30 April 2009

Expropriation has financial impacts on NL-based Fortis

From Fortis Inc’s first quarter financial statements, issued Thursday comes an indication of the wider impact Bill 75 has had.

Bear in mind the bill expropriated the assets of several companies besides Abitibi, including the Exploits Partnership which was owned 51% by Fortis Properties.

From the Critical Accounting Estimates section:
Exploits Partnership

Following the announcement by Abitibi of its intention to close its Grand Falls-Windsor newsprint mill on March 31, 2009, the Government of Newfoundland and Labrador expropriated most of the Newfoundland-based assets of Abitibi. The expropriated assets included the hydroelectric generating facility assets of the Exploits Partnership. The Exploits Partnership is owned 51 per cent by Fortis Properties and 49 per cent by Abitibi.

The Exploits Partnership had previously incurred a term loan from several lenders to finance its assets. As at December 31, 2008, approximately $61 million remained outstanding under this term loan. The term loan is withoutrecourse to Fortis or Abitibi, as partners of the Exploits Partnership, and is secured by both the hydroelectric generating assets and related agreements regarding rights to operate and sell power to Newfoundland Hydro during the term of the loan. Although the expropriation has caused the Exploits Partnership to default on the term loan, to date the lenders have not demanded accelerated repayment of the term loan. The Exploits Partnership made the scheduled term loan payment for the quarter ended March 31, 2009. As at March 31, 2009, the balance outstanding under the term loan was approximately $60 million. [bold added]

The generation and sale of electricity by the Exploits Partnership continued in the normal course until the newsprint mill closed on February 12, 2009, up to which point Newfoundland Hydro paid the Exploits Partnership for the energy produced on the same basis as the pre-expropriation power purchase agreement. Payment for all energy delivered since February 13, 2009 is currently outstanding from the Government of Newfoundland and Labrador pending resolution of expropriation matters. The day-to-day operations of the hydroelectric generating facilities have been assumed by Nalcor Energy, a crown corporation, as the agent for the Government of Newfoundland and Labrador with respect to this matter.

On March 24, 2009, the Government of Newfoundland and Labrador announced that Abitibi had discontinued discussions with Nalcor Energy regarding compensation for the expropriated assets. Abitibi, which was incorporated in the US, has also indicated that it intends to challenge the expropriation of its assets and seek compensation through the North American Free Trade Agreement.

Historically, the financial statements of the Exploits Partnership were consolidated in the financial statements of Fortis. Pending resolution of the above matters, deferred financing costs of $2 million and utility capital assets of $61 million related to the Exploits Partnership were reclassified to other assets and the $61 million term loan was reclassified as current on the consolidated balance sheet of Fortis as at December 31, 2008.

During the quarter, the combination of uncertainty created by the expropriation and the loss of control over cash flows of the Exploits Partnership has required Fortis to commence reporting its investment in theExploits Partnership using the equity method of accounting, effective February 13, 2009. Consequently, the assets and liabilities of the Exploits Partnership are no longer consolidated in the accounts of Fortis. Equity earnings recognized during the first quarter of 2009 were equivalent to the amount that would have been recognized in the absence of the expropriation. This approach is consistent with the public statement of the Government of Newfoundland and Labrador that it is not its intention to adversely affect the business interests of lenders or independent partners of Abitibi.
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Williams offers to subsidize AbitibiBowater

No matter how you slice this, any severance pay going to former AbitibiBowater employees in Newfoundland and Labrador will come out of taxpayers’ pockets.

"Any cheque that is going to be passed over to Abitibi in compensation for the assets that basically have been expropriated through legislation will have to take into consideration severance…”

Williams said it could mean the government cutting a big cheque to AbitibiBowater, and the company uses that money to pay the severance, or the government could deduct the value of the severance payments from the compensation and then send that money directly to the employees.

Two questions:

1.  Why are taxpayers going to be on the hook for something the company would or should have been paying anyway?

2.  If that’s the case, why doesn’t the government just cough up the cash and then sort it out with AB later on, rather than leave the workers hanging?

BTW, the CBC story that extract comes from got its headline all wrong.  There’s no ultimatum involved at all. 

AbitibiBowater chief executive David Paterson is likely rubbing his hands together in glee since now he won’t have to worry about paying out severance to the local workers.  Danny’s gonna pick up the tab for him.

At the same time, the government’s energy monopoly gets the assets at a cut rate with none of the power being earmarked for industry in central Newfoundland.

AB wins.

Nalco wins.

Who loses?

Just think about it for a second.

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Tory-gate hits 30K mark

There’s at least $30,000 of public money for Tory party work in the Ed Byrne statement of facts, according to the official opposition. 

They popped out a news release yesterday that included a table of other PC party spending in the Byrne fraud and bribery conviction case.  The local media haven’t touched this angle of the story at all, oddly enough.

This money isn’t covered by the restitution order, contrary to the claim of former PC Party president – and current deputy Premier – Kathy Dunderdale.  She told the legislature her party was prepared to pay the money back (she meant the 3K from St. Barbe) but decided against it because Byrne had been ordered to pay it back.

Makes you wonder who gave Dunderdale and her colleagues the really bad advice.  Anyone who read the decision by Judge Mark Pike would have known the difference. It’s pretty obvious.

Of course, the Byrne agreed statement only covers a portion of the total.  According to the agreed statement, Byrne received a total of $501,507 in constituency allowance payments with the bulk of it coming in FY 2001, 2002 and 2003.

Byrne only copped to paying back $117,300 which, according to the statement, seems to be what he took for himself. The rest is pretty much a black hole.  The public has no idea where their money went. 

All the Tory party spending  detailed below  isn’t in the restitution order.  No one knows how much more there is since the government and the chief electoral officer  - himself a former president of the Tory Party - are refusing to investigate.

Tory Trevor Taylor, elected in the other by-election in January 2001, called the whole sordid mess in the House dating back to 2000 “dirt and filth”,  a“serious stain on the political face of Newfoundland and Labrador.”

He’s absolutely right, of course.

But then Taylor voted against an investigation into the large chunks of the mess that haven’t been looked at by the police and that will likely keep going unexplored as long as Taylor and his colleagues have their way.

And it’s not like Taylor is unaware of the legal niceties of all this.  Get a load of his comments about the $30K:

The only piece that is within the purview of the Chief Electoral Officer, as far as I know, is the $3,000 that was spent on the St. Barbe campaign in the by-election of 2001. That is the only thing that he has authority to look at. He has no authority to go and look at how some funds may or may not have been sourced from constituency allowance and then utilized to conduct research for the PC Party of Newfoundland and Labrador. That is where the RNC came in. That is where the courts came in. That is where the Auditor General came in. That is who has responsibility for that. [Emphasis added]

Somebody has been doing their research into reasons why not to go looking, evidently.

At the end of it all, the most apt description of what’s been happening with Tory-gate came, ironically enough from Ross Wiseman.  The guy who got elected as a Liberal and then crossed the floor said this:

I am not supporting this motion because it reeks of cheap politics. It is partisan politics of its worst.

He’s right but not in the way he seems to have intended.  The sordid mess began as partisan politics at its worst, continued as partisan politics at its worst – as the Byrne case now makes plain, stayed the course of cheap partisan politics in June 2006 and now remains exactly where it has been:  in the political gutter.

Wiseman, Taylor and their 34 colleagues ensured that by continuing to oppose an investigation that would root out all the rot, no matter what party it was in.

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-  Gus Coombs received a payment of approximately $2,000 from Edward Byrne for an expense he incurred while running as a candidate in the 1999 Provincial Election

$2000

Page 10, paragraph 31

-  A cheque was located showing that Gus Coombs receive a cheque for $3,600.

$3600

Page 10, paragraph 32

-  Wayne Clark stated that around that time in 2001, he was assisting in running a byelection campaign for Wally Young in the district of St. Barbe. Wayne Clark stated that, at that time, he did receive a payment for his services and expenses and it would have been for approximately $3,000.

$3000

Page 11, paragraph 35

-  Charles White stated that they billed the PC Party $10,000 and they received two payments in the form of personal cheques from Edward Byrne. One payment was for $4,000 and one payment of $5,000 and they wrote off the remaining $1,000.

$9000

Page 11, paragraph 42

-  Gina Steele had worked as a receptionist in the PC Party Office.

She stated that she had received a personal cheque of $1500 from Edward Byrne around the fall of 2000. She stated that Edward Byrne had given her the cheque because he felt bad about her being let go from her job around September 2000.

$1500

Page 12-13, paragraph 46

-  Vernon Smith stated he did some work for Edward Byrne and the PC Party around December of 1999. Vernon Smith stated he believed he was paid about $4,000 for this work. Vernon Smith was shown a copy of a personal cheque of Edward Byrne dated December 22, 1999, in the amount of $4,025 which was made payable to him. Vernon Smith acknowledged that

He received this cheque and that it was his signature on the back of the cheque.

