Where did more than $63 million in financial assistance for Atcon go? That’s what provincial Auditor-General Kim MacPherson was trying to answer in her latest report.
MacPherson says six cabinet ministers were interviewed to find out why $50 million in new loans were granted. She was told there were three reasons: The depressed economy of the Miramichi, the fear New Brunswick companies would not get paid what they were owed and they thought Atcon’s plan for the future looked promising.
MacPherson says her office came to a different conclusion that $50 million would not save Atcon from declaring bankruptcy.
MacPherson calls the provincial cabinet’s decision to release the Province’s security in favour of the bank a critical failure with no explanation why. The province has recovered only $2.8 million of the $63.4 million but if the province hadn’t given up security, it might have got back from $12 to $19 million.
MacPherson also says leasing a corporate jet at a cost of $124 thousand a month when you’re asking for government financial help is also inappropriate. The corporate jet wound up costing more than $8 million.
Over a period of three years, when Atcon was seeking financial assistance, more than $700,000 of personal expenses were put through company accounts. Purchases included a vacation property in Aruba, jewelry, luxury car lease payments, registered retirement savings plan (RRSP) contributions, personal income tax payments and more. Atcon was also leasing a corporate jet with estimated operational costs amounting to $8.2 million from 2008 to 2010.
MacPherson also discovered certain family members of key management people who did not appear to have a regular and sustained presence at Atcon received significant salaries.
Opportunities NB had reported it fully implemented 15 of the auditor general’s 19 recommendations from 2015. However, MacPherson determined only four of 19 were put in place. There are eight new recommendations to strengthen the financial analysis provided to cabinet for future decisions on financial help.
