- Exclusive: MacPolitics: Allegations That NS Liberal Party Covered Up Theft Of $120K By Ex-Staffer
By Andrew Macdonald – Published Feb. 11th, 2022
There are allegations a former staff member at the Nova Scotia Liberal Party offices in Halifax stole $120,000 from the party coffers over a six year period.
Then Party president Joseph Khoury, a Saint Francis Xavier University professor, and executive director Mike Mercer were not responding Feb 10th, 2022 to Notebook email and phone messages. One staff member refused to provide Khoury’s email address when told him why I was calling.
At issue is a now terminated party toiler, who worked with the party’s finances over a 20-year period. Confronted in December 2020, the worker tendered their resignation on Jan. 1, 2021.
The former staffer has not been charged with a crime and is now working elsewhere within the provincial government.
The terminated staffer was not an employee of the Premier’s Office, but of the province’s Liberal Party.
After receiving a tip on Feb. 10th, 2022, I have talked to multiple sources who tell me then-outgoing leader Premier Stephen McNeil wrote to Khoury asking him to thoroughly investigate the matter.
I understand McNeil was given information on an alleged theft by a third party, not from party president Khoury nor from executive director Mercer, with whom the premier reportedly had a fractured working relationship. McNeil ran two successful campaigns with his own team, not relying on the Liberal executive director but instead on Liberal rank and file, such as M5 Agency co-owner Chris McInnes.
To be clear, McNeil handled the issue of missing funds appropriately, writing to president Khoury and asking for a thorough investigation.
In McNeil’s letter, part of which was read to me, the premier told Khoury that party rules and bylaws clearly stated any theft of funds would have to be thoroughly investigated. He suggested Khoury contact police if wrongdoing was confirmed.
It is not clear why neither Khoury nor Mercer did not report the missing money to police, but Khoury did bring in two auditors in the winter of 2020-21, after McNeil left office. A forensic audit was conducted to determine if money was stolen, and another audit team was tasked with reviewing party processes and procedures.
Khoury and the Liberal Party also retained a lawyer, as did the terminated employee, report sources.
No charges have been laid against the terminated employee, and that is why I am not naming the person in this article.
Then-Premier Stephen McNeil told party president Joseph Khoury the Liberal board would have to go to police saying if wrongdoing was confirmed. (NS Government photo)
My initial source suggested other news media in Nova Scotia have been advised to the allegations that of the missing funds.
My tipster provided a detailed account of things, which I have since confirmed with multiple sources.The email tip sent to The Notebook was headlined: ‘The Story of an Unreported Theft in the NS Liberal Party’.
“If someone stole $120,000-plus, did a theft occur?” the tipster asked. “If a theft involved government funds, is there a higher level of accountability to report such a theft to the police?
“If it is acknowledged that the theft occurred, is there a responsibility in terms of ensuring good governance that a full governance review be initiated by the organization’s governing board?
“The answer of course to all of these is a YES,” wrote the tipster, who added that the Nova Scotia Liberal Party management board recognized a theft had occurred but opted not to report it to police “and has so far thwarted any effort to initiate a governance review.”
In late December 2020 or early January 2021, it was discovered that something in the range of $10,000 to $20,000 had been stolen from the party by the now-fired employee during 2020.
The management board was advised of the matter in early 2021, details my tipster.
The staffer, when confronted, admitted the theft, and was offered an opportunity to resign.
Premier McNeil is said to have directed the board to report any crime that may have occurred to the proper authorities, but why that was not done remains a mystery. Neither Khoury nor Mercer took my news calls on Feb. 10th, 2022
.
Former Liberal Party executive director Mike Mercer was not taking questions on a possible cover-up over missing funds and a now-terminated employee in Feb. 2021.
The missing funds from the year 2020 were paid back by the former staffer in early 2021, my source says.
“However, a decision to investigate prior years was taken and it was determined that the theft had been ongoing for six years. By late spring 2021, it had become evident that in excess of $120,000 was stolen,” says my informant.
In July 2020,,the ex-staffer subsequently paid back the full $120,000 that had been determined to have been stolen, the source says.
Throughout the period, Khoury and Mercer “made every effort to limit any possible public disclosure of the theft,” says my source. “Management board members were only told pieces of information, and they were required to sign non-disclosure agreements for the little bit of information they were provided.”
While details of how the theft was engineered remain known to only a select few, Mercer’s signature had been forged on cheques, the source reports.
A review of property records shows the fired employee took out a mortgage on a house in Hants County in the summer of 2021 for an amount in excess of $150k.
Key Questions:
The theft occurred throughout the time that Mike Mercer was the party’s executive director. I have a number of so-far unanswered questions for him:
1. Why was a governance review not authorized given that it was his signature forged on the cheques?
2. What poor processes were in place that allowed the situation to not only occur, but also continue undetected for years?
3. Why does a staff member have signing authority?
Typically signing authority rests with the elected officers of the board, but a governance review would determine best practices and whether the party was employing good practices.
Dr. John Gillis was the party president throughout much of the period when the alleged theft occurred, so I asked him on Feb. 10th, 2022 about a full governance review, and whether he consented to staff being given signing authority? It is understood that staff did not have that authority prior to his presidency.
In an email response to The Notebook, Gillis wrote: “Hey Andrew, sorry I’ve been traveling. I haven’t been an officer of the Nova Scotia Liberal Party for 3.5 years now, and I’m in no position to comment on any internal NSLP matter. I’ve also learned long ago not to comment on random anonymous, potentially libelous accusations about me or anyone else. Stay safe!”
Questions presented in Feb. 2022 for Mike Mercer and Joseph Khoury (neither are talking):
1. What information has been conveyed to Elections NS and when? The 2020 audited financial statements were required to be filed in Spring 2021.
2. NS Liberal Party funds are raised from individual Nova Scotians. Can those donors have confidence in the management of the NSLP if there is no public accounting of what took place and specifically if a governance and management review is not undertaken?
3. The NSLP, like all recognized political parties in the province, receives public funding. In the interest of transparency and accountability, isn’t there a moral obligation to be open to citizens and taxpayers about any financial impropriety in an organization that is partly publicly funded? (The IWK comes to mind).
Various sources report the board of the NS Liberal Party is a cozy environment.
Dr. John Gillis as a former NS Liberal Party president is not commenting on allegations party brass covered up the theft of $120,000 by a now ex-employee.
On the board is party president Khoury’s spouse, Janet Becigneul, who sits as secretary of the board.
Meanwhile, the Liberal women’s commission president is Patty Culbert, a close friend to Mercer, as is the youth president Ray Anjoul, who is also an employee of the Liberal caucus office and would be in a conflict of interest given his employment.
STFX professor Joseph Khoury is president of the Nova Scotia Liberal Party.
Khoury is not running again for president. The race was between Bedford’s Paul Doucette and Peter Bragg. Doucette won the 2022 contest.
Doucette is a close friend of Dr. Gillis, and when he celebrated a birthday in January of 2022, one of the first to wish him a happy birthday was Becigneul.
Paul Doucette, past president of the NS Liberal Party president, as pictured on the social media pages of former president Dr. John Gillis. The two friends flew to Europe in 2021.
Meanwhile, Bragg is the son of the late, great Ross Bragg, Liberal Premier John Savage’s 1993 Economic Development minister.
