- MacPolitics: Chartered Accounting Association Confirms It Is Investigating NS Auditor General Following Complaints From Ex-Liberal President Joseph Khoury
By Andrew Macdonald
Updating a news file, a complaint lodged by former Liberal party president Joseph Khoury against Nova Scotia Auditor General Kim Adair, the professional org that self-regulates chartered accounts is confirming it is investigating Khoury’s complaint.
In 2024, Khoury lodged a formal complaint against Adair, stating his reputation and integrity were challenged after Adair probed the 2022 theft of over $150,000 at the offices of the NS Liberal party.
Adair was critical of the Liberals for what she said involved a lack of transparency and amounted to a cover-up. She recommended that then-Liberal leader Zach Churchill go to the police about the theft at Liberal offices by a since-fired Liberal toiler.
In 2024, Khoury lodged a formal complaint concerning the Auditor General with the Chartered Professional Accountants of Nova Scotia.
“While Auditor General Adair is protected by law from being sued for defamation, she is not protected from her professional obligations as outlined in the CPA Code of Professional Conduct,” stated Khoury. “The Auditor General chose to do an incomplete investigation and then publicly report behind a shroud of secrecy, while making defamatory and harmful allegations.”
Khoury’s complaint points out that Adair, acting in her professional capacity as Auditor General of Nova Scotia – a job to which the skills of professional accountancy are necessarily relevant, and to which the CPA NS code of conduct should indeed apply – failed to meet the standards outlined in the code concerning both professional behaviour and objectivity.
Auditor General Kim Adair said in 2024 that the Liberal Association of Nova Scotia’s financial report for the year the party discovered itself to have been the victim of six figures worth of theft by an employee, there was no mention of the misuse of funds, other than a single debit and credit entry. (The Notebook).
Khoury said triggering a complaint with CPA NS was his only recourse to dispute the AG’s findings as there is currently no complaint process or Code of Conduct that applies to the Auditor General’s office.
“I was quite surprised that the AG’s office lacks a code of conduct and a complaints mechanism,” added Khoury. “In Canada, we are supposed to have due process. The lack of a code of conduct and complaints process removes the due process that is a basic underpinning of how the government and its agents interact with citizens in this country.”
Khoury points to the oversight and accountability provided by a Code of Conduct currently in place for the Federal Auditor General as a model that could work in Nova Scotia.
“Ensuring citizens of our province have a clear and fair process to challenge the Auditor General’s decisions and findings is an important safeguard for both the subjects of AG reports as well as the Auditor and her staff,” says the former Liberal Party President.
“There is simply no downside to applying a Code of Conduct and a dispute resolution process to the office the Auditor General – I’d expect our elected representatives and legislators across all parties here in our province to support such measures. Frankly, I’d expect the Auditor General herself to be in support as well.”
Recently, the Auditor General’s office, when asked for an update on the file, told The Macdonald Notebook: “We understand that it’s working its way through the process.”
Also recently, the Chartered Professional Accountants of Nova Scotia’s spokesperson, Jessica Gillis confirmed it is looking into Khoury’s allegations against Adair.
“CPA Nova Scotia is restricted from disclosing information about a complaint by section 65 of the Chartered Professional Accountants Act, which states: All complaints received or under investigation and all proceedings of the Complaints Committee must be kept confidential by CPA Nova Scotia,” she explained.
“Disclosure is permitted under s. 66(a)(i) when information is otherwise available to the public. The public is also notified when the registration of a member is restricted or suspended during an investigation,” she adds.
But Khoury went to the media about his complaints against Adair, so the complaints were widely public.
“In this instance, because the Complainant published his complaint in the media, we are able to confirm that we have received a complaint against our member, Kim Adair. Due to the confidentiality requirements of our Act, we are unable to comment further on that matter,” adds Gillis.
