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.
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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.
04 July 2006
03 July 2006
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:
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.
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.
02 July 2006
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.
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"?
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"?
01 July 2006
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.
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.
30 June 2006
J'accuse?
Not surprisingly a lawyer representing one of the five people named thus far in the House of Assembly spending scandal has taken issue with the way Auditor General John Noseworthy has been conducting his business. Vernon French is the lawyer representing Jim Walsh, a former Liberal member of the House and a former cabinet minister.
Frankly, Noseworthy has given plenty of ammunition with his claims and statements. Bear in mind that nothing has been presented publicly thus far other than evidence that something occurred. One possible explanation of what that something is - criminal activity, for example - has been largely implied by Noseworthy in the absence of corroborating evidence.
Take for example his comment that he couldn't find any evidence that the pins, fridge magnets and rings had been purchased. Amazingly rings started popping up within seconds of the news story hitting the radio and television. The next evening, television news could show coasters and other items covered by the expenditures.
Mr. Noseworthy's comment suggested fraud.
By the next day, any such implication had been severely damaged. It looked like - and may well be that - Mr. Noseworthy and his team simply did not ask for or go looking for the items in question.
In the same way, Noseworthy has called on police to investigate constituency allowances from 1989 to the present. He says that he has indications of misspending before his audit period but gives absolutely no indication of what indications he has.
The year 1989 is a long way from his constituency accounts audit that went back nor further than 2000. On another day, Noseworthy acknowledged that one of the key checks in a good system of checks and balances existed prior to 2000. That system has not been replaced to this day, apparently, despite claims by the current administration that everything at the House of Assembly is now fine. So on what basis is AG Noseworthy basing his claims? Hunches? Apparently so.
Let's be clear though: Noseworthy has uncovered something. It could be criminal activity. It could also be overspending on an expense account, which is not a criminal matter. It could be violation of conflict of interest rules and the Public Tender Act. It is serious but by no means as serious as accusing people of acting in collusion for a criminal purpose.
Let's also be clear that being involved in a matter such as this is heady stuff. It isn't every day that someone has such praise-filled coverage in which one is described as smart and meticulous and is given credit for "bringing down" this one or that one in a manner reminiscent of Eliot Ness. Gaggles of reporters hang on Noseworthy's every word. It would turn any but the most strong head.
However, the conduct of a proper investigation sometimes must take place with very little being said publicly save that an investigation is underway. There are many reasons for doing so, not the least of which is ensuring that any court proceedings cannot be compromised by inappropriate publicity.
It is heady stuff to run about shouting "J'accuse". But if the police investigation does not support the initial claims or if a lawyer can point to an investigation starting from a false premise, we might find ourselves left with a scandal of tremendous proportions and no one held accountable for anything because of someone going bald-headed at it.
Perhaps it would be best if the Auditor General exercised considerably greater restraint in his public comments from here forward. There will be plenty of time for accusations backed by evidence from people whose expertise is the Criminal Code of Canada.
______________________________
French and Walsh met Noseworthy on Tuesday, although French said Noseworthy would not allow him to examine records that he has collected.One of the most obvious ways to mount a defence here is to attack the credibility of the accuser.
"The AG refused to provide copies of the requested information and, in fact, refused to permit me to look at any of the documentation in his possession," French said.
Frankly, Noseworthy has given plenty of ammunition with his claims and statements. Bear in mind that nothing has been presented publicly thus far other than evidence that something occurred. One possible explanation of what that something is - criminal activity, for example - has been largely implied by Noseworthy in the absence of corroborating evidence.
Take for example his comment that he couldn't find any evidence that the pins, fridge magnets and rings had been purchased. Amazingly rings started popping up within seconds of the news story hitting the radio and television. The next evening, television news could show coasters and other items covered by the expenditures.
Mr. Noseworthy's comment suggested fraud.
By the next day, any such implication had been severely damaged. It looked like - and may well be that - Mr. Noseworthy and his team simply did not ask for or go looking for the items in question.
In the same way, Noseworthy has called on police to investigate constituency allowances from 1989 to the present. He says that he has indications of misspending before his audit period but gives absolutely no indication of what indications he has.
The year 1989 is a long way from his constituency accounts audit that went back nor further than 2000. On another day, Noseworthy acknowledged that one of the key checks in a good system of checks and balances existed prior to 2000. That system has not been replaced to this day, apparently, despite claims by the current administration that everything at the House of Assembly is now fine. So on what basis is AG Noseworthy basing his claims? Hunches? Apparently so.
