What's next for Nalco? #nlpoli

Just so that everyone is clear on this, it has taken Dwight Ball every single day from May 23 until June 2 to admit that he knew Ed Martin had received a severance payment on his departure from Nalcor despite the fact that Martin has supposedly resigned.

In effect,  Dwight Ball - as the chief representative of the only shareholder in Nalcor  - approved of the severance with his silence.  The same thing went for natural resources minister Siobhan Coady.

What's more, Ball reminded us all again that whatever happened with respect to Martin's contract was solely at the discretion of the Nalcor board, which has since resigned.

Right.

So what exactly has Dwight Ball's knickers in such a bunch?

Seriously.

Nalcor and Conflict of Interest #nlpoli

Is anyone else having trouble trying to figure out what all the fuss is about Cathy Bennett, Nalcor, and conflict of interest?

Seriously.

Here’s the story in a nutshell.

The Year of Living Dubiously #nlpoli

Conflict of interest is great thing to deal when there is a chance of stopping it or dealing with it, not six or seven years later.

Back in 2006, conflict of interest was all the rage.

Noting the problems with conflict of interest wasn’t.

Loyola Sullivan and conflict of interest #nlpoli

From the report by federal conflict of interest and ethics commission into certain actions by former fisheries ambassador Loyola Sullivan:

In June 2011, after consulting with my Office about whether he could take the position, Mr. Sullivan took up the position of Vice President of Resource Management and Sustainability at Ocean Choice International (Ocean Choice). In that position he had several interactions with Fisheries and Oceans Canada and Foreign Affairs and International Trade Canada related to matters of interest to Ocean Choice during his one-year post-employment cooling-off period. He also attended a consultation organized by Fisheries and Oceans on behalf of the Groundfish Enterprise Allocation Council.

During my examination I found that several of these interactions were made in order to persuade federal government officials to make a decision to the advantage of Ocean Choice and, in one case, to change a policy in accordance with the position of the Groundfish Enterprise Allocation Council. In my view, these interactions involved making representations. I have therefore found that Mr. Sullivan contravened subsection 35(2) of the [Conflict of Interest] Act.

-srbp-

A List of Interesting Things #nlpoli

Follow this one for a second.

In 2005, Kathy Dunderdale – minister responsible for the Rural Secretariat  - announced a raft of appointments to the groups that advise government about rural economic development. One of the appointees is a guy named Ted Lewis from Croque.

In November 2005, Lewis went on a provincial government trade mission to Greenland.  he represented a company called Holson Forest Products.

In July 2008, industry minister Trevor Taylor announced $25,000 in provincial money for a company called Quality North to help it expand its markets for manufactured wood panels into places like Greenland and Iceland.  Quality North was formed in 2006 by three people, one of whom was Ted Lewis of Holson Forest Products

On August 12, 2009, Tom Hedderson - the provincial fisheries minister  - announced that Ted Lewis would take over as chair of the board that approves fish processing licenses.

On August 21, 2009,  then-natural resources minister Kathy Dunderdale announced that her department would be giving $10 million to Holson Forest Products  to set up a wood pellet plant in Roddickton.  The head of the company is a guy named Ted Lewis.

By 2011, a news story turned up in the Telegram saying that the company expected to start production in late March.  But, as events unfolded, the company has had trouble shipping pellets because of the cost of routing them through nearby ports. 

Liberal member of the House of Assembly Ed Joyce says he has been having trouble finding out what is happening with the provincial money. The Telegram even wrote an editorial about the problem, largely because one company official complained that the political inquiries were hurting the company.

But if you go to the official record of the House of Assembly, you will see that questions came up in the House on May 15.  On May 16, natural resources minister Jerome Kennedy added some details on the cash:

There was a $10 million investment which included a $7 million repayable loan, a $2 million non-repayable loan, and $1 million under the Green Fund.

Mr. Speaker, Holson has since come back looking for more money and we have indicated that there is only so far as a government that we can go. Beyond Roddickton, we also put $1 million in 2010 to assist harvesters in the Northern Peninsula, of which $830,000 has been spent as of March 31, 2012.

In response to another question in June, Kennedy added even more information.  What’s interesting is that Kennedy used the information to attack the local MHA who had asked a question about something else:

Let me tell you, Mr. Speaker, how this Third Party [the NDP] works. About three weeks ago, I got an e-mail from the Member for The Straits – White Bay North asking if I would meet with him and the owner of the Roddickton plant to discuss what was going on in Roddickton. I wrote him back, Mr. Speaker. I said if Mr. Lewis wishes to meet with me, he can contact me directly. I never heard back from Mr. Lewis.

