Walsh guilty of corruption

Rob Antle
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Former MHA convicted of two charges; acquitted of bribery

For years, Jim Walsh has maintained his innocence. From his 5-1/2 hour interview with police investigators in 2007 through his seven-month trial on corruption charges, Walsh painted himself as the victim of what he called "the craziest system in the world."

But on Monday, a provincial court judge rejected Walsh's shifting explanations for how he overspent so much of his taxpayer-funded constituency allowance from 1998 through 2004.

Former MHA Jim Walsh (right) leaves provincial court Monday after being convicted of fraud over $5,000 and breach of trust by a police officer. At left is Walsh's lawyer Vernon French. - Photo by Keith Gosse/The Telegram

For years, Jim Walsh has maintained his innocence. From his 5-1/2 hour interview with police investigators in 2007 through his seven-month trial on corruption charges, Walsh painted himself as the victim of what he called "the craziest system in the world."

But on Monday, a provincial court judge rejected Walsh's shifting explanations for how he overspent so much of his taxpayer-funded constituency allowance from 1998 through 2004.

Those explanations, according to Judge David Orr, were not credible and not logical.

Orr found Walsh - a former Liberal transportation and tourism minister - guilty of fraud over $5,000 and breach of trust by a public officer.

The judge acquitted Walsh of a third charge - paying kickbacks to an official at the legislature.

Walsh will be back in court for sentencing Jan. 6.

The former MHA sat stoically as Orr read through his hour-long decision.

Neither Walsh nor his defence lawyer, Vernon French, had any comment after the verdict.

Crown prosecutor Frances Knickle said she was not surprised.

"I'm very pleased with the decision," Knickle told reporters. "It's evident from Judge Orr that he was well aware of the intricacies and complexities of the evidence."

The charges against Walsh related to excess claims totalling $159,316 from his taxpayer-funded constituency allowance.

The vast majority of the overspending took place in an 18-month period spanning 2002 and 2003.

Walsh acknowledged receiving the extra cash, but said it was the result of errors and lax oversight.

The former MHA indicated he was unaware of the amount of cash he was receiving, and blamed the system of controls in place at the legislature for not catching his mistakes.

His defence also zeroed in on House director of financial operations Bill Murray, who faces corruption charges of his own in conjunction with the spending scandal.

But Orr rejected Walsh's pleas of ignorance, calling Walsh's "central assertion that he was unaware of the amount that he was receiving" not credible.

"I cannot accept that Mr. Walsh was unaware that he was exceeding his spending limit," Orr told the court.

"It is very obvious, particularly in 2002 and 2003, that anyone receiving such a large amount of money in such a short amount of time would have to be aware of that fact."

During that 18-month period, Walsh's overspending accelerated.

In 2003, Walsh blew through his $30,500 spending limit just two months into the fiscal year.

But the MHA continued filing another $70,000 in claims until his defeat in the election held just four months later.

Orr concluded that Murray filled out nearly all of Walsh's claim forms during this time period, when Walsh's overspending ramped up.

"It makes no logical sense that Mr. Murray would do so and remit the money to Mr. Walsh unless Mr. Walsh asked him to do it," Orr said.

Orr also noted "evidence of dishonesty on Mr. Walsh's part," citing a donation to a local service club that had been altered to put an extra $2,000 into Walsh's pocket.

"Mr. Walsh's claim that he was an innocent victim of a flawed system and a dishonest employee does not make logical sense and is not believable."

In finding Walsh not guilty of the bribery charge, Orr said the only evidence of the alleged kickbacks came from Murray's own testimony.

Murray told the court that he had received envelopes stuffed with cash from Walsh as "tokens of appreciation" for running through excess claims.

But Orr said Murray's kickback claim "is not supported or corroborated in the other evidence."

The judge indicated it would be "too dangerous to accept any assertion made by (Murray) not verified in some other way."

Walsh becomes the fourth former MHA convicted in relation to the constituency spending scandal, which rocked provincial politics when it was first uncovered by the auditor general in 2006.

Subsequent police investigations have, to date, led to charges being filed against six people.

Liberal Wally Andersen, Progressive Conservative Ed Byrne and New Democrat Randy Collins all pleaded guilty to corruption charges.

Meanwhile, Murray - who has entered a plea of not guilty - is scheduled to appear in Supreme Court today.

And St. John's businessman John Hand was charged by police last month for his alleged role in the scandal.

Hand was affiliated with three companies the auditor general reported as receiving $2.7 million from the legislature for baubles and low-value trinkets.

