'The problem was the system'

Rob Antle
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Crown slashes amount at issue in Walsh trial

Former MHA Jim Walsh pointed the finger of blame at House of Assembly staff and "the craziest system in the world" during the opening day of his corruption trial Tuesday.

"The problem was the system," Walsh said in videotaped evidence played at provincial court in St. John's on Tuesday.

"We had faith in the people that we were counting on."

Meanwhile, Crown prosecutors slashed the amount they contend Walsh illegally obtained from his constituency allowance, agreeing that he had no knowledge of more than $93,000 in payments made to third parties from his fund.

Former Liberal cabinet minister sits in court in St. John's Tuesday at the start of his trial on fraud and breach of trust charges. - Photo by Joe Gibbons/The Telegram

Former MHA Jim Walsh pointed the finger of blame at House of Assembly staff and "the craziest system in the world" during the opening day of his corruption trial Tuesday.

"The problem was the system," Walsh said in videotaped evidence played at provincial court in St. John's on Tuesday.

"We had faith in the people that we were counting on."

Meanwhile, Crown prosecutors slashed the amount they contend Walsh illegally obtained from his constituency allowance, agreeing that he had no knowledge of more than $93,000 in payments made to third parties from his fund.

Walsh is facing trial on three charges - fraud over $5,000, breach of trust by a public officer and fraud on the government.

Most of Tuesday's court proceedings involved an August 2007 interview with Walsh conducted by Royal Newfoundland Constabulary investigators.

The bulk of the 5-1/2 hour interview was played for the court Tuesday, with the remainder to come today.

On the videotape, Walsh repeatedly cited the oversight role of legislature officials - the Speaker, then-clerk of the House John Noel and director of financial operations Bill Murray - when faced with questions about overpayments to his taxpayer-funded constituency allowance.

"I'm not pleading innocence. I'm pleading I don't know," Walsh told police, indicating he left the administration of his allowance to those in charge of the system. Walsh noted that his staff members filled out the forms for him.

The former Liberal MHA and cabinet minister repeatedly stressed the number of officials who would have had to vet his constituency allowance claims before paying them.

Walsh recalled for investigators conversations he had with staff, telling them he had to be over his limit.

But they told him he wasn't, according to Walsh - and sure enough, the end-of-year report put his spending right at the published ceiling.

Walsh said Noel told him those were his correct numbers, according to an audit.

"Every claim that I sent, I was confident that (clerk of the House) John Noel was confirming my claims," Walsh said at one point during the videotaped interview.

But investigators found that Walsh was reimbursed $159,316 above his total annual amounts from 1998 to 2004.

Crown prosecutors agreed in court documents filed Tuesday that an additional $93,169 in direct payments made to third-party companies from Walsh's account happened without his knowledge. Walsh's signatures on some of those claims appeared to be photocopied.

In the 2007 interview, police investigators pressed Walsh on some specific aspects of his claims.

In the fiscal year ending March 31, 2003, Walsh's total constituency allowance spending limit was $30,500.

But, according to police, he claimed $28,650 in "non-accountable" expenses - those not requiring receipts - that year. The limit for that category of claims was $5,500.

Pressed by police on those numbers, Walsh replied, "I can't explain it, other than the fact I believed I was allowed to do it."

RNC investigators also asked Walsh about his relationship with Murray. Walsh replied that he was "friendly" with Murray, but not friends with him.

Walsh said Murray had a serious alcohol problem in the early 1990s, and he allowed Murray to stay in his cabin for a week.

At other points, Walsh said, he paid for a meal for Murray and Murray's wife at P.J. Billington's and gave him $50 towards an oil bill. But Walsh said he did not charge taxpayers for those amounts.

Walsh further clarified his relationship with Murray by saying he "was the gatekeeper and John Noel held the key."

But Walsh stressed he resisted buying items from what he called "Bill Murray's warehouse," run out of Murray's office in the legislature.

"He ran a store from there and he was always putting pressure on members to buy things," said Walsh, adding that the Speaker and clerk allowed Murray to do so.

Murray is also facing charges in conjunction with the constituency allowance spending scandal.

Walsh's trial is scheduled to resume today.

rantle@thetelegram.com

Geographic location: St. John's

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