So what the member opposite did, he tried to interject himself into the middle of the situation. He was obviously told to go away out of it, Mr. Speaker. I would suggest to him that if he is going to come forward with suggestions that he make sure that they are real and they are practical. What we are worried about is keeping this industry alive, keeping Kruger open and benefiting the people of this Province, Mr. Speaker.

And on August 13, 2012, Lewis wrote a letter to the Northern Pen explaining the current shutdown. Lewis said that the company needed to find a cheaper way to ship pellets overseas because the price for pellets dropped right after they got the cash commitment from the provincial government. Now that prices are recovering the lowered value of the Euro is causing problems.

The company is still working on the problem, apparently:

Any investment into either of these ports reduces the feasibility of pellet transportation. Roddickton harbour has the depth of water required and the required land base. With the right facility in Roddickton this and other industries can prosper. Thankfully there are plans moving forward to develop the infrastructure – no commitments yet.

Liberal fisheries critic Jim Bennett is only wondering whether or not the fisheries minister thinks that it’s alright to have the processing plant licensing board run by a guy whose company is on the hook to the province government for the better part of $10 million.

Here’s what Bennett told the Western Star:

"Is Lewis in a perceived conflict of interest in his job as chairperson of the Fish Processing Licensing Board, given that his company owes so much money to the government," Bennett questioned in a press release issued Monday.

Via telephone, Bennett said it was not an accusation, but that he would like the minister to review the appointment to determine whether or not there is a conflict.

Doesn’t that seem rather,  errmmm,  what is the best way to put it?

Oh yes.

Lame-assed.

That’s it, Bennett’s comments are lame-assed, weak, and laughable.

-srbp-

Looking beyond the Hebron sandbox #nlpoli

ExxonMobil drew a line in the sand this morning, and the minister and I are here to draw another line in the sand, as far as this project is concerned.

Premier Kathy Dunderdale, 21 June 2012

Premier Kathy Dunderdale and natural resources minister Jerome Kennedy spent more than a half hour meeting with reporters on Thursday to talk about the provincial government’s position that a major module for the Hebron project must be built in the province.

Take a look at the scrum video.  There is a lot of talk.  There is a whole lot of talk.  Some of it tough-sounding.  There are threats.

But there is so much talk, and so much rambling, and so many threats that most of the talk is unconvincing.

A closer look at the history and the agreements pulls you toward the same conclusion.

Conflict of Interest and the Nalcor board appointments #nlpoli

2050 hrs – Mulligan Update – scroll to the end

Leo Abbass is the mayor of Happy Valley-Goose Bay.

He is a staunch of supporter of the Conservative Party.  He is such a staunch supporter of the Conservative Party – federal or provincial – that he can sometimes take on the appearance of the Pushme-Pullyou from Doctor Dolittle.

Hebron benefits less than touted #nlpoli

The companies developing the Hebron oil field offshore Newfoundland and Labrador won’t be doing as much of the construction work in the province as some people might have believed.

According to the Telegram, Kiewit’s yard ay Marystown “is being looked at” to build the drilling support module, the accommodation module is supposed to go to Bull Arm, but a third module that could be built here is looking doubtful.

And as the news starts to mount that maybe the local benefits from Hebron are a lot less than some people believed, you should remember the golden words as they slipped so effortlessly from Hisself’s golden tongue:

… this agreement reflects our resolute determination to maximize the benefits that Newfoundland and Labrador receives from the development of all our resources.

Surely Hisself would not have said it were it not so.

But as it turns out he did and it wasn’t.

And what of Hisself’s former shield maiden in the fight to maximise benefits?  What did she say of the August agreement?

Kathy Dunderdale talked of unprecedented local industrial commitments and “ maximizing industrial benefits.” 

Surely she would not have said it, were it not so.

But it turns out she did and it wasn’t.

They both talked about the “co-venturers”, a wonderful bit of spin-speak about the companies who would develop the project and decide where the work would go.

One of those “co-venturers” is – of course – the provincial government’s own energy company.  that’s what the Hebron racket was really all about, as it turns out.

People should take another look at the Hebron agreement.  Well, at least the limited bits that have been made public. They should check the bits with the little stars by them in the news release issued by one of the co-venturers.

