VICTORIA – The B.C. legislature’s top official has retired from his job Thursday after the release of a report by former chief justice Beverley McLachlin into misspent taxpayer money inside the capital building.

Clerk Craig James retired immediately as part of a “non-financial settlement” with the legislature after McLachlin’s report found he violated four of five areas of his employment.

However, sergeant-at-arms Gary Lenz, who also stood accused of wrongdoing, did not violate the terms of his employment. He remains suspended with pay.

“The special investigator found that Mr. James did engage in misconduct with respect to four of the five allegations, specifically in relation to making expense claims where improper purchases (were) of a personal nature, by directing the creation of three benefits to his personal advantage outside established protocols, improperly removing legislative assembly property … and by improperly using legislative property,” said NDP government house leader Mike Farnworth.

“I wish to inform this house that Craig James has retired effective today and that a non-financial settlement has been reached by Mr. James and the legislative assembly.”

James and Lenz were suspended with pay and marched out of the building by police and Plecas’s chief of staff on Nov. 20. Neither has been charged with any crime.

Their employment status could only be changed by a motion and vote of MLAs in the house, because both jobs are officers of the legislative assembly.

James wrote a letter announcing his retirement Thursday.

“I have been in public service for more than four decades, and with the Legislative Assembly for more than 32 years. I made many friends, achieved much, and have fond memories – of the people, and the institution,” he said.

“But I have had enough. I have been publicly ridiculed and vilified. My family has been deeply hurt and continues to suffer humiliation. In an effort to put an end to that, I have decided to retire, and reach a settlement with the Legislative Assembly.”

James called for the Legislative Assembly to publicly release written submissions and supporting documents he provided in response to Speaker Darryl Plecas’ allegations, so that the public “can know and understand the whole picture and judge the truth of these matters for themselves.”

LISTEN: A bombshell report by former chief justice Beverly McLachlin into the legislature spending scandal lands. What allegations panned out and what fizzled into nothing? We hear audio from Speaker Darryl Plecas and suspended sergeant-at-arms Gary Lenz. Also, Premier John Horgan launches a public inquiry into money laundering – a much-needed move for justice or transparent politics against the Liberals (or both)? Rob and Mike dig into and analyze the stories.

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Lenz said he felt exonerated and is confident the other investigations underway will find that he did nothing else wrong.

“The fact that my reputation has suffered immeasurable harm is concerning however there continues to be an opportunity to move in a positive direction and I look forward to resuming my services to the people of British Columbia at the earliest convenience,” he said.

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Lenz said he was “shocked” at the allegations in the Plecas report and the damage it did to his life. But he said he does not hold a grudge and would like to return to the building to work with him.

“I’ve done nothing wrong at any point and I’m looking so forward to be able to get this cleared up,” he said.

Lenz, a former RCMP officer and military member, said he welcomes the changes to improve accountability at the legislature.

McLachlin report P.52-52. She examined 7 Plecas allegations of misconduct against Lenz. Sided with Lenz on all 7. Examined 8 allegations of misconduct against James. Split 4-4. Plecas success rate: 4 of 15 allegations or 25% — VaughnPalmer (@VaughnPalmer) May 16, 2019

Plecas told reporters that the report is a step forward in reforms at the legislature he hopes will be completed over the next year and bring the building into line with normal government rules.

“I can say I’m happy with the conclusions (of the) McLachlin report, I think it says that the issues which I had raised were accurate,” said Plecas. “Of course it’s not everything, but I’m reminded her terms of reference were very narrow. So there’s a number of things which weren’t considered.”

The house leaders from the NDP, Liberal and Green parties praised McLachlin’s work Thursday, and thanked her for getting to the bottom of months of uncertainty.

“I think former chief justice McLachlin did an outstanding job,” said NDP government house leader Mike Farnworth at a press conference flanked by Liberal house leader Mary Polak and Green house leader Sonia Furstenau.

“I think the report is worth every penny. Because it’s not just about dealing with the allegations we asked her to, but I think the public expects and all members of the house expect that this place functions the way it is supposed to do.

“And I can tell you that these recent events have caused I think significant questions in the mind of the public, but also the people who work in this building. I view the McLachlin report as important not just in terms of dealing with the allegations contained in the speaker’s report but also in restoring and helping to start to restore confidence in this institution.”

Farnworth said the settlement with James, which is not financial, will still entitle him to his public sector pension, as per employment law.

Farnworth said later this month MLAs will strike an all-party committee to find a new clerk.

Although the McLachlin report backed up some – not all – of Plecas’s initial concerns on spending, the former chief justice was also critical of how Plecas handled the situation.

She concluded he failed in his duty to properly oversee the legislature because he was too focused on conducting a quasi-police probe and his own criminal prosecution against the two men.

“It is not entirely clear why the Speaker did not bring his concerns to the attention of the clerk and sergeant-at-arms forthwith, as one would expect of a supervising officer, or in any event before taking the dramatic action of having them publicly expelled from the grounds of the legislative assembly building,” wrote McLachlin.

