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Tory senator delayed disclosure of federal contracts for family business

By Josh Wingrove
Tuesday, January 14, 2014

Josee Verner, shown in the Housr of Commons in February, 2011, is now a Conservative senator. (Sean Kilpatrick/The Canadian Press)

An advertising firm with ties to Senator Josée Verner was awarded a pair of federal contracts she did not disclose within time limits set out in Senate ethics rules, raising new questions about oversight of the Red Chamber.

A two-firm consortium that included LXB Communication-Marketing Inc. won tendered deals from both the National Gallery of Canada and the Canadian Museum of Civilization in 2010 and 2012, respectively. Ms. Verner’s husband, Marc Lacroix, is LXB’s President. She once worked for the firm and corporate records show her family’s trust fund has an ownership stake in it. LXB is allowed to bid on such contracts, but changes made to the Senate conflict of interest code in 2012 required Ms. Verner to report the deals within 60 days. She did not.

After losing re-election as an MP, Ms. Verner – a former heritage minister, a role that oversees museums and galleries – was appointed to the Senate by Prime Minister Stephen Harper in June, 2011. The new disclosure rules were adopted in May of 2012, but Ms. Verner’s first public annual disclosure that fall didn’t mention either contract. She then amended the disclosure in April of 2013 to report the deals. That amendment didn’t say when the contracts were issued or specify her family trust fund’s ownership stake.

Asked about the delay, the senator said she ultimately disclosed the contracts when she learned about them.

Ms. Verner’s family trust fund also has an ownership stake in LXB, Quebec corporate records show.

According to one record, LXB’s largest shareholder is Corporation Maxélie Inc., which another record shows it is administered by Mr. Lacroix and majority-owned by the family trust fund, Fiducie Marc Lacroix. Ms. Verner disputes these records. When asked specifically what ownership stake the family trust fund has in LXB, she replied “none.”

Ms. Verner told The Globe she is one of numerous beneficiaries of the family trust fund, but stressed she has “received nothing from the family trust since 2006,” when she was first elected as an MP.

It’s up to Senate Ethics Officer Lyse Ricard to enforce the conflict of interest code, and her spokesperson confirmed the 60-day limit includes “any contracts or other business arrangements” a senator’s spouse has with any “federal agency or body.” Asked specifically about Ms. Verner, Ms. Ricard’s office declined to comment about “a senator’s particular circumstances.” The office has never conducted a formal inquiry into any alleged wrongdoing, but has released three “advisory opinions” on specific ethics questions since 2005.

The National Gallery awarded a four-year, $728,700 contract to the consortium, which included LXB and Kaboom Communication Design, in March of 2010, according to a gallery spokesperson. In May of 2012, the Canadian Museum of Civilization awarded LXB-Kaboom a $230,807 contract, a copy of which was released to The Globe under the Access to Information Act, after the initial firm selected in the process backed out, citing creative differences.

“Following the rules, as soon as I learned about it, I disclosed it,” Ms. Verner said in an e-mail about the museum contract, adding in another: “My husband and I ALWAYS have been honest and law-abiding people.”

A spokesperson for the National Gallery confirmed LXB remains under contract, providing the gallery with “design and media placement services.” The Museum of Civilization contract was to “conceptualize, develop and produce advertising and promotional material” over two years. The museum has since been renamed the Canadian Museum of History. LXB backed out of that deal in September, 2013, the second firm to do so. Mr. Lacroix said the work was better suited for Kaboom, and emphasized, as the museum contract shows, that it was a tendered bidding process. “My wife had certainly nothing to do with this contract,” Mr. Lacroix said.

With a report from Rick Cash in Toronto