Let's be clear though: Noseworthy has uncovered something. It could be criminal activity. It could also be overspending on an expense account, which is not a criminal matter. It could be violation of conflict of interest rules and the Public Tender Act. It is serious but by no means as serious as accusing people of acting in collusion for a criminal purpose.
Let's also be clear that being involved in a matter such as this is heady stuff. It isn't every day that someone has such praise-filled coverage in which one is described as smart and meticulous and is given credit for "bringing down" this one or that one in a manner reminiscent of Eliot Ness. Gaggles of reporters hang on Noseworthy's every word. It would turn any but the most strong head.
However, the conduct of a proper investigation sometimes must take place with very little being said publicly save that an investigation is underway. There are many reasons for doing so, not the least of which is ensuring that any court proceedings cannot be compromised by inappropriate publicity.
It is heady stuff to run about shouting "J'accuse". But if the police investigation does not support the initial claims or if a lawyer can point to an investigation starting from a false premise, we might find ourselves left with a scandal of tremendous proportions and no one held accountable for anything because of someone going bald-headed at it.
Perhaps it would be best if the Auditor General exercised considerably greater restraint in his public comments from here forward. There will be plenty of time for accusations backed by evidence from people whose expertise is the Criminal Code of Canada.
______________________________
29 June 2006
The case for Mr. Hodder's resignation
Speaker Harvey Hodder claims he was shocked by revelations of the Auditor General.
At this point, the only people who should be genuinely shocked are the people of Newfoundland and Labrador.
They should be shocked by information about the House of Assembly - for which Mr. Hodder is responsible - and about Mr. Hodder's own apparent actions and those of the Internal Economy Commission (IEC) which he chairs.
By Mr. Hodder's admission he had some misgivings about the financial operations of the Assembly when he took the Speaker's Chair in 2004. Apparently, there was sufficient awareness that Bill Murray, the former financial operations director was in a conflict of interest in that his own private company had been doing business with the Assembly.
The Auditor General noted in his most recent report:
For the outset, the key decision that apparently facilitated the entire fiasco has gone unnoticed. At some point around 2000, the IEC allowed the House financial officer to hold the complete control of financial transactions and determined that he did not have to supply documents to the Comptroller General. At no point after 2000, and apparently not until the past few weeks, successive Speakers of the House of Assembly and the IEC did not alter that requirement.
It is the simplest of simple checks. It is the most obvious of the simple checks that would likely have made the entire spending fiasco from occurring in the first place. Yet it was not done. So much for Mr. Hodder's misgivings.
With that in mind, the accusation that Mr. Hodder recently visited the former financial director in hospital should raise further alarms. His likely excuse - that it occured because of a sincere human concern for Mr. Murray's welfare - does not pass the sniff test of credibility. He may well be concerned about Mr. Murray's health; who wouldn't be. In the context of the alleged misappropriations, there simply is no reason why Mr. Hodder ought to be visiting the individual identified as being at the heart of the alleged misappropriations and misspending.
If the full accusation is true - that is, if Mr. Hodder spoke with Mr. Murray about events in the House and either attempted to or was perceived as having tried to elicit a confession from Mr. Murray - then we have cause to be suspicious of Mr. Hodder's actions and his motives. Mr. Hodder may well be innocent of anything at all. He may well be innocent of anything but being asleep at the switch, but his actions in visiting the hospital are grossly inappropriate.
Even if all this were not true, there are other questions about Mr. Hodder's behaviour in recent days. Mr. Hodder held responsibility to receive the Auditor General's report. Together with the IEC, he had the authority and the responsibility to take the actions of calling in the police, instituting any other inquires, and, of course, advising the public fully of what was taking place.
He has done nothing of the sort. Instead, Mr. Hodder has surrendered the legislature to cabinet and his own office to the first minister.
All he has done in this whole fiasco is appear with several news media a week after the story broke and express his shock and amazement at events. Mr. Hodder has taken no responsibility to clean up the mess and instead points his elbows toward the external auditors for failing to find anything wrong in the first place.
All this points to two straightforward things which must occur.
First, Mr. Hodder must step aside, even if only until the investigations are complete.
Second, and most important, the cabinet must appoint a public inquiry without further delay. This is the only way the public can be assured that all relevant information will be disclosed, those responsible identified and held accountable and the innocent exonerated.
At this juncture, nothing less will do.
At this point, the only people who should be genuinely shocked are the people of Newfoundland and Labrador.
