A mulligan or a snipe hunt?

Some two weeks after telling the people of Newfoundland and Labrador that he had finished his audit work at the House of Assembly, Auditor General John Noseworthy apparently asked for and received direction from cabinet to go back to the House of Assembly and conduct further audit work.

This is just the latest turn in a sordid tale of inappropriate spending, alleged criminal activity and alleged overpayments to members of the provincial legislature that has already seen numerous contradictory comments from the Auditor General and members of the House on the scope of the scandal and on measures that have supposedly been taken to prevent further impropriety.

That is, it is a further twist if the latest news release from Speaker Harvey Hodder is to be taken at face value.

The only thing that can be said with certainty about this latest news release is the the extent of public outrage at the scandal, dissatisfaction with efforts by politicians to contain the fall-out and growing support for a public inquiry prompted someone in Confederation Building and the House of Assembly to order up some further action.

But that's where the story becomes murky.

According to the news release, AG Noseworthy will be conducting "comprehensive annual audits of accounts of the House of Assembly for fiscal years 1999/2000 to 2003/04." [Note: in common government usage this would be FY 1999 to FY 2003.]

Noseworthy's one page "report" on alleged payments to former cabinet minister Ed Byrne covered FY 2002 and FY 2003, although Noseworthy mis-indentified the years involved. At the time he released the report on Byrne, AG Noseworthy indicated he had some unspecified indications of additional overpayments to Byrne for two previous fiscal years. That would take the review already conducted back to FY 2000, at least for Byrne.

When he met with news media in June to discuss the Byrne report, Noseworthy said:

"What we're seeing here is an end of an era and I don't think this sort of era will come again," Noseworthy said.

"This is over, I think."

He also stated unequivocally that changes made to the House administration by the new Internal Economy Commission (IEC) would prevent further misspending past April 2004.

That was before he released four further reports.

Reports on Randy Collins, Wally Andersen and former legislator Jim Walsh covered the periods FY 2002 to FY 2005, although once again AG Noseworthy misidentified the years involved. Another report, on payments made to four companies, covered the period from FY 1998 to FY 2005. Again, Noseworthy's reports mis-identify the years.

The total amount of dubious spending from FY 1998 to FY 2005 was almost $4.0 million.

All this is to point out not merely the inconsistencies in Noseworthy's comments but the discrepancies among the periods already auditted and the extent of the audits already conducted.

Presumably, if Noseworthy had focused on four current and former members of the House and then announced his work was done, he had looked at all the accounts and pronounced clean all but the problems he announced.

But if those inconsistencies were not enough to give pause, Speaker Harvey Hodder told The Telegram, the province's largest daily newspaper, that in fact he had received no reports from the Auditor General despite the news conferences and the release of reports that included letters of transmittal addressed to Hodder.

And so we are told on Wednesday that AG Noseworthy" has asked for and received cabinet direction" to do work that covers, in largest part, work he supposedly had already done.

It is possible that Nosworthy is being given a mulligan, a do-over. That would mean the first audits and reports were incomplete and so Noseworthy is being given the chance to go back and get it right. That would also have an impact on the police investiagtions resulting fcrom his first reports although whether his mulligan would forestall or widen the police investigation is unclear.

It is also possible Noseworthy is being sent on a snipe hunt, or its Newfoundland equivalent the search for The Wild Baloney. [Left: erstwhile snipe hunter displays proper posture]

Noseworthy will look at how money was spent but, since he already eliminated all but four for overspending, he will find little else. After all, as long as members of the House of Assembly did not overspend their accounts, a great many dubious expenditures seem to have been approved by the Internal Economy Commission after the legislature's administrative rules were changed in June 1996.

Noseworthy has mentioned his suspicion that one former member purchased wine and art from his constituency allowance. Criticism of this alleged spending is based on the rules for this allowances which Noseworthy has quoted as being:

the payment of expenditures incurred in the performance of constituency business and may cover such items as office rental, equipment, supplies, secretarial and other support services, information material such as newspapers, advertising, purchase of flags, pins, etc..

However, what is the difference between those alleged purchases and the admission by the current Speaker, two current cabinet ministers and one former minister that they had spent their district budgets on everything from personal advertising, outfitting sports teams with new shirts, gifts to seniors homes, supporting volunteer firefighters to making donations to the Royal Canadian Legion?

Since all those expenditures fell within the spending approved by the IEC, Noseworthy will have difficulty reporting negatively on them unless the members involved overspent their accounts. After all, since Noseworthy is aware or ought to have been aware of these expenditures in the course of his recent audits, he already ha dplenty of opportunity to comment on them.

The likelihood Noseworthy is on a snipe hunt is reinforced by the charge he has been apparently given to review constituency allowances from 1989 to 2004. Firstly, there is no evidence whatsoever to suggest ther were any impriorieties with their accounts before the IEc changed the rules on this spending in June 1996.

Estimates 1994, for example, shows clearly that these allowances were underspent in 1993 by a significant amount. This was in a year when Noseworthy's predecessor had full access to the House accounts. By contrast, forthe years Noseworthy has already covered, the annual estimates show at least two years of significant budget overruns. In another year, the estimates show the accounts as being exactly - miraculously on budget, even though Noseworthy's reports allege that at two members received signifcant amounts more than they were entitled to in the same fiscal year. These were years when the Auditor General was not allowed access to the House accounts.

Secondly, this looks like a snipe hunt since Noseworthy is going over old ground and can't look any more recently than March 2003. Even though his previous work showed significant mis-spending continued until as recently as December 2005, the Auditor General's latest audit will simply stop dead almost two full years short of when evidence already suggests accounts were being fiddled.

Thirdly, Noseworthy's task looks like a snipe hunt since he is specifically being sent back to the past to "determine whether overspending occured at the constituency allowance level beyond which [sic] was approved, authorized or provided through the Internal Economy Commission policies."

He isn't looking for inappropriate spending. Noseworthy is just looking for people who got too much money. If a members were allowed by the IEc to buy art or pay their mortgages with constituency money, there won't be much Noseworthy can say about it since that is beyond his limited mandate. Noseworthy can judge whether or not the rules were followed but he can't tell us if he thinks the rules were wrong in the first place.

There is an outside chance that Noseworthy is actually being sent to do solid work. His "comprehensive" audits might actually include a full review of IEC policies. His work this time might actually call to account the various memebrs of the IEC including the two current senior cabinet ministers who sat on the IEC in 2000 and afterward when it apparently made some of the most significant decisions related to the current scandal.

Don't count it though. The members of the legislature, the Speaker and the cabinet have worked diligently to prevent a public inquiry which is the only way to get to the bottom of the entire House of Assembly mess. There is a police investigation to be sure, but the police will not look at the House administrative practices. There is a judge looking at allowances but he has been specifically told not to look at what occured in the past and can offer no opinion on whether or not what happened before June 2006 was right or wrong: it's beyond his very carefully limited brief.

Those in authority have also structured this latest mission of the Auditor General to look at only a portion of the issue, leaving out the bits that will likely involve many of the people in positions of responsibility having to account for their actions. They have sent him to look like he is looking for something.

Public pressure does seems to be having an effect, though. Perhaps the embarrassment of having this scandal dominate the news while provincial premiers are in St. John's next week will prompt a complete inquiry.

Wonder what would happen if premier after premier was asked if he and his fellow legislators could make gifts out of their office budget to ringette teams just like Danny Williams and his colleagues can do?

We might just get a public inquiry after all.

National CBC Radio copy written by Premier's spin machine?

How many facts can one reporter get not only wrong but wrong in a way that sounds like the story was written by Liz Matthews?

Check Vic Adopia's piece on CBC national radio this morning on the House of Assembly spending scandal.

As soon as I can get a transcript, I'll go through it in detail.

In the meantime, just realize that while local reporters are past the bullshit, some people can obviously still get taken in.

Too bad an erroneous report gets carried across the country.

The Power of Sheila Compels You

Speaker Harvey Hodder and members of the House of Assembly have been taking a hammering for weeks now for not releasing the details of how they spend their parliamentary budgets.

The politicians don't like it one bit, being accused of being unaccountable on the one hand and on the other hand actually hiding documents and other so they won't have to reveal who has been pocketing the public's cash.

The excuse offered was that the expense and travel claims might be involved in a police investigation ongoing into alleged overspending by four members. The Auditor General finished his work recently pronouncing everyone else to be clean for the period he audited. Basically the Speaker's legal advice about police investigations looked like a not-so-clever dodge.

So what did the Speaker do in the face of all that pressure?

He announced the auditor general is coming back to investigate all those files people want to see.
Yep. The Exorcist is heading back to confront the demons of impropriety possessing files and papers in the House of Assembly.

Oddly enough the files can't be made public while the AG is working them over...yet again. Hell, Noseworthy won't even let people being audited see which document he is talking about when he askes them to explain that document.

Oddly enough too, the AG is likely to emerge with little if any new information, the local high priest of the Church of the Balance Sheet can say he has exorcised them and they are free of taint.

Then Harvey can go back to withholding the documents but assuring people there was no information in them anyway.

