Auditor general set to deliver report on Atcon fiasco

One of the biggest fiascos of Shawn Grahams Liberal government is about to come back to haunt Premier Brian Gallant.

New Brunswicks auditorgeneral will report Tuesday on how taxpayers lost more than $50 million in government loans to the Atcon group of companies.

Several of the cabinet ministers who approved those loans in 2009 are now back in power as members of Gallants cabinet.

As recently as last week, the Opposition Progressive Conservatives were still taunting the Liberals about Atcon.

PC MLA Kirk MacDonald asked cabinet minister Bill Fraser if any of the players in the Atcon scandal were invited to attend meetings with him during his recent tour of northern New Brunswick.

Gallant called the questions a waste of time and appalling.

Gallant himself was not part of Grahams government, but six of his cabinet ministers were.

AuditorGeneral Kim MacPherson will present her audit Tuesday at 11 a.m. at a joint hearing of the legislatures public accounts and Crown corporations committees.

Provincial assistance to Atcon included a 2009 package of three loan guarantees totalling $50 million, a decision that went against the advice of the civil service, and despite evidence Atcon was already in trouble.

A forensic audit obtained by CBC News found that Atcon had overstated its revenues by as much as $35 million in the two years leading up to the loan guarantees.

When Atcon went bankrupt in 2010, taxpayers lost out: other creditors had priority for any money from asset sales because of the way the province structured the loans.

Taxpayers were also on the hook for up to $4 million worth of Atcons faulty work on the Deh Cho Bridge in the Northwest Territories, because New Brunswick had guaranteed the work.

Taxpayers have recouped little from Atcon

Taxpayers have recouped only a tiny fraction of the money: in 2012, the judge overseeing the bankruptcy, Thomas Riordon, divided up $9 million among several creditors. The government got just $341,000.

And CBC News has learned through court documents that last fall, Riordon approved another round of pay-outs to creditors after the court-appointed receiver negotiated a settlement with the Canada Revenue Agency over Atcons unpaid taxes.

The most recent recovery by the province is a paltry $6,125.95.

Besides the cost to taxpayers, the Atcon affair also tarnished the reputation of Shawn Graham, who became the only premier in the provinces history found to be in a conflict of interest.

Conflict commissioner Patrick Ryan ruled in 2013, three years after Graham lost power, that he shouldnt have been part of the 2009 Atcon decision because Grahams father was the director of an Atcon subsidiary.

Graham had defended the Atcon loan guarantees as a sincere effort to help the Miramichi region, which had seen several employers shut down.

The intention of our government was to save those jobs and that's why we made the decisions we did, he said in 2012.

But after Ryans ruling, he acknowledge the conflict, apologized to New Brunswickers, and resigned as the MLA for Kent.