Then look again at what one of the co-venturers told us about maximising benefits and ‘unprecedented local commitments.

And then see if there’s a sale on salt down at Dominion because The Lord Hisself knows you’ll be taking every one of those rosy promises with as much Sifto as you can choke down.

There is the public interest and there is the interest of the oil companies.

The Hebron development agreement signed in 2008 turns out to be a very good example of what happens when the political party elected to protect the public interest deliberately and consciously places itself in a conflict of interest with its desire to run an oil company.

One of the interests will lose.

- srbp -

@cbcnl using Nalcor lobbyist as election commentator #nlpoli #cdnpoli

 

CBC Newfoundland and Labrador will be using registered Nalcor lobbyist Tim Powers as an election commentator but Powers will apparently be commenting as part of a group of journalists and a political scientist, not as an identified partisan or lobbyist.

CBC’s David Cochrane will host the new TV program  - On Point – that will air Sunday afternoons at 1:00 PM on the island during the provincial election. Cochrane described the show in an interview with St. John’s Morning Show host Anthony Germain on Tuesday. 

Cochrane included Powers as part of a group comprising political scientist Amanda Bittner, Telegram editor Russell Wangersky and  Germain. The show will also feature a partisan panel, made up of representatives of the three provincial political parties. Each Sunday show will also have a feature interview.

Great concept, great panel - including Powers  - except for one enormous problem:  Powers is in a blatant and undeniable conflict of interest.  He’s a paid lobbyist for Nalcor.  Work for Nalcor, you work – in effect for the provincial government.   That means that the object of Powers’ lobbying work will play a central role in this campaign.

Blind people could see the ethical problems the CBC has created journalistically by including Powers on a panel discussing the provincial election.  

Powers has been a registered lobbyist for Nalcor on the Lower Churchill project since at least 2007.  According to the lobbyist commissioner’s office, Powers’ registration with the federal lobbyist registry expired in March 2011.  He reactivated the registration in June 2011.

Powers has an impressive resume.  A former political aide to John Crosbie, Powers holds degrees from four universities including the London School of Economics and Harvard University.  He is well known as a media commentator on political issues.

But that doesn’t trump his obvious conflict of interest.  The guy can’t even pretend to offer unbiased commentary in an election in which his client and his client’s sole shareholder are directly involved.

For some reason, Powers’ role lobbying on behalf of Nalcor in Ottawa is seldom mentioned publicly in his commentaries even when he speaks about his client’s business. 

In the past, Powers has written about and commented on Nalcor issues on his blog at the Globe and Mail yet neither he nor the Globe  disclosed his status as a registered lobbyist for the provincial Crown corporation in connection with the pieces.

Some people touted Powers as a potential successor to Danny Williams, but that was before the provincial Conservative Party sorted out its backroom deal for Kathy Dunderdale.  He’s also commented about provincial politics, generally.  In June 2011, Powers commented on the role of political myth in Newfoundland and Labrador.

- srbp -

For want of a nail: cabinet ministers and conflict of interest version

The issues raised by the Paul Oram case just got a whole lot worse, politically:

…Oram replied that "if you look at any business people that are involved in government you'd have to ask the same question."

"I'm not the only one that owns businesses within government and owns shares within government, and has been a director of a business within government. There's all sorts of people that are involved there."

Expect reporters and others to ask some logical questions:

• Who are the others in cabinet with business interests that aren’t in a blind trust?
• Has there been a real or perceived conflict of interest in each of these?
• How come the Premier didn’t simply require his ministers to put their businesses in a blind trust when they were appointed to cabinet?

That last one remains the crucial one for your humble e-scribbler.  This entire issue was one of the easiest to manage with a little preventive action.

As a result of that initial decision, Paul Oram’s answer to The Telegram just opened up a whole new line of inquiry where really there shouldn’t need to be one.

-srbp-

Better late than never: Oram version

The province’s health minister putting his business interests in a blind trust.

The issue arose when Oram  - who owns two personal care homes – was appointed to his new portfolio.
As CBC reports it:

Not only is he moving all his shares in personal-care homes into a blind trust, Oram said, but he is going even further by moving all of his business interests — including stakes in funeral homes, a grocery store and a construction company — into a blind trust.
It makes sense to do it all at once, Oram said, in case he changes portfolios.

Yes.

Good idea this blind trust thing.

Heaven knows you wouldn’t want to be appointed to a portfolio  - like say the Department of Business (which Oram held at the time of his appointment to health)  – and be running businesses in the province.