Gee, Harve. What a clever way to hide documents while claiming to be open, transparent and accountable. I wonder who came up with that dodge.

The Keystone Kops of Konfederation Building

Two odd things turned up in a news release today from harvey Hodder announcing that John Noseworthy is going back to the House of Assembly to conduct either a mulligan or a snipe hunt in the ongoing legislature spending scandal.

The first one is in the opening paragraph, itself a masterpiece of abysmal writing:

Following a meeting of the Internal Economy Commission and conversations with the Auditor General, Speaker Harvey Hodder announced today that, in accordance with Section 16(1) of the Auditor General Act, the Auditor General has asked for and received cabinet direction to conduct comprehensive annual audits of the accounts of the House of Assembly from fiscal years 1999/2000 to 2003/04.

Section 16(1) of the Auditor General Act provides that, based on an order from the Lieutenant governor-in-council or a resolution the House of Assembly, the AG may "inquire into and report on a matter relating to the financial affairs of the province or to public property or inquire into and report on a person or organization that has received financial aid from the government of the province or in respect of which financial aid from the government of the province is sought."

This special audit isn't something the AG would ask for; rather it is something that either cabinet or the legislature directs.

As well, there is a separation of the cabinet and the House for good reason. Normally the cabinet would order a special audit into an entity entirely under its control. That means a department of government or a government agency or Crown corporation. Problem with Hydro or the forestry department? Cabinet calls in the AG.

Since the government is accountable to the legislature, and the government has no legal authority to control the House of Assembly or inquire into its operations, any special audit of the House should come only from the House of Assembly. Money missing in the House? The legislature calls in their own employee to sort it out.

This issue is big enough to get all the members back for a quick sitting, at least one long enough to approve a resolution authorizing the Auditor General to sort out the financial mess.

So basically, the release starts out by having the AG ask to do something he is supposed to be told to do. On top of that he is being directed by the cabinet even though there is no statutory basis for cabinet directing the Auditor General to inquire into the legislature. Basically, cabinet has seized control of the elected representatives who are supposed to hold the cabinet to account on our behalf.

Pesky thing the constitution, but the rules are there to be followed not broken. Apparently in this instance though, the way to deal with rule breaking is further rule breaking.

The second thing is inadvertent humour. At the end of the release, Speaker Harvey Hodder tries to wax poetic on the need for accountability and transparency. Of course, no one is fooled by Hodder's sudden conversion to the cause of openness in government.

His argument in favour of keeping accounts secret took yet another savaging in The Telegram's editorial pages on the same day he made the announcement of the AG's latest foray into Hodder's office looking for baloney or snipe.

For the record, here's the poetic speaker in full flight:

Trust and confidence is fostered where public disclosure and transparency permeates the principles upon which public funds are received and where the expectation of public accountability and disclosure is understood and practiced.

The Telegram version was more understandable and more credible:

Actions speak louder than words.

Harvey needs a dose of plain language training.

Our accountants can work wonders...

but they must have receipts.

The Telegram editorial this hot summer Wednesday nails down another aspect of the House of Assembly spending scandal, namely the unwillingness of members to disclose their expense claims.

Perhaps those same politicians have forgotten the most important adage of all: that actions speak louder than words.

Here's the fact - we offered the province's MHAs an opportunity to show that they weren'’t involved in constituency allowance misspending.

Not one MHA felt confident enough to actually have public scrutiny of the propriety of their constituency spending.

Like it or not, any MHA who decides to hide behind the Speaker's legal opinion will have earned the reputation they wear.

The Telly will not be winning any friends in the House of Assembly with this editorial, but then again, editors don't make their money saying things that arecomfortablee all the time.

As the host of one radio call-in show noted this week, it's ironic that all those faithful, loyal and unquestioning supporters of the current crop of politicians praised a local newspaper whenever it slagged Liberals and took up the cudgels on the Premier's cause du jour. These same people are now turning savagely on the same paper for printing stories that are - explicitly or implicitly - critical of the Premier.

The Telly-torialists make an oblique reference to The Independent in the editorial this week. While the Indy has not exactly been scoring coups with its coverage and in some instances has provided inaccurate and incomplete information, at least they have asked a few questions. Hopefully, it hasn't poisoned the well of information out there nor has the Premier's savage reaction deterred others from asking simple questions.

The Telly editorial today makes the point simply and eloquently when it points out that when it comes to disclosure (the congenital twin of transparency), actions speak far louder than mere words.

The Premier and the charitable impulse

A check of the Canada Revenue Agency (CRA) website reveals there are currently 389 family foundations in Canada with charitable status. That means they can grant tax receipts for donations received.

There are two family foundations in Newfoundland and Labrador. The Johnson Family Foundation supports the Grand Concourse Authority and the Geo Centre, among other things. The Williams Family Foundation Inc, (WFF) featured this past weekend in The Independent, provides assistance to groups and individuals focusing on poverty reduction and education.

Family foundations, like many charitable groups are organized to conduct philanthropic workin a variety of areas of social concern, while providinga fromal grant-making structure, legal and financial safeguards and financial benefits. They are designed to support and encourage philanthropy in Canada.

Some of the family foundations are endowed; that is, they have assets and use the revenue from those assets and from donations - usually from family members - to give financial support to groups and individuals that meet the foundation's criteria.

Other foundations are smaller or merely operate on the basis of annual donations. Both the Johnson and Williams foundations appear to operate in this way, although the Johnson foundation has annual revenues more than 10 times that of the Williams foundation in the most recent year for which reports are available from Canada Revenue Agency.

Of the 389 registered family foundations in Canada, though the Williams family Foundation is different in one significant respect. It is the only family foundation, and apparently the only grant-making foundation at all in the country, that is associated with a serving politician let alone a sitting premier.

For that reason alone, the operation of the Williams family Foundation would merit public scrutiny for reasons discussed below.

But the Premier himself put his family's foundation in the public spotlight when he committed three years ago to donate his entire salary as first minister to charity through the Williams Family Foundation. The public has a right to know how much has been donated to charity, even if the individuals receiving the money are known only to the foundation and to federal taxation authorities.

The first problem, unfortunately, is that we don't know where the premier's salary has gone. CRA filings by WFF indicate that the WFF received only $20, 000 in donations in 2003 and $110, 000 in 2004. Both amounts do not match the approximately $150, 000 pre-tax salary provided to the premier.

The second problem that arises from the Williams Family Foundation is that it apparently is not run at arms length from the Premier's Office. In the first year following the October 2003 election, a member of the Premier's Office political staff appared in the Western Star presenting a WFF cheque in the city represented by the Premier in the legislature. This past weekend members of the Premier's Office provided official comment on behalf of the foundation even though the Premier himself is not a registered director of the charity.

This second problem is the crucial one. It is rare, indeed likely unprecedented, for a politician in Canada to be so closely associated with an organization donating over $100, 000 per year to groups and unnamed individuals in the province. Some of it is apparently directed to registered charities but at least half the funds distributed by WFF in 2004 went to unnamed individuals.

It is rare since the act of charitable gift-making on such a scale raises concerns about a conflict of interest between the politician and the recipients. Were the foundation run at arms length from the Premier himself, one would have almost no argument. But given that the Premier is apparently intimately associated with the operation of the family foundation, there is the very real potential that the Premier's charitable work - as sincere as it is - also carries with it a conflict in the recipient between his or her direct, personal need, his or her political choices and a natural desire to display gratitude for assistance received.

In short, every private gift from the Williams Family Foundation - no matter how worthy - places the recipient in an unacceptable position given that it comes openly, and without doubt from the Premier.

Some of the donations to registered charities create similar potential problems. In two years, the WFF gave money to foundations associated with health care boards in the province. The directors of these boards ought to be able to speak openly and to take issue with government policy from time to time. That is what they get paid to do. However, these directors and senior officials are placed in an unacceptably difficult position when their foundations receive grants from the WFF.

In the same way, advocates for health causes such as the cancer society, the school lunch program or the arthritis society may be compromised in their ability to advocate openly on behalf of their clients when cash donations are being received from the Premier's family foundation.

No one should question the Premier's motives in establishing the Williams Family Foundation or doubt the work the Foundation does.

However it is entirely inappropriate for a serving politician, let alone the province's first minister to be directly associated with providing money to anyone in the province, except through the provincial government's budget.

Anything else represents a compromise of the politicial system that is every bit as serious as allowing cabinet ministers to actively conduct any other type of business from their ministerial offices.

After all, how can a voter hold the Premier and his administration properly accountable for their decisions when he or she is simply so thankful that the "Danny Williams foundation" ensured her aging mother did not lose her eyesight? It obviously never occured to a recent caller to Night Line that the Premier and his administration ought to cover such medical treatment for everyone under the province's medical care plan.

The premier must move quickly to place the family foundation at arms length from his office.

Otherwise he may well be damaging our political system, taking it back to a point where it has not been in the better part of a century or more.