$4,025

Page 13-14, paragraph 51

-  Noella Hynes acknowledged being given $1,500 by Edward Byrne. Noella Hynes stated that she had been promised a job by Edward Byrne so she quit the job that she had been working at, only to find out that there was no job with the PC Party. She said that Edward Byrne gave her $1,500 to help her out until she got another job.

$1500

Page 14, paragraph 14

-  Derek Connolly stated he did work for Edward Byrne and the PC Party, but he had been paid by Government issued cheques. Derek

Connolly acknowledged he did receive a personal cheque from Edward Byrne for $1,200, but could not remember for what purpose.

$1200

Page 14, paragraph 61

-  Supporting documents attached to a claim was an invoice in the amount of $3,944.21 from Canadian Helicopters. The invoice was dated January 10, 2001, and the flight date was January 3, 2001.

(this trip would have been for organizing by-elections on the Northern Peninsula)

$3,944.21

Page  17, paragraph 73

Total: $29,769.21

Disquieting similarities

Via labradore, a disquieting trend among certain people leaving comments on various websites over time.

1.  During the Cameron Inquiry when the Premier raised a stink about the way Madam Justice Margaret Cameron was conducting the inquiry:

“another waste of our tax money.”

2.  From 2007, when a question was raised about giving extra cash to the New Democrats even though they’d lost one of their two seats in the legislature:

“Waste of tax dollars.”

3.  On Tory-gate:

“… an investigation will be a complete waste of money!”

The same refrain has been used constantly, like from April 22 and the longer string of comments from the question of the day over at voice of the cabinet minister.

labradore didn’t get ‘em all yet, though.

4.  How about a federal Tory talking point about the Mulroney-Schreiber affair?  Across the country, the faithful deployed their talking points to newspaper letters pages and online comments in droves all with the same refrain:

“waste of money”

5.  Does anyone remember the Tory Talking Point when the whole House of Assembly scandal first broke open and some of us called for a public inquiry into the whole mess?

Well, there was a line that started right at the beginning, namely that Danny Williams was responsible for rooting out the bad stuff.

It was there on Day Two.  That was the day the rest of us found out about it.  Day One was actually the date on which Ed Byrne told the Premier the Auditor General was poking into Byrne’s allowances.

That same theme was also there when they announced the appointment of what became the Green Commission:

In light of recent findings of the Auditor General into the finances of the House of Assembly, Premier Danny Williams today announced that his government will build upon the successful reforms already implemented since forming government.

And that theme continues right down to the latest revelations about public money funnelled illegally and improperly to pay for Tory party operations between 2000 and 2003. Try Trevor Taylor from the debate on a motion to appoint an investigation into the sordid mess. 

Taylor voted against looking into what he described as “filth” but not before he went back to the Tory Talking Point Number One:

none of this would have uncovered and laid bare before the people of Newfoundland and Labrador, had it not been for the election of 2003 when Premier Williams and this government were installed in this place as the government.

But what was Talking Point Number Two, the one used to deal with calls for a public inquiry?

Take a guess.

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In which Pooh worries about H1N1 Influenza A

image001

29 April 2009

Warren the K: anti-tobacco lobbyist

Effective March 1, 2009, Warren Kinsella is a registered lobbyist with the Government of Newfoundland and Labrador as part of a nation-wide effect to spark up some kind of law suit against Big Tobacco.

Here’s an extract from file number CL-272-216:

Particulars:
Launch legal proceedings to recover financial damages to the Ministry of  Health caused by the harmful effects of tobacco products. Assist the Government of Newfoundland and Labrador as part of a national coalition pursuing co-ordinate civil legal actions to recover financial damages to respective health-care systems caused by the harmful effects of tobacco products.

Registration Number:
CL-272-216

Lobby Activity Date:
2009-03-02

Status:
Approved

Effective Date:
2009-03-01

Amended Date:
2009-03-02

Approval Date:
2009-03-03

Kinsella’s registered in other province’s effective the same day on what appears to be the same project.

Two observations:

1.  The provincial government launched a tobacco lawsuit almost a decade ago. The thing has lived in some sort of limbo for legal briefs ever since. Odds are against it suddenly restarting now matter how passionate everyone is about the project.

2.  Good idea as this might be, you can tell who has real political juice and who doesn’t in this province by looking at the registry.  Friends of the party in power – for example,  the people with the ability to pull tens of millions out of the public coffers – never have to register as lobbyists. 

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Total shocker: Abitibi pensioners version

AbitibiBowater is in bankruptcy protection.

The company has stopped topping up unfunded employee pensions on the good-faith basis they’ve been operating on when they had money. As a result some people are getting less money and some are getting none at all.

And you know it is not like someone did not see this coming.

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28 April 2009

Fitz can give him some pointers

Former Connie/Tory member of parliament Bill Casey is Nova Scotia’s new ambassador to Hy’s.

Maybe our own Man in a Blue Line Cab can give him some pointers what with that whole embassy thing having proven to be so monumentally effective for Newfoundland and Labrador.

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The House of Assembly, condensed

1.  bit courtesy of Courtesy of nottawa.

For the record, the grandstanding was not supplied by the Premier.

He is apparently still on some sort of vacation – yet again – and couldn’t be in the legislature.

2.  Meanwhile, people in the province yesterday learned that – contrary to comments by his supporters – the Premier does collect his salary in full. 

The admission came from finance minister Jerome Kennedy during questioning on the budget estimates:

Mr. Chairman, first, again, I think the Leader of the Opposition knows better in terms of the Premier’s salary. It is my understanding that Finance told him he had to take the salary in order to donate it to charity, which is essentially what he does. To leave any other impression, I would suggest, Mr. Chairman, is not fair. The Premier’s salary is provided to, I think it is the Williams Family Foundation, which then distributes it to charity. The Premier of this Province does not receive one cent to himself for the benefit of what he does. Unlike the rest of us, or at least unlike me, I use my salary to live.

And by “not one cent of benefit”, presumably the finance minister does not include in that estimate accumulating pension entitlements and taking the tax breaks on the donations which go – it must be pointed out – to the family charity run by his wife, daughter and family friend.

Notice, as well, the construction of Kennedy’s sentence which clearly leaves the impression the goal of the exercise was to make the donation, not avoid taking a salary.

He apparently never heard of a “dollar-a-year” man.

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26 April 2009

Phake photos add up to more tourism travails

As you can see at Geoff Meeker’s blog and at labradore, the provincial tourism departments advertising campaigns are marred by what amounts to fake photography.

That is, the company behind the campaign has taken a couple of shots and then through a series of deletions and additions created something that actually doesn’t exist all in aid of getting people to come here to experience something which is, according to one advert, as far from Disneyland as you can get.

Uh huh.

Now that might actually be true since the evidently invented, fanciful and ultimately fake stuff you experience at Disneyland or Disney World actually exists at the theme park.

The stuff in the pictures does not.

So at least in that bit they told the truth, just not in the way most people would take the meaning if they didn’t know the little photoshop of horrors involved.

To give you some sense of the manipulation involved both blog posts include both unedited shots and the doctored outcomes. 

It’s worth taking the time to look at both just to see not only how much doctoring has been done but how much the sights didn’t need the creativity of the Picassos of pixilation.

This is just the latest in a string of problems in the tourism ministry over the past few years.  The province’s energy corporation plans to drive a string of gawdawful high voltage electricity towers right through a UNESCO World heritage site.  Never mind that one of the tourism television ads this year highlights Gros Morne as a destination known for its unspoiled natural beauty, as you’ll see in Meeker’s post.

Nope, seems the geniuses at NALCO think the rest of us just need to be “educated” on why their solution  - 43 metre high towers right along key sight lines - is the only one that’s right. 

Then there was last summer’s little round of bullshit  - as we noted not once, not twice but thrice - with the billboard along the Gardiner Expressway in Toronto.

And all of that comes against the backdrop of an advertising campaign that is costing about double what it did four years ago but which isn’t seeing comparable growth in the actual numbers of  real tourists. 

In fact, the only real growth to speak of has been in locals who stay home in the summer.  They are doing that not because of watching tourism spots on CTV Newsnet every 15 bloody minutes but because it’s cheaper to stay home than travel what with the dollar at less than par.

Now that lack of results is not so much an issue with the advertiser as it is with the department headed up by a minister who is, for the most part, one of those resident visitors to the capital city region his department likes to talk about.

You see, the minister hits the taxpayers with the bills for his visits to the office in St. John’s rather than buy or rent a home here out of his own expenses like the rest of us would have to do.  He’s not alone either; almost half the cabinet nails the taxpayers for the cost of travel back and forth between their offices in St. John’s and their homes in various parts of the province.

To get back to the point:  the problem is that the current administration’s whole master plan for tourism has been to simply throw money into advertising.  That’s their phantasmagorical never-seen-before-in-the-history-of-human-civilization strategy, and despite the evidence that sheer volumes of dollars don’t work, they are determined to carry on with all the ingenuity of Douglas Haig.