For more coverage of Joseph Khoury’s complaints against Auditor General Kim Adair, here is a Notebook archived story from April, 2024:
By Andrew Macdonald – Published April 2024
- MacPolitics: Liberal Theft: A Notebook Conversation With Joseph Khoury
Back in 2022 when I broke many stories about the theft of money from the coffers at the NS Liberal Party Association, then NS Liberal president Dr. Joseph Khoury, Ph.D. labelled my Macdonald Notebook as fake media – in his words, “not formal media”. He also labelled my Notebook, a gossipy libelous website.
Now, as he makes the rounds with various media outlets, he is talking to The Macdonald Notebook. He gave me a generous 30-minute news chat.
Khoury is a former NS Liberal party president, in office when it was discovered a 20-year veteran and senior staffer with the Liberal party had stolen funds over a seven year period. She was later discovered to have stolen money after she claimed travel expenses during the lockdowns of the pandemic when the NS government banned travel among Nova Scotians.
After an investigation, Khoury’s party was able to recoup the stolen funds, plus the legal costs the party paid to Cox & Palmer and a financial audit by global accounting firm Deloitte.
In total the since fired employee paid back $195,000, including the $135,000 she stole, by also using party credit cards.
NS Auditor General Kim Adair, issued a scathing report against the NS Liberal party, finding the party “concealed” the theft until after the 2021 election was held. She called in the Mounted Police.
Liberal leader Zach Churchill quickly accepted the AG’s findings, and he also called in the cops.
Khoury, an English and Catholic studies professor at Saint Francis Xavier University denies there was a cover-up, he says there was no ‘concealment’ and any suggestion otherwise from the AG is dead wrong, and in fact, a case of defamation against him.
The AG is protected from being sued, so Khoury has called for a code of ethics” to govern the AG’s office. He has also lodged a formal complaint to the Chartered Professional Accounts of NS.
In this deep dive into the Liberal theft, I had a 30-minute chat this work week with Khoury – and we present elsewhere his official news release and official statement.
When I reminded Khoury he once labelled me a ‘fake media & gossipy libellous news site’ he said this week, he hoped there were no hard feelings. I told him I took the harsh commentary as a sign my journalism was correct and fair, that it was a badge of honour, and that my Antigonish mother just laughed at his 2022 statements.
“I hope you did not take it personally….That is in the past and I am glad it is in the past,” adding in 2022 he was dealing with lawyers and could not talk to the media.
But now he is talking to The Macdonald Notebook, as he gets his story out on the Liberal theft, and the AG’s probe report.
He calls the AG’s report “a drive-by smear campaign” against him, and Khoury believes she defamed his name and reputation, although she is protected from being sued via NS Legislature privilege commentary.
Khoury is the past president of the Liberal party and stressed that he is speaking as a private citizen, not speaking on behave of the Liberal Association, nor its leader.
“I am not the president and have not been for over two years now, and I do want to emphasize I am not speaking on behalf of the party or the leader, I am speaking just for myself, completely, it is personal.”
Khoury honestly believes he was defamed by the AG’s report.
“She got a number of things wrong, and she never interviewed me until the very end (near completion of her report), 13 months after she began her investigation. She never interviewed the (former) executive director, who discovered the misappropriation of funds.” Khoury refers to Mike Mercer.
“To me, a proper investigation would have done that job, would have actually interviewed the people who were directly involved (in uncovering the theft). The people she interviewed were my successor (past Liberal president, Dr. Paul Doucette, and some others. They were not the people involved (in the matter). How can you do a proper investigation, if you have not interviewed the people who were actually involved in the event,” Khoury tells The Macdonald Notebook.
On the Todd Veniot News 95.7 FM show the host remarked he was surprised that folk involved with the file were not interviewed – and in the case of Khoury 13 months after the probe began.
Khoury says he found 13 issues where he insists the AG was wrong.