The Royal Newfoundland Constabulary recently indicated that work on Operation Radius - the wide-ranging probe of the legislature's financial affairs - is not over yet.

rantle@thetelegram.com

Organizations: Supreme Court

Geographic location: St. John's

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Recent comments

  • Frank M
    July 02, 2010 - 13:35

    He should lose his lucrative MHA pension for robbing the public he was elected to represent.

    Now that would be punishment and would serve as a detterent for remaining and future politicians.

  • Francis
    July 02, 2010 - 13:35

    He sees you when your stealing he knows when your a snake. He knows if you've been bad or good so be good for goodness sake.
    God love you jimmey , hope Santa gives you more than coal this year.Merry Christmas.

  • bob
    July 02, 2010 - 13:34

    I agree with Robert from CBS, all of the money should be paid back. This should be easy to do because former MHA'S are entitled to large severence packages and even better pensions. If you are found guilty of a crime then full retribution should be mandatory.

  • Truth
    July 02, 2010 - 13:31

    What social class are we an official part of now, Jimmy????!!

  • Robert
    July 02, 2010 - 13:30

    His sentence should stipulate repayment of every shaggin' cent.

  • Frank
    July 02, 2010 - 13:25

    He should be white-washed of everything he has and placed in prison
    attire for the remaining years of his life.

    How can the Newfoundland society survive with everyone dipping into its financial pot. How many more are guilty of this? I think all those who held office should be investigated, not just a few.

    I agree, he should receive no pension for his service of injustice to the people of Newfoundland and Labrador.

    Be interesting to note, is this happening everywhere in Canada?

  • Mike
    July 02, 2010 - 13:23

    Given his age, and the likelihood he will likely get a jail sentence in the 2 year range, the only real prospect of recovering the money will be through forfeiture of his MHA pension.

  • fintip
    July 02, 2010 - 13:22

    There are few politicians who oozed as much arrogance and sleaze as Jim Walsh. And that widespread impression of Walsh existed long before the spending scandal broke. Whatever sentence he gets will look good on him. That being said, I would not be surprised to see Walsh launch an appeal. He would have had no chance had he been convicted on the bribery charge. His acquittal on that charge is ironically his best hope for appeal on the two convictions. In essence the crown failed to prove that the fraud was orchestrated by collusion or conspiracy with other parties. While the judge understandably concluded that Walsh's claim that he didn't know he was overspending wasn't credible, it still puts his conviction down to subjectivity. Fraud by virtue of exceeding one's allowance - whether in government or the private sector - is a little more challenging than other forms of fraud against an employer. Evidence of falsifying claims or working a scam with someone in accounting are more damning because they show conclusively that the defendant knew exactly what he was doing. Simple overspending by itself is something that goes on almost everywhere in government and industry. Mostly it is small scale stuff and if caught, the worst that usually happens is that the employer will take it out of the person's pay. Other than the over $5,000 that makes it a more serious crime, it is hard to say exactly at what point overspending becomes fraud. (There were other politicians for example who had to pay back money but weren't charged) That is especially true when the defendant can claim that he thought accounting would let him know when he was overspending. Of course it would be absurd to believe that Walsh didn't know he was overspending but that may not stop his lawyers from trying to convince an appeals court that he wasn't given the benefit of the doubt.

    Even if the conviction sticks, and I hope it does, responsibility for this scandal goes well beyond the people who were charged. There is no doubt that within the house of assembly there were senior people who knew that keys to the public treasury were being handed out to anyone who wanted them. They can claim they didn't know but more likely they knew exactly what was going on and they liked the arrangement. Why else refuse to let the auditor general take a look at your books - something that was fixed only after Williams became premier. Walsh is not totally off base when he called it the craziest system in the world which of course is no doubt why he thought he could exploit it so easily.

  • Ross
    July 02, 2010 - 13:22

    I wonder do convicted criminals still collect their $120,000 Federal salary????

  • GAR
    July 02, 2010 - 13:20

    Big Jim is goin' to the Big House and his lawyer is trottin' off to the bank with a wheelbarrow full of money. Walsh stole $160,000 of taxpayers' money and now he's bankrupt ? Where did all that money go ? Hmm.lol

  • Whatever Bud
    July 02, 2010 - 13:20

    That Jim Walsh! Throw him to the lions!!!

  • bob
    July 02, 2010 - 13:16

    I agree with Robert from CBS, all of the money should be paid back. This should be easy to do because former MHA'S are entitled to large severence packages and even better pensions. If you are found guilty of a crime then full retribution should be mandatory.

  • Sparkey
    July 02, 2010 - 13:13

    I really think any & all MHA`s that are elected by the people of the Province should pay-back any & all moneys stolen while they were in office!,so-what how old they are !,I don`t care if they are 96yrs-old now, pay-up!