When it comes to authentic tourism events, the minister – like his entire cabinet seatmates – don’t seem to know anything beyond trying to get the feds to pony up.  The sorts of people who come to Newfoundland and Labrador  go to places to see something different and real, something that actually is as far from Disneyland as you can imagine.

Too bad our whole tourism promotion is built around fakery.

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25 April 2009

Tory-gate: the opinion columns version

From the Saturday Telegram, Russell Wangersky’s column:

In fact,  [chief electoral officer Paul] Reynolds defends the spending by saying that even if the under-the-table cash were added to the declared funding, "neither the PC candidate nor the party would have exceeded the legislated expenditure limits for the electoral district in that byelection."

That's not the point.

The point is how did $3,000 in spending end up off the books, and could there be other off-book spending in the province's elections?

Could there be?  A look at the information already in the public domain suggests  there was.

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24 April 2009

Two charged with 73 election finance violations

Hang on, there.

Don’t get excited.

It isn’t Tory-gate. 

The mayor of Vaughan, Ontario and her husband have been charged with election expense violations following an investigation:

Vaughan Mayor Linda Jackson and her husband, Mario Campese, have been formally charged with violations of election finance rules in the run-up to her narrow 2006 victory against former mayor Michael Di Biase.

Jackson was served with 68 charges at her home yesterday afternoon by a representative of independent prosecutor Timothy Wilkin, who was hired by Vaughan City Council to determine whether such charges should be laid under the Municipal Elections Act.

Her husband, who served as her campaign manager, also faces five charges, including accepting illegal cash contributions.

How sad could it be when a small city in Ontario has higher election finance ethics standards than the entire province of Newfoundland and Labrador.

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Freedom from Information: another missing report by Bill Marshall

Coincidence of coincidences.

Your humble e-scribbler mentions Bill Marshall in jest in a post that connects back to the whole Ed Byrne Tory-gate spending scandal.

As it turns out, on the very same day that Danny Williams decided to tell the world about the auditor general’s investigation of Ed Byrne back in June 2006  justice minister Tom Marshall released government’s response to the Lamer commission report into wrongful convictions.  Williams had known of the AG investigation since the middle of the day before he made it public, apparently, but that’s another story.

Anyway…

June 21, 2006.

Gee.

And right there in the middle of the release is an announcement that former cabinet minister and retired supreme court judge Bill Marshall would be running a review of the Crown prosecutor’s office, as Antonio Lamer recommended:

Establishing an independent review of the Office of the Director of Public Prosecutions is one of the recommendations Minister [Tom] Marshall [no relation to Bill] said government will implement immediately.  Commissioner Lamer recommends that an independent review be called to ensure that steps have been taken or will be taken to eliminate the "Crown culture" that contributed to the wrongful conviction of Gregory Parsons, and was also evident in the prosecution of Randy Druken.

"This is an important recommendation on which government must act immediately and we are pleased that retired Court of Appeal Justice, William Marshall, will immediately head up the review," said Minister Marshall. "The review will be very thorough, independent and at arms length; it will examine resources, training, morale and the systemic issues identified in the report." [bold and italics added]

Immediately head up the review but not immediately finish the thing, as it turns out.

imageJust  a few weeks shy of three years after Bill Marshall immediately headed up the review into Lamer’s recommendation 18, there’s no apparent sign the work of the government’s favourite Grand Inquisitor is anywhere near done. [click the to go to the report] 

Perhaps the former Supreme Court Justice and Tory cabinet minister has been too busy with another review, this one of inland fisheries

The second one was a sort of star chamber, since the whole thing was never announced. 

Indeed, government has never revealed either the scope of inland fisheries probe or when Marshall started work on it.  Opposition House leader Kelvin Parsons asked a question in the House about an access to information request that wanted to find out some basic stuff about the judge’s inquest – like how much it had cost so far – but the minister answered with a mere two sentences:

Mr. Speaker, with respect to the review being undertaken by retired Judge William Marshall, I believe the review is not completed to this point. Obviously, the information could not be disclosed until we have the results of the review.

That, dear friends, is all we know of that one.

So now we have it:

Two investigations.

Same guy, running both.

Zero results.

Unknown costs.

And it’s not like Bill Marshall isn’t popular when it comes to the current administration. 

Way back in October 2003, the guy who started campaigning for the premier’s job in the now infamous St. Barbe by-election appointed Bill Marshall as sort of a watchdog:

Bill Marshall, a recently retired Appeal Court judge and former PC cabinet minister, will act as the liaison between Williams and departing premier Roger Grimes.

Liberals warned against new contracts

Williams says the outgoing Liberal government should not make any plans for spending announcements.

"I don't expect them to do that, "he says. "That would be irresponsible for an outgoing government that, no longer has a mandate to take those kind of actions. So, I'm trusting that Mr. Grimes and his government will do the honourable thing, and I expect them to do that."

The whole thing was just another of the nasty, mean-spirited, petty, small-minded, miserable  little insinuations about others that Danny Williams likes to make, as we have come to learn.

As it also turns out, the guy who started his latest political life as the Premier’s watchdog has, in his retirement, become a sort of Tory Torquemada – if you will plant your tongue firmly in cheek – ready, nay eager, to take on any investigation, inquiry or inquisition that needs to be done.

Too bad he apparently can’t finish them.

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23 April 2009

Tory-gate: former electoral officer supports spending probe

Paul Reynolds’ predecessor knows that to do.

Former chief electoral officer Chuck Furey says that he’d have appointed a retired judge to investigate the St. Barbe by-election.

Furey, a former Liberal cabinet minister, now lives in Dominica.  Furey was Danny Williams’ pick for the chief electoral officer three years ago.  At the time of Furey’s appointment, Williams’ new release described the OCEO job like this:

The Chief Electoral Officer operates under the Elections Act 1991 and is responsible for exercising general direction and supervision over the administrative conduct of elections and enforcing fairness, impartiality and compliance with the act.

Williams handed the job to former Tory party president Paul Reynolds when Furey resigned. The news release at the time Williams announced Reynolds as his choice  described the office’s responsibilities with exactly the same words.

The release didn’t include Reynolds’ extensive pedigree with the province’s Tory party in the release.

For reasons that should be obvious, Furey’s comments virtually guarantee there won’t be an investigation into campaign finance irregularities in at least one by-election held since 2000.

For reasons that should be even more obvious, Furey’s advice is sound.  In a situation where there is a question of irregularities – especially a question of irregularities involving the party the chief electoral officer is tied to – the most sensible thing to do is call in an independent person and have them sort through the mess.

Anything else – anything else  - gives the controversy legs.

Refusing to investigate, especially using a preposterous series of excuses, just looks suspicious.

After all,  if things really were as innocuous, limited and uneventful as Reynolds claims, then why not have some impartial investigator have a look?

Just don’t look to get Witch-hunt Willie Marshall on the case.  He’s already busy with a sooper- sekrit investigation that he apparently hasn’t finished yet and the government refuses to talk about.

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AbitibiBowater launches NAFTA challenge

The following was released today by AbitibiBowater (paragraphing changed for legibility):
US$
ABWTQ (OTC)
ABH (TSX)

MONTREAL, April 23 /CNW Telbec/ - AbitibiBowater today filed a Notice of Intent to Submit a Claim to Arbitration under the North American Free Trade Agreement ("NAFTA") with regards to the expropriation of its assets and rights in Newfoundland and Labrador, Canada. It is the Company's position that the passing of Bill 75, which expropriates the Company's provincial assets and contractual rights to natural resources, by the provincial government was arbitrary, discriminatory and illegal. AbitibiBowater is seeking in excess of CDN$300 million in direct compensation for the fair market value of the expropriated rights and assets, plus additional costs and further relief as the Arbitral Tribunal may deem just and appropriate.

In early December 2008, AbitibiBowater announced various capacity-reduction measures, including the permanent closure of its Grand Falls mill, as a result of the economic downturn and decline in product demand. In retaliation, the province hastily passed Bill 75, without any attempt to consult with the Company and without holding any public hearings.

The Company has asserted in the Notice of Intent that Bill 75 unquestionably breaches Canada's NAFTA obligations on a number of grounds, including among others:

- Basis of Expropriation: NAFTA explicitly details the grounds under which government expropriation can occur. The criteria for expropriation are not met in Bill 75.

- Fair Compensation: AbitibiBowater is entitled to immediate, full and fair compensation. Bill 75 does not ensure payment for the fair market value of the expropriated rights and assets.

- Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access the courts, which is independently a violation of NAFTA.

- Discrimination: AbitibiBowater should be afforded the same rights and privileges as all other domestic and foreign investors. Bill 75 is retaliatory in nature and discriminates against the Company.

"AbitibiBowater has been operating in Newfoundland and Labrador for more than a century, contributing significantly to the region's economic, social and sustainable development," stated David J. Paterson, President and Chief Executive Officer.

"The nationalization of our assets was unexpected and an unnecessary course of action. It came despite our proactive outreach to form a joint working group to address and resolve all issues related to our rights and assets in the province. The Company remains open to seeking a collaborative resolution with the federal and provincial governments."

The expropriation relates to a broad range of AbitibiBowater's rights in Newfoundland and Labrador, including land rights, timber rights, water use rights and various other related rights and business partnerships, and these rights can be traced back in part to grants by the provincial government and its predecessors, as well as to other third-party transactions. In addition to the substantial sums it expended to acquire these rights, the Company has invested hundreds of millions of dollars in the province over the last century, ranging from capital investments in mill operations to road projects that have helped build rural Newfoundland.

Since the Company is incorporated in the state of Delaware and carries out business activities in the United States, the expropriation of rights and assets represents a breach of Canada's obligations to a U.S. investor under Chapter Eleven of NAFTA.

The Company has filed this notice as part of the dispute resolution mechanism available under NAFTA and will submit the claim to arbitration in three months, pursuant to the relevant NAFTA provisions, should this matter not be resolved by that date.

"It is our obligation to defend the interests of our shareholders and ensure we receive compensation for the fair market value of the expropriated assets, plus additional damages. With this notice, we have taken the first step in pursuing legal actions," added David Paterson.

Media should take note that copies of the Notice of Intent under Chapter Eleven of NAFTA are available upon request. The following paragraphs may be of interest:

NAFTA Provisions Breached: Paragraphs 6-7
Underlying Facts: Paragraphs 8-11
About AbitibiBowater: Paragraphs 12-17
AbitibiBowater's History and Rights in the Province: Paragraphs 18-29
Additional Investments: Paragraphs 30-33
The Hydro Assets: Paragraphs 34-41
The Grand Falls Mill Closure Plan: Paragraphs 42-51
The Province's Ultimatum: Paragraphs 52-54
The Province's "Justifications": Paragraphs 55-58
Expropriation: Paragraphs 59-67
Denial of Justice: Paragraphs 68-69
Lack of Compensation: Paragraphs 70-71
NAFTA Violations: Paragraphs 72-86
Relief Sought: Paragraph 87

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world.

AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea.

Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets under the stock symbol ABWTQ.

For further information: Investors: Duane Owens, Vice President, Finance, (864) 282-9488; Media and Others: Seth Kursman, Vice President, Communications and Government Affairs, (514) 394-2398, seth.kursman@abitibibowater.com


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Tory-gate shocker: Williams backs hand-picked chief electoral officer

What else would we expect the Premier to do but back the guy he picked for the job?

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Tory-gate: Making wrong a right

1. labradore does the usual fine job of documenting the Progressive Conservative Party’s reliance on paid campaign staff.  Note especially the relatively heavy amounts spent in certain districts in certain elections.

Paying staff isn’t the problem.

Paying them with stolen money would be.

Paying them with money improperly obtained (but not stolen) would be especially if that money – as in the St. Barbe case – was never reported publicly as required by law.

No one can claim there were no rules this time out.

2.  The curious nature of former PC party president – and current chief electoral officer – Paul Reynold’s reliance on false information to justify his refusal to investigate the (alleged) election spending wrongdoing.

We know, as an incontrovertible matter of fact, that the election finance reports filed by the Progressive Conservatives for the 2001 by-election are wrong.  Contrary to the Elections Act, 1991, they do not include all party spending on the by-election.

That’s been established in the agreed statement of facts coming out of the recent conviction of former party leader Ed Byrne’s recent conviction for fraud and corruption.

It’s implicit in his curious statement, linked above.

Why they don’t is a matter to be determined.

Then Reynold’s relies on documents he knows to be wrong to justify doing nothing:

The reports filed on behalf of the PC candidate in the 2001 by-election and by the party indicated election expenses totaling $17,362. Even including the amount of $3,000 identified in the statement of facts released with respect to the Ed Byrne criminal proceedings, neither the PC candidate nor the party would have exceeded the legislated expenditure limits for the electoral district in that by-election.

That might be true if we knew that the $3,000 was all the illegal spending involved.

But we don’t.

and we don’t know because Reynolds is refusing to do his job.

In the Byrne case,  we only have a partial accounting of the Byrne case.  We only know where about roughly where $173,000 went when in fact Byrne received the better part of a half million in the years between 2001, 2002, 2003.  Coincidentally, those are the years leading up to the 2003 general election.  There were also a few by-elections in there as well, including the one in St. Barbe which the Provincial Conservatives campaigned so hard to win.

They fought so hard that their new leader – acclaimed the day after the by-election vote – used it as an example of the turning tide of Tory fortunes.  heck, the new leader even spent pretty much all the campaign driving around in his Winnebago campaigning for the party.

But that is digression.

We know how much money went astray in the Byrne case.

We don’t know where it went.

We don’t because the chief electoral officer is using any excuse at his disposal to avoid investigating his old political party.

He said we didn’t need an investigation because they guy that won, won a second time so things must be okay.

Now he’s telling us that documents that he knows are wrong can actually be right, as long as it means he doesn’t have to investigate his old friends.

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22 April 2009

Offshore board invites public comment on Hebron project environmental document

Form the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The public is invited to comment on the draft comprehensive study scoping document for the Hebron Development Project being proposed by ExxonMobil Canada Properties on behalf of its co-venturers, Chevron Canada, Petro-Canada, StatoilHydro and Nalcor.

The Hebron Project will include activities associated with installation, drilling and production, maintenance, and decommissioning of a concrete gravity-based structure (GBS) at the Hebron Field, northeast Grand Banks. The Hebron Project will also involve construction activities at two locations, the Hebron Field and the Bull Arm marine facilities in Bull Arm, Trinity Bay. Construction activities are scheduled to commence in 2012, with petroleum production to begin in 2016 or 2017.

Pursuant to the Canadian Environmental Assessment Act (CEA Act), the Hebron Project is subject to a Comprehensive Study level of assessment. Pursuant to Section 21(1) of the CEA Act, the C-NLOPB, on behalf of the responsible authorities for the federal environmental assessment of the project (C-NLOPB, Fisheries and Oceans Canada, Transport Canada, Environment Canada and Industry Canada), is inviting the public to comment on the proposed scope of the project. The scoping document defines the plan for the environmental assessment and outlines the extent of the project and the elements to be assessed.

The Board will accept written public comments on the scoping document until noon on Friday, May 22, 2009.

The Project Description and Scoping Document are available on the Board’s website, www.cnlopb.nl.ca or by e-mailing ead@cnlopb.nl.ca.

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Media Contact:

Sean Kelly, APR (709) 778-1418 (office) (709) 689-0713 (cell) skelly@cnlopb.nl.ca

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Tory-gate: the PC party election spending scandal

1.  The Chief Electoral Officer’s statement on why he is refusing to investigate.

Note that CEO Paul Reynolds apparently only spoke with unnamed Progressive Conservative Party officials after he told CBC’s David Cochrane that he would not be investigating the matter as he felt the by-election had been conducted properly:

They [unnamed party officials] indicated that they became aware of this issue when the statement of facts relating to the Ed Byrne Constituency Allowance fraud case was brought forward by a CBC reporter, this being the same time that my office was made aware of the situation.

2.  The legal argument against Reynolds:

306. (1) No person other than the chief financial officer of a registered party or candidate shall authorize election expenses for that party or candidate and no election expenses shall be incurred except by a chief financial officer or a person designated in writing by a chief financial officer for that purpose.

So if Mr. Reynolds' assertion is correct, why are there no charges, and why is there no investigation?

3.  The logical argument against Reynolds:

Given the severity of the potential breach of justice, the lack of initial evidence does not constitute a prima facie case against a full investigation into whether stolen money was indeed used to fund a provincial election campaign.

Reynolds' statement contains 4 attempts of negative proof, otherwise known as argumentum ad ignorantiam. For a pithy explanation, see Fallacy Files: http://www.fallacyfiles.org/ignorant.html

The case against this type of argumentation is simple: a lack of evidence by itself is no evidence.

4.  Three years after the House of Assembly spending scandal story broke, the people of Newfoundland and Labrador still do not know the answers to simple questions:

  • Who knew?
  • What did they know?
  • When did they know it?
  • Where did the money go?

It’s not like someone didn’t suggest this at the outset:

Make no mistake: AG Noseworthy's inquiries and the police investigation will not root out the answers to all the questions raised by this scandal which itself is without precedent in the province for over 80 years.

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21 April 2009

Word from the bunker: Reynolds issues red herring statement

Chief electoral officer Paul Reynolds – under fire over the Progressive Conservative Party election spending scandal - issued a written statement late Tuesday attempting to justify his inaction in the case.

In the statement, Reynolds now claims he conducted a cursory review prior to concluding nothing further needed to be done. The statement contains a series of non sequiturs - colloquially known as red herrings - that don’t stand up to scrutiny.

Reynolds, a former president of the Progressive Conservative Party and a district PC party official at the time of his appointment, apparently spoke only to unidentified representatives of the PC party. There is no indication of when he spoke with the unnamed individuals.

The statement bears a time stamp of 4:55 PM, but as of 6:53 PM, the statement was not available on the provincial government website.

More to follow, once the statement is available online.

