20 Oct Barrow, MacFadden, and ‘Suitcase’ Simpson: the final chapter

Extortion.

That’s how the Liberal Party of Nova Scotia obtained the money it would be blocked from using by a government bill introduced in the legislature Tuesday. Liberal leader Stephen McNeil should think hard before crying victim.

Justice Minister Ross Landry, who introduced the bill, suggested the Liberals give the tainted funds to charity. A better idea would be to give it back to the provincial treasury, because that’s who they stole it from.

McNeil may think voters’ memories are too short to remember the details, but a few of us old coots are still around to remind them.

The money in question came from two ‘trust’ accounts, the Hawco and Howmur Funds. They came to light in the 1983 influence-peddling trial of three Nova Scotia Liberal Party fundraisers, Sen. Augustus Irvine Barrow, Clarence MacFadden, and the colorfully named James G. “Suitcase” Simpson.

The three bagmen oversaw a Liberal Party toll-gating scheme from 1970 to 1978, while Gerald Regan was premier. As the Supreme Court of Canada (R. v. Barrow, [1987] 2 S.C.R. 694) described it:

In October of 1970, the liberal party defeated the then Government of Nova Scotia in a general election and formed the new government which held power until 1978. During the period from 1970 to 1978, the Committee collected contributions amounting in total to $3,836,468.13, of which $2,770,773.52 was deposited in one bank account and $1,065,694.61 in the other. A police investigation commenced in the autumn of 1978 resulted in the seizure of many documents from government departments and agencies and also from several wineries, distilleries and other corporations. The evidence revealed that the contributions made by liquor and wine companies dealing with the government were based on a fixed amount per case of products sold to the Government. Other companies doing business with the government paid a percentage of monies they received from government work which ranged from three to five per cent.

Simpson plead guilty and paid a $75,000 fine. MacFadden and Barrow were found guilty at trial; MacFadden paid a $25,000 fine, but Barrow, for whom conviction would have meant expulsion from the Senate, appealed and won a new trial on a technicality. He was acquitted at a second trial.

At the first trial, Hugh Rynard, president of Acres Consulting Services Ltd., testified:

One of my functions was to insure that we as a company did whatever was necessary to improve our ability both in obtaining work and in execution of our work. And I was told that it would be in order for me to seek an appointment with Mr. Barrow.

Rynard and Barrow met on March 7, 1973 so Rynard could pitch the bagman on the company’s expertise. According to Rynard’s undisputed testimony, Barrow:

told me during that conversation that we would be expected to pay from three percent to five percent of the fees generated from Provincial Government work to the  . . . into the coffers of the Liberal Party.

For years, the Liberal Party used interest off these secret funds to finance campaigns and, in at least one notorious example, to pay a secret salary to Liberal leader Vince MacLean.

The funds returned to the public spotlight in the early nineties, thanks to late George Hawkins, a courageous Liberal who spent years trying to convince fellow Party members to give up their ill-gotten gains, and apologize for taking them in the first place. “Since the beginning of the Regan administration,” Hawkins said, “the Liberal Party… has been living… from the proceeds of crime.”

Even before the Barrow-MacFadden trial, Hawkins knew the source of the money because, ironically, his father, a Liberal stalwart, had set up one of the funds. There is little doubt that Nova Scotia Conservatives carried out similar shakedowns during the Robert Stanfield and G.I. Smith administrations, but the party’s financial records were destroyed in a mysterious fire around the time the RCMP began making inquiries.

Thanks to pressure from Hawkins, the Liberal Party eventually agreed to audit the funds, and relinquish to the province any money that proved tainted. But as Kings College Journalism prof. Steven Kimber recounts, the party’s actions fell short of this promise:

After another year of obfuscating, the party released its so-called “audit,” which wasn’t. Instead, the auditors, “as specifically agreed,” only perused the actual trial transcript and identified $1,287,473.14 “proven or alleged to have been obtained” through kickbacks. “This procedure,” the auditors noted dryly, “does not constitute an audit.”

Liberal House Leader Manning MacDonald likes to pretend the funds were “cleansed many years ago” through this process, but this is malarkey. Most, if not all of the money that remains in the funds was stolen from the taxpayers of Nova Scotia.

Steven McNeil has a decision to make. Will he continue the long tradition of lying about the source of this money? Or will he support Bill 44, a measure that would finally put this sordid chapter of our history to rest?