Redford admitted she wrote a memo in 2010 recommending the contract go to a consortium of law firms that included her ex-husband Robert Hawkes' firm.
But she told the house during question period that the memo simply reflected her thinking at the time and that the final decision to go with the consortium was made by Verlyn Olson, who succeeded her when she quit cabinet in 2011 to make her successful run for the PC party leadership.
"That memo truly reflected what needed to be considered," Redford told the house.
"The government of Alberta four months later — when I was not the minister of justice — I presume considered the same factors and that's why the decision was made."
Wildrose Leader Danielle Smith and NDP Leader Brian Mason said regardless of the outcome, Redford showed extremely poor judgment by weighing in at all on a contract that could benefit her ex-husband.
Hawkes has remained close to Redford professionally as an adviser and was the head of her transition team when she became premier in the fall of 2011.
"Did you not realize that it was inappropriate, at the very least, for you to be involved in a decision that would likely involve a substantial financial benefit to your ex-husband?" Mason asked Redford.
Redford, a lawyer herself, sat still in her chair on the front benches through the questioning by the Wildrose and Mason, her hands clasped in front of her, eyes staring off into the middle distance.
She answered some of the questions and deflected others to current Justice Minister Jonathan Denis.
But when Wildrose critic Rob Anderson, who is also lawyer, suggested Redford's actions violated her duties to the legal profession and could be a matter for the law society to deal with, her demeanour changed.
Anderson said: "How can I feel comfortable (filing a complaint) when the president-elect of the Law Society of Alberta itself happens to be Carsten Jensen, senior partner in — you guessed it —the exact law firm that you awarded the tobacco contract to. The tangled web never ends, does it?"
Redford bounded to her feet.
"This is getting absolutely absurd," she replied.
"If this person (Anderson) who theoretically should understand what the law society is, is now prepared to malign the legal profession in this province, then I have no idea where this discussion is supposed to go.
"But I'll tell you that if this 'honourable' member decides to make a complaint, go ahead!" she said as her cabinet members and backbenchers cheered.
It was another angry session of the legislature, with high-decibel insults flying across the aisle between the government benches and the opposition Wildrose.
When Government House Leader Dave Hancock jumped to his feet for a third time to register a breach of parliamentary rules, Anderson shouted, "Sit down, Dave."
The PCs then shouted down Anderson, one of whom appeared to mock his religion.
"That's a Mormon!" hollered one of the backbenchers. The jab could be heard in the gallery and on the audio recording of the proceedings, but it was not clear who yelled it.
The controversy around the tobacco lawsuit arose Wednesday when CBC aired a report detailing how the Justice Department in 2011 hired International Tobacco Recovery Lawyers, or TRL, a consortium of law firms from Florida, Ontario and Alberta.
Among the firms in the consortium is Calgary's Jensen Shawa Solomon Duguid Hawkes, or JSS, in which Hawkes employed.
CBC released a memo written in 2010 by Redford to her Justice officials commenting on the three shortlisted candidates for the contract to sue tobacco firms. The government aims to recover $10 billion in health treatment costs from tobacco-related illnesses.
In the Dec. 14, 2010, memo, Redford tells her top department bureaucrat: "I note that the review committee considers all three firms interviewed to be capable of conducting the litigation and believes that while no consortium stood above the others, all three have unique strengths and weaknesses.
“Considering the perceived conflicts of interest, actual conflicts of interest, the structure of the contingency arrangement and the importance of a 'made-in-Alberta' litigation plan, the best choice will be the International Tobacco Recovery Lawyers."
Denis told the house that the government chose the Tobacco Recovery Team because it was not acting for any other provinces and was therefore a good choice to ensure Alberta's interests were not lumped in with other litigants against the tobacco companies.
"We need a made-in-Alberta solution, and that's what we got in this process," said Denis. He added that it's his understanding that Hawkes does not stand to directly benefit from the lawsuit and that the lawyers are working under an agreement that they only get paid if they win a settlement.
The JSS law firm, in an email, echoed Redford's remarks,
"While Minister Redford initiated the selection and negotiation process, we negotiated with outside counsel hired by the government for six months, and the negotiations were difficult," said the email.
"It was not clear to us that we would ultimately be retained right up until TRL was hired in June of 2011."
Opposition Liberal Leader Raj Sherman said the issue needs a ruling from provincial ethics commissioner Neil Wilkinson.
"There's an appearance of a conflict of interest and that needs looking into," said Sherman.
But Mason said given that ex-spouses are not listed in ethics rules, there isn't much of a case for the ethics commissioner.
"I think what we need to do instead is to ask the people of Alberta to be the judge of whether this standard of ethical behaviour is enough for them or not," said Mason.
It's the second time in two weeks that scandal has struck Redford and those close to her.
Last week, freedom of information documents showed Redford's sister, Lynn, used her position as a Calgary health executive to bill taxpayers for about $3,400 to buy liquor, tickets and bug spray for PC party events.
The premier has declined to comment on that case and Lynn Redford continues to work as a senior health executive.
Health Minister Fred Horne has said Lynn Redford's expenses were run up for a health region that no longer exists and that the province is moving on with tougher expense rules.