Beth and Expenses #nlpoli #cdnpoli

All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.

Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish.  She was barred from the House by the legislature’s internal economy commission.  The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.

But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go.  While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.

That’s important because of Marshall’s record once she got into the House herself as a member in 2003.

AG finishes term with more fumbles

Outgoing auditor general John Noseworthy held to his pattern of making less-than-accurate claims or claims without evidence, this time with respect to the offshore regulatory board.

Noseworthy’s claims and the accurate information from the board are in a story available at the Telegram website.

In his latest accusation, Noseworthy said he did not have full access to the offshore board records.  Fact is, he did.  What Noseworthy couldn’t get was proprietary information belonging to the oil companies.

“We invited him in. He had sent four people in, they were here for four months conducting an audit. He had full access to the board,” [offshore board CEO Max] Ruelokke said.

But Ruelokke said Noseworthy’s staff did not have access to information provided to the board by oil companies — which the companies deem to be proprietory [sic]— and that’s because of section 119 of the Atlantic Accord Act.

The act states companies have to approve the release of the information to any third party.

“When we asked (the companies) to do so, on behalf of the auditor general, they refused to do that. So we couldn’t release it to him,” Ruelokke said.

The distinction is significant.

Your humble e-scribbler has raised questions about Noseworthy’s attack on the board – and that’s what it has been – from the beginning.

The most recent post on the topic raised the question  of why Noseworthy had failed to produce a report or bothered to update the public on it since he launched his public attack on the board in 2008.  Maybe Noseworthy’s most recent unfounded accusation was an effort to deflect attention away from his own shortcomings.

While Noseworthy enjoys local “media cred’ – that is, they will never, ever question any of his pronouncements – the retiring auditor’s record is far from pristine.

Noseworthy missed millions in House of Assembly overspending that continued well into 2006. The accurate figure turned up in some fairly simple analysis done by the Green commission. 

Despite having access to financial records kept by the comptroller general, Noseworthy did not once report on the obvious overspending in some House of Assembly accounts until after his auditors stumbled across irregularities in 2006.

From the rings to spending by individual members of the legislature to the actual rules in place during the period, Noseworthy or his crew simply didn’t do the homework in many cases to know what they were looking at. That didn’t stop him from making claims that were baseless or that lacked evidence.

And to cap it all, Noseworthy still hasn’t completed the tasks set out for him in a 2006 cabinet order.  Instead he substituted his own commentary on individual member’s spending in an incomplete report he issued to wide media coverage.

And on that one Noseworthy also missed one fairly obvious problem in the House scandal: diversion of public money for partisan purposes. It’s obvious wrong and there was way more to it than just the $11,000 he did report.  Three times that turned up during subsequent criminal trials of former members of the House.  And while Noseworthy couldn’t have reported that while the investigations and trials were under way, it was the most fundamentally corrupt practice he should have seen raised in his original audits.

But he didn’t.

Instead, Noseworthy focused on trinkets.  In one news conference, Noseworthy said that he and his staff “did not find” any rings.  That led many to believe initially that the rings did not exist. They quickly turned up, however if one looked. Obviously, Noseworthy and his staff didn’t look.   

In perhaps the most bizarre case, Noseworthy replaced his actual recommendations for a report on government operations and substituted one he never made.  He then reported compliance with his invented recommendation in a review he produce of government compliance with his reports.

The matter gets to be all the more serious when you realise the subject of the original report was an apparent lack of adequate management of public money handed out to private sector companies.

Noseworthy has never explained the discrepancy in what he reported originally and what he claimed happened later on. Nor did Noseworthy report in his self-assessment that one of the companies covered in the original report had gone bankrupt in the intervening two years.

- srbp -

Noseworthiness, redux

Sometimes you do have to wonder if anybody – let alone Auditor General John Noseworthy himself - actually reads what his office spits out.

Take, for example, the most recent report on operations in government departments.  Page after page of the report contain sentences containing random spacing that one piece of software or another has added to text as someone cut and pasted it back and forth.

Your humble e-scribbler knows the problem all too well. There’s a huge difference, though,  between someone writing in his spare time and the province’s official accounting watchdog.

But perhaps the worst part of Noseworthy’s report is the shameless massaging of numbers to make his office look way more effective than it actually is.

No, we are not talking about a problem identified in previous reports: the AG actually made up recommendations he never originally made and then claimed departments had complied with the fake ones.

This is a case of basic math problems.

Previous reports contained a total of 193 recommendations according to Noseworthy’s most recent report.  In following up on them, he reported that 89.1% “had been acted upon”.

Nearly 90%?

Wow.

That’s amazing.

Until you look at the detail.

Departments and agencies only fully accepted  79 of the 193 recommendations.

That’s 41%.

Departments only partially implemented another 79.

And they didn’t implement another 21 at all.

The remainder are less than partially implemented, whatever that means.

But think about it:  Noseworthy’s success rate is not 90% as his statement implies;  it’s really only 41%. 

Government departments either gave up implementing 60% of his recommendations fully or simply refused to implement them altogether.

So if the guy massages the numbers about his own office in order to make things look better than they actually are, what might he be doing with the other numbers?

- srbp -

Related: 

• “Noseworthiness”
• “Auditor General’s examination of offshore board mysteriously vanishes”

Jacks and the Auditor General

What is it about Dipper leaders named Jack and their problems with having the Auditor General check over their expense claims?

Here’s Jack Layton using a worn out excuse that hasn’t been tried since well before the spending scandals in legislatures in St. John’s, Halifax and among Jack’s political brethren in Westminister:

"Well, those are already audited, so I don’t know why wasting money on a second audit of something that has already been audited would make sense," he said.

Yep and there were audits in the House of Assembly too during the peak of the spending scandal.  Layton should ask his defence critic Jack Harris who, as it turns out, is the former leader of the New Democrats in Newfoundland and Labrador. Here’s what he had to say in voting for a government bill that proved to be a key foundation stone for the spending scandal:

Similarly, we have a new provision which requires an annual audit of the accounts of the House of Assembly which I think is appropriate; that there be accountability through an annual audit.