They should be shocked by information about the House of Assembly - for which Mr. Hodder is responsible - and about Mr. Hodder's own apparent actions and those of the Internal Economy Commission (IEC) which he chairs.
By Mr. Hodder's admission he had some misgivings about the financial operations of the Assembly when he took the Speaker's Chair in 2004. Apparently, there was sufficient awareness that Bill Murray, the former financial operations director was in a conflict of interest in that his own private company had been doing business with the Assembly.
The Auditor General noted in his most recent report:
Furthermore, the Clerk of the House of Assembly indicated that, after writing all staff including the former Director in February 2004 advising that they had a responsibility to disclose any conflict of interest activity, he received written notification from the former Director that business activity between Unique Keepsakes and the House of Assembly would cease. However, I found that the former Director appeared to circumvent this commitment by having Unique Keepsakes' transactions go from direct payments recorded in Government's financial management system (FMS), to transactions directly with the various Members of the House of Assembly which were then claimed through their constituency allowance and therefore undetectable through FMS.This last statement - "and therefore undetectable through FMS" - refers to the provincial government's financial management system. This is the computer-based administration system which is intended to verify claims are legitimate and appropriate and then to generate payment. In order for any other payment to be generated for any government department, completed claims, for example, with original supporting documents must be sent to the Comptroller General. It is the responsibility of the Comptroller General to assess the claim and provide the final sign-off. Without original documentation, indeed without information apparently beyond the name of the payee and the amount to be disbursed, there would be precious little the Comptroller General could do to verify the authenticity of payment demands.
For the outset, the key decision that apparently facilitated the entire fiasco has gone unnoticed. At some point around 2000, the IEC allowed the House financial officer to hold the complete control of financial transactions and determined that he did not have to supply documents to the Comptroller General. At no point after 2000, and apparently not until the past few weeks, successive Speakers of the House of Assembly and the IEC did not alter that requirement.
It is the simplest of simple checks. It is the most obvious of the simple checks that would likely have made the entire spending fiasco from occurring in the first place. Yet it was not done. So much for Mr. Hodder's misgivings.
With that in mind, the accusation that Mr. Hodder recently visited the former financial director in hospital should raise further alarms. His likely excuse - that it occured because of a sincere human concern for Mr. Murray's welfare - does not pass the sniff test of credibility. He may well be concerned about Mr. Murray's health; who wouldn't be. In the context of the alleged misappropriations, there simply is no reason why Mr. Hodder ought to be visiting the individual identified as being at the heart of the alleged misappropriations and misspending.
If the full accusation is true - that is, if Mr. Hodder spoke with Mr. Murray about events in the House and either attempted to or was perceived as having tried to elicit a confession from Mr. Murray - then we have cause to be suspicious of Mr. Hodder's actions and his motives. Mr. Hodder may well be innocent of anything at all. He may well be innocent of anything but being asleep at the switch, but his actions in visiting the hospital are grossly inappropriate.
Even if all this were not true, there are other questions about Mr. Hodder's behaviour in recent days. Mr. Hodder held responsibility to receive the Auditor General's report. Together with the IEC, he had the authority and the responsibility to take the actions of calling in the police, instituting any other inquires, and, of course, advising the public fully of what was taking place.
He has done nothing of the sort. Instead, Mr. Hodder has surrendered the legislature to cabinet and his own office to the first minister.
All he has done in this whole fiasco is appear with several news media a week after the story broke and express his shock and amazement at events. Mr. Hodder has taken no responsibility to clean up the mess and instead points his elbows toward the external auditors for failing to find anything wrong in the first place.
All this points to two straightforward things which must occur.
First, Mr. Hodder must step aside, even if only until the investigations are complete.
Second, and most important, the cabinet must appoint a public inquiry without further delay. This is the only way the public can be assured that all relevant information will be disclosed, those responsible identified and held accountable and the innocent exonerated.
At this juncture, nothing less will do.
28 June 2006
Nervous much, Harvey?
According to CBC television's Here & Now supper-hour news show, Bill Murray - the former financial operations director at the House of Assembly - has local lawyer Averrill (A.J.) Baker representing him.
So far, everyone who has been to see the Auditor General has lawyered-up with the best and/or best-known criminal barristers in town. By my count, there are only a couple left so people better hope they fall under John Noseworthy's scrutiny soon. Otherwise it is gonna be hard to find anyone other than a slip and fall specialist to help deal with the criminal probe that grows by the day.
