05/27/2014 11:28 EDT | Updated 07/27/2014 05:59 EDT

CEO of Enterprise Cape Breton Corp. fired after patronage investigation

HALIFAX - The CEO of Enterprise Cape Breton Corp. is being fired after a parliamentary watchdog concluded that he hired four people with ties to the federal Conservatives and Nova Scotia Progressive Conservative party without demonstrating the appointments were merit-based, thereby creating the appearance of patronage.

John Lynn will be dismissed as a result of a report tabled by the federal integrity commissioner, the minister of state for the Crown agency told the House of Commons on Tuesday.

"I have taken steps to terminate Mr. Lynn's employment," Rob Moore said.

Lynn could not be reached for comment.

In his report, Mario Dion said Lynn hired four people in 2009-10 without showing that there was a formal hiring process or that their appointments were based on merit, breaching a code of conduct.

Without a comprehensive explanation from Lynn, the integrity commissioner determined there was an element of deliberateness to his actions that could reasonably be expected to create a perception of patronage within the federal public sector, Dion's report says.

Dion told a news conference that his investigators talked with representatives for Lynn more than once but he was bound by the law governing his office from revealing what was discussed.

"We came to the conclusion that there was wrongdoing in spite of the representations made by Mr. Lynn's representatives," he said.

Dion launched his investigation last year after the Liberals filed a complaint alleging Lynn did not follow proper procedures when he made the hires.

Liberal MP Roger Cuzner provided to The Canadian Press a copy of a letter Dion addressed to him that says the four people who were hired were: Ken Langley, a defeated Nova Scotia Progressive Conservative candidate; Robert MacLean, a former executive assistant to former provincial Tory cabinet minister Cecil Clarke; Allan Murphy, a former chief of staff to federal cabinet minister Peter MacKay; and Nancy Baker, who worked for MacKay both prior to and following her term at Enterprise Cape Breton Corp.

Dion was asked Tuesday whether there was any evidence that linked MacKay given his association with two of the people hired.

"We have no indication of a direct involvement by Mr. MacKay," said Dion.

Cuzner, the MP for Cape Breton-Canso, said he supports Moore's decision to fire Lynn given the integrity commissioner's findings.

"I think it was the only appropriate action the minister could take," said Cuzner.

But Cuzner said one outstanding question remains: the status of those hired by Lynn as Enterprise Cape Breton Corp. prepares to be absorbed by the Atlantic Canada Opportunities Agency. That move is part of a legislative change announced in March.

During question period, Cuzner asked Moore whether he would ensure that those hired by Lynn wouldn't remain as public service employees. Moore did not respond to that question but said that the federal government has acted.

Attempts through MacKay's office, the Atlantic Canada Opportunities Agency and Enterprise Cape Breton Corp. to contact the four people hired by Lynn were unsuccessful. A spokesman for the Cape Breton agency would only confirm that Murphy and MacLean are still working there.

Dion said in the report that while Lynn's appointment decisions were inconsistent with good governance standards, they did not amount to gross mismanagement nor did they affect the ability of Enterprise Cape Breton Corp. to carry out its mandate to promote development in that region.

Dion also said the agency's board of directors approved in November a new recruitment and selection process policy that more clearly incorporates fairness and transparency into staffing processes.

Lynn was named CEO of Enterprise Cape Breton Corp. in May 2008, and had previously been a long-serving executive with Sobeys.