That proved to be so incredibly effective, as a subsequent review by an Auditor General revealed. Heck, Jack Harris’ old bench mate wound up going to jail for his part in the whole business.

The days of the kind of unaccountable political privilege the two Jacks  and the rest of the Ottawa Dippers are clinging to is long over.

A little sunshine in dark corners goes a long way to killing off any untoward activity that is taking place, the glare of public scrutiny also helps to keep it from taking root.

Imagine what might have been prevented if political donations were scrutinised more closely.

-srbp-

A fraudster (allegedly) by any other accent

A member of parliament facing fraud charges in the Whitehall spending scandal tries gamely but lamely to defend himself on national television.

Just remember:  people elected this guy to vote on what the rules would be for everyone else.

Warning:  This video contains scenes of incredible stupidity that may strike some viewers as awfully bloody familiar.

h/t Guido.

-srbp-

And the cliche gets it…

Senator Beth Marshall.

Here’s the view from January 19:

Beth Marshall would be too obvious just because all the spec puts her name up right next to the two Loyolas.  She’s at the point now where her name is on everyone’s list of nominees for everything. Watch out if the Pope drops dead tomorrow.  Local spec will have Beth in the running right behind the two Loyolas;  it’s gotten to be that much of a cliche.

An interesting choice if one that is remarkable for how cliche it really is.

Others have already pointed out that Marshall very publicly declined to join the ABC silliness. That obviously stood her in good stead for this plum.

Others, however, have also over-estimated her lack of connections to the local provincial Conservatives and how this might not help improve relations between the federal Connies and their provincial cousins.  Bear in mind she was handed the plum of over-seeing implementation of the Green report and has been a faithful party player on the House of Assembly management committee.

She’s tight enough with both the federal and provincial crews to serve as a bridge. And it’s not like she hasn’t got experience in changing her tune when it serves her partisan purpose as well.

Don’t be surprised if she goes to cabinet in short order or otherwise gets a neat job to facilitate the rapprochement. The anti-Ottawa hysteria that once was the local Connie stock-in-trade will quickly be a thing of the past.

-srbp-

Spending Scandal: when “facts” aren’t true

The agreed statements entered in some of the trials resulting from the House of Assembly spending scandal are remarkable, if for no other reason than by the incorrect information contained in them.

Take this one from the statement entered on Tuesday in the Bill Murray trial:

In simplest terms, that statement is not true.

The finance department’s Comptroller General continued invariably over the whole scandal period to maintain accurate records of the total amounts paid under the allowances budget item each year.  

The Comptroller General’s figures were reported in the provincial government’s financial statements which were – it should be noted – audited each year in the scandal period by first Elizabeth Marshall and then her successor John Noseworthy.

Even a cursory examination of the Public Accounts shows overspending well in excess of what was subsequently reported by John Noseworthy once the scandal story broke.

In fact, as documented at Bond Papers and in Chief Justice Derek Green’s inquiry report, the overspending was obvious.  The BP post from December 2006 indicated that the total overspending amounted to more than twice as much as anything Noseworthy ever indicated.

In the chart from that post (above), red indicates the overspending as reported in the public accounts.  Yellow is the figure reported by Noseworthy for a given fiscal year. It only includes money identified by Noseworthy as being made to four members of the House of Assembly.

No one – least of all Noseworthy – has explained the massive discrepancy between the available evidence and what Noseworthy reported or the consistent failure of any audit officials to make public reference to the evident overspending.

-srbp-

Related:

• “AG reports leave serious unanswered questions” (July 2006) – discusses problems with Auditor General’s reports on four politicians, including inconsistencies in the way travel expenses were allocated by the AG’s office for the four MHAs.
• “Legislature financial scandal bigger than previously revealed” (August 2006)
• “The little things” (September 2007) – Among other things, the Ag did not offer any comment on the diversion of constituency funds for partisan purposes, something which was improper at the least and potentially illegal at most.
• “NL AG hoist by petard of own misleading statements” (February 2008)
• “AG report makes up old recommendation…” (November 2009) – Notes that an auditor general’s update on previous reports included a fake recommendation which he claimed had been acted on instead of the five on which no information was proved.

Mr. Walsh goes to jail

Former Liberal cabinet minister Jim Walsh will be spending a few months behind bars for his part in the House of Assembly spending scandal.

Judge David Orr sentenced Walsh to 22 months for fraud and 12 months for breach of trust.  The sentences will be served concurrently.

By contrast, former provincial Conservative leader, natural resources minister and government leader in the House of Assembly Ed Byrne got two years less a day for fraud and 18 months for breach of trust, also served concurrently, for his part in the affair.

Walsh is the only one of the politicians charged thus far who opted to plead not guilty and face a trial.  That likely had something to do with the sentence. The Crown recommended 18 months while the defence suggested no more than half that time to be served conditionally.

Former Liberal cabinet minister Wally Anderson was sentenced last year to 15 months for forgery and none months for breach of trust.

Former New Democrat member Randy Collins will be sentenced January 15.

-srbp-

Walsh guilty

In his decision Monday, Judge David Orr found former Liberal cabinet minister Jim Walsh guilty on two of three of the charges against.

Orr found Walsh guilty of fraud and breach of trust by a public official.  Orr found Walsh not guilty of frauds against the government, a bribery and corruption charge.

He’ll be back in court January 6 for sentencing.

Walsh recently filed for bankruptcy in Alberta where he currently maintains a residence.

In 2006, the province’s auditor general found Walsh had filed expense claims beyond approved limits totalling almost $300,000 in the period between 1998 and 2003.

-srbp-

Spending scandal widens

The Royal Newfoundland Constabulary laid charges today against a man identified as owning one of three companies involved in the House of Assembly spending scandal.

John William Hand, aged 68, is facing charges of fraud, fraud against the government and breach of probation.  According to CBC Here and Now, the breach of probation charge stems from a previous conviction related to the Atlantic Canada Opportunities Agency. The Telegram has details online.

