MacAulay resigns, insisting he's innocent

Lawrence MacAulay resigned as federal solicitor general on Tuesday, insisting that he had done nothing wrong, threatening lawsuits and attacking a critical report from ethics counsellor Howard Wilson.

While Prime Minister Jean Chrtien accepted the minister's resignation, he completely backed his long-term supporter. "He did absolutely nothing wrong," Chrtien said.

MacAulay, the minister who represented Prince Edward Island in the cabinet, was accused of using his office to direct government projects and contracts to friends and family on the island.

• FROM OCT. 16, 2002: MacAulay future hot topic in Ottawa

Wilson cleared him of those allegations, saying government rules had been followed in awarding the contracts.

But then he reached back to a 1999 transaction and concluded MacAulay had breached some obligations at that time.

MACAULAY FACTS

Appointed Solicitor General on November 23, 1998 Elected to the House of Commons on November 21, 1988 to represent the constituency of Cardigan in eastern P.E.I. Previous cabinet appointments: Minister of Labour, Secretary of State (Veterans) and Secretary of State (Atlantic Canada Opportunities Agency) Born on September 9, 1946 in St. Peter's Bay, P.E.I. Married Frances Elaine O'Connell in 1972 Three daughters: Carolyn, Rita and Lynn

SOURCE: Lawrence MacAulay Web site

That deal involved a plan to have the federal government invest in Holland College, the only community college in P.E.I., to train corrections officers. The problem was that MacAulay's brother Alex was president of the college.

Wilson concluded that there is no difference between dealing with a company and a public institution, like the college, in terms of conflict of interest, but MacAulay said one is run for profit, and the other involves public policy.

As the only minister from P.E.I., he said he should not be precluded from dealing with an important institution simply because the provincial government appointed his brother to run it.

He also pointed out his brother stood to make no gain from the deal. Wilson agreed, but said that was irrelevant.

In his resignation letter, MacAulay said Wilson was "dead wrong" about the college plan.

He closed his letter by threatening to sue "those who have publicly slandered my reputation."

MacAulay's lawyers sent letters to Canadian Alliance Leader Stephen Harper, Progressive Conservative House leader Peter MacKay, and The Globe and Mail on Tuesday afternoon, notifying them of an impending lawsuit.

Another Island MP, Wayne Easter, was sworn in as solicitor general late Tuesday afternoon.

MacAulay didn't attend the cabinet meeting on Tuesday.

In his letter, MacAulay said he was stepping down because the controversy was distracting attention from the government's agenda.

"In this era of political correctness," MacAulay wrote, "if I were to remain in cabinet, I would be seen to be fighting for my job, rather than for my honour."

In accepting the resignation, the prime minister wrote back that he agreed with MacAulay's assessment of the ethics report.

Chrtien is set to unveil a new package of ethics guidelines on Wednesday.