March 13, 2014 was a Thursday.
Normal cabinet day.
According to Auditor General Terry Paddon’s report on the Humber Valley Paving contract, Nick McGrath, then minister of works and transportation called his deputy minister at 8:45 AM and asked him whether he’d heard that HVP wanted to get out of their Labrador paving contract. (p.39) He hadn’t.
There’s no indication of how McGrath became aware of HVP’s problems. According to Paddon’s report, McGrath told him that he “may have” heard about HVP from colleagues. (p.54) It’s all pretty vague.
The deputy called Gene Coleman at 9:15 AM, according to Paddon. Coleman, son of the erstwhile Conservative leadership candidate McGrath claims he had not heard of, confirmed the company “would not be going back to Labrador” (p. 54) in 2014, at least not without compensation. Coleman indicated that without compensation, HVP would want a mutually-agreed termination of the contract with the government. (p.39)
The Fairity Intervention
At 9:30 AM, the deputy got a call from Kevin O’Brien. He was calling about the HVP contract, too, even though O;Brien had no reason to be involved. (p. 39) Asked by Paddon later how he became aware of the issue, O’Brien - who was also an organizer for Frank Coleman’s leadership campaign - said that he had heard “colleagues” talking, wanted to speak with the deputy about other issues but raised the HVP issue because of the potential connection to forest fires in Labrador. (p. 54) O’Brien was minister of fire and emergency services
In this screen cap from a CBC video shot on May 8, you can see McGrath and O’Brien (at left). Frank Coleman is in the centre of the shot talking to Danny Williams.
O’Brien apparently didn’t speak about much else because by 9:45 AM, the deputy was outside the cabinet room bringing McGrath up-to-date. Cabinet was due to meet at 10:00 AM. It’s interesting McGrath didn’t go to the department before heading to cabinet but called instead. It’s also not clear whether O’Brien and McGrath were both in the cabinet room around 9:30 AM.
That doesn’t match the story McGrath told in the House of Assembly on May 5, by the way. McGrath told the House that “it was on March 13 that the company had first approached government to enter into a verbal conversation to move forward to make a decision whether or not there could be a mutual agreement that termination of the contract would be in the best interest of the government, the people of Newfoundland and Labrador, as well as the contractor in question here now. That was on March 13.”
Paddon didn’t explore the obvious contradictions between the version of the story McGrath gave the public in the House and the one he gave Paddon’s investigators. Another one was the discrepancy between Paddon’s conclusion that the whole thing was decided on March 13 and McGrath’s version of events on May 5 that the final decision came on March 21.
What did Tom know?
Then there’s the question of Tom Marshall. Paddon concluded that McGrath didn’t tell the Premier anything. That’s based - apparently – solely on the fact that McGrath told his deputy not to prepare a briefing note for the Premier on the decision. Paddon relies heavily on documentary evidence in making his conclusions, even though documentary evidence is just what wouldn’t exist in cases like this. In this case, it seems the direction not to produce a document is enough for Paddon to conclude that Marshall or anybody connected to him didn’t know anything.
This is where the absence of evidence in Paddon’s report leaves considerable room for doubt about what he actually found out. Paddon merely states that there is no evidence concerning Marshall and cabinet. The problem is that we have no idea what Paddon actually found. There’s nothing in Paddon’s report to indicate that that Paddon did anything to determine what, if anything, Marshall and his officials knew, how he arrived at the conclusion that Marshall only learned of the contract termination in late April, or how he concluded that the contract wasn’t discussed at the cabinet meeting on March 13. Cabinet ministers could have discussed lots of things outside the formal cabinet agenda, as Paddon should know.
Paddon makes much of that date merely because of the telephone calls that happened quickly on that date. But what about the question of how McGrath learned of problems with HVP? Paddon has nothing on it. Other conversations that happened before the 13th of March? Zippo.
In some ways, it’s reminiscent of John Noseworthy’s statement during the spending scandal that he “did not find” any of the infamous rings. Most people assumed that Noseworthy had looked but couldn’t find them. As it turned out, neither Noseworthy or his officials actually looked at all. Once news of the rings broke, three turned up within an hour. In the process, we learned that Noseworthy’s investigations were far less than thorough.
As for what the Premier knew, McGrath was convoluted in what he told the House May 5. He stated at one point that he had “many conversations with the Premier as well as the Cabinet and caucus, and verbal conversations. I will not say that I did not have a conversation with the Premier concerning this because, as I said, I have conversations almost on a daily basis, especially with Cabinet. There is no written documentation as there was not with Humber Valley Paving…”.
No written documentation.
In answer to another question about the Premier, McGrath said:
Mr. Speaker, I cannot speak for other departments, but I will guarantee you that as part of being an open government and as part of being a communicative government, I certainly discuss many issues as a minister of the Crown with the Premier, who actually governs this whole government. I would think it would be responsible that you do have conversations with the leader of your party.
