Liberals trying to shift focus from harsh audit to old election texts, Higgs says

A day after a scathing audit of their Saint John budget bailout, New Brunswick Liberals tried to change the subject in the legislature by suggesting a Conservative-friendly online group may have violated election laws.

Liberal MLA Rob McKee called for an investigation into New Brunswick Proud, also known as Proudly New Brunswick, including whether it co-operated with the Progressive Conservative Party during last year's provincial election.

But Premier Blaine Higgs said the Liberals were trying to distract voters from Tuesday's report by Auditor General Kim MacPherson. It said a $22.8 million bailout by the Brian Gallant government circumvented provincial law.

"This was seven months or eight months ago, sort of an old item," Higgssaid of the Liberal allegations, "but obviously the auditor-general's report is very current."

Even so, Higgs said he's willing to revive a proposal his party made when it was in opposition to ban or restrict campaign spending by outside groups.

"I do think we need to bring it back," he told reporters. "The idea is you can't have an open season. That is not democracy."

Anti-Liberal texts duringcampaign

New Brunswick Proud sent out automated anti-Liberal text messages during and after last fall's provincial election campaign.

Outside-group or "third-party" advertising is allowed during provincial election campaigns, but the groups must register with Elections New Brunswick if they spend more than $500. They must also file returns listing their donors and expenses.

According to its return, New Brunswick Proud had only two donations above $100: $5,000 from the pro-oil group Modern Miracle Network, and $7,000 from the Manning Foundation, a conservative-leaning think-tank.

The Modern Miracle Network's New Brunswick address is listed as in care of Nic Ouellette, a Saint John lawyer and former executive assistant to Higgs.

The Manning Foundation's address is listed as the law offices of Lawson Creamer, a Saint John firm where former PC leadership candidate Mel Norton works.

Higgs said no one from New Brunswick Proud was involved in his campaign, "certainly not directly with me in any way, shape or form." He also said he was not aware of any co-ordination between his campaign and Norton and Ouellette.

But McKee said their involvement with New Brunswick Proud "raises a suspicion."

The law on political donations says third-party group and political parties cannot "collude" with each other "to circumvent or attempt to circumvent" the law.

McKee also said the group appears to have spent money on the campaign before it officially registered last September, a potential violation of the law.

"When you look at the big picture, it just makes it seem a little cozy in terms of the sophisticated planning that went behind it," he said.

Heidi McKillop, listed on the return as the chief financial officer for New Brunswick Proud, said via a text message Wednesday that she would not comment because she is no longer with New Brunswick Proud.

Ouellette did not respond either, and Norton's office said he was away until next week.

Higgs sees hypocrisy

Higgs said Wednesday if the Liberals want to push for transparency, they should give the auditor general access to documents from their government that would shed more light on the Saint John budget bailout.

MacPherson's audit flagged several problems with the bailout, including that then-premier Gallant guaranteed the city the money before cabinet had approved it, and that some money was handed over before Gallant signed the agreement.

The $22.8 million was meant to close Saint John's deficit gap over three years, giving municipal and provincial officials time to work out longer-term solutions to the city's fiscal problems. But Higgs said the money was intended to buy votes in the city.

MacPherson said in her audit that she "found evidence departments involved did not provide all documentation and communications requested," a potentially illegal obstruction of access under the Auditor General Act.

Higgs's comment suggests the Liberals still control access to documents from their time in power.

But MacPherson's office refused Wednesday to clarify precisely which documents she was referring to in the audit, and which government the Liberals or the PCs refused to turn them over.

Her spokesperson Kevin Maillet acknowledged the wording of the passage is "ambiguous" and said it was written that way deliberately.

Asked Wednesday whether his government had given MacPherson everything she asked for on the bailout, Higgs said he didn't know, but "if there's information that I can control that she wants to look at, she's got it."

The Liberals denied they timed their questions about New Brunswick Proud to shift the focus from the audit. McKee said they'd been researching the issue for months and wanted to raise it before the legislature adjourned for the summer.