D'oh Update: Reynolds pulled a real Homer moment with this statement, as will become plain in the days ahead. Let's just start out with issuing the statement at the end of the day. In light of the recent boner play at Eastern Health, this one is sure to earn the scorn of local reporters.

For those who are looking for some evening entertainment, the ever-reliable labradore has posted a copy of the release which - as of almost 9:30 PM Newfoundland time is still not available at the government website.

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20 April 2009

The ghost of Richard Squires: party work with public money

According to the statement of facts in the Ed Byrne case, members of the House of Assembly were reimbursed for expenses incurred while representing their constituents.

In other words, work for a particular political party wouldn’t be covered by the expense accounts.

Here’s paragraph six of the agreed statement:

6. When MHAs incur out of pocket expenses while representing their constituents, they are later reimbursed for these costs from the House of Assembly’s Financial Accounts. During the time period in question, the IEC set the rules on eligible and ineligible expenses, per diem rates, general expense guidelines and actual expense limits related to Travel and Constituency Allowance (TCA) claims.

As outlined by the IEC in its annual report,

“Each Member (of the House of Assembly) is entitled to an accountable constituency allowance. This allowance is for the payment of expenditures incurred in the performance of constituency business and may cover such items as office rental, equipment, supplies, secretarial and other support services, informational material such as newspapers, advertising, purchase of flags, pins, etc.”

That’s one of the reasons why the whole section of the statement dealing with work done by the local law firm White, Ottenheimer, Baker is odd.

Charles White – senior partner with the firm – insists that in 2000 the firm did work for the Progressive Conservative Party for which it billed $10,000. The solicitor who did the work – now provincial Court Judge John Joy also insisted he did work for the party – not the opposition office – on some constitutional issue related to the fishery.

Lawyers aren’t known for being sloppy with their language so when White says that it was the PC Party – and not the opposition office as Byrne is noted as saying – you have to take notice of it.

Charles White confirmed that the law firm did some work for the PC Party in 2000 and that John Joy was the lawyer who did the work. He said they were engaged to do the study by Edward Byrne but the PC Party was their client.

One of the other reasons to look somewhat quizzically at the whole affair is how White says the firm got paid: two personal cheques from Ed Byrne. Not cheques from the party directly; not even cash from the party treasurer, but two personal cheques from the party leader at the time.

Charles White stated that they billed the PC Party $10,000 and they received two payments in the form of personal cheques from Edward
Byrne. One payment was for $4,000 and one payment of $5,000 and they wrote off the remaining $1,000. Charles White stated that this was the only work their law firm did on Edward Byrne's behalf.

When shown two cancelled cheques from Byrne, White confirmed those were the ones received and cashed by the form for work White and Joy say was done for the party.

In the party contributions reports for the calendar year 2000, the chief electoral office shows that Ed Byrne and his wife made donations to the Progressive Conservative Party totalling less than $7,000.

On top of that for the fiscal year ending in 2000, there’s no expense item for the PC Party that comes anywhere close to $10,000, at least not where one might expect to find it.

Now if the report is for the year ending in March 2001 - which would include most of 2000 – there is a PC caucus expense reported of slightly more than $47,000 but that’s pretty clearly attributed to supporting caucus expenses.

It isn’t for what White, Ottenheimer and Baker believed was party work. besides, if the party paid the expense, then why did Byrne bill his legislature accounts for it and pay the tab with a cheque drawn on his own personal accounts.

The line item for professional fees – where you’d expect to find a party expense for legal work – there is only a flat $2,500.

And since we know Byrne billed the $10,000 for White, Ottenheimer Baker to the account covering his constituency and travel bills as the member of the legislature for Kilbride, the whole thing doesn’t appear to be very clear at all.

Now just to be sure, there’s no indication that the old Tory chambers, the PCJ nor any of its barristers and solicitors involved in the firm did anything wrong; nor is there any reason to suspect them of anything.

The problem here is on the party side and the pretty obvious inconsistency with its reports, as presented by the elections office, and required by law under the Elections Acts.

The whole thing looks like something straight out of the old days when political leaders kept their personal accounts in one pants pocket and the party ones in the other.

All this goes a long way to undermining the claim of the current chief electoral officer – and former Tory party president - Paul Reynolds that everything is tickety-boo with election finance reports from his office.

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Charlie White/John Joy (Work done by Ottenheimer White and Green)

38. On June 4, 2001, a travel and constituency allowance claim in the amount of $9,000 was submitted by Edward J. Byrne. Attached to this claim was a generic receipt for a payment of $9,000 to Charlie White for contractual work done on behalf of the official opposition of which Edward Byrne's behalf. There was a signature "Charlie White" on the receipt. A recap dated June 4, 2001, shows that Edward Byrne was paid $9,000 for this claim.

39. On September 22, 2000, a Travel and Constituency Allowance Claim in the amount of $10,000 was submitted by Edward J. Byrne. Attached to this claim was a generic receipt dated September 20, 2000, for a payment of $10,000 to John Joy for research conducted on behalf of the Official Opposition. There was a signature "John Joy" on this generic receipt. A recap generated on September 22, 2000, showed a payment of $10,000 to Edward Byrne for this claim.

40. Charles White is a senior partner in the law firm of White, Ottenheimer and Baker. John Joy is now a Provincial Court Judge in Happy Valley-Goose Bay, but in 2000 was also a lawyer in the firm.

41. On August 7, 2007, one of the investigators spoke with His Honour Judge John Joy by telephone. Judge Joy advised that when he was a lawyer in the law firm of White, Ottenheimer and Baker he had done some work for the PC Party in relation to a constitutional issue regarding the food fishery in Newfoundland and Labrador. Judge Joy said he couldn't recall signing any receipt. The investigator e-mailed Judge Joy a copy of the generic receipt. Judge Joy responded that he had never seen the generic receipt before and that it definitely wasn't his signature on the document. Judge Joy stated that he personally did not receive $10,000.

42. On August 15, 2007, the investigators interviewed Charles White. Charles White confirmed that the law firm did some work for the PC Party in 2000 and that John Joy was the lawyer who did the work. He said they were engaged to do the study by Edward Byrne but the PC Party was their client. Edward Byrne maintains that this work was done for the Official Opposition. Charles White stated that they billed the PC Party $10,000 and they received two payments in the form of personal cheques from Edward Byrne. One payment was for $4,000 and one payment of $5,000 and they wrote off the remaining $1,000. Charles White stated that this was the only work their law firm did on Edward Byrne's behalf.

43. Charles White was shown copies of the two personal cheques from Edward Byrne made payable to White, Ottenheimer and Baker. Charles White confirmed that these were copies of the cheques they had received. Charles White was also shown the generic receipt for $9,000 which was purportedly signed “Charlie White”. Charles White stated that he had never seen that document before and that it wasn't his signature on the document. Charles White was then shown the generic receipt pertaining to the $10,000 amount that John Joy was supposed to have received. Charles White stated that he knew John Joy's signature and the signature “John Joy” on the receipt was definitely not his signature.

44. Edward Byrne received $10,000 as a result of submitting the receipt purporting to bear the signature of John Joy. Although the receipt bearing the signature of Charles White is also apparently false, Charles White acknowledges that there was work done by their firm, and there was a payment of $9,000 as stated in the receipt.

Real political identity confusion

The province’s l’il Liberals are holding a fundraiser in May.

For 25 bucks you can have some pancakes and listen to a guest speaker.

Who are the young Liberals in Newfoundland and Labrador hosting, you might ask?

Danny Williams’ best friend.

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IOC may shut operations from July to October

Ironore Company of Canada (IOC) has advised the Newfoundland and Labrador labour minister that the company will close its mining operations in Labrador in July and may stay closed until October, according to Radio Canada.

If ore prices don’t rebound, the company is considering keeping its mine and associated facilities closed for as long as 13 weeks.

“Oui, c'est vrai,” IOC executive Michel Filon told Radio-Canada. “Maintenant, il n'y a aucune décision qui a été prise et si on a envoyé ce mémo, c'était pour garder le maximum d'options ouvertes et certainement de respecter les lois du travail”.

[Rough translation: “Yes, it’s true.  No decision has been made yet  and in sending the memo it is to keep our options open to respect labour laws.”]

Audio:  Radio-Canada

H/t:  labradore

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18 April 2009

More partisan business with public money ?

It appears the Provincial Conservatives fought two by-elections on the Great Northern Peninsula in 2001 with public money.

CBC News has already reported a payment of $3,000 to a party organizer for work on the St. Barbe by-election. There was another by-election at the same time in The Straits and White Bay North.

Following is another extract from the agreed statements of facts in the Ed Byrne case. This entry came under a section concerning double- and triple-billings for the same expenses.

Note in this case that the invoice involved is for almost $4,000 and covers what appears to be the lease of a helicopter from Canadian Helicopters on January 3, 2001. There may be other helicopter leases; in the agreed statement, note that the CHC officials is said to have confirmed only once invoice for a specific amount. There’s no discussion of other invoices and that’s likely because police investigators were looking for specific types of activities.