So finding that Murray had a lawyer wasn't a surprise. It was what Baker said: Speaker of the House of Assembly Harvey Hodder - Murray's boss and the guy responsible for the House's administrative procedures - paid Murray a visit in the hospital where Murray is apparently undergoing treatment.
Baker claims Hodder tried to elicit a confession from Murray. As Baker noted, anything Murray may have said wouldn't be admissible in court.
That's not really the point.
Hodder shouldn't be anywhere within a hundred miles of Murray. If Baker's accusation is false, the little visit just looks odd.
But if Baker is correct, then Harvey looks like a really nervous guy and the visit could be called suspicious. It's the kind of thing the fellows down at Fort Townshend will be looking for as they bring the whole sordid mess at the House under their scrutiny.
Just remember, Harvey and everyone else. The Constab these days are not the guys who used to get a chuckle rousting teenagers making out in the backseat of Dad's Chev.
Nope, these days the men and women at Fort Townsend are among the best cops around. And if that wasn't good enough they can always bring in Mounties or whoever else they need to find.
And even if you didn't do anything wrong, Harvey, you might wind up looking for a barrister of your own... just because you acted very suspiciously.
So far, everyone who has been to see the Auditor General has lawyered-up with the best and/or best-known criminal barristers in town. By my count, there are only a couple left so people better hope they fall under John Noseworthy's scrutiny soon. Otherwise it is gonna be hard to find anyone other than a slip and fall specialist to help deal with the criminal probe that grows by the day.
So finding that Murray had a lawyer wasn't a surprise. It was what Baker said: Speaker of the House of Assembly Harvey Hodder - Murray's boss and the guy responsible for the House's administrative procedures - paid Murray a visit in the hospital where Murray is apparently undergoing treatment.
Baker claims Hodder tried to elicit a confession from Murray. As Baker noted, anything Murray may have said wouldn't be admissible in court.
That's not really the point.
Hodder shouldn't be anywhere within a hundred miles of Murray. If Baker's accusation is false, the little visit just looks odd.
But if Baker is correct, then Harvey looks like a really nervous guy and the visit could be called suspicious. It's the kind of thing the fellows down at Fort Townshend will be looking for as they bring the whole sordid mess at the House under their scrutiny.
Just remember, Harvey and everyone else. The Constab these days are not the guys who used to get a chuckle rousting teenagers making out in the backseat of Dad's Chev.
Nope, these days the men and women at Fort Townsend are among the best cops around. And if that wasn't good enough they can always bring in Mounties or whoever else they need to find.
And even if you didn't do anything wrong, Harvey, you might wind up looking for a barrister of your own... just because you acted very suspiciously.
Hodder fits the Premier's frame
Speaker of the House of Assembly Harvey Hodder commented today for the first time on the scandal in his office.
Hodder chairs the Internal Economy Commission.
He says he had concerns about some issues when he took over in 2004. Hodder added he felt the big mistake was barring the Auditor General from the House of Assembly in 2000.
Oddly, Hodder gave no indication of the changes he implemented in 2004. Evidently, whatever changes he implemented weren't enough. Of course, Hodder is now claiming credit for something that last week the Premier claimed credit for doing.
But that really won't get him out of the glare of scrutiny since Hodder is, after all, responsible for overseeing the operations of the House of Assembly.
But I digress.
Overall, though Hodder is sticking to the Premier's line and the focus on the Auditor General.
Hodder apparently made no mention to the key decision in 2000 and the real root of the issue. In 2000, IEC gave the former director of financial operations the power to have cheques cut by the Department of Finance without submitting supporting documents. This decision wasn't reversed in 2002 or even in 2004. It may have changed within the past few days, given the Auditor General's findings
The Auditor General notes that this is one of the decisions that facilitated the $2.8 million in questionable spending that continued almost two full years into Hodder's tenure as Speaker. It is also totally at odds with administrative practices in every department of government.
According to Hodder's version of events, it takes the Auditor General to point out that having one person responsible for all financial transactions is a recipe for disaster. That's another point noted in AG John Noseworthy's latest report. No one has indicated yet if the former Auditor General, who sat on IEC in 2004, brought this issue to Hodder's attention either. Maybe all this happened but that there was a concerted effort to hide facts from the people responsible for overseeing administration of the House of Assembly.
Of course, if the AG doesn't get around to auditing your books for over two years, Harvey, a few bucks might go astray in the meantime.
Hodder chairs the Internal Economy Commