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Public Sector Integrity Commissioner nominee Mario Dion waits to testify before the Commons government operations committee in Ottawa, December 13, 2011.


The head of an Atlantic Canada regional development agency improperly provided lucrative employment for former political staffers of senior Conservative cabinet minister Peter MacKay, a year-long investigation has found.

The four appointments, as well as the man who made them, are now in question, part of a growing controversy that has unearthed a pattern of patronage abuse by the Conservative government in two Atlantic Canada regional agencies.

Canada's federal integrity commissioner says the appointments smack of political patronage since none of the individuals, all with strong Tory ties, had to submit to a competitive hiring process.

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Commissioner Mario Dion declared a finding of "wrongdoing" against John Lynn, the CEO of Enterprise Cape Breton Corporation (ECBC), a federal Crown corporation that delivers economic development programs on Cape Breton. It is under the auspices of the Atlantic Canada Opportunities Agency (ACOA).

Mr. Lynn was appointed in 2008 and he is a friend of Justice Minister MacKay, who was the ACOA minister at that time. He announced Mr. Lynn's order-in-council appointment.

"The unilateral hiring of these four individuals within the federal public sector by Mr. Lynn creates a perception of political patronage, and contributes to my finding of wrongdoing in this instance," Mr. Dion wrote in a seven-page report, provided to Cape Breton Liberal MP Rodger Cuzner.

Mr. Cuzner and his Atlantic colleagues complained more than year ago about partisan abuse in hiring practices at ECBC. Mr. Dion is to release his report publicly at a press briefing Tuesday.

Two of the four individuals whose positions were scrutinized in the investigation – Allan Murphy and Nancy Baker – are connected to Mr. MacKay. Mr. Murphy was a political staffer to Mr. MacKay and also ran unsuccessfully in the 2011 election for the federal Tories in a Cape Breton riding. He was hired to ECBC in a "newly created federal liaison position," according to the Liberals.

Ms. Baker was also a political aide to Mr. MacKay – and then went to ECBC before returning to Mr. MacKay's political staff in Ottawa.

The other two – Ken Langley and Rob MacLean – have strong provincial Progressive Conservative connections.

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Mr. MacKay will not comment on the allegations of patronage.

"Mr. Lynn's actions were not only unfair, but also improper, and they do not stand up to the test of public scrutiny," Mr. Dion wrote in his report. "Mr. Lynn seriously breached ECBC's Code of Conduct … when he appointed four individuals with political ties to ECBC executive positions without demonstrating that the appointments were merit-based."

He went on to say that Mr. Lynn's actions create a perception of patronage within the federal public sector, which "weakens the legitimacy of the public sector."

For the past year, Mr. Lynn has been on paid leave because of the integrity commissioner's investigation and another by the ethics commissioner into an unspecified complaint made to the head of ACOA.

He will soon be without a job as the federal Conservatives have brought in legislation to wrap ECBC into ACOA – but there are questions about the size of a severance payment he may receive. The bill is expected to pass the House of Commons before the summer break.

In Question Period Monday, Liberal MP Cuzner demanded ACOA Minister Rob Moore show leadership and ensure Mr. Lynn "isn't rewarded with taxpayer dollars for committing, as the commissioner, states, 'a serious breach of the Code of Conduct?'" Mr. Moore did not answer the question, replying that Mr. Lynn is on "personal leave."

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This is the second time in days that Tory appointments to Atlantic regional development agencies have come under fire. A Federal Court of Canada judge revoked the appointment of Kevin MacAdam as director general of operations for ACOA PEI. The judge found the hiring process "tainted." Mr. MacAdam is also a former political staffer and a long-time friend of Mr. MacKay. He is considering whether to appeal the court decision that upheld the decision by the Public Service Commission to revoke the appointment.

Unlike the Public Service Commission, the integrity commissioner cannot revoke an appointment. Rather, Mr. Dion can only issue a finding. It is up to the employer to decide on the consequences.

A spokesperson for Mr. Moore would not comment until the report is tabled in the House.

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