Hand had not been previously identified as connected to the three companies:  Zodiac Agencies, JAS Enterprises and Cedar Scents International. 

The companies supplied souvenirs, pins, fridge magnets and other similar items to members of the legislature. Auditor General John Noseworthy alleged the companies received $2.65 million improperly in the period from 1998 to 2005.

-srbp-

“Feeling queasy”: Is quieter better?

People in Newfoundland and Labrador must surely be looking with some puzzlement on the flap over federal Conservatives handing out government money as if it was their own.

In this province, their provincial Conservative cousins have the thing down to a science. The use of public money for partisan benefit is an old one in Newfoundland and Labrador but this current crowd have raised it to a fine  art. 

The House of Assembly spending scandal was – for the most part – a scam worked up to push free and untraceable cash that politicians could hand out to all and sundry in their district for any purpose the politician could think of approving.

So pervasive was the practice that a review by the auditor general found scarcely a single politician from any political party who sat in the House after the scam started in 1998 who did not use it to some extent. 

The review also revealed that the politicians elected after 2003 used it with an enthusiasm their federal cousins could only envy.  Of the top ten spenders as a percentage of their constituency operations allowance, six were elected after 2003 and all but one was a Tory.

As it turned out, one of the biggest supporters of the public cash for partisan benefit scheme was a former auditor general.  Ironically, she was the one the House management commission blocked from looking at some aspects of the scam while it was first organizing.  Beth Marshall also felt no qualms about handing out cash in small and larger amounts, nor did she feel any difficulty that there was a skimpy audit trail for the cash or that money was going to duplicate  existing government programs in some cases.

The use of public money for partisan purposes was not confined to individual members of the legislature and that’s where the parallel with the federal Conservatives really becomes apparent.  Since 2003, the Provincial Conservatives have worked to make sure that local partisan benefit came from any available pot of public cash:

-  As we found out when Tom Rideout packed it in, road paving and construction is over-seen by a political staffer in the Premier’s office.

Since 2003, it has been consistently managed in a way to maximise the benefit to Conservative districts and to punish those that voted for another party.

-  Fire trucks are a recent favourite for the spending announcement with the local MHA. With the recent by-elections and political upheaval, the fire truck announcements are coming about one a week.

The one they’ve consistently used is the small time cash being handed out by one department or another.  The money is from a legitimate departmental program but when the cash is handed out someone from the government caucus gets the credit.  It is inevitably called a “donation” or a “contribution” to make the free cash sound like anything but what it is.

There’s nothing new about it.  Back in 2007, Bond Papers linked to an old CBC news story that dates from the early 1970s that mentions the same practice dating back three or four decades and more.

But just because something is old is not a reason to think it is okay.  Not all traditions are fine or honorable.

Nor is it any better that it is done quietly in these parts as opposed to brazenly at the federal level.  The quiet nature of the local practice makes it all the more insidious.

Done loudly or quietly, though the practice is enough to make anyone concerned for the state of our democracy feel very queasy indeed.

-srbp-

Anderson cops to 90K; Walsh files for bankruptcy

Another spending scandal player has copped a plea.

Wally Anderson, the former Liberal member for Torngat Mountains admitted to fraudulently receiving about $90,000.  That’s a fraction of the total he was accused of obtaining and there is no admission he engaged in bribery like former Tory cabinet minister Ed Byrne.

There’s another difference.  Anderson claims he never pocketed any of the cash himself.  Byrne funded his party with the illegal gains in addition to funnelling the money to his own benefit.

Anderson will be sentenced on Friday.  The Crown is seeking up to two years less a day, a sentence on par with the Byrne plea agreement.  The Crown’s rationale for sentencing is interesting:

"Mr. Andersen is clearly a respected individual in the area he represented," said lawyer Frances Knickle. "But that's what makes this so troubling. We are not talking about a crime of impulse but something that was done deliberately over many years."

That’s interesting because in Byrne’s case, he was the leader of the party and leader of the opposition at the time of the crimes. Some of his activity involved illegally funded his party, and the scope of Byrne’s illegal activity isn’t known.  How much money was directed to his party simply hasn’t been revealed and may never be known.

Meanwhile, former Liberal cabinet minister Jim Walsh  - another one of the spending  scandal accused - has filed for bankruptcy in an Alberta court.  Walsh apparently now resides in Alberta.  Bankruptcy would frustrate efforts to recover any of the money in the event Walsh is found guilty.

During his trial, Walsh has acknowledged receiving thousands more than permitted by his allowance limits but is claiming he isn’t responsible.

His trial continues in November.

-srbp-

Old habits die hard: legislative expenses version

In the United Kingdom, an inquiry into the expenses scandal at Whitehall is running into members of parliament griping about their quality of life.  The MPs want improvements, so it seems, despite the excesses which have been revealed in the past few months.

Meanwhile, the Bow Wow parliament has a committee holding hearings before the committee submits recommendations on a new pay and allowances scheme for local politicians to the House of Assembly management committee. 

Ostensibly, the committee wants to get public input. So far only five people have turned up to offer views to the committee at hearings held across the province.

  That’s hardly surprising given that the committee is holding hearings during the time when most people in the province  - including most politicians - take a nice long break from the business of politics.

But here’s the question no one seems to have asked in Newfoundland and Labrador:  why is the committee out there in the first place?

The politicians will tell you they appointed the committee because it is in the Green bill, the legislation that came after the local spending scandal hit daylight. Now that is true, but there was considerable discretion available to the legislators. 

Since they got their salaries set in 2007 at the time of the last election, they could have amended the legislation so that the next salary committee wouldn’t be appointed until after the next general election 2011.   They also could have delayed appointing the current committee until some time in early 2011, thus giving members of the legislature a full four years at their old pay scheme before they would look at an increase.

Either of those approaches would have shown some restraint on the part of members.  This might have been prudent given that the public is more than a wee bit soured on them after listening to the litany of miss-spending and excuses for same that poured forth from the honorable members.