Khoury says the AG found fault with the disclosures to auditors. But Khoury said a partial forensic audit was still being conducted, when April 1st, 2022 financials were reported, and he said the party could not make up the stolen figure. “They were still doing their work, so we did not know everything and if she had asked us, we would have confirmed that – but she never asked us.”
“What I would have told her if she asked us is that we did not want to prejudice the findings by making guesses, the forensic investigators will still investigating (Deloitte). So we did not know everything. That is one important thing.”
Khoury says that is an example of “misinformation” at the AG’s office. “But she never interviewed us.”
Khoury has not consulted a lawyer over his alleged statement of being defamed by the AG, but he does not dispute that she is protected from being sued. “As she should be, I am not disputing she should not have immunity. But to me a code of ethics which would allow me to say, ‘With all due respect Ms. Adair, this is wrong, you did not interview me’, would be appropriate”, explains Khoury.
“I am not asking for anything beyond to be treated fairly, really, I was never interviewed, the executive director was not interviewed and then she makes her findings,” he adds.
Concealment
“The worst thing is she then speculates on some concealment, and I do not know what she is talking about. Automatically people assume that I was actually concealing something and I did not conceal anything.”
“The only thing I did was to make sure the taxpayers and donors got their money back – that was the only thing I did.”
I asked Khoury if recouping the stolen money was more important than going to the police to file a criminal complaint – the party never did go to the police.
“You would appreciate that, certainly, first of all, the police became aware. Even she (AG) says she contacted the RCMP commercial crime section, and they told her they would not proceed with an investigation,” explains Khoury.
“I do not know what the police do and it is not my business to tell them what to do, obviously. In a democracy, they have to be separate from the government. I fully accept that is the way it should be,” says Khoury/
“The reality is that if let’s say she was charged immediately, and again it would not be up to me anyway, would we have been able to get the money back? I do not know. What we were told if you want the money back then try to get the money back, the rest is up to the RCMP,” he adds.
“We got the money back. And, not only that, this is very, very important, we also got the former employee to pay the expenses to the lawyer and forensic investigator.”
Khoury Hurt by Theft of Party Money
The Macdonald Notebook has never named the Liberal staffer who took the money – the story for me was how the party handled it.
Joseph Khoury is a STFX professor and a past president of the NS Liberal Party (STFX).
Khoury talks about being hurt by the betrayal of trust the party officials had placed with the staffer, who had worked at the political office for some twenty years.
“Absolutely, I think a lot of us were hurt, to be honest. In any organization, you develop good relationships, and you know relationships are important and when something like this happens, any boss would be upset. And this was difficult, very difficult on me, I was just a volunteer, it is not a paid position. But I took the job very seriously, and of course, I was hurt. It is sad because you also lost a friend.”
Khoury says the theft went back seven years, and the AG says a complete forensic audit was never undertaken by the party, despite Liberal officials claiming a forensic audit was conducted.
“I would not say she was wrong in that, but what I would say, this is true. The forensic auditors (Deloitte) were not hired by me, they were hired by the lawyers (Cox & Palmer), hired at arm’s length, because I wanted full objectivity…I asked them what is it that you need, and they told me what they needed, and I gave it to them, everything that they needed,” explains Khoury.
“A complete audit would have looked at everything, let’s say the rent, which is paid directly, no one had anything to do with it, that was not required.”
Khoury says the auditors determined what they needed. “It is very clear I make this point clearly, whatever they asked for, they got it.”
“This is Deloitte, this is a major huge firm and I trust they knew what they were doing.”
“The Auditor General has no comment on the complaint but will certainly cooperate with CPA Nova Scotia”, says the AG’s spokesperson, Amy Pugsley Fraser.
The Auditor General says she stands fully behind the report and the process followed to prepare it, adds the spokesperson.
“The report recommendations were accepted and immediately acted on by Liberal Leader Zach Churchill, and accepted and endorsed formally last Wednesday by the legislature’s Public Accounts Committee,” said AG Adair in an email message sent to The Macdonald Notebook.
