27 June 2006

The frame and the iron fist of cabinet

Less than a week after cautioning residents of Newfoundland and Labrador not to make hasty judgments about the financial scandal affecting the House of Assembly, Premier Danny Williams announced today measures that he claims will address the matter. The actions he is taking are guided, as much as anything else, by the frame he has placed around the issue.

That frame focuses on the Office of Auditor General and on moving forward from here with the Premier being seen as acting decisively to correct a problem.

Take a look at the release. It fits the frame perfectly. In a news release, the most important information for the reader is contained in the first sentence - sometimes called the lede - and in the opening paragraph. Here's the lede for the latest news release:
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. The Williams Administration [sic] committed to transparency and accountability, and has demonstrated this commitment with several initiatives including passing the new Transparency and Accountability Act, Lobbyist Act and Access to Information legislation.1
The second paragraph then builds off the first, confirming that the Premier is satisfied he was right all along and is doing all that needs to be done to handle the problems that have been made public. The actions announced on Monday include changes to the Internal Economy Commission Act that will clearly state the Auditor General can audit the House accounts, the appointment of Chief Justice Derek Greene of the Supreme Court Trials division to review member’s' salaries and allowances on a "“go-forward basis"” and implementation of other changes needed to correct the House of Assembly's internal controls and compliance.

Overall, one must know what occured and why before one can take corrective action on any problem. In this instance, the Premier is acting without knowing very much of anything save that something has occured. The Auditor General is still furiously reviewing the House accounts and producing tiny reports with the ink still wet. His copious media interviews contain claims but his one report thus far says little of substance beyond demonstrating that something wrong occured.

As well, the police investigation is only now underway and the larger issue of how the Internal Economy Commission operated will simply not be examined (see below).

Let's take the Premier's initiatives in order.

As far as the Auditor General is concerned, while this has been a key element of the Premier'’s frame for the House of Assembly misappropriation issue, it is not really the most important one in understanding what happened and why. The Auditor General can only detect problems after they have occurred. Since the Auditor General was allowed back to review the House books, the Premier'’s change to the IEC Act proposed on Monday is largely a cosmetic one.

Chief Justice Greene'’s task is one of the most curious aspects of a very curious approach to handling a scandal of this magnitude. Firstly, the Premier'’s news release makes it clear that while Chief Justice Greene will review salaries and allowances of members, the Chief Justice will not be acting with powers under the Public Inquires Act.

Under section 13 of the Internal Economy Commission Act, the House may appoint a committee of no more than three persons to review salaries, indemnities and other benefits with the powers of a public inquiry. The review is to be completed within 90 days and handed to the Internal Economies Commission for action. This confirms that the House is master of its own destiny and that members of the House are collectively responsible for appointing an independent commission to review salaries and benefits.

The Premier's charge to Chief Justice Greene is significant since it specifically prevents the Chief Justice from reviewing any aspects of the current scandal which may have arisen from the way in which the IEC discharged its responsibilities and which may affect any recommendations he makes. Since the Chief Justice does not have the powers of a public inquiry he cannot compel evidence from a witness or cause the production of any records. His powers are being clearly limited; the purpose of the limit is far from clear.

In short, Chief Justice Greene has been given a task that appears to be similar to requirements under the House of Assembly Act for setting salaries and benefits however he is reporting in this instance to the Premier and the cabinet to determine salaries for the House of Assembly.

As for the administrative changes, the Premier'’s news release on Monday makes it clear that the House of Assembly practices that likely contributed to the current scandal did not change in 2004. Rather, the only thing changed was the access to the legislature accounts for the Auditor General.

This is a significant acknowledgement on the one hand, however, it raises at least two unanswered questions that have potential significant implications. The most obvious question is why the IEC in 2004 did not put in place the simple administrative checks and balances which were obvious as long ago as 2000 when the IEC Act was changed.

There is also no potential for determining if the nature and amount of allowances is appropriate but that the IEC acted inappropriately. This is something Chief Justice Greene cannot determine since his powers have been purposely limited.

Did abuse continue after 2004? AG misreports date of audits

More importantly though, the second question is what, if any, misappropriation took place after 2004. The Auditor General has stated he is reviewing spending by the House of Assembly for Fiscal Years 2003 and 2004. This would cover the period from April 2003 to March 2005, given the government'’s fiscal year system.

However, the attachment to the Auditor General'’s one page report on Ed Byrne misidentifies the time period for the audit. The headings are for FY 2003 and FY 2004. The dates, though, are for FY 2002 and FY 2003. Only two payments appear to have been made in FY 2004 however it would appear, on the face of it that these payments actually relate to FY 2003.

This is no small matter. The Auditor General may have reviewed spending since May 2004 but his reports thus far have not indicated if he actually reviewed FY 2004 and found nothing or if he has simply not audited the period at all.

If administrative practices had actually changed in March/April 2004, then there would be no need for the Premier to announce those changes in 2006.

In "Reframing the issue", the Bond Papers raised the concern that, in his sincere desire to address an obviously grave issue, the Premier has effectively usurped legal powers he does not have. Monday'’s release confirms that this practice is continuing, although the Premier is suddenly conscious of this aspect. His news release concludes:
The Premier noted that the IEC is an autonomous body with representation from the Progressive Conservative and Liberal parties. Any changes to the operations of the House of Assembly would require approval of the SpeakerÂ’s Office and the IEC, and Premier Williams said he will be instructing his caucus members to ensure appropriate measures are undertaken.
Having already taken responsibility for decisions that are actually not his to make, this last paragraph raises even more questions. The Premier'’s news release on Monday suggests that he will ensure that salaries and benefits for the House of Assembly will be set by cabinet and imposed by the power of the government caucus. Even with the acknowledgement that the Premier lacks the legal power to do what he has undertaken, his comments suggest he will do it anyway.

It would be interesting to know if former New Democratic Party leader Jack Harris still holds the view he held in 2004, when he told the House of Assembly that the legislature made "provision for the Internal Economy Commission so the House of Assembly was not subject to the iron fist of the cabinet in telling the House of Assembly what to do."”

1 The Access to Information and Protection of Privacy Act was passed by the legislature prior to the 2003 general Election but not proclaimed by the grimes administration.