That would be a conflict of interest, wouldn’t it?

-srbp-

Told ya so Update:  The CBC story, linked above, has grown a tail made up of people essentially tossing back and forth comments in defence of Oram and attacking him.


All wonderful stuff and all completely unnecessary.

A real or perceived conflict of interest could have been avoided in this case and others if cabinet ministers were required to place their business interests in a blind trust when they are appointed to cabinet.  It's a simple solution and one that's been used in this province before.


All you can do is shake your head in disbelief.

Conflict of interest curiosity

Under the 1995 Conflict of Interest Act, a public officer hold is defined as any person who “receives a salary or other remuneration, in whole or in part, from money voted by the legislature…”.

That would make a cabinet minister a public office holder under the meaning of the Act.

Pretty simple, right?

There are also sections of the House of Assembly Act  that cover conflict of interest for elected members. There are provisions that tell cabinet ministers what to do.

They all come down to the same basic points.  People can’t further their private interests using information they gain from their public office.  In addition, cabinet ministers who may find themselves in a conflict of interest have a couple of options on how to handle a specific case, should it arise.

The simplest way for a cabinet minister to avoid an appearance of conflict is to place any business interests in a blind trust as soon as he or she is appointed to cabinet.

The reason is pretty simple:  lots of things come before cabinet or a cabinet committee, especially at budget time.  If you had certain types of business interests, the “leave the room” or “get someone else to do it” procedures set out in the House of Assembly Act would basically mean some ministers would spend more time out of the cabinet room than in it.

The Premier sensibly put his interests in such a blind trust after the October 2003 election.  He may have taken a while to do it and he may have moaned and complained as he went through the process but ultimately, his approach is the most sensible way to avoid political problems. When you have important work to do, there’s no reason to be distracted by issues that can be easily avoided.

Odd then, that the Premier has apparently made no such rules for his cabinet.  In response to reporters’ questions today, the Premier said that handling potential conflicts of interest would be a matter for the new health minister to sort out with former Tory party president Paul Reynolds ( in his role as Commissioner of Legislative Standards) but, for his part, Danny Williams advised Oram to put things in a blind trust.

Advised him?

Odder then, that Oram has been in cabinet – as business minister – but hasn’t bothered to sort out this issue before now.  A blind trust is a really simple, practical solution to a very real potential political problem.

And the whole thing is odder yet again considering that in 1997, then-Premier Brian Tobin issued cabinet conflict of interest guidelines that added to the requirements already in legislation.

1) Ministers shall place in a blind trust all assets, financial interests or other sources of income within the definition of "private interest" in S. 20 (e) of the Act, except for those that are an "excluded private interest" within the definition of S. 20 (a) of the act;

(2) Trustees for these blind trusts shall be other than members of the Minister's immediate family; and

(3) Ministers shall cease to serve as directors or officers in a company or association, as referred to in S. 20 (e) (iii) of the act.

Tobin acted amid accusations of a conflict of interest involving one of his ministers.

Maybe that’s what Danny Williams referred to before the 2003 election when he laid out his own ethics and accountability commitments to the people of Newfoundland and Labrador:

We've seen blatant abuse of office and taxpayers' money, allegations concerning conflict of interest, questions of fundraising contributions, and suggestions of impropriety during leadership conventions. These are very serious issues that are eroding the people's confidence in government. [Emphasis added]

Who knows?  Maybe he had other issues in mind.

But there’s no doubt he was aware of the issues and concerned enough about them to issue a suite of promises on ethics.

He didn’t mention a specific commitment on cabinet ministers and conflicts of interest but it seems passing strange that he hasn’t given his ministers any specific instructions on conflict of interest for his own cabinet.  If nothing else, clear instructions remove needless political problems like we said already.

The Premier certainly has the power, authority and everything else needed to set the rules for his own cabinet.

So how come he has decided to let Paul Reynolds sort it out?

-srbp-

Hebron deal: Big Oil’s new L’il Buddy

A curious extract from the financial agreement that was part of the Hebron development deal:

5.1 Support of Province.

The Province shall, on the request of the Proponents:

(A) assist and support each of the Proponents in seeking modifications for federal fiscal enhancements to the extent that such enhancements do not, in the opinion of the Province, have a negative financial impact on the Province, or where such enhancements do have a negative financial impact, they have been offset to the satisfaction of the Province by the Proponents;

(B) use all reasonable efforts to assist the Proponents in securing commitments from Canada and municipal governments in the Province regarding the legal and regulatory framework applicable to a Development Project; and

(C) support the efforts of the Proponents in responding to any future legislative and regulatory changes that may be proposed by Canada or a municipal government in the Province that might adversely affect any Development Project, provided such action does not negatively impact the Province or require the Province to take any legislative or regulatory action respecting municipalities.