The next day – May 6 – McGrath stated unequivocally that the first conversation he had with Marshall about the contract was April 28.
The Auditor General’s report doesn’t clear any of that up.
Big problems with the Auditor General’s report
People might be quick to accept the Auditor General’s report but there are plenty of problems with it. The biggest problem with the report is the lack of supporting evidence for Paddon’s conclusions. Normally, a major investigation such as a public inquiry or a court decision would include a substantive narrative describing the events under review. The narrative would include specific quotes from documents and individual interviews to illustrate how the author reached whatever conclusions the report or decision contains.
You won’t find anything of the sort in Paddon’s report. In fact, Paddon disposes of the entire controversial portion of the contract - McGrath’s decision to cancel the contract - in a mere two pages (35-36 of the document; 39-40 of the pdf). There’s typically not a single piece of evidence to support Paddon’s conclusions beyond statements of the obvious such as that there was insufficient documentation or that the whole thing happened in the space of seven and a half hours. In other important areas – such as what, if anything, Tom Marshall knew - Paddon states his conclusion but provides nothing to support it.
Paddon didn’t explore any of the discrepancies or pursue any of the questions that turned up during his investigation even though they are crucial to understanding what occurred, were well within Paddon’s charge from cabinet, and well within Paddon’s powers as Auditor General. Instead, we are left with what amounts to a “frigged if I know” shrug from the Auditor General on a number of serious questions. In a news release, Paddon said merely that the “auditor general was not able to satisfy himself why two ministers, within half an hour, independently contacted the deputy minister of Transportation and Works to enquire about the status of Humber Valley Paving Ltd. on the morning of March 13, 2014. [via the Telegram] Big question. No answer.
The O’Brien call is also a crucial detail since it goes to the heart of the McGrath’s “error in judgement”. After all, it was McGrath’s supposed failure to notify the Premier’s Office of the decision to terminate the contract that led to his resignation. No one has explained why McGrath resigned, even though he still believes he did everything correctly.
Nor has anyone – least of all premier Paul Davis - explained why he let McGrath walk away. Davis could have refused the resignation and fired McGrath for whatever reasons Davis wanted to offer. That would have sent a clear message about how Davis runs his cabinet. As it is, Davis’ carefully rehearsed media lines, delivered robotically with unblinking exactness, looked good but weighed nothing. Davis basically let McGrath walk away, head held high, insisting he had done nothing wrong at all.
To get back to Paddon’s report, we do know now that other people in cabinet knew of some issues with the contract and, once O’Brien spoke to the deputy, of efforts to rectify them. There was no reason for O’Brien to contact the deputy minister about an issue outside his responsibilities as a minister. It wasn’t necessarily a suspicious breach of protocol, but more importantly, nor was O’Brien’s inquiry entirely innocent or without potential implications. People may have long suspected that the contract deal was worked out for partisan political reasons instead of the public interest. Given the news about O’Brien’s involvement in the affair, that now seems much more likely. In other words, McGrath’s initial story, delivered in May, just wasn’t true.
There are other troubling aspects of Paddon;s report as well. Paddon had a simple direction from cabinet to inquire into any and all aspects of the contract. That’s on page one of his report. There was no reason to meet with the Premier or anyone else in cabinet about the investigation, especially since the Premier and others would be the subject of the Auditor General’s scrutiny at some point.
Instead, Paddon decided to limit his inquiries to a few simple questions that were primarily procedural in nature. He met with Tom Marshall – his old boss as finance minister – on May 21 to get Marshall’s blessing on the severely limited inquiry. In effect, Paddon re-wrote his own terms of reference after the fact. While the government released the original terms of reference, there’s no indication that Paddon or anyone else disclosed that he was actually doing far less than looking into “any and all” aspects.
Pull the other one
When it comes to coded political language, “error in judgement” is right up there with “family reasons” as one of the biggies that no one takes at face value. You hear it and you just know there’s way more to the story than anyone is willing to talk about.
That was certainly the case on Monday with the latest twist in the Humber Valley Paving story. Premier Paul Davis met reporters [CBC] on Monday afternoon and told them that Nick McGrath had resigned from cabinet. He told them that “on that particular day” – March 13, 2014 – and apparently on no other days, McGrath had “erred in judgment.” That error was “clearly reflected” in the Auditor General’s report. McGrath resigned as a consequence and Davis accepted the resignation.
Frank’s long gone.
The company is winding up.
The paving work is still not finished.
And now Mick is gone for an “error in judgment.”
Except for all the problems with the story that Paddon’s report either stirs up or leaves unaddressed. Those problems will serve to undermine whatever damage control strategy the Conservatives have been following. Thus, the Humber Valley Paving story will likely turn out to be a lot stickier than some people apparently assumed.
Talk about errors of judgment.