  • Frank M
    July 01, 2010 - 20:25

    He should lose his lucrative MHA pension for robbing the public he was elected to represent.

    Now that would be punishment and would serve as a detterent for remaining and future politicians.

  • Francis
    July 01, 2010 - 20:24

    He sees you when your stealing he knows when your a snake. He knows if you've been bad or good so be good for goodness sake.
    God love you jimmey , hope Santa gives you more than coal this year.Merry Christmas.

  • bob
    July 01, 2010 - 20:23

    I agree with Robert from CBS, all of the money should be paid back. This should be easy to do because former MHA'S are entitled to large severence packages and even better pensions. If you are found guilty of a crime then full retribution should be mandatory.

  • Truth
    July 01, 2010 - 20:20

    What social class are we an official part of now, Jimmy????!!

  • Robert
    July 01, 2010 - 20:18

    His sentence should stipulate repayment of every shaggin' cent.

  • Frank
    July 01, 2010 - 20:12

    He should be white-washed of everything he has and placed in prison
    attire for the remaining years of his life.

    How can the Newfoundland society survive with everyone dipping into its financial pot. How many more are guilty of this? I think all those who held office should be investigated, not just a few.

    I agree, he should receive no pension for his service of injustice to the people of Newfoundland and Labrador.

    Be interesting to note, is this happening everywhere in Canada?

  • Mike
    July 01, 2010 - 20:08

    Given his age, and the likelihood he will likely get a jail sentence in the 2 year range, the only real prospect of recovering the money will be through forfeiture of his MHA pension.

  • fintip
    July 01, 2010 - 20:07

    There are few politicians who oozed as much arrogance and sleaze as Jim Walsh. And that widespread impression of Walsh existed long before the spending scandal broke. Whatever sentence he gets will look good on him. That being said, I would not be surprised to see Walsh launch an appeal. He would have had no chance had he been convicted on the bribery charge. His acquittal on that charge is ironically his best hope for appeal on the two convictions. In essence the crown failed to prove that the fraud was orchestrated by collusion or conspiracy with other parties. While the judge understandably concluded that Walsh's claim that he didn't know he was overspending wasn't credible, it still puts his conviction down to subjectivity. Fraud by virtue of exceeding one's allowance - whether in government or the private sector - is a little more challenging than other forms of fraud against an employer. Evidence of falsifying claims or working a scam with someone in accounting are more damning because they show conclusively that the defendant knew exactly what he was doing. Simple overspending by itself is something that goes on almost everywhere in government and industry. Mostly it is small scale stuff and if caught, the worst that usually happens is that the employer will take it out of the person's pay. Other than the over $5,000 that makes it a more serious crime, it is hard to say exactly at what point overspending becomes fraud. (There were other politicians for example who had to pay back money but weren't charged) That is especially true when the defendant can claim that he thought accounting would let him know when he was overspending. Of course it would be absurd to believe that Walsh didn't know he was overspending but that may not stop his lawyers from trying to convince an appeals court that he wasn't given the benefit of the doubt.

    Even if the conviction sticks, and I hope it does, responsibility for this scandal goes well beyond the people who were charged. There is no doubt that within the house of assembly there were senior people who knew that keys to the public treasury were being handed out to anyone who wanted them. They can claim they didn't know but more likely they knew exactly what was going on and they liked the arrangement. Why else refuse to let the auditor general take a look at your books - something that was fixed only after Williams became premier. Walsh is not totally off base when he called it the craziest system in the world which of course is no doubt why he thought he could exploit it so easily.

  • Ross
    July 01, 2010 - 20:07

    I wonder do convicted criminals still collect their $120,000 Federal salary????

  • GAR
    July 01, 2010 - 20:04

    Big Jim is goin' to the Big House and his lawyer is trottin' off to the bank with a wheelbarrow full of money. Walsh stole $160,000 of taxpayers' money and now he's bankrupt ? Where did all that money go ? Hmm.lol

  • Whatever Bud
    July 01, 2010 - 20:02

    That Jim Walsh! Throw him to the lions!!!

  • bob
    July 01, 2010 - 19:56

    I agree with Robert from CBS, all of the money should be paid back. This should be easy to do because former MHA'S are entitled to large severence packages and even better pensions. If you are found guilty of a crime then full retribution should be mandatory.

  • Sparkey
    July 01, 2010 - 19:51

    I really think any & all MHA`s that are elected by the people of the Province should pay-back any & all moneys stolen while they were in office!,so-what how old they are !,I don`t care if they are 96yrs-old now, pay-up!