The by-elections in the two districts started on January 8, 2001 but the work to prepare was already well under way before that. The Tories had nominees in place by December 2000 and on January 3, 2001 they issued a news release for a nomination vote on the 10th of January.

Here’s that release, for the record, just to give an indication of the level of activity going on over the holidays in late 2000 and early 2001 :

PC nomination meetings in
The Straits & White Bay North

January 3, 2001 — The Newfoundland and Labrador Progressive Conservative Party and The Straits & White Bay North PC District Association today announced details of the nomination meetings to select the Party's candidate in the upcoming provincial by-election (for which the government has not yet set a date).

Voting will take place on Wednesday, January 10 between 5:00 p.m. and 8:00 p.m. at the following three locations:

  • the Vinland Motel at St. Anthony;
  • the May Flower Motel at Roddickton;
  • the Straits Development Association office at Shoal Cove East.

The three people seeking the Progressive Conservative nomination in The Straits & White Bay North are as follows:

  • Ford Mitchelmore
  • Ward Samson
  • Trevor Taylor

For further information, please contact Annette Genge, President of The Straits & White Bay North PC District Association at (709) 454-0062.

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Now other than that by-election, there doesn’t appear to have been any opposition caucus activity at the time - other than related to the by-election - that might have warranted a helicopter charter for one day.

While we’ll keep digging into this to see if anyone will confirm the itinerary and other details for the charter, it seems a pretty curious coincidence in timing that CHC billed Ed Byrne, opposition party leader, for a helicopter at around the same time as everyone was gearing up for a by-election fight.

Byrne billed the flight to his travel and constituency allowance account, which he’d be entitled to do as opposition leader at the time the trip took place. Note as well, that in this section of the agreed statement the problem police pointed to was not that Byrne billed for the flight but that he billed for it more than once.

They weren’t as concerned with the propriety of the spending as much as the business of billing for the same service multiple times and thereby committing a fraud.

Here’s the extract from the agreed statement of facts:

Canadian Helicopters

72. On April 25, 2001, a travel and constituency allowance claim in the amount of $6,210.83 was submitted by Edward J. Byrne. One of the supporting documents attached to this claim was an invoice in the amount of $3,944.21 from Canadian Helicopters. The invoice was dated January 10, 2001, and the flight date was January 3, 2001. A recap dated April 25, 2001, shows that Edward Byrne received a payment of $6,210.83.

73. An undated travel and constituency allowance claim for the period May 1, 2001, in the amount of $25,086.86 was submitted by Edward J. Byrne. One of the supporting documents attached to this claim was a photocopy of the same invoice in the amount of $3,944.21 from Canadian Helicopters that had been submitted with Edward Byrne’s April 25, 2001, claim. A recap dated June 19, 2001, shows that Edward Byrne received a payment of $25,086.86.

74. On October 12, 2001, a travel and constituency allowance claim in the amount of $3,944.21 was submitted by Edward J. Byrne. Attached as supporting documentation to this claim was a photocopy of the same invoice in the amount of $3,944.21 from Canadian Helicopters which Edward Byrne had previously submitted on his April 25, 2001, and his May 1, 2001, claims. A recap dated October 12, 2001, shows that Edward Byrne did receive a payment of $3,944.21.

75. Upon review of the personal banking record of Edward Byrne seized from Newfoundland and Labrador Credit Union (NLCU), only one personal cheque of Ed Byrne in the amount of $3,944.21 being paid to Canadian Helicopters was located.

76. On October 12, 2007, Janice Tipple of Canadian Helicopters was interviewed.

Copies of the 3 invoices that Edward Byrne had submitted were faxed to her to review.

On October 16, 2007, Janice Tipple of Canadian Helicopters advised the investigators that that there was only one $3,944.21 invoice from Canadian Helicopters to Edward Byrne and that the others were duplicates.

77. Edward Byrne had in effect claimed and was reimbursed for this $3,944.21 invoice from Canadian Helicopters 3 times, resulting in an overpayment of $7,888.42.

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17 April 2009

For the record: The Tory Organizer and the Swirling Scandal

From the agreed statement of facts in the Ed Byrne fraud and bribery conviction, the sections related to Wayne Clarke, a Provincial Conservative party organizer who figured prominently in David Cochrane’s story about the St. Barbe by-election in January 2001. [Note: bolding is added; SRBP notations are in square brackets]

Wayne Clarke

34. Two receipts were submitted by Edward Byrne as part of Constituency expenses in relation to Wayne Clark.

1) An undated expense claim for the period of May 2001 in the amount of
$25,086.86 was submitted by Edward J. Byrne. Attached to this expense claim was a handwritten generic receipt in the name of Wayne Clarke for an amount of $3,000. This generic receipt stated that it was for payment for work done in the district of Kilbride. The signature "Wayne Clarke" was on this receipt. A recap, dated June 19, 2001, shows payment of $25,086.86 to Edward Byrne as a result of this claim. [SRBP: The by-election finished on 30 Jan 01. This invoicing is at least five months later.]

2) On February 11, 2003, a travel and constituency allowance claim in the
amount of $10,669.75 was submitted by Edward J. Byrne. Attached to this claim was a generic receipt for a payment of $5,000 to Wayne Clarke for a research project. The signature "Wayne Clarke" appeared on the receipt. A recap dated February 14, 2003, shows that Edward Byrne was paid $10,669.75 for this claim.

35. Wayne Clarke was identified as being an individual who had been involved with the PC Party for several years. On August 1, 2007, Wayne Clarke was interviewed by the investigator and shown the first generic receipt for $3,000. He stated it was his signature on the receipt; however, he never did any work in the district of Kilbride.

Wayne Clark stated that around that time in 2001, he was assisting in running a by-election campaign for Wally Young in the district of St. Barbe. Wayne Clark stated that, at that time, he did receive a payment for his services and expenses and it would have been for approximately $3,000. [SRBP: Six months later is not necessarily “around that time” but it is interesting to note the acknowledgement of the signature and the payment for work on the by-election. Notice as well that in this instance, there is no indication of who paid Clarke. He is merely noted as saying that he was paid for his work. In other instances in the agreed statement, the auditors were able to match personal cheques from Byrne to individuals doing political work. In this instance, there is no reference to such a cheque.]

36. Upon next being shown the generic receipt in his name for the $5,000 amount for a research project, Wayne Clark stated that he had never seen that document before nor did he receive $5,000. Wayne Clark stated that he never did any research project for the PC Party at that time. Wayne Clark stated that the signature on the receipt was definitely not his. Wayne Clark did receive $1,700 from Edward Byrne. [SRBP: Note that this incident took place in early 2003 and relates to work done by Clarke for the Provincial Conservative Party at some unspecified time prior. The nature of the work is also unspecified.

37. Edward Byrne was reimbursed for the amounts as a result of these fraudulent claims. Of the $8,000 claimed, $3,000 of this was for work that was actually performed by Wayne Clark, but not as part of constituency work. [SRBP: This is a curious conclusion. The paragraph immediately preceding it confirms that in addition to $3,000, Clarke received $1,700 from Byrne in 2003. That puts the total he received as being $4,700 of the $8,000 billed. we don’t know what the second payment was for.]

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Mr. Byrne goes to jail

Danny Williams’ predecessor as Provincial Conservative Party leader and his former right-hand political man is headed to jail after pleading guilty to fraud and bribery charges.

Judge Mark Pike sentenced Ed Byrne today to two years in jail, less a day and ordered restitution of over $100,000.

More:

Video:  source – cbc.ca/nl

The sentencing decision – link from cbc.ca/nl

Canadian Press.

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16 April 2009

Chief electoral officer refuses to investigate alleged campaign finance irregularity of his old political party

According to CBC’s David Cochrane, a Progressive Conservative organizer  received $3,000 for working on the by-election in St. Barbe in 2000-2001.

Nothing irregular in that.

What is irregular is that the money came from then-Tory leader Ed Byrne’s constituency allowance, according to Cochrane, billed as work in Byrne’s Kilbride district. Presumably that much detail is in the agreed statement of facts in Byrne’s recent conviction on fraud charges in the House of Assembly spending scandal.

What’s even more irregular is that neither the Progressive Conservative Party nor the Tory district campaign listed the salary expense in their expense records filed for the by-election, according  to the CBC report.

And if all that wasn’t odd enough, the province’s chief electoral officer is refusing to investigate the matter. 

Cochrane said Paul Reynolds  will not pursue the matter further and considers that the St. Barbe by-election was – to use the words from the CBC Here and Now report - “conducted properly.”

Reynolds is the former Tory party president (during the 1980s) and long-time PC Party worker who was appointed to the supposedly non-partisan electoral office job two years ago. 

Reynolds appointment shortly before the 2007 general election was not without controversy.  A Telegram editorial at the time noted the issues:

In other provinces, the office of chief electoral officer is filled by experienced impartial professionals with a track record of either elections law or past experience organizing elections.