And it’s not like the poor darlings wouldn’t have seen any pay hikes in the meantime.  Under section 15(3) of the Green bill, they would have collected the same percentage increases the executive of the public got in any given year.  That’s not bad for a crowd making a hefty wage anyways and given that almost half of them or more are drawing extra pay allotments, members of the legislature can hardly claim they’ve been hard done by. 

Rather than do either of those things, the members of the legislature  - most or all of whom are members of the successor to the old internal economy commission - decided to go for a restructuring of their pay and allowances scheme in addition to the annual percentage hikes a mere two years after the system came into effect in the first place. 

They decided to do it at a time when the public are – for the most part – simply not paying attention to things political. The politicians discussed postponing things until the fall, incidentally,  but decided to carry on such that the bulk of the work was being done at the worst possible time of the year. 

Well, worst possible time if one was serious about getting public input.  The resolution appointing the committee went through the House in May.  The committee must report no later than the end of October. The hearings will be over and done – save for one – by the end of August. 

Their report will then find its way back to the House of Assembly where it will be passed, one expects, as quickly and as quietly as possible in what has become a notoriously lightweight and very short fall sitting of the House.

That’s pretty much how most things involving pay and allowances for members have been handled over the past decade.  Despite all the public furor, despite all the revelations of miss-spending, the members of the provincial legislature are carrying on much as they have always done when their pay and allowances are involved.

Old habits -  it seems -  die very hard indeed.

-srbp-

Changing the frame, at last

Premier Danny Williams may well have lived up to an election promise and brought the auditor general in to look at the books, but until then, not one single "honourable member" involved at the centre of the slimefest thought of taking a principled stand on the issue.

We’ve talked about frames before and that quote from the Saturday Telegram editorial shows just exactly how effective some frames can be in skewing the discussion of a topic.

That idea – that Danny Williams made an election promise and sent the auditor general to the House of Assembly – is one that the governing party and its supporters have pushed since the moment the Premier revealed the existence of the auditor general’s investigation.

It has survived despite countless column inches of news coverage and minutes of electronic reporting.  It has survived despite an extensive investigation by the province’s Chief Justice that shows the full detail of things.

But try and find one single sentence in the entire report by Chief Justice Derek Green that confirms anything even close to the claim that “Danny Williams…  brought the auditor general in to look at the books…”.

You won’t find such a sentence, though, because it never happened.

The second half of that editorial quote is also wrong.

Not one but three members of the House of Assembly “thought of taking a principled stand on the issue” of ethics and accountability in the House of Assembly.

In fact, the three – Danny Williams, Harvey Hodder and Ed Byrne – felt so strongly about the need for stricter financial controls that they held a news conference in order to unveil nearly two dozen commitments designed to address public distrust of politicians.

In the event, the three only got around to implementing about half their commitments, though,  and the ones related to the House of Assembly allowances only came about because there was no way to avoid them. 

The Telly editorial isn’t just satisfied to repeat the official frame;  the writer takes the time to add a myth or two of his or her own.   Take, for example, the view of the role played by the provincial government’s cheque-writer, otherwise known as the comptroller general:

The comptroller-general's office, which issued the cheques, unable to question any of them, no matter how peculiar.

That simply isn’t true, of course. One of the enduring mysteries of this entire affair is how the chief cheque-writer could issue cheques far in excess of maximum amounts that were well known to officials and yet at no point did he or his staff apparently raise any concerns. As Chief Justice Green notes in his third chapter:

During this era, the Comptroller General had full access to all financial documentation in respect of the disbursement of public funds from the accounts of the legislature. Internal audit and compliance staff of the Comptroller General could review transactions of the House of Assembly and test for compliance with policies. In short, while the House and the IEC were understood to have the authority to make management and policy decisions, independent of Treasury Board or Cabinet, various elements of this overall financial control framework of government were deemed to apply to the House of Assembly.

Far from being unable to pose questions, the comptroller general had both the knowledge and the legal ability to ask questions about the chronic overspending.  He didn’t.  Nor did the auditor general raise any questions either even though he and his staff  had access to the same information available to the comptroller general. 

Both offices – the CG and the AG – produced annual reports on government spending and dutifully reported the overages.  Neither said so much as “boo”.  For 2004 and 2005, for example, both the AG and the CG issued the Public Accounts that showed the House accounts for members’ allowances out of whack by roughly a  million each year.  They never once noted that the budget presented the previous spring had claimed that the accounts were exactly on budget

The Telegram editorial illustrates the extent to which the frame applied to the House of Assembly scandal persists despite a mountain of evidence to the contrary.  In other words, three years after the people of the province learned of the scandal and after a series of reports and court cases, there is still a marked preference in public comment for fiction over faction, for myth over reality. 

Until commentators reject the frame applied to the scandal three years ago, it will remain a political life unexamined.

-srbp-

Plus ca change pour M. Hodder

The Jim Walsh trial continued in court this week.

Former House of Assembly Speaker Harvey Hodder is still on the stand.

The Telegram account of his evidence on cross examination suggests the former Speaker is continuing the curious pattern he has had of offering accounts of events that vary somewhat over time.

-srbp-

‘Ethics and accountability’ report card

More than half not done despite 2003 commitment “to deal with them and begin to restore the public's confidence”

Of the 23 commitments made by the Progressive Conservative opposition on what a February 2003 news release termed “ethics and accountability”, 11 remain unfilled and in two instances, the action taken went against the stated commitment.

Amendments to the energy corporation act in 2008 and the research and development corporation act in 2009 both increased the restrictions on disclosure.

No action has been taken to impose six new, tougher restrictions on campaign financing.

No action has been taken to reduce restrictions on disclosure of cabinet confidences and no amendments that would “enhance the transparency of government actions and decisions.”

Of the 10 commitments actually met, one to impose significant penalties for breaches of the lobbyist registration act turned out to be nothing more than a potential one year de-registration.

At least two significant lobbying efforts were never registered.  One involved a multi-million dollar fibre-optic deal.  in another instance, officials of a tourist project now in bankruptcy protection claimed publicly to have been lobbying but never registered their activities.