Dubious donations

On the growing ethical issue of politicians and charities, check these online commentaries:

1. Dubious donations by C-SPAN corporate vice president general counsel Bruce Collins notes concerns that American politicians are using their personal charitable foundations as a way of circumventing American campaign finance laws.

2. A 2002 article from the National Center for Policy Analysis points to the number of American politicians who have been creating charities and then securing federal funds to support the charities. "Government funds for local pork projects usually flow to local government entities -- but setting up these charities eliminates the government middleman and allows politicians to receive the credit."

3. "Limits urged on political charities" is a news report from Boston on growing efforts to curb the use of charities by politicians as a way of evading American campaign finance restrictions.

The Mile One Foundation?

Did anyone else find it strange that the Premier's Office was taking questions about the operation of a private charitable foundation?

There doesn't seem to have been any effort to direct questions about the operation of the Williams Family Foundation, Inc. (WFF) to the foundation itself or its lawyers.

Nope. The Independent got comment directly from the Premier's Office.

We'll be posting more on later on the idea of a serving first minister being so intimately connected to a charitable gift-making organization.

For now, let's just note that The Independent missed a bunch of relevent information:

1. The registry of companies records that the WFF started life as the Mile One Foundation.

2. The Indy also didn't take issue with the official spokesperson's comment that the WFF couldn't receive donations until 2003 once its charitable status was approved. That isn't strictly true.

The WFF could have taken donations at any point after it was incorporated in 2000. It just couldn't issue tax receipts until its charitable registration was approved by Canada Revenue Agency. It looks like the Williams family waited until it could get tax receipts before it started using the WFF.

3. The Indy also missed the slight discrepancy between the spokeperson's insistance that, in addition to the registered charities reported, the WFF gave money "...to individuals and familes in need who are not registered charitable organizations" and the gift apparently made by the WFF to a school science group in Harbour Grace - apparently in 2003/04.

4. The Indy didn't notice either that the WFF apparently has no assets and exists purely based on the donations it receives from unspecified sources. In 2004 - the last reporting year available from Canada Revenue Agency - donations into the WFF totalled $110, 000.

5. Related to that, the question still remains as to where the Premier's salary goes. All along he has insisted it goes to charity. If so, where does it go and how does it get there? no matter how you slice it, $110, 000 in 2004 doesn't appear to be the right number if it represents the Premier's salary.

6. The Indy did note that in the CRA filing the WFF reported for 2004 over $66, 000 in donations to "qualified donnees", that is other entities with charitable status, yet its list of "qualified donnees" amounted to only one third of that amount. But they just mention it in passing without raising the question as to why the filing is out of whack.

There's no indication the list is a sample. The previous year's filing has the two amounts matching. Check another similar foundation, like say the Johnson Family Foundation, and the numbers all match.

Most likely the discrepancy is an oversight, but still, it's worth asking.

7. The one thing that was unmistakeable from the Indy's coverage though, was that Danny Williams hated - viscerally loathed - having to answer any questions about the WFF whatsoever.

That's too bad, really, because the disclosure of accurate information helps to fight the twisting of facts and misrepresentation the Premier was correct to criticize last week.

But when disclosure is accompanied by so much protest, it just fuels suspicion that something inappropriate is being done even where none may be warranted.

And when the Premier speaks publicly on behalf of an organization that he is not officially supposed to be speaking for - he isn't a registered director - then it just fuels more suspicion and speculation.

Which of course only survivies because of the limited amount of information the Premier grudgingly provided.

Spiderman!

Another piece of the puzzle

Answering a question from Night Line host Linda Swain on Thursday, Health minister Tom Osborne let slip another little bit of the House of Assembly spending scandal.

He didn't mean to do so obviously, but he did it just the same.

Just like Speaker Harvey Hodder gave away something significant when he told the Telegram last week that he had not received reports from the Auditor General and therefore the AG was supposedly still working.

I digress.

AFter repeating that he had been cautioned to let the police conduct their investigation, Osborne said something to the effect that as we now know, the rings were purchased to mark the 50th anniversary of Confederation.

Actually, Tom we didn't know that at all.

Then Tom added that he had been offered a ring by the former financial director of the House as a gift but for some unexp0lained reason Osborne claims he offered Bill Murray $100 for the ring.

There's a bunch of stuff that doesn't add up here.

First of all, no one had mentioned previously that the rings were purchased in 1999 to mark the Confederation anniversary.

Second, if they were anniversary rings, then ever member of the House likely received one, with new members receiving them as they were elected. Osborne was elected in 1996 and re-elected in 1999 so he ought to have known about the whole project from the beginning. The Auditor General indicated rings were purchased between April 1998 and December 2005 which would suggest an on-going purchase program and it is hard to imagine a member of the legislature since 1996 wouldn't have asked his colleagues - like his own mom, f'rinstance - where they got the lovely rings.

Third, Osborne's story of accepting the ring as a gift and then offering $100 doesn't make sense. Right off the bat, people aren't usually in the habit of accepting gifts and then offering to pay for the gift. If that wasn't enough, the House of Assembly is too small a place for members not to be aware of a ring purchase program or to be unable to find out about one if it occured.

Heck, if he had a problem, Tom could have just asked his mom Sheila about it. She's one of the most wired-in politicos in the House let alone the Progressive Conservative party.

Yessirree, Tommy Osborne has added some curious new information to the little saga of House mis-spending.

He's also given us a half-baked little story that isn't likely to stand up to much scrutiny, especially if there is an allowance claim form or other document authorizing the deduction from his House of Assembly budget.

If the Premier would just be as open, accountable and transparent as he claims he is, we would not have the sorry spectacle of ministers sheepishly telling little stories. The whole sordid mess would be in public. We would all know what happened and who knew what, when.

Disclosure of what the member saw might even speed up the police investigation. The cops wouldn't have wade through the mounds of bafflegab some people are likely going to throw up to avoid being connected to one of the most embarrassing and serious scandals in our political history.

Osborne sounded a tad uncomfortable answering questions tonight.

Almost like he was wishing he could pick a fight with ExxonMobil.

"To listen to old, archived messages, press 2..."

Voice mail has an odd quirk.

Every now and then, it sends an old message along with a new one.

The message could be days old, or on rare occasions the message seems to be from weeks or months ago.

But it is definitely old and likely is one received and answered long ago.

That was Danny Williams' news release yesterday on ExxonMobil, Hibernia, Hebron and fallow fields.

There was nothing new in it at all, on any level. Even the financial information on Hibernia revenues are essentially what local economist Wade Locke told the offshore oil and gas conference in St. John's about three weeks ago.

So what's up with that?

People in the Newfoundland and Labrador have long noticed that the Williams administration seems to be a serial government. Issues don't get handled in parallel. Rather, the Premier's desire to keep close personal control over major files usually means that things get handled one after the other. There seems to be manic activity on one file, then a period of less action and then another period of manic action on some other file.

Except for the bright, shiny object that current holds the Premier's attention, everything else goes on hold.

Everything.

The Serial Government approach is one of the reasons, for example, that the Premier's business department - originally created as his personal domain - has languished for three years without a full staff compliment or even a clearly defined mission.

In this case, Williams seems to be reacting to comments made during the offshore oil conference three weeks ago. Several presentations at the conference addressed the future of the oil and gas industry in the province in the wake of the collapse of talks about Hebron.

Yesterday's release seemed to be aimed at those comments.

Likely this statement would have been released back then, except for one big interruption: the audit scandal at the House of Assembly. The Premier got wrapped up in micro-managing that one and now that it has been largely put back behind the curtain - at least to the Premier's reckoning - he can now get back to stuff he planned to do a while ago.

Aside from the quirky timing, the Premier's new release raised a bunch of obvious questions.

Like, when did ExxonMobil refuse auditors access to the Hibernia books?

Like, how could it be that the Government of Canada, with an 8.5% share of the project, netted over a billion dollars in 2005 while ExxonMobil - with 33% - netted a little over $900 million?

Like, why did the Premier refer to the federal government's supposed $10 billion cash stake in Hebron yet omit entirely the $10 billion plus that would have flowed to provincial coffers? (not including the construction spending in the province and the subsequent cash flowing from the development of Ben Nevis)

Like, why the Premier only now raised the issue of tax concessions with the federal government after he flatly rejected the idea of concessions when they were first presented during negotiations last year? The feds would have to agree with a sales tax holiday for the construction phase since sales tax - HST - is a joint federal/provincial undertaking.

Like, why the Premier is talking about this stuff publicly when he ought to be talking about it privately if he was seriously interested in restarting the Hebron talks?

Like, why is NOIA committing treason for merely suggesting the Hebron project is important and that the parties should restart negotiations?

Like why the Premier would poor-mouth Hibernia royalties when he knows the project will move to a high royalty regime within the next five years or so, thereby pouring billions into provincial coffers over a longer period of time than previous expected?

Like, why would the Premier raise the issue of an "audit" of Hibernia, when he knows that the companies are required to provide information for the calculation of royalties and have been doing so all along?

or lastly, why the Premier would find it personally insulting when someone supposedly offered the comment that Hibernia wasn't meeting initial expectations, let alone why he would find it insulting at all? Maybe the Exxon accounting nerds made a big miscalculation. Why would Danny take personal ownership of someone else's error? Maybe we need to hear from Dr. Phil and not Navigant on that one.