Here, Premier Danny Williams has selected a person not only without those qualifications, but with clear and obvious ties to a political party. In fact, with clear and obvious ties to Williams’ own party.

Williams’ choice for what is supposed to be a politically impartial position is Paul Reynolds, who, among other things, was a director of the PC district association on the day he was picked, a role he has filled for several years.

Questioned about the $128,506-per-year appointment, Williams suggested that politics didn’t matter, and that it wouldn’t be right to disqualify Conservatives simply because of their political stripe.

Cochrane’s report won’t be the end of the affair since it left too many unanswered questions about the St. Barbe by-election, possible violations of the province’s election finance laws and the chief electoral officer’s quickie decision on the matter .

Buried update:  There’s a short version of the Cochrane story tacked on the end of a story about Byrne’s date in court on Friday for sentencing.

 

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The Matrix runs on Windows XP

Just in case you are wondering, Winston:

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Offshore board appoints retired Justice Robert Wells to head helicopter crash probe

The following was issued today by the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced today the appointment of the Honourable Robert Wells Q.C. as commissioner of the Public Inquiry into Worker Safety Associated with Helicopter Travel To and From Offshore Oil and Gas Facilities.

Mr. Wells is highly qualified to lead this important inquiry. He retired as Justice of the Supreme Court of Newfoundland and Labrador, Trial Division in 2008 after 22 years of service.

Mr. Wells also served as President of the Law Society of Newfoundland (1977-1981) and National President of the Canadian Bar Association (1985-1986).

Further details regarding the inquiry, including the Terms of Reference, will be publicly announced in the coming weeks as Mr. Wells takes on his duties as commissioner.

The Board is conducting an inquiry pursuant to the provisions of the Atlantic Accord Acts. The Board is pleased that Mr. Wells has agreed to take on this important inquiry and we look forward to receiving his final report.

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AbitibiBowater seeks creditor protection

The following was issued today by AbitibiBowater:

US$ ABH (NYSE, TSX)

MONTREAL, April 16 /CNW Telbec/ - AbitibiBowater Inc. ("AbitibiBowater" or the "Company") today announced that it and certain of its U.S. and Canadian subsidiaries have filed voluntary petitions in the United States under Chapter 11 of the United States Bankruptcy Code ("Chapter 11").

As well, AbitibiBowater and certain of its Canadian subsidiaries will seek creditor protection under the Companies' Creditors Arrangement Act ("CCAA") in Canada. The Company intends to file in Canada on April 17, 2009.

AbitibiBowater's subsidiaries located outside the United States and Canada have not commenced Chapter 11, CCAA or similar proceedings. The Company has concluded that there are no viable alternatives to its previously announced proposed refinancing of its Bowater and Abitibi-Consolidated subsidiaries, and as a result has determined that the best course of action is to pursue its overall restructuring under Court supervision in the United States and Canada.

Concurrently with its CCAA filing, the Abitibi-Consolidated subsidiary will request the termination of its previously announced recapitalization transaction under the Canada Business Corporations Act. AbitibiBowater plans to use this process to deal decisively with its debt burden for the benefit of all stakeholders.

The Company's normal day-to-day operations will continue during the restructuring process.

AbitibiBowater's Board of Directors has, after careful deliberation, consultation with its advisors and extensive consideration of all other alternatives, resolved that the Company take this action in the long-term interests of AbitibiBowater, its employees, customers and other stakeholders.

The Company has also announced that it has entered into a financing commitment with Fairfax Financial Holdings Limited and Avenue Management LLC for debtor-in-possession (DIP) financing totaling approximately $200 million for certain of its Bowater subsidiaries. In addition, its Abitibi-Consolidated subsidiary has entered into an amendment providing for the continuation of its existing securitization program for its accounts receivable, in the approximate amount of $210 million.

These arrangements are subject to approval of the Courts in both the United States and Canada and will allow the Company to meet current operating needs, including wages, benefits and other operating expenses. Additional financing options are currently under consideration.

"Today's announced decisions ensure business continuity for AbitibiBowater and were made only after all other viable options to recapitalize our long-term debt were exhausted," stated David J. Paterson, President and Chief Executive Officer.

The steps we are taking today and the vote of confidence given to us by our restructuring financial partners will enable us to protect the value of the business for our many loyal employees, customers, suppliers and other stakeholders."

"Over many months, we undertook an exhaustive examination of the Company's recapitalization options," said Dick Evans, Chairman of the Board of Directors. "The Board and management believe the actions initiated today will allow the Company to make the necessary changes to ensure the long-term viability of the Company within a process that ensures fair and equitable treatment for all stakeholders, while allowing it to continue to meet the needs of its customers."

The Company's financial advisors are Blackstone Advisory Services LP and BMO Capital Markets and its legal advisors are Paul, Weiss, Rifkind, Wharton & Rice LLP, Stikeman Elliott LLP and Troutman Sanders LLP.

More information about AbitibiBowater's restructuring process can be found at www.abitibibowater.com or by calling toll-free 888-266-9280. International callers should dial 503-597-7698.

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.

Forward-Looking Statements

Statements in this press release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about the long term interest of the Company, business continuity and long-term viability, the protection of the value of the business, the proposed financing commitment as well as our overall restructuring plans.

Forward-looking statements may be identified by the use of forward-looking terminology such as the words "expect," "ensure", "believe", "will," and other terms with similar meaning indicating possible future events or potential impact on the business or other stakeholders of AbitibiBowater and its subsidiaries. The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance.

These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially.

These risks and uncertainties include, but are not limited to, the ability to negotiate definitive agreements for the proposed financing arrangements, the ability to obtain additional financing, the ability to obtain court approval for the financing, the ability to continue to meet the needs of our customers, the ability to meet all current operating needs, including wages, benefits and other operating expenses, the ability to ensure business continuity, the ability to protect the value of the business, the ability to make the necessary changes to ensure the long-term viability and the condition of the U.S. credit and capital markets generally.

Additional factors are detailed from time to time in AbitibiBowater's and Abitibi-Consolidated's filings with the Securities and Exchange Commission (SEC), including those factors contained in AbitibiBowater's Current Report on Form 8-K filed on February 9, 2009.

All forward-looking statements in this news release are expressly qualified by information contained in AbitibiBowater's and Abitibi-Consolidated's filings with the SEC. AbitibiBowater disclaims any obligation to update or revise any forward-looking information except as required by law.

For further information:

Investors: Duane Owens, Vice President, Finance, (864) 282-9488;

Media and Others: Seth Kursman, Vice President, Communications and Government Affairs, (514) 394-2398, seth.kursman@abitibibowater.com

 

-srbp-

15 April 2009

Gimme your lunch money, dork: the latest editorial version

The Telegram editorial this wintry Wednesday in April tackles the ever-stimulating issue of federal-provincial fiscal relations.

That’s federal transfers of cash to the provincial governments in plainer English.

After covering the litany of complaints from provincial governments about federal transfers, the Telly winds up this way:

Piecemeal doesn't work; different deals for different provinces cause more pain than gain. That being said, there should be some moderation built into the system to deal with revenues from non-renewable resources, so that provinces experiencing brief booms in commodity-based revenues can invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.

What we have here is a federation virtually united in saying that the federal government is mismanaging - and sometimes deliberately damaging - its fiscal relations with the provinces.

It's time for big repairs.

There are a few observations that may have been made before but are worth repeating.

Firstly, the “federation” – that is the provincial governments in it – have always been united in their fundamental belief that the federal government never hands them, individually or collectively, enough cash.

Secondly, since the provincial governments can never find a definition of “enough” which isn’t open-ended, there is absolutely no repair, big or small, which will end the bickering.

Thirdly, that doesn’t mean there can’t be or shouldn’t be changes.  It’s just that we have to bear in mind the first task is to sort through what ought to be in place.

This is a huge matter given that the provinces can’t even agree among themselves.  in the last round of discussions that led to the O’Brien recommendations, the provinces couldn’t agree on how to reform the system that redistributes some taxpayer cash from the federal government to the provincial ones.

Fourthly and flowing from that, one of the things to bear in mind is that provincial governments have a responsibility to manage their own financial affairs.  That’s the way our system is supposed to work and it falls to the public that foots the whole bill to hold them accountable for their actions.

In this neck of the national woods, we’ve set a new standard for unaccountable provincial public spending.  Take as an example, the political charade over “have” status and the federal budget.  The provincial government can spend as it pleases, withhold information from the public and launch yet another jihad over a supposed slight and few if any dare to question whether or not what we were being told is even close to the whole story.

Ask yourself this simple question:  would you have been half as bent out of shape over $414 million in Equalization payments lost to this province in 2009 if you had known in late January or even in November that the provincial government was sitting on $1.8 billion in temporary investments that it planned to use to fuel a $1.3 billion cash shortfall in its upcoming budget? 

By the by, even with that extra federal cash, the provincial government budget would still be out of whack on a cash basis by almost a billion and odds are good that we’d still be staring that $1.3 billion shortfall in the face anyway.  But that’s another story.