In two others where action was taken, nothing appears to have been done to implement the commitment until the House of Assembly spending scandal became public.  The commitments – for a code of conduct for members of the legislature and  new administrative procedures on allowances  - were implemented in 2007 as a result of recommendations by Chief Justice Derek Green following his inquiry.

The policy commitments were made by then-opposition leader Danny Williams.  Ironically, Williams was accompanied at the announcement by Ed Byrne, currently serving a prison sentence for fraud and corruption.
Williams’ words at the time proved to be prophetic:

We've invited you here today to address what I see as one of the greatest challenges facing elected governments today. As a result of recent developments at both the provincial and national level, I firmly believe that the public is losing confidence in their elected officials. 

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.

Now, we can either choose to ignore these issues and continue with the status quo or we can attempt to deal with them and restore the public's confidence. I'm saying that it's time to deal with them and begin to restore the public's confidence.

Public confidence likely took a further dip with the revelations of what occurred in the legislature between 1997 and 2006.

Here’s a list of the commitments and notes on the actions taken or not taken.  The complete news release is at the bottom of this post.

Serial	Commitment	Action
1	“We will legislate maximum donations to candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”	No action taken.
2	“We will set out in legislation that the cash contribution to the party from an individual or corporation shall not exceed $10,000.”	No action taken.
3	“We will also legislate maximum expenditures by candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”	No action taken.
4	“Furthermore, we will require the full public disclosure of all donations to, and expenditures by, candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.”	No action taken.
5	“With respect to Party leadership races, we will require that donations must be disclosed when they occur, and all expenditures must be independently audited and fully disclosed within three months after the election of a new leader.”	No action taken.
6	“We will also enact provisions governing the ownership of unused contributions donated to candidates in leadership races. These legislative provisions will ensure that all unused donations are returned to the donors”.	No action taken.
7	“We will amend the Elections Act to require that provincial elections be held on a fixed date every four years, or immediately if a government loses a confidence vote in the House of Assembly.”	House of Assembly Act amendment, 2004
8	“The legislation will ensure that, if the Premier resigns or the Premier's office is vacated within the first three years of a term, an extraordinary election will be held within twelve months and a new government will be elected to a fixed four-year term.”	House of Assembly Act amendment, 2004
9	“We will also amend the Elections Act to require a by-election to be called within 60 days of a vacancy and held within 90 days of a vacancy, so as to ensure that all Newfoundlanders and Labradorians are appropriately represented in the legislature.”	House of Assembly Act amendment, 2004
10	“We will establish a new procedure to provide for the proper auditing and disclosure of the expenses of Members of the House of Assembly.”	Significant new procedures were not implemented until after the disclosure of the spending scandal and not until passage of the House of Assembly Accountability, Integrity and Administration Act in 2007.
11	“We will amend the Access to Information legislation to enhance the transparency of government actions and decisions.”	Amendments to the Energy Corporation Act in 2008 and the research and development corporation act 2009 significantly reduced access to information related to these two bodies.  There have been no amendments to the ATIPPA to “enhance the transparency of government actions.”
12	“The Access to Information legislation proposed and passed by the Grimes government in 2001 (though it has not yet been proclaimed) allows the government to exclude a great deal of information from release to the public under the umbrella of "cabinet confidences". We will limit that exemption so more information that rightly belongs in the public domain will be accessible to the public.”	No action to limit the exemption. A request for disclosure of polling (specifically listed in the 2002 legislation as not being exempt from disclosure) was denied initially on the grounds it may disclose cabinet confidences.
13	“Also, the legislation will be changed so any information that continues to fall under the umbrella of "cabinet confidences" will be released earlier.”	No action taken
14	“We will enact changes to tighten up the exceptions to the release of information.”	Amendments to two other acts in 2008 and 2009 created new mandatory exemptions.
15	“We will remove provisions that allow the cabinet to override the legislative provisions of the Act by regulation at their discretion.”	No action taken.
16	“Finally, we will shorten the time lines for the release of information so information that rightly belongs in the public domain is available to the people of the province on a timely basis. Access delayed is sometimes access denied.”	No action taken.
17	“A Progressive Conservative government will commission a process of public consultation directly or through a special committee of the House of Assembly to develop appropriate and strict legislation for the registration of lobbyists operating in this province.”	Consultation took place in 2004.
18	“The primary objective of the legislation will be to establish a registry so the public can see by whom their Members and their government are being lobbied.”	Lobbyist Registration Act, 2004.
19	“The legislation will require that lobbyists report their activities. It may also require those who hold public office to disclose circumstances in which they have been lobbied.”	Lobbyist Registration Act, 2004. Public office holders are not required to disclose circumstances in which they have been lobbied.
20	“The legislation may require lobbyists to file their general objectives and/or their specific lobbying activities.”	Lobbyist Registration Act, 2004.
21	“The legislation may differentiate between those who are paid to lobby government and those who represent volunteer or non-profit agencies.”	Lobbyist Registration Act, 2004.
22	“The legislation will impose significant penalties for those who violate these provisions.”	The only penalty that may be imposed is the cancellation of a registration or the refusal to register a lobbyist for period not to exceed one year in duration.
23	“We will also ask the legislature to adopt a strict code of conduct for all Members, to be enforced by the Commissioner of Members' Interests, emphasizing their accountability to the wider public interest and to their constituents, and the need for openness, honesty and integrity in their dealings with the public, constituents and lobbying organizations.”	A code of conduct for members of the House of Assembly was included in the House accountability act in 2007 on the recommendation of Chief Justice Derek Green. Prior to the disclosure of the House of Assembly spending scandal, no action appears to have been taken on this.

-30-

Williams announces policies regarding
ethics and government reform

ST. JOHN'S, February 5, 2003 — Danny Williams, Leader of the Opposition and MHA for Humber West, today announced a number of policies regarding ethics and government reform. His speaking notes follow:


Good afternoon, and thank you everyone for coming out today. Joining me is Ed Byrne, our House Leader, and Harvey Hodder, one of our longest-serving MHAs.