Plecas had argued that the clerk was too powerful to remain and had to be dealt with carefully, but McLachlin said Plecas had lost sight of part of his job.

“What emerges from the evidence is that the Speaker viewed the matters that concerned him through the lens of a police investigation and criminal prosecution, rather than the lens of an administrator,” she wrote.

“He seems to have seen his task as to build a credible criminal-type case against Mr. James and Mr. Lenz, rather than promptly confronting and correcting the administrative practices that he questioned.

“He focused on an investigatory line of inquiry at the expense of his duty to ensure that the affairs of the legislative assembly were properly administered on a current basis.”

Plecas said he would have done nothing differently and that past administrative approaches did not solve the problem.

MLAs hired McLachlin in March to be the independent arbiter of allegations made by Speaker Darryl Plecas into misspending by James and Lenz.

Her mandate was “a confidential fact finding to determine whether Mr. James or Mr. Lenz engaged in misconduct in the course of their employment as permanent officers of the legislative assembly.”

Plecas, who conducted a one year undercover investigation with his chief of staff Alan Mullen, has accused the two men of justifying tens of thousands of dollars in questionable purchases, including lavish overseas trips and inappropriate workplace vacation or retirement benefits.

The Speaker turned over his findings to the RCMP last year. The police asked for the appointment of two special prosecutors, and are investigating those and other unspecified allegations. No charges have been laid.

James and Lenz denied any wrongdoing, saying they would co-operate with the RCMP probe and that expenses were approved by Plecas.

McLachlin was appointed as special investigator on March 7 and turned in her report on May 2.

Plecas’s misspending allegations included wasting taxpayers’ money on a $13,000 wood splitter and trailer, a $1,200 suit, a $1,100 suitcase, $10,000 in alcohol, as well as lucrative retirement allowances and life-insurance policies.

He also highlighted a “conference” the two men attended in 2017 with 10 other people, including their wives, in Washington State in which an “earthquake preparedness” event on the agenda was actually a whale-watching experience and a seminar on large-scale evacuations at Safeco Field in Seattle was a Mariners baseball game.

McLachlin concluded there was nothing improper about the international travel trips, including to the United Kingdom and Washington State.

She found that neither James nor Lenz engaged in misconduct by improperly receiving vacation payouts due to a failure to record vacation leave, according to her 54-page report.

But she determined that James engaged in misconduct by making improper purchases, including making expense claims for two suits, three purchases of luggage and private insurance premiums to the Legislative Assembly.

He did not engage in misconduct related to buying office gifts, display items and electronics, she said. That includes watches James bought at the House of Commons gift shop in the U.K., dubbed the so-called “corruption watch” by Plecas’ chief of staff Mullen.

James and Lenz didn’t engage in misconduct by recommending the Legislative Assembly buy a wood splitter and trailer, and participating in the approval of their purchase, McLachlin said.

But James did engage in misconduct by keeping both under his personal control for close to a year, and using them for personal purposes, despite there being no reason for them not to be on Legislative Assembly property.

She concluded that James engaged in misconduct by directing, outside of established protocols, the creation of three benefits to his personal advantage: the 2012 retirement benefit, 2018 resignation benefit and a death benefit proposed in a Nov. 9, 2017 letter. Those allegations don’t pertain to Lenz.

McLachlin found that James engaged in misconduct when he removed alcohol from the Legislative precinct without account for it.

However, neither James nor Lenz engaged in misconduct related to an investigation into former speaker Linda Reid’s travel expense claims. Plecas touted a former Liberal staffer who came forward and accused Reid of double-dipping her expense account and of James and Lenz of covering it up.

There was no cover-up, concluded McLachlin. The expenses – airfare to Victoria and vehicle mileage to the legislature and airport – were perfectly justifiable, she wrote. Reid was forced to resign as assistant deputy speaker after prominent MLAs, like Green leader Andrew Weaver, said they’d lost confidence in her.

McLachlin concludes her report by noting six “areas of concern,” making recommendations to address them all.

“There is a lack of clarity regarding who has authority for administrative matters at the Legislative Assembly,” she said.

“The structure of the organization and the applicable legislation indicates that it is the Legislative Assembly through the Office of the Speaker. On the other hand, in practice, and as stated in certain policies, it is the Clerk that seems to hold such authority. This has caused confusion for subordinate employees who are sometimes unsure as to how to report problems they identify.”

McLachlin recommends the Legislative Assembly “clarify the applicable lines of authority” and make them clear to everyone in the organization.

She recommends the Legislative Assembly clarify its policies on vacation entitlement and how expenses that appear to be business-related and personal in nature are managed. It could develop specific travel expenditure rules for employees and permanent officers, and put in place a formal policy for managing alcohol purchases, she said.

McLachlin said the Legislative Assembly should determine what liability, if any, might come from 2017 letters setting out death benefits for James and Lenz, and investigate the financial consequences of a letter setting out the 2018 resignation benefit.

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