Think about who decided to spend $1.3 billion more than the government expected to take in during 2009.

It wasn’t Paul Martin, Jack Layton, Stephane Dion, Michael Ignatieff or even Stephen Harper.

It was Danny, Jerome and the rest of the provincial cabinet.

Before we start yet another round of federal-provincial wrangles over cash, we need to sort out who is responsible for what in the country.

That leads us to the fifth point:  we can’t have a worthwhile discussion if the basic facts of the matter are either ignored or presented wrongly.

As far as ignorance goes, few can match the way in which the talk show hosts at  Voice Of the Cabinet Minister joined the Premier’s January Jihad.  They didn’t need facts.  They didn’t question anything.  They not only accepted at face value the Premier’s premise but also took to adding their own torque.

Check with federal members of parliament and you’ll likely find that the first round of attacks they faced came from some known partisan corners but the largest group started once the government news agency’s on-air crew started encouraging people to pressure their members of parliament to stand up for the province.

The other news media, as influential as they are, were better in some cases but no one seemed to dig into the thing just a wee bit more than the late night newser allowed. This is not so much an exercise in blame – for all but the three talk show hosts – as it is to note that the sources of information on which so many rely can be swept along with the mob.

As for presented wrongly, we’d be remiss not to note the simple, but very important factual error in this Telegram editorial.

This province is dealing with a $414-million shortfall in offshore revenue payments this year, according to the provincial budget.

The $414 million is an Equalization amount, not oil revenues. Those oil revenue payments are down by more than a billion and the feds had nothing to do with it. 

The $414 million amount comes from the difference between what the provincial government was planning to do and what actually occurred.  In 2007, the provincial government planned to switch to O’Brien 50% in 2008/09 – a formula the Premier opposed two years ago(!) – such that the combination of that Equalization formula plus the 1985 Atlantic Accord (the real one) would generate extra cash on top of everything else that was flowing.

As it turned out, the federal government made changes to the formula for one year only in order to forestall an even bigger federal money problem now that Ontario qualifies for the federal hand-out.  Far from being the only province affected by the changes, Newfoundland and Labrador is arguably the least adversely affected.

All that leads us to another contentious point in the editorial, namely the suggestion that:

That being said, there should be some moderation built into the system to deal with revenues from non-renewable resources, so that provinces experiencing brief booms in commodity-based revenues can invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.

This idea has been around for some time, but just a simple look back over the past month should be a clue that this idea is one that needs some serious questioning.

For starters, provincial governments are free to spend their own money as they see fit.  Alberta started just such a heritage fund decades ago and today is infinitely better off as a consequence.

The provincial government could do the same thing here, in order to ensure that they can “invest those revenues in a way that can keep them from needing more assistance when the revenues inevitably run out.”  It’s an idea we’ve pushed among the e-scribbles since at least 2007.

There is nothing stopping the current administration from doing just that, except, of course, that they chose not to do so.

Chose not to do so, of course, as they started accumulating short-term investments they’ll start blowing this year to cover budget deficits.

And how much money are we talking about?

The $1.8 billion in temporary investments and cash is  more than the annual federal transfers to the province in just about any year in the last two decades or more. It’s also more than the provincial government’s own-source revenues 15 years ago (1994).

C0mpare that to the $414 million lost from the elimination of an option the provincial government didn’t even want when it started.

There may well be some repairs needed to federal-provincial fiscal relations.

But before we start that, we’ve got to repair the serious problem with the lack of public knowledge of what is actually going on. 

Federal-provincial repairs are like any others:  if you don’t know what you are doing, you could wind up putting a hammer through something that  didn’t need mending until you started swinging.

-srbp-

Chinese officials in town

Wags will no doubt make much more of the story at the government’s official news agency that Chinese officials are in town to learn how we do things government-wise in this neck of the woods.

The group is apparently visiting St. John’s and Mount Pearl to find out about things like land use planning.  really, in the week we heard there’s a move a foot at Tammany at Gower to erect more duck crossing signs across the city, you just couldn’t make this stuff up.

For some reason AMEC exec Susan Sherk is offering comment on the Chinese trip.

Sherk says what they are mainly interested in is the fact that we engage the public so much in our decision making.

They must be surprised because unlike the land of Tiananmen, engaging citizens doesn’t involve machine guns.

Given the way things get done downtown, the gang at city hall can no doubt enlighten the Chinese on how to run over the citizenry without using tanks.

-srbp-

14 April 2009

Manley ponders rot

Former federal fin min John Manley compared the recent provincial budgets in Ontario and Newfoundland and Labrador.

Ontario took full advantage of the anxious times in which we live, and with the help of Ottawa tackled some of the toughest structural problems in its tax system. At the same time, it made a virtue of necessity in announcing stimulus spending that will end the short succession of surplus budgets and lead to predicted deficits of $3.9-billion and $14.1-billion over the next two years.

Ontario's tone was in sharp contrast to that of Newfoundland and Labrador, which treated Canadians to another blast of icy rhetoric about how Ottawa was screwing the Province by "unilaterally" changing equalization. (Equalization is a federal program — decisions to alter it are enacted by Parliament alone, so of course it's unilateral.)

Too bad Manley didn’t look beyond the superficial rhetoric of the past several months to see some curious things that rest beneath. Like say the source of the faux outrage which was carefully orchestrated for the media effect.

Turns out the provincial government timed its switch to O’Brien 50 (50% of non-renewables counted) in an effort to maximise its cash take from the program.

They presented a budget in 2008 which showed the fixed formula calculation but – and this is the crucial bit for later – they knew full well that:

  • they had the option to switch to O’Brien retroactively; and,
  • they’d planned to switch to O’Brien and pocket as much as $800 million in cash.

As the Premier put it in one media interview, they’d even foregone $65 million extra the year before just to set the whole thing up. That was the year the finance minister originally predicted a switch and then switched back at budget time.

The language at the time of the switcheroo obscured what they were up to:

"We conducted a thorough review of this updated information, and determined that it was no longer in the long term financial interest of Newfoundland and Labrador to elect the new formula for 2007-08…"

The rest of the release rabbits on about the great screwing supposedly done to the province.

The truth only became clear this year.  In order to generate the magical sums expected in 2009 through a combination of O’Brien and the 1985 Accord, they would have had to take in about $800 million from O’Brien 50 in 2008.  That’s the sort of forecasting they were using in 2008 when they made the decision and set the 2008 budget plan.

Unfortunately for the little project, world oil prices shot through the roof.

That brought in so much cash that the projections went off. Now they still switched to O’Brien 50 for 2008 and pocketed $116 million for from Equalization for 2008 which they’d never even hinted at before.

But remember that in November 2008, the premier proclaimed the province was off Equalization at that point. At the time he had the calculations  - even if only from his own provincial officials - that showed cash flowing from O’Brien in 2008, even if it was less than they’d originally projected.

And, odds are that he already had a very good idea that the government would elected O’Brien 50.

Reporters and others who looked at the whole claim of a second Equalization screwing in January 2009 all assessed it based on a very limited set of numbers and a very short-term perspective.  They didn’t see the long term sequence.

Case in point:  federal officials always share budget projections with their provincial counterparts. If there is a major change coming, they typically pass that on as well. There’s no indication they didn’t share projections with all the provinces through November, especially considering that the federal government planned a major budget reform in early December 2008.

Everyone forgets that little aspect.

If the federal opposition parties hadn’t scuttled the original Harper plans, the Equalization changes brought down in January would have actually occurred in December.

But if all that weren’t enough, there’s no sign the provincial government went looking for figures they normally get.

That alone should have sparked some local questioning, but it didn’t.

Not a peep.

If you accept the provincial version of events, not only did the numbers not come from the feds – as they always, invariably  do – but the provincial government officials never went looking for them.  That seems like an awful (incredible) dereliction of duty on the part of the public servants and – even more startling – an opportunity missed by the snarliest provincial government in Canada to accuse the federal government of perfidy when there was time to maximise the political damage that could be done.

Imagine the uproar if Danny Williams had howled in late November or early December?

By January – when they supposedly discovered a shafting - there was no chance the “problem” would be fixed. There was lots of posturing but nothing of a sustained value.  As it turns out, and contrary to the interpretation we gave it here at the time, the provincial government knew they had cash in hand and nothing to really worry about financially in the short term.

New information changes everything.

The locals also seem to have forgotten that the whole “have” province thing morphed as time passed.  By the time the 2009 budget emerged, “have” status was from that point forward, not from November as originally presented.

Is there something rotten, as Manley suggests?

Not really.

There’s just some really skilful political manipulation, lots of information kept from the public whose money is in play, and a raft of people  - reporters and politicians alike - who simply don’t bother to ask simple, obvious questions like “what did you know” and “when did you know it”.

Part of that situation likely comes from not knowing what ought to happen. 

Part of it comes from not wanting to ask.

Part of it comes from people who are in on the whole thing or willing to play along for their own purposes and own reasons.

That’s not rotten.

That’s just politics.

-srbp-