We've invited you here today to address what I see as one of the greatest challenges facing elected governments today. As a result of recent developments at both the provincial and national level, I firmly believe that the public is losing confidence in their elected officials.

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.

Now, we can either choose to ignore these issues and continue with the status quo or we can attempt to deal with them and restore the public's confidence. I'm saying that it's time to deal with them and begin to restore the public's confidence.

To that effect, I am today announcing several policies to help modernize the electoral process and the day-to-day operations of the government in Newfoundland and Labrador. These policies concern three separate areas that can be classified under the following general headings: transparency in political fundraising, effective government, and regulation of lobbyists.

Each policy area was developed under the basic philosophy that the public has a legitimate right to be informed of their government's activities.

A. Transparency in Political Fundraising

Let's first look at transparency in political fundraising.

The Elections Act limits election campaign contributions and spending, and attempts to promote electoral fairness by allowing candidates to recover part of their campaign expenses from public funds.

However, the intent of the Act is undermined by loopholes that allow political parties to raise and spend unlimited amounts of money before an election is called, and permit unlimited contributions and spending on leadership contests.

A Progressive Conservative Government will amend the Elections Act to close those loopholes.

• We will legislate maximum donations to candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.
• We will set out in legislation that the cash contribution to the party from an individual or corporation shall not exceed $10,000.
• We will also legislate maximum expenditures by candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.
• Furthermore, we will require the full public disclosure of all donations to, and expenditures by, candidates in Party leadership contests, nominees in Party candidacy races, and candidates in general elections and by-elections.
• With respect to Party leadership races, we will require that donations must be disclosed when they occur, and all expenditures must be independently audited and fully disclosed within three months after the election of a new leader.
• We will also enact provisions governing the ownership of unused contributions donated to candidates in leadership races. These legislative provisions will ensure that all unused donations are returned to the donors.

The public is demanding transparency in the raising and spending of all funds related to the election of Party leaders, Party candidates and Members of the House of Assembly. It is our obligation and our commitment to deliver the transparency and accountability that the public is demanding.

B. Effective Government


We also have seen problems arise over timely elected representation. There have been numerous situations over the last few years in which the electorate has gone unreasonable periods of time without elected representatives. In fact, one district did not have representation for the entire Voisey's Bay debate, which was one of the most important debates that occurred in this province last year. We have an ongoing situation in which the Premier has governed the province for two full years despite the fact that the people of Newfoundland and Labrador did not have the opportunity to elect him. And we have situations in which individuals are not able to obtain information from their government because of countless restrictions and excessive wait periods. This is wrong.

A Progressive Conservative Government will address these issues decisively.

• We will amend the Elections Act to require that provincial elections be held on a fixed date every four years, or immediately if a government loses a confidence vote in the House of Assembly.
• The legislation will ensure that, if the Premier resigns or the Premier's office is vacated within the first three years of a term, an extraordinary election will be held within twelve months and a new government will be elected to a fixed four-year term.
• We will also amend the Elections Act to require a by-election to be called within 60 days of a vacancy and held within 90 days of a vacancy, so as to ensure that all Newfoundlanders and Labradorians are appropriately represented in the legislature.
• We will establish a new procedure to provide for the proper auditing and disclosure of the expenses of Members of the House of Assembly.
• We will amend the Access to Information legislation to enhance the transparency of government actions and decisions.
• Our legislative changes will clearly identify information that should be in the public domain, and will require full and prompt disclosure of the information to the public. The Access to Information legislation proposed and passed by the Grimes government in 2001 (though it has not yet been proclaimed) allows the government to exclude a great deal of information from release to the public under the umbrella of "cabinet confidences". We will limit that exemption so more information that rightly belongs in the public domain will be accessible to the public.
• Also, the legislation will be changed so any information that continues to fall under the umbrella of "cabinet confidences" will be released earlier.
• We will enact changes to tighten up the exceptions to the release of information.
• We will remove provisions that allow the cabinet to override the legislative provisions of the Act by regulation at their discretion.
• Finally, we will shorten the time lines for the release of information so information that rightly belongs in the public domain is available to the people of the province on a timely basis. Access delayed is sometimes access denied.

C. Regulation of Lobbyists


Another activity which must be brought forward for public review involves government lobbying. The governments of Canada and four provinces have enacted legislation requiring lobbyists to disclose their identities, their intentions and their activities. Since there is no such legislation in this province, the people of Newfoundland and Labrador do not know which individuals and groups are lobbying their government to make decisions that will benefit the lobbyists or those they represent. Disclosure reassures the public that their representatives' arms are not being twisted behind the scenes.

• A Progressive Conservative government will commission a process of public consultation directly or through a special committee of the House of Assembly to develop appropriate and strict legislation for the registration of lobbyists operating in this province.
• The primary objective of the legislation will be to establish a registry so the public can see by whom their Members and their government are being lobbied. It will not be our intention to impede free and open access to government by individuals and groups, but we will strike the proper balance through transparency and disclosure.
• The legislation will require that lobbyists report their activities. It may also require those who hold public office to disclose circumstances in which they have been lobbied.
• The legislation may require lobbyists to file their general objectives and/or their specific lobbying activities.
• The legislation may differentiate between those who are paid to lobby government and those who represent volunteer or non-profit agencies.
• The legislation will impose significant penalties for those who violate these provisions.
• We will also ask the legislature to adopt a strict code of conduct for all Members, to be enforced by the Commissioner of Members' Interests, emphasizing their accountability to the wider public interest and to their constituents, and the need for openness, honesty and integrity in their dealings with the public, constituents and lobbying organizations.

Conclusion


In conclusion, I firmly believe that people are losing their confidence and trust in elected government, and that must change. Our Party is committed to that. It is our intention to begin to address these issues and restore public confidence with these policies.

