a MOU signed between CMT and Innovation P.E.I. in 2012. Sheridan also denied knowing who Paul Maines, president of CMT, was at the time.
“Paul Maines had nothing to do with this initiative,” Sheridan said of the work of the province’s e-gaming working group.
In 2014, Sheridan stated in an interview with The Guardian that CMT had “nothing to do with” the e-gaming initiative.
“Capital Markets Technologies had no role with any of the work we were doing with online gaming here in Prince Edward Island,” Sheridan told The Guardian at the time.
In its statement of claim, CMT alleges LeClair and other public officials recruited Maines and others to P.E.I. in 2011 in order to pursue business opportunities related to gaming. The filing also alleges that in May of 2011, the province rented the Crowbush Crow golf course “in order to entertain CMT” and other associated companies.