Of course, as people have started to ask questions of the Premier - let alone hard questions - he evidently doesn't like it one bit. That's why he is now claiming to be focused on getting Ottawa to back fallow field legislation rather than fixate on ExxonMobil's supposed audit problem.

Press 2 again and you'll see that Prime Minister Stephen Harper already explained to Danny that wasn't going to happen.

Four months ago.

How to win friends, Danny-style

So Danny Williams hired Navigant Consulting to "audit" the books for the Hibernia Project.

Here's the type of audit Navigant promotes: forensic accounting, money laundering probes and corporate fraud.

Rather than set these guys loose on ExxonMobil, Danny might let them take a peek at the House of Assembly accounts.

Those are the books that the Premier says we might get to see, eventually, if... As the Premier put it on Wednesday, "Now, if at some point in time, the press require full disclosure, the people of the province want full disclosure, they'd get it."

Ok, then Dan-o. Before you take ExxonMobil and book 'em, consider this the point in time when the news media and the public want full disclosure of the House of Assembly books. Let's give the guys from Navigant a contract to run through those books and make their results public.

If nothing else it would strengthen any case you'd have to get a peek at HMDC's books.

Hey Crawley. Maybe ExxonMobil is hiring.

As The Telegram pointed out earlier today, Premier Danny Williams crapped on the idea of Max Ruelokke as chairman and chief executive officer of the board regulating the offshore oil and gas industry in the province.

Specifically, Williams said: "From my perspective... I want people there who are going to represent the interests of the people of the province. ... I have a problem with the fact that Mr. Ruelokke came out of the oil industry."

The Telly pointed out the obvious contradiction between Williams' attack on Ruelokke and his endorsement of Ed Martin, the former oil industry executive who Williams appointed to run the Hydra corporation.

There's a better question though: If Williams' doubts Max Ruelokke's commitment to the province because he used to work in the oil industry, then what does the Premier think of his own chief of staff?

Brian Crawley used to work for Hibernia Management and Development Corporation.

Nothing like knowing you have the boss' supreme confidence, eh, Brian?

Cloudbusting

According to a story in Thursday's Telegram, the introduction of a new claims form is not linked to the Auditor General's report on alleged financial misappropriation at the legislature.

Bond Papers noted on Wednesday that:

1. The new rules were exactly the same as the old rules, meaning there were no changes at all.

2. The "changes" reported by the Telegram made it plain that previous comments by the premier and others that significant changes were made to the House procedures in 2004 were, to put it mildly, not entirely in conformance with the facts.

Every time Harvey opens his mouth, there are more and more concerns about the handling of the spending scandal.

This past weekend Speaker Hodder told the Telly that in fact the Auditor General has not submitted any reports to him on the scandal.

So what were all those things posted to the Auditor General's website labeled reports and apparently with transmittal letters addressed to Hodder?

Simple answer:

Either the Speaker is senile or doesn't open his mail; or,

There is, in fact, a secret report from the AG to the Premier and/or Hodder that contains considerably more detail than the skimpy slips of paper the Auditor General released to news media.

My money is on the second one. There is too much about government's handling of this matter that seems stage-managed and designed to minimize the amount of information released to the public.

The ultimate hint that the government is not being transparent and accountable here is the anger evident in the Premier's comments to reporters on Wednesday about the issue. The Premier said he was "all about accountability and transparency and when I say that, I really mean it."

That's like being world class. If you have to tell us, then you ain't. The actions count in this instance, not the pious claims.

As for the Premier's concerns that some people will put a slant on information, he can only look to the reality. If all relevent information is in public, then the public can make their own sensible conclusions based on facts.

However, if tons of information are being deliberately withheld, irrespective of the reason, then people are going to form conclusions to fill in the gaps. Those conclusions could be right or they could be wildly wrong. We can't tell without accurate information.

And that's what we don't have right now thanks to Harvey Hodder's smoke machine, among other things.

The Premier should know a simple rule of the law and public relations:

Disclosure busts the clouds of suspicion.

Telly-torial on Ruelokke: Spot On!

The Telegram editorial today focused on the legal ifght being mounted by Max Ruelokke to compel the provincial government to abide by the law and by the process the provincial government accepted that led to Ruelokke's selection as chairman and chief executive office of the board regulating the offshore industry.

Premier Danny Williams' comments on this yesterday were off-the-wall, to say the least.

Rather than re-invent the editorial wheel, Bond Papers is just going to reprint the Telegram editorial. It's available from thetelegram.com, but it won't last there beyond five days.

The Telly-torialist hits the nail on the head. Repeatedly.

Danny’s argument doesn’t hold water
By The Telegram

The Telegram said it right here, on the editorial page, just over a month ago: "The provincial government is about to be faced by a legal action it is likely to lose embarrassingly."

Now, that looks even more likely. The only real question is how much the legal action is going to cost the province.

Wednesday was the second day in a hearing of an application by Max Ruelokke against the province.

Ruelokke was the winner of a job competition to be the next chairman and chief executive officer of the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB). The province refused to confirm that appointment, and has done so for months.

On Wednesday, the judge hearing the case, Judge Raymond Halley, said from the bench that the case was a slam-dunk — that the province took part in the process and then refused to accept the decision of a properly named hiring panel.

Perhaps stung by those statements, Premier Danny Williams apparently decided to add insult to injury, suggesting that Ruelokke couldn’t be counted on to represent the province.

"From my perspective … I want people there who are going to represent the interests of the people of the province. … I have a problem with the fact that Mr. Ruelokke came out of the oil industry," Williams told reporters Wednesday afternoon.

Now, Williams may have gotten caught up in his own rhetoric — after all, the head of the CNLOPB is hired to ensure the administration of the board’s legislation, not to represent the interests of one particular party at the table.

But even if Williams was bang-on in his analysis of the role of the head of the CNLOPB, there's a huge hole in the rest of his argument.

Premier Williams has apparently forgotten that he appointed Ed Martin as the chief executive officer and president of Newfoundland and Labrador Hydro.

At the time, the government said Martin's "strong background in the petroleum sector will provide the leadership and expertise which Hydro requires as it takes on a new role to support the development of our growing energy sector."

And if there ever was someone who Williams might see as coming from the dark side, why wouldn’t it have been Martin?

After all, here’s the thumbnail resume from Martin's appointment announcement: "In his most recent position as manager, Petro-Canada Joint Ventures and New Developments, Mr. Martin was responsible for Petro-Canada’s interests in Hibernia, White Rose, Hebron, New Developments (including natural gas), Acquisitions, Tankers and Transshipment Terminal. Prior to that he spent nine years with the Hibernia Management and Development Company and over 10 years with Mobil Oil in Halifax, Calgary and St. John's."

Williams, after all, was in high dudgeon Wednesday because ExxonMobil — Martin’s former employer — has reneged on an agreement to allow independent auditors to examine the books at the Hibernia project.

Of course, no one is questioning Martin's qualifications or dedication.

The fact is, he was picked following a national search for the most qualified candidate, something the Williams government trumpeted at the time of his appointment.

But wait a minute — so was Ruelokke.

Everything old is new again

According to a great story in today's Telegram, veteran political scribe Rob Antle reports that the House of Assembly has put in place what are described as new rules governing the accounting and administration of expense claims by members of the provincial legislature.

Don't bother checking thetelegram.com; the "news story" in the online edition is a puff piece about the SmartCar.

Go figure.

Anyway...

The new rules are simple: every claim must have receipts and any questions are to be directed to the chief financial officer.

They replace the old rules in which all expense claims had to be supported by receipts and questions were directed to the chief financial officer.

This is no joke.

The new rules are exactly the same as the old rules.

And it took a memorandum from no less than three people and a meeting of political staff in the House of Assembly to ensure everyone understood the new rules...

which were, of course, exactly the same as the old rules.

The only actual change is that from July 10 2006 onward, the entire claim must go to the Comptroller General before a cheque will be cut. This is a step forward, but evidently a determined program could frustrate the Comptroller General's last line of checks in the system.

Heck, even in the system that used to exist, the Comptroller General apparently never noticed that $1.0 million in cheques were cut to four individuals beyond the publicly available limits set by the Internal Economy Commission.

That said, this Telegram story demonstrates that when the province's finance minister, the Speaker and the Auditor General assured everyone in the province that changes already made in 2004 would prevent financial problems, these three august individuals were not telling factual and accurate information.

Nope.

If changes had been made in April 2004, the House of Assembly would not need to introduce changes in mid-July in the wake of a spending scandal.

One of the things that hasn't changed is the ability of members of the House to make donations of any kind and amount they deem fit out of money allocated for the operation of constituency offices and for discharging their duties as parliamentarians.

Apparently, there is also no requirement that the claims for donations or any other spending will be made available to the public as occurs in the provincial government through the Access to Information and Protection of Privacy Act.

In other words, the system remains as fundamentally unaccountable and opaque to the voting public as it has ever been.