Talk about your little gem of a concession to the oil companies.

This section commits the provincial to support any or all of the proponents on any action taken by the Government of Canada that “might adversely affect any” development project on any of the lands covered by the agreement.

What might we be talking about here?

Well, it’s pretty wide open. If you look up the definition of “Development Project” in the agreement you’ll see it’s broad enough to cover every aspect of the project from start to finish, including environmental considerations. If the proponents think the idea is bad, then the province is obliged to help out. It doesn’t have an option; if the proponents ask, the “Province shall.”

And before you note the little provisos there about the Province and the conditions under which it doesn’t have to lend support, bear in mind that the definition of the Province in the agreement is also pretty tight and tidy:

“Province" means the Province of Newfoundland and Labrador, Her Majesty the Queen in Right of the Province of Newfoundland and Labrador, or the geographical territory of the Province of Newfoundland and Labrador, as the context may require.

Now this gets even more squirrely when you consider that the provincial government co-manages the offshore with the federal government through the Canada-Newfoundland and Labrador Offshore Petroleum Board. The sort of regulatory changes we are talking here are ones that are most likely to come through the offshore board.

Environmental regulations, shipping regulations, changes to safety requirements, that sort of thing: all covered through federal legislation since the offshore is legally in federal jurisdiction.

Even fallow field is covered by this provision. If a future federal government wanted to change land tenure in such a way that it would affect lands covered by Hebron, the provincial government would likely be obliged to toe Big Oil’s line. If the proposed federal regulatory “enhancements” actually worked out well for the provincial government, the Proponents can cut a side deal under this clause to secure their support to fight the “enhancements”.

Not a bad little clause.

Well, not bad for the oil companies, anyway.

This provision is even more squirrely because the provincial government – through the minister of natural resources (Kathy Dunderdale) and the provincial representatives on the offshore regulatory board – will not only carry on all this lobbying at the behest of and on behalf of Big Oil in the first place, they can do it from behind closed doors.

There isn’t a single clause there that would oblige the provincial government to disclose its lobbying on behalf of the oil companies; no disclosure to the public and indeed no disclosure to anyone.

Seems like a pretty big conflict of interest, but not one that should come as any surprise given that government’s policy is to be both a regulator and an operator simultaneously.

That’s pretty much the definition of conflict of interest as we’ve discussed here before, particularly when the talks broke off in 2006. We also raised the issue given the Premier’s curious claim after the recent helicopter crash that – despite the fairly obvious – the provincial government didn’t have a regulatory role in the offshore.

It also shouldn’t come as a surprise given that the Hebron deal sets the local research and development below the levels set by the offshore regulator. Government accepted that low amount - and the pledge to back Big Oil - after the offshore board won a court case against Big Oil over just those sorts of levies set retroactively by the offshore board. Next time out, Kathy Dunderdale or her successor will be working to make sure the regulatory changes don’t get out of the board in the first place.

All of that pales in comparison to the clause in a fiscal deal that obliges the provincial government to back the oil companies whenever the companies ask.

-srbp-

“We don’t have a regulatory role”

The provincial government has no regulatory role in the offshore?

Nothing could be further from the truth.

The provincial government has no other role in the crash of a helicopter travelling to the White Rose oil field?

Nothing could be further from the truth.

Conflict of interest is just the start of it.

Oil company update:  When the de facto head of the provincial government’s oil company calls for a review of offshore survival suits, the guy who speaks for the association of oil companies operating in the province agrees that it’s a good idea.

Already underway update:  Turns out that the Canadian Association of Petroleum Producers was already working with the federal standards agency on the review of survival suit regulations. In an interview with CBC Radio on Friday, CAPP spokesperson Paul Barnes said they’d expressed their support for the review when they got a letter from the standards agency on February 24.

Now that news make you wonder why the Premier would call for a review that was already underway.

And why would he leave the impression there were concerns when the review appears to have been started as part of the regular review and update process?

Did anyone think to ask those questions yesterday?  Like when the Premier said that someone made him aware of the issue.

Who made you aware? seemed like a fairly obvious, logical sensible question.

 

-srbp-