Today in history…

On this date in 2006, then natural resources minister Ed Byrne left the annual NOIA conference and went off to discuss with Premier Danny Williams the auditor general’s review of the House of Assembly accounts and specifically some problems discovered in the records for Byrne.

It was a Tuesday.

The next day – over 24 hours after that chat with Byrne – Williams told the rest of the province about what became the House of Assembly spending scandal.

How much had changed from a little over five years before when Williams took the reins of the Tory party from Byrne at a convention in St. John’s (left).

Byrne remained a major force within the party up to his resignation on June 21.

To mark the third anniversary of the scandal, Bond Papers has collected together links to the posts on the spending scandal.  You’ll find them if you scroll down the right hand column.  There are a lot since the scandal is huge and continues to reverberate to this day.  The are so many, we’ve had to break them down by year.  The first couple of months worth are ready as this post goes live.  The rest will follow in short order.  Unlike the last link list on the scandal, this one will be a permanent sidebar feature.  Interest in the issue hasn’t abated.

The are arranged chronologically beginning with the first one, posted the evening the Premier told the rest of us some of what he already knew.

The story has gone through a number of twists and turns as more information came to light.  Still, three years later, the people of Newfoundland and Labrador do not have a complete tally of how much cash went out the door nor do they have any idea where most of it went.

Along the way there have been some moments of personal satisfaction for your humble e-scribbler. 

In a post in August 2006 – two months into the scandal -  Bond Papers pointed out how much of that the Auditor General missed in his reports.  Chief Justice Derek Green confirmed it in his report in mid 2007. The Auditor general has never corrected his figures or explained his glaring oversights.

While the Green report turned out to be a significant turning point in the whole affair, the response was less edifying.  As Bond Papers reported first in “One last trip to the trough?” the members of the legislature adopted the Green bill quickly but made sure they didn’t have to live with the chief justice’s spending rules until after the fall election. 

Then- government House leader Tom Rideout proved a source of great entertainment as he tried to explain how in June the legislature had decided to implement the legislation “tomorrow” but in the language of parliament “tomorrow” was not the next day but a day five months later.  Only a title lifted from Get Smart – “Chaos in Control” -  could cover such a piece of hilarity.

Then there was a moment of unease.  In reviewing the posts, you will find one written early on about the use of public money for partisan purposes.  At that point it was only a suspicion. The suspicion was confirmed when Ed Byrne pleaded guilty to the charges levelled against him.

Only five individuals were charged in the scandal.  One pleaded guilty.  Another case is currently before the courts and three more are due to start over the summer and into the fall.

Since the scandal broke in the Bow Wow parliament, other similar stories have emerged elsewhere.  In Britain, the scandal of account mismanagement in the House of Commons has ended political careers sparked numerous investigations and may ultimately topple the Labour government.  The public has received details of the spending and reacted with appropriate anger.

Yet, three years later, and despite a series of investigations, there has not been a full public accounting of the money or where it all went.

There may never be.

-srbp-

More help for Jerome

Finance minister Jerome Kennedy’s not alone.

He’s not alone on a lot of things, but in this case, we refer to his lack of willingness to read the documents relevant to an issue and to understand the plain English meaning of them.

Jerome’s already been poked a bit both here and at the Telegram over his apparent ignorance of the role of the Clerk of the House of Assembly.

But there’s more ignorance, and that has to do with one of the issues the House of Assembly Management Commission discussed at its May 13 meeting.

They were talking about recreating the financial statements of the legislature for Fiscal Years 1999 and 2000.  The issue is whether or not to pay an outside audit firm to rebuild the House accounts for those two years and then audit them.

Auditor General John Noseworthy believes this work would be for naught since many of the records are missing and there is no guarantee the accounts would be accurate.  He noted in correspondence dating back to 2007 that his reviews would be sufficient to meet the legislative requirement the management commission is looking at in trying to have this work done. There’s an estimate under discussion of hiring an outside audit firm at a cost of over $600,000 to do the work.

Jerome thinks the work ought to be done.

Without going into all the details, he’s right.

The work ought to have been done and it should have been done by the Auditor General under the task assigned to him by cabinet in 2006. The only problem is that it isn’t clear the work was done.

In the summer of 2006, cabinet directed the Auditor General to do two things as a result of the House of Assembly scandal. 

First, he was directed to go back to 1989 to find any other examples of overspending up to 2004.  He did that and apparently found nothing beyond what he’d already reported.  Note that he didn’t look in detail at the two years up to 2006 when the allowances account was overspent by about $1.0 million and the budget estimates presented in the House were known to be wrong.

Second, the Auditor General was directed to conduct “annual audits of the accounts of the House of Assembly from fiscal years 1999/2000 to 2003/2004.”

So where are those audits?

Good question, since they’ve never been made public. In fact, there’s no public sign that component of the order was ever done even though the Auditor General got extra money and staff in order to do the work.

What we got instead was a report that discussed some inappropriate spending from 1989 to 2005. We can say “some” inappropriate spending  since Noseworthy never went into enough detail to determine where all the cash actually went or if people misdirected money even if they didn’t exceed their allowance totals.

For example, Noseworthy never reported at all – apparently never even noticed – how much money was directed to partisan purposes even for a member now known to have funded party work out of his allowances.  There was a glaringly obvious breach of the Elections Act in there but it went unreported until the Ed Byrne trial.

If Noseworthy didn’t do that for one glaring example, then we have to wonder just exactly how much of a look his team of auditors actually gave any of their reports.  But that’s a digression.

The key point to bear in mind is that the Auditor General himself was tasked with producing detailed audits for 1999 up to 2004.  That’s irrespective of whether or not there was an audit by a private firm.

On top of that, there’s no sign Noseworthy and his team ever did the work they were tasked with by cabinet in 2006.

So what exactly is the House of Assembly Management Commission doing arguing about spending public money to recreate what the Auditor General already got paid to do?

-srbp-

The strange case of Harvey Hodder

Anyone who has been following the spending scandals in the Mother of Parliaments and in the Bow-Wow parliament cannot help but be struck by the contrasts.