Change evidently means more of the same.

Lono's odd sense of humour and interesting insights

Check out Offal news.

You'll find two things.

First is this picture, under the title "After the next election...".

Second is a series of articles on the Hebron negotiations. You can also find the complete thing in the latest issue of Atlantic Business Magazine.

Due diligence, Kathy? Try unduly indifferent.

Kathy Dunderdale, currently collecting a paycheque as the minister of natural resources, likes the phrase "due dilligence".

In her former cabinet post, as the almost completely ineffectual minister of innovation, trade and rural development, she used the phrase all the time. A little over a year ago, Dunderdale was desperately trying to explain how her department had signed agreements with an American call-centre company and yet the department seemed completely unaware of a series of serious law suits involving the company.

Dunderdale's excuse at the time was that the department's "due diligence piece" had been completed before the law suits had been filed. Unfortunately a simple use of google would have turned up numerous suits that were filed before the deal was inked and the "due diligence piece" was completed. Former NDP leader Jack Harris called google "due diligence for dummies". All this was covered at the Bond Papers before.

That little episode followed on the heels of at least one other major failure of Dunderdale's department to handle its "due diligence piece" on a Chinese company under embargo from the United States for shipping sensitive weapons technology related to weapons of mass destruction.

All this is just to refresh our memories as we listen to Dunderdale tackle an interview with CBC television's Debbie Cooper on why the provincial government has run to Ottawa to ensure INCO lives up to its contractual commitments to build a smelter/refinery in the province.

The interview is amazing given that Dunderdale never really explains what is going on; but she does manage to say "due diligence" and "due diligence piece" twice in the space of about 30 seconds at the start of the interview.

Simply put, there is no logical reason for the pleadings sent off to prime Minister Stephen Harper. The provincial government has a development agreement with INCO that apparently binds the company to build a conventional smelter/refinery if the hydromet facility originally proposed for Argentia fails. If anyone is going to hold INCO's feet to the fire, to use another horrid cliche, then that would be Premier Danny Williams. Harper's probably scratching his head in bewilderment over the letter.

So are the rest of us... even after duly diligently piecing together whatever it was that Dunderdale said.

For some months now, the provincial government and INCO have been engaged in some sort of dance with INCO wanting to build its hydromet test facility at Long Harbour while the provincial government insisting on having it built at Argentia as originally planned.

INCO has given no indication it won't build a hydromet smelter, although if you read the government news release, you will find just such an implication - "[Premier Williams has] written the Prime Minister to seek his assurance that as the Government of Canada proceeds with its due diligence of takeover and merger arrangements involving Inco, it will ensure the company commits to the use of hydromet technology in Newfoundland and Labrador for its Voisey's Bay project."

The issue seems to be about where the smelter will go.

That's about all we know in the public.

The reason is because while the provincial government likes the phrase "due diligence", no one on The Hill seems to have a clue what it actually means. What Dunderdale appears to mean by saying "due diligence" is that government is looking to achieve a certain result that will be beneficial to the province.

Due diligence is a term popular in business and means simply that a project is thoroughly researched and assessed before it is pursued. It can also mean that all reasonable means are used to secure a good result.

Due diligence carries with it another expectation, namely that shareholders will be thoroughly and properly briefed on a project. This is especially true when the project is risky or when the sharehodlers may take a financial loss if the project fails.

In that respect, "due diligence" is like "accountability" and "transparency". It is also like one of the basic definitions of public relations: we communicate to gain and maintain informed support. That can't exist if there is no information.

It can't exist if there is no action. Due diligence, like transparency and accountability are more than words to be tossed at random during interviews.

Instead of due diligence, it appears that what what we have from Dunderdale and her colleagues is yet another example of government being unduly indifferent to the requirement that they be fully and properly accountable to the public.

Getting off the road to hell

In the spending scandal at the House of Assembly, the frame placed on the issue by the members of the House of Assembly - and by cabinet - has focused on overspending, breaches of the public tendering process and possible criminal activity.

Certainly those issues can be addressed, to some degree, by changes to the House's administrative processes and by the police investigations currently underway.

But comments by deputy premier Tom Rideout and Speaker Harvey Hodder this past week expose an even more significant issue in how the members of the House of Assembly spend public money intended to pay for their office operations. As noted here at the start of this scandal, the frame which elected officials want us to accept simply does not cover all of the problems the scandal entails.

Specifically, both Rideout and Hodder acknowledged that they and other members of the House of Assembly routinely make donations to groups in the community from public funds. We are not speaking of purchasing the odd ticket to a dinner for a church group. Rather we are talking, in some instances of single donations of thousands of dollars or the purchase of advertising "compliments of" this or that member of the legislature.

There are several problems with this.

Firstly, on the face of it, the money for operation of a parliamentary office should not be spent on any purpose other than that intended. It doesn't matter that members of the legislature granted themselves an exemption from the ordinary and accepted practices of government spending and thereby followed the rules.

The rules that allowed such spending were wrong.

Some of the donations apparently took the form of advertising. But the advertising we are speaking of here is not related to parliamentary business. What was intended in 1989, when these operations budgets were created, was the kind of advertising that tells constituents how to contact their member in the legislature. What members have apparently been purchasing as advertising is nothing more than personal promotion for the individual member and that is an entirely inappropriate use of public funds.

We went through this sort of waste in the free-spending years of the Peckford and Rideout administrations in the 1980s. At that time it was only cabinet ministers who had the budgets to allow for that type of waste. What occurred in 1996 was a return to the waste of the past, but in the new form all 48 members of the legislature were given the ability to waste public money on personal promotion.

In the example used by Harvey Hodder, he could easily have purchased a ticket to the school play in his district. That sort of spending is already covered in one way or another as the type of expense a public official will incur as part of his or her official responsibilities. It would also be far less costly than the personal advertising he has purchased untold times out of public money.

It is also useful to look at the alternatives Hodder used. Rather than spend money on a constituency newsletter, Hodder feels it is better to buy advertising for himself.

Note how many members of the legislature maintain constituency websites, for example.¹ These days such a simple device is an inexpensive means of keeping in touch with constituents and informing them of a member's activities as their elected representative. It is exactly what constituency allowances would cover yet one wonders how many legislators opted to fund a little personal promotion - as Speaker Hodder would approve - instead of informing constituents on important issues.

Secondly, spending by members of the legislature under their district budgets is largely secret. While receipts are supposedly collected and kept on file, the only detail disclosed by the Internal Economy Commission (IEC) is the total. Voters - the people to who legislators are responsible have no idea how money is being spent and who is receiving the public cash.

This is the antithesis of accountability and transparency, despite the number of times those words have been tossed about over the past three weeks or in 2000 to justify changes to the IEC Act. We simply do not know what groups are being favoured, as at one observer has described the activity, nor do we know if the individuals involved are or have been political supporters of the individual legislator involved.

This leads to the third issue, namely that this money has been or could be used as a form of vote buying or other political corruption. This does not mean that members have actually been up to no good; rather there is an apprehension - a reasonable suspicion - that such behaviour could be taking place.

The image of the self-interested and corrupt politician is corrosive in our political system. Yet while Speaker Hodder and some other members of the lesiglature seem worried - lately - that their reputations are being tarnished, they have done nothing at all to dispell the concerns. Rather, Speaker Hodder is encouraging members to withhold details of the spending, claiming legal advice that these records may become part of the current police investigations.

In this instance, there is no meaningful way in which the disclosure of what we are assured are legitimate expenditures could compromise a police investigation into wrongdoing. What Hodder and others have been doing may be inappropriate, but it isn't likely to land them in jail. Instead, disclosure of members' spending details - even at this late stage - would help to persuade sceptical voters that Mr. Hodder and his colleagues are indeed spending publicly money appropriately. One wonders why such an obvious point can be so easily over-ruled by a lawyer's standard advice.

The fourth problem with this spending comes from the explanations being offered by Speaker Hodder, among others. Put bluntly, it doesn't matter at all that, in the instances we know of, recipients of the money are doing good work in the community.

Good works do not preclude the possibility that the gifts from Mr. Hodder and others carry with them or may be perceived as carrying with them some conditions that are less than desireable. No matter what the intention, Mr. Hodder and others have created a climate in which voters are compromised by receiving public money inappropriately.

If these programs are worthy of public financial support, then there ought to be specific votes in the government's own budget through the appropriate department. In this way, all such groups in the province would have equal and fair opportunity to receive public financial support. Any public spending ought to be done in as open, fair and equitable a way as possible. It must be devoid of even the appearance of impropriety. Sadly this not what has been occuring.

What has opened up in recent weeks is clear evidence that the rhetoric favoured by our province's politicians is a far cry from their actions. Rather than being genuinely accountable, open and transparent in spending of public money, members of the legislature have been secretive.

Only such information as members wish to disclose is actually made public and even that - as in the IEC reports such little information as to be all but meaningless. That is, they would be meaningless even if, as the Auditor General recently alleged, the House accounts were falsified in at least four cases. Our politicians give us only the information they want us to have. Genuine accountability would give us the information we deserve.

Money has allegedly been misappropriated, but as more information comes forward, we find that misspending goes beyond just overpayments to individual members. We have found that members are spending scarce public money on personal promotion. By their own admission, members are handing out donations to community groups using money that was never intended to be spent on anything other than the operations of parliamentary offices.

If there was ever a doubt about the need for a far-reaching public inquiry, then both Harvey Hodder and deputy premier Tom Rideout have given us fine and ample reasons to probe further into how members of the legislature have been handling public money.

A public inquiry is the only way we can get off the road to hell that has been paved, if Hodder and others are to be believed, with the good intention of helping fill children's bellies before starting school each day.

---------------------------------

¹ An alert reader tells me there are three.

Provincial legislature salaries and benefits

It will be interesting to see if The Independent can actually piece together and describe accurately the salaries, allowances and other benefits for members of the House of Assembly in the edition this weekend.

The House of Assembly scandal is a story a newspaper like The Independent was designed to tackle. Much of the interesting detail takes digging and leg-work such that it doesn't matter if the competition is a daily outlet. There's plenty for everyone.

Remember the comment made here about the Indy being a guilty sin? Well, this is the scandal for the purpose. As much as people like Harvey Hodder can bitch about the story, the Indy could be the paper everyone turns to on the weekend to find more detail on a huge public issue.

Whether that happens past this weekend depends on two things:

First, the Indy has to get this week's story dead-accurate factually. Linking the current allowance system with the one that existed before 1996, for example, would be a fundamental cock-up that may fit some people's perceptions. It just isn't accurate. Anyone who mentions the Morgan Commission report from 1989 will have to tell us what that was meant to accomplish and how the system worked before 1989. Understanding the back-story helps understand how the current mess came to be.

Second, the Indy has to do the basic research that leads it to the other facets of this story beyond what is convenient and easy. For example, it isn't good enough to tell us what the local indemnity and allowances are by themselves and in comparison to other jurisdictions.

Nope.

The Indy has to get into issues like what allowances can be spent on here and everywhere else. They will likely run into some roadblocks from people who will be uncomfortable having their spending habits held up to scrutiny, but hey: that's accountability.

So while you wait for the Indy to appear on Saturday evening, take a look at the summaries compiled by the Saskatchewan legislature as part of its review of members' salaries. They call it the indemnity - meaning salaries.

District budgets are something else and there isn't any online information on those amounts for each province. One Alberta member of the legislative assembly reported her constituency expenditure at around $87, 000. Note that it includes salaries of employees - something not included in House of Assembly district budgets.

One line item not listed is donations to charitable or non-charitable groups in her riding. In fact, there doesn't seem to be any place in Canada where elected officials can spend public money in such a fashion.

Yes but what about responsible?

Harvey Hodder carried on his act as the Scarlet Pumpernickel crusading in defence of members of the House of Assembly on Thursday.

He did an interview with the CBC Radio St. John's Morning Show about the brewing controversy between the Scarlet Pumpernickel and his nemesis Ryan Cleary of the Indy over the Indy's publication last week of accurate information inaccurately presented. Harvey took offense because it appeared - according to some - that most members of the House were overspending their allowances.

Anyway, in the course of said interview with Jeff Gilhooley, Hodder blathered and flopped around trying to explain the allowances members get.

Gilhooley asked him a simple question: is it right that members use public money to make donations to charitable or non-charitable groups?

Harvey clearly had not been briefed or skipped that part of the Official Briefing Note from the Ministry of Truth - otherwise known as The Tenth. He flopped even more than on the stuff he thought he knew. His answer was something to the effect that the rules said it was okay and besides I give my donations to educational and youth groups.

At no point did he explain why it would be okay for Harvey Hodder - Speaker, not Pumpernickel - to give public money to a group and collect a personal tax receipt for it, for example. He never tried to justify the rules he just said he followed them. The rules were apparently handed down on tablets from a mountain somewhere or otherwise appeared magically from some authority that cannot be identified or questioned.

(By the way, you'll notice a few things in the answers MHAs past and present have been giving on this scandal:

1. I wasn't responsible; it was someone else. I don't recall who it was exactly but I do know it was someone else. The Sullivan variation is: I merely represented the will of caucus.

2. I don't recall. Perhaps the most common answer, especially offered by members of the group responsible for overseeing House operations. This is usually followed quickly by, but I do remember I was not there for that meeting. If the records show I was there, I don't recall that coming up for a vote and I voted against it. This was Tom Rideout's answer to reporters one day; other's have uttered similar lines.

3. I only followed the rules. This one is a favourite since it never explains what the rules were, who set them - the MHAs themselves - or attempts to justify them. It's the local equivalent of "I vuss only folloving ooorders".)

I digress.

At least Hodder finished with a flourish that was vaguely reminiscent of the Ming's Bight amateur dramatic society production of A Few Good Men featuring the late Don Knotts in the role of Colonel Nathan Jessep.

"We are not afraid of the truth" sputtered Hodder.

Uh huh.

But if I want to review allowance claims of members to see how public money is being spent, will Harvey show them to me as he promised he would during the interview?

Don't hold your breath. Under the Access to Information Act, the House is exempt from any disclosure. Now of course, the MHAs can decide what records to release - if they want to. Something tells me though, that we'll be hearing a lot of one of the stock House answers when the request gets turned down:

"I am only following the rules."

And then MHAs will sputter on about how unfair it is that people distrust politicians and that politicians are getting smeared. They need only look in the mirror to understand why the public is so intensely cynical of people who make the rules and talk about accountability and then deny anything and everything all the time, as convenient.

Accountability is not without responsibility and that's the word our elected members seem to forget.

Williams boosts size of cabinet in wake of scandal

Updated: 15:30 hrs 05 Jul 06

Danny Williams increased the size of his cabinet today in the wake of a growing scandal over spending within the House of Assembly.

Kevin O'Brien, a pharmacist from Gander, takes over the Department of Business. Known at Bond papers as the Department of Danny this was supposed to be the centre of major new policy initiatives to develop the economy. Instead it turned out to be a backwater. Reputedly, the deputy minister of the department had great difficulty getting in to see the minister in a timely way. until this morning, Danny was the Minister of Business.

Kathy Dunderdale replaces Ed Byrne as Minister of Natural Resources. Byrne is under investigation for alleged overpayments on his House allowances. Dunderdale's appointment increases the Premier's control over the direction of oil and gas policy in the province.

Replacing Dunderdale at Innovation, Trade and Rural Development will be Trevor Taylor.

Taking over Taylor's old job at Works and Transportation is Lake Melville MHA John Hickey.

St. John's South MHA Shawn Skinner is as parliamentary secretary to the Premier while Charlene Johnson holds the job of parliamentary assistant to the Minister of Natural Resources.

That brings to 20 the number of government caucus members holding cabinet or parliamentary secretary/assistant portfolios. Of that number 15 are in cabinet, including Williams.

Roger Grimes' last cabinet numbered 19 including the Premier.

Who's little friend are you?

Paul Oram, first elected to the legislature in 2003, has one of the gold rings everyone is wondering about.

Paul called one of the local call-in shows today to explain how he came to have one of the golden circles.

Turns out that he received the ring about a year ago from "a friend". Paul wouldn't reveal who the friend was, although he was quick to deny that he received the ring from the legislature's former financial operations director.

According to Oram, once he found out there was a problem with the rings, he returned it to the Speaker's Office.

Hmmm. This is the same Speaker's Office (right next to the Clerk's Office) where the Auditor General couldn't find rings, pins and fridge magnets.

The story gets curiouser and curiouser.

Any bets that one of his "friends" calls Paul and suggests he stay off the Open line shows?

The process isn't fine, Mr. Noseworthy

Auditor General John Noseworthy said on Tuesday that the process he followed in auditing the House of Assembly was fine and didn't need any changes.

Here are just a few of the problems with the supposedly fine process:

1. An interpretation of what constitutes working papers of the Auditor General that prevents those being investigated from seeing the very documents they are being asked to explain. It's a basic principle of justice that an accused individual can confront the individuals and evidence being used against him. Self-serving interpretations don't make for a bullet-proof audit. The fact that this can even be raised as an issue potentially compromises any subsequent investigation.

2. Reports that provide incomplete or inaccurate information. Forget the quirky way of reporting the fiscal year. AG Noseworthy's reports do not provide sufficient information on the process followed or the information collected to support conclusions of anything beyond overspending. Part of the confusion dogging anyone trying to pick sense of the whole mess - The Independent included - is that no one has provided a simple explanation of what was supposed to happen and what actually happened. The AG hasn't told us what led to the audit in the first place, how far back in time he and his team went. heck we don't even know if he was asked to look at specific issues by the Internal Economy Commission or just conducted a routine audit and uncovered problems.

Take away the mandatory blather in the Ag reports and you wind up with four reports on members of the House of Assembly that in total wouldn't cover a single 8.5 X 11 sheet. There is a great deal of background detail missing from the reports. For example, one of the nice things to know would be how much each member was entitled to claim - in total - and what the discrepancy was between that number and the amounts actually paid. Part of the problem with the Indy's reporting this past weekend was confusion about the most basic of information - stuff the AG should have already explained to everyone in plain English.