For starters, voters in the United Kingdom actually know where the money went and who spent it.  In Newfoundland and Labrador, voters have no idea where the bulk of the money went even three years later.

Then there is the matter of Mr. Speaker.  In London, Speaker Michael Martin has been forced from office.  In St. John’s Harvey Hodder – who took office two years before the scandal broke - stayed in place and has even been called as a witness in one of the criminal trials under way coming out of the scandal.

Hodder is a curious figure, even as speakers in the Bow-Wow parliament go.  He did not prove himself particularly adept at keeping control of the House when it was in session.  He never strayed far from partisan politics, even in his supposedly non-partisan role as Speaker. Things got so bad at one point that the opposition had to try and embarrass the old fellow out of the chair.

His curious behaviour once the scandal broke, showing up at the hospital bedside of the guy at the centre of the scandal and apparently deferring repeatedly to direction from the Premier’s Office, prompted a post here that called for his resignation.  That’s just one of the many unfortunate moments in this mess when Hodder had the chance to do one thing but elected to do something else.

Even as he finally retired, Hodder couldn’t resist offering up a few self-serving explanations for his own spending habits.

All that makes it very odd that Hodder turned up as a witness in a court case but even the odd took a bizarre twist as Hodder’s comments appear to contradict many of the things already known about the scandal and his role.

For example, Hodder told the court  funder oath that

… he wanted to look at the books that former legislature finance director Bill Murray, who also faces fraud charges, was keeping.

Hodder testified his request met with resistance, and Murray did not want to share his records.

Hodder said he was later reassured by the former clerk of the house, John Noel, that everything was fine, and Hodder should concern himself with other things.

Leave aside for a moment the obviously lackadaisical leadership style Hodder displayed by allowing his subordinate to refuse a direct request.  Consider instead that when the scandal broke Hodder had a completely different explanation for his apparent inaction despite his own claims that he had misgivings about the House accounts:

"Early on, I expressed misgiving about some of the financial management practices," said Harvey Hodder, who became Speaker after the Progressives Conservatives took office in 2003.

But he said he was initially satisfied when a private accounting firm found nothing untoward in the legislature's spending and didn't flag what turned out to be nearly $3 million lavished on trinkets, gold rings and other baubles over the past seven years.

Was Hodder reassured by the Clerk or by an audit?  There’s a big difference in the implications flowing from the two stories. The one continuous thread, though, is that Hodder was aware of problems but found some reason to go back to his office and not bother to exercise the control which he held by virtue of his office as Speaker.

He turned a blind eye.

And then once the scandal had been exposed, Hodder set about to blame others, first his predecessor and the members of the House executive committee in 2000 and then Hodder’s subordinate:

"That could only happen where one person is responsible for controlling the information," Hodder said.

One person wasn’t responsible, of course.  He was allowed to function as he did by Hodder and others who have never been called to account for their inaction.

Hodder made some other curious claims under oath.  Like this one about his knowledge of the system:

Hodder testified that MHAs were keenly interested in issues surrounding constituency allowances, poring over spending breakdowns and the limits published just after their annual release.

If this meant the breakdowns for each member then he should have noticed something much earlier than anyone else.  But even if Hodder got fudged records, there is no mistaking the accounts maintained by the province’s comptroller general and published each year as the Public Accounts.

If Hodder indeed had such a “keen” interest then he would have noticed that in 2004 and 2005, the budget laid in front of the House of Assembly falsely reported that the members’ accounts were bang on budget when the Public Accounts showed them to be out of whack by about a half million each year.

Bond Papers noted this in August and December 2006 and the accounting was confirmed by the Green report on the spending scandal. neither the province’s auditor general nor anyone else has explained the overages in those two years as well as the discrepancy between the budget figures and the Public Accounts. The auditor general made no reference to these discrepancies in his annual reports for those years.

Then there’s another claim about the diligence with which Hodder kept his own track of his own spending:

Hodder testified he kept copies of every receipt, claim form, payment stub and other supporting documentation during his long career in provincial politics.

The auditor general’s report on constituency allowance spending by all members after 1989 showed that Hodder:

• double billed the legislature (albeit for $129)
• made donations of public money totalling over $30,000, and
• made alcohol only purchases out of his constituency allowance totaling over $1,100.

None of this was permitted under even the lax rules that applied during the scandal period.  If Hodder kept as close a track of his spending as he said under oath, then he knew about his own inappropriate spending. When the report was released, incidentally, he attributed the alcohol purchase to a mistake in accounting.  He also is in a position to identify specifically all the donations he made during his term in the legislature.

Now Hodder wasn’t the worst when it came to using public money for gifts to unnamed individuals and groups, but it is a bit rich for him to pass judgment on others when his own record is far from stellar.  While Hodder may not have known of criminal activity, he certainly was aware of the sordid practice of using the constituency allowances as what amounted to a slush fund.  He did nothing about it, by his own admission.

Did nothing, at all and yet Hodder found no shame in making this sanctimonious statement as he left politics:

"It is regrettable that there are hungry children in this province, in my former constituency, who could've benefited from some of that money."

That’s not all that is regrettable about the House of Assembly between 1996 and 2007, as the strange case of former Speaker Harvey Hodder shows.

-srbp-

Sound familiar?

A bunch of politicians accused of living high on the public hog and getting into an argument about what the rules permit.

From Guido Fawkes:

Guido has been shouting about the Green Book Rule changes which came into force on April Fools Day - and politicians really do take us for fools. To stop all the rule breaking by MPs they came up with a clever solution. Scrap the rules!

Meanwhile, there is a hunt on for the person who leaked information on the story to the papers.

The Mother of Parliaments might wind up following the path taken in the Bow-Wow Parliament once the whole thing explodes.

We could loan them a Chief Justice who could sort the mess out quite nicely.

In the meantime, it might be interesting to find out if any of their cash from their spending scandal had been directed to paying party campaign expenses as has been the case here, albeit something the ruling party isn’t at all interested to see investigated with the same judicial vigour.

-srbp-