As for AG Noseworthy's claim he has evidence of misspending dating back to 1989, we are all waiting to see any evidence to back that one.

3. Pull the other one. According to the Auditor General, Wally Anderson and Randy Collins made no claims for travel for three of the four years he reviewed. When they did submit claims it was for a tiny fraction of travel spending by St. John's-area MHA Ed Byrne.

If AG Noseworthy, is right then there are much bigger problems at the House of Assembly than mere misappropriation of funds by some members.

Something tells me the AG's work is incomplete; however since he didn't described for us the work he did complete in reaching his conclusions, we just don't know. Taken together with all the other issues in this audit, AG Noseworthy's word just isn't good enough.

4. "Do I look like Gil Grissom?" After standing on his hind legs and insisting that having claim forms with a signature was evidence that the individual under review actually signed the forms, AG Noseworthy admitted on Tuesday that police investigation will have to determine if documents he attributed to four members of the House were forged.

If the AG process was adequate, he would have already ruled out forgery as a possibility before alerting police to a problem. AG Noseworthy would have described the process of submitting claims, who had opportunity to forge claims and how he eliminated the possibility of fraud before accusing anyone of criminal activity.

As it stands, we now have claims made by the Auditor General that don't even meet the sniff test of thoroughness.

5. I can't tell you if the items were even delivered. Does that mean you looked and couldn't find them or never looked in the first place? Given that rings and other items mentioned in the $2.8 million questionable spending report started turning up less than an hour after the report was made public, it sure looks like the audit team didn't do their job very well.

6. All is well... sort of. When the story broke three weeks ago, AG Noseworthy was everywhere insisting that changes made at the House of Assembly in 2004 "fixed" the problems. The Byrne report appeared to confirm that since the alleged overspending stopped at the end of Fiscal Year 2003.

Two weeks later, AG Noseworthy details alleged overspending that carried on two years after the changes.

Those changes included not only hiring two more financial staff in the House of Assembly but, apparently, requiring that claims had to be submitted to the Comptroller General with all supporting documents in order for payment to be made.

$200,000 later, it turns out the controls were less than adequate and that all that was well two weeks ago is apparently not so well after all.

7. Maybe I should end this here. Perhaps the finest proof that AG Noseworthy's approach to this matter was inadequate is the unseemly haste with which he ended Tuesday's news conference once reporters started asking tough questions.

Much of what they sought was the same information Noseworthy had volunteered freely two weeks ago. However, at some point over the weekend, someone advised Noseworthy to do the smart thing and restrict his comments to the facts he was making public.

As it is, his free-wheeling accusations have tarnished reputations of all current and former members of the House of Assembly, possibly opened up legal defenses for those he accused and generally created an environment in which factual information is in short supply and rumour and innuendo are running rampant.

If this is a perfectly fine process, we should all hate to see one that was shagged up.

The Lard of the Rings

For those still seeking a good name for the House of Assembly scandal, consider this one:

The Lard of the Rings.

The $69, 000-worth of gold rings seem to symbolize the $4.0 million in alleged misappropriations and inappropriate spending and that spending, in and of itself appears to be lard or fat.

We can shorten it to Ring-gate from those who like their scandals to be named derivatively.

The inscription on the One Ring from Tolkien even seems oddly appropriate:

One Ring to rule them all.
One Ring to find them.
One Ring to bring them all,
and in the darkness bind them.

The Scarlet Pumpernickel

The seek him here.

They seek him there.

But Harvey Hodder - otherwise known as the Speaker of the House of Assembly - only seems to turn up at the oddest of moments during the scandal in his precincts over alleged misappropriation of over $4.0 million of public money.

Hodder stayed silent when the story broke and did absolutely nothing in response to alleged misappropriations that occured right under his nose. Instead, Hodder surrendered his authority as Speaker of the legislature to the Premier and cabinet.

Hodder popped up briefly last week to criticize some of his fellow politicians for their taste in jewelry.

"I don't know why anybody would want to wear these gaudy looking rings, but that's their business," Hodder said.

He brandished one of the rings, supposedly turned in by a House staff member.

Then the lawyer for the former financial director of the legislature told reporters that Hodder had been visiting the fellow in hospital attempting to elicit a confession. Mr. Speaker was acting oddly if not downright suspiciously, especially given that in another interview with CBC, Mr. Speaker Hodder fingered his own former employee as the guy at the centre of the scandal. Hodder conveniently forgot to point out that he had responsibility for supervising the House and its operations.

Surprisingly, Hodder stopped doing interviews after those two self-inflicted wounds.

That is, he stopped speaking to news media until Tuesday, two days after a story appeared in The Independent that inaccurately conveyed some information about members of the legislature and their allowances and spending. Indignant Mr. Speaker demanded unsold copies be withdrawn and a new front page be printed with a full retraction.

Tough talk from a weak Speaker who has demonstrated repeatedly these past two years he is nothing short of incompetent in discharging the considerable responsibilities he holds. Too bad Hodder didn't discover his backbone a few weeks ago when this mess first appeared.

As if that feeble display were not enough, Mr. Speaker's condescending tone about rings - at a time when only Liberals had fessed up to owning them - was shown to be ill-timed if not downright disingenuous.

It seems that seven of his colleagues from the Progressive Conservative caucus have gold rings. That means Harvey likely knew all about the rings some time ago; the House is just too small a place to hide such "gaudy" adornments from notice. But here's the bit that makes the story even more lame for the Speaker: one of the confessed ring-holders is none other than Roger Fitzgerald, deputy speaker of the House and a member of the House's Internal Economy Commission.

Harvey Hodder might just want to resign now and save us all the further waste of time and himself from further embarrassment. His little effort to right wrongs at The Independent couldn't have been more inappropriate or misplaced than if it was done by Daffy himself in the classic 1950s Looney Tunes adventure.

AG reports leave serious unanswered questions

Auditor General John Noseworthy finished his work on the House of Assembly scandal by filing three reports on two current and one former member of the House who allegedly received overpayments on constituency accounts amounting to more than $766, 000 for Fiscal Years 2002, 2003, 2004 and 2005.¹

However, the the reports on Wally Anderson, Ed Byrne, Randy Collins and Jim Walsh raise more questions than they answer.

For example, constituency allowances are supposed to include a travel component. This is the explanation for members from remote districts - such as Torngat Mountains - having an allowance of approximately $84,000 per year while members from urban districts have much lower allowances.

The Auditor General reports that Ed Byrne, who represents a constituency in metropolitan St. John's billed five times as much for travel as did Randy Collins, representing western Labrador and Wally Anderson, representing northern Labrador, combined over the whole reported period.

In fact, AG Noseworthy reports Byrne's travel claim for one year - at about $5, 000 - totals as much or more than Anderson's and Collins' combined claims for one year. For three of the four years, the Auditor General reports no House of Assembly travel portion for either Collins or Anderson.

Looking more closely, Byrne's claim for FY 2004 includes a travel allowance of $16,000, while Anderson reportedly claimed no more than 25% of that amount in FY 2005. AG Noseworthy reports no travel for Anderson in FY 2004.

On the face of it, this is extremely unusual. Either Anderson and Collins took minimal travel to their districts in the four fiscal years under review or AG Noseworthy's audit contains serious flaws that might ultimately undermine the credibility of the audits themselves.

Further, the Auditor General has indicated to news media that the requirement to submit original claims with supporting documentation was reinstated by the Internal Economy Commission in April 2004 (the start of FY 2004). However, the reports released Tuesday on Collins and Anderson show these two members were allegedly able to bill over $200,000 more than their report allowance limits in the years after the administrative changes the Auditor general and others claim corrected the problems.

Simply put, the supposed changes to the administrative rules should have prevented $200,000 in alleged overpayments from having occured in the first place. in Collins'' and Anderson's cases, these amounts are almost half the total they are alleged to have received in overpayments.

The Auditor General's latest reports bring the total alleged overpayments to four current and former members to more than $1.0 million. Overpayments for Wally Anderson and Randy Collins are alleged to have been made for the period FY 2002 to FY 2005. Overpayments for Ed Byrne and Jim Walsh are alleged to have occured in FY 2002 and FY 2003. According to the Auditor General, almost 25% of the total overpayments took place after the problems were supposedly fixed. In one of his first comments on the scandal - when Bryne's report was released - AG Noseworthy said on several occasions that changes made by the IEC to House administrative practices in 2004 would prevent overpayments from occurring again.

According to some media reports, the Auditor General shied away from making the bold statements he did earlier on the likelihood of collusion - a criminal offense - as being at the heart of the overpayments.

Criticism of the Auditor General has been mounting since he filed his first report three weeks ago. Some critics have focused on the accusations leveled by the Auditor General - such as collusion - which have not been supported by the skimpy reports made public.

Given the contradictions in the Auditor General's four reports, his work may be done but he has left more unanswered questions in his wake both about the alleged offenses and about the operation of the Auditor General's office.


_____________________________

¹ The Auditor general consistently reports fiscal years in a way that is at odds with the way the provincial government notes its fiscal years. For example, for the Fiscal year that begins in April 2002 and ends in March 2003, the provincial government refers to this as Fiscal Year 2002. The Auditor General refers to this as FY 2003.

For the sake of consistency, Bond Papers will use the more common Fiscal Year references.

World of the Psychic Auditor General

Consider this situation.

You are meeting with a provincial Auditor General who is interviewing you about some expense claims from three years ago. The AG has already stated publicly he considers the claims are dodgy, although to this point he hasn't named you publicly.

"Explain these, please," pronounces the AG, holding several forms in from of him.

"May I have a look at them?" you ask. "It's been a few years and I'd like to refresh my memory."

"Hooooo no," says AG. "I am not permitted to show you any documents." He clutches them tightly to his chest.

"That's the law. Now I think you fiddled these claims so please explain this one for example." He holds up a sheet plucked from the middle of the pile. It is indistinguishable from a gajillion other such forms.

"Is this an audit or a test of my freakin' psychic ability?"

"Come, come now. Your attitude isn't helping."
______________________

Sounds asinine but it isn't much beyond what several members of the House of Assembly have apparently faced in the audits related to the House financial fiasco.

According to Auditor General John Noseworthy, he is not permitted to show people being interviewed any papers related to his investigation. He hasn't referred publicly to any specific section of the Auditor General Act, but based on his comments to the Sunday Telegram we can guess it is section 21.

That provides the AG and his staff must hold their work confidential.

Makes sense. God knows you wouldn't want the Auditor General in front of the news media waving around forms and making all sorts of accusations before he has finished his work.

Oh.

Yeah.

Right.

But here's what s. 21 says:

The auditor general and each person employed in the office or appointed or engaged to assist the auditor general for a limited period of time or in respect of a particular matter under section 28 shall keep confidential all matters that come to his or her knowledge in the course of his or her employment or duties under this Act and shall not communicate those matters to another person, except as may be required in connection with the discharge of his or her responsibilities under this Act or under the Criminal Code. [s. 28 allows for the hiring of temporary staff support.]

Now Auditor General John Noseworthy has some clever lawyers and Noseworthy himself has conducted his fair share of audits. Presumably both the AG and the lawyers can read plain English. This section of the AG Act makes it pretty obvious that an AG is permitted to disclose certain documents as required during the conduct of an audit or investigation. It's a fundamental element of our system that people should have a right to confront any individuals or other evidence being used to accuse them.

Even if there was no suggestion of anyone doing anything wrong, it would simply make common sense to allow an individual being interviewed to have a chance to review certain documents in order to refresh his or her memory. After all, it is an audit, intended to get at the facts of what occured.

It certainly appears AG Noseworthy has either applied a particularly stupid or a particularly self-serving interpretation of his legal powers in this case. Perhaps he should turn to the shrine in his office every once in a while and ask "What would Sheila do?"

She'd probably hand the guy being audited the bloody form, if for no other reason than to ensure the whole thing doesn't get tossed because of questionable audit practices and funky interpretations of plain English.

AG Noseworthy gives us yet another reason for a public inquiry.

A counterpoint to trash talk

Check out the Imperial War Museum site dedicated to the Somme.

This is a stunning site with solid introductory information and a balanced, well-informed perspective.

It stands in stark contrast to some of the nonsense spouted by our man in Ottawa, for example, on a documentary aired last week by CBC Radio.

Question of the week?

vocm.com has left its public inquiry question up now for about three days.

That's long enough for some people who didn't vote to climb on board and lower the percentages from 75/18 in favour an inquiry - after the end of Day 1 - to now when all three categories, yes, no and not sure are about even.

Since when is Question of the Day supposed to be "Question-of-As-Long- as-it- takes"?

The pressure mounts

Public support is growing for a public inquiry into the operations of the House of Assembly.

At vocm.com the Question of the Day results show 75% of respondents favouring a public inquiry with only 18% opposed. It isn't scientific but it does indicate there is a public mood in favour of a more far-reaching inquiry than the Williams administration has suggested lately.

As The Current magazine online points out, Simon Lono has started an online petition.

Deputy Premier Tom Rideout says the time is not right yet to decide on an inquiry. The time has been right, Tom, since Day One. let's see what the Premier does hwne he gets back from France and receives publicly the report for Auditor General John Noseworthy that he has had privately for over a week.

Commemoration Day, 2006

Some time ago, I planted Forget-me-nots on my front lawn. Each June, they sprout and spread wildly. They get cut when the lawn is mowed but they always come back.

The pretty blue flowers are small but they never fail to catch the eye across the deep green of the lawn. In a little ravine just a few hundred metres from my house, the little flowers grow wild along a small stretch of river that flows, ultimately past Bowering Park and on to St. John's Harbour.

It's easy to understand why Forget-me-nots were chosen as the flower for Commemoration Day. Aside from their name, they are everywhere by July 1st, the anniversary of the opening day of the Somme offensive in 1916 when the Newfoundland Regiment was all but wiped out in their assault on German trenches near Beaumont Hamel.

On July 1st, 1916, the Somme valley was not the muddy pile of trenches so familiar as an image of the Great War. Rather, the lush farmland was largely untouched by heavy shelling even after the massive preparatory bombardment that lasted the entire week before the infantry assault on the fateful Saturday morning. Green grass was everywhere.

This year marks the 90th anniversary of the tragedy in which the 1st Battalion, the Newfoundland Regiment suffered the highest casualties of any battalion in the British Army at the time. Virtually every man who stepped over the parapet and advanced toward the German lines was killed or wounded that morning. Only the 10% cadre left out of battle and the battalion headquarters escaped the slaughter.

The casualties included:

- 14 officers and 219 other ranks killed or died of wounds;
- 12 officers and 374 other ranks wounded; and,
- 91 other ranks missing

Miraculously, some men did manage to escape unscathed. Lieutenant Owen Steele, serving as officer commanding D Company recorded after the battle that 16 men of the company returned to the Newfoundland trenches unwounded. Steele, whose brother was wounded in the assault, was injured by German shelling on 7 July 1916 and died of his wounds.

The last survivors of the battle died more than a decade ago. Abe Mullett, the last of the original recruits, known as the First 500 or the Blue Puttees for the navy coloured material of their original leggings, died in 1993. The last known survivor of the battle, Walter Tobin, passed away in 1995. Ron Dunn, died in 1993 as well, having survived the battle in 1916. He was wounded in the stomach and staunched the flow of blood with the field dressings from his pack and clumps of grass torn from the French soil.

Newfoundland's participation in the Great War produced profound changes in the small Dominion. The regiment marked the first national effort that was not divided or organized along sectarian lines. Efforts at home to assure the appointment of officers based on sectarian lines was firmly resisted by serving officers on the grounds that ones religious beliefs were irrelevant in wartime. One was only concerned that an officer or soldier was capable to doing his job.

Commemoration Day was established by an act of the House of Assembly in 1916 to be held on the Sunday nearest July 1st each year. It was one of the first Great War remembrance days established in the Commonwealth. Although the statute remains in effect, common practice has been to hold a remembrance parade and wreath-laying on the morning of July 1st each year with the remainder of the day devoted to Canada Day.

In the 1920s, memorials were erected by the Newfoundland government at five sites in France and Belgium. Each marks a significant moment in the regiment's history during the Great War. At each stands a life-size bronze caribou looking toward the German position. The main Newfoundland national memorial is fittingly located at Beaumont Hamel. A sixth caribou (right) stands in Bowring Park, in the west end of St. John's facing across the ocean toward northwest France and Flanders.

The National War Memorial was erected on Water Street in St. John's in 1924.

Most significantly though, survivors of the war and their fellow Newfoundlanders and Labradorians chose to establish as a permanent memorial to the fallen a new non-sectarian college that later became Memorial University.

The Somme offensive and the British Army's performance in the Great War continue to be a source of controversy. More recent scholarship has taken very different view than the one commonplace in the anti-war climate of the 1960s. The Newfoundland Regiment's experience in the Great War has largely escaped examination by Canadian historians. Comparing the experience of the Newfoundlanders and Canadians might serve to temper some of the interpretations that have been applied t Canada's war effort at the time.

Historians from Newfoundland and Labrador have given the history of the Dominion's war effort some attention, but by no means to the depth it deserves. Popular attention continues to focus on Beaumont Hamel.

Some continue to abuse the events of 1916 for their own purposes and ascribe to the war an effect on Newfoundland and Labrador it did not have. The people of Newfoundland and Labrador did not pay for their sacrifice with a loss of democracy. This is merely a dolled up version of a convenient townie myth that has existed largely unchallenged since the 1920s.

Such an interpretation, which sadly will be broadcast across Canada this weekend as if it were credible, makes a mockery of what did occur.

Regardless, the Forget-me-nots will bloom again next year at this time, as they have for decades. It is hard to forget what occurred almost a century ago, even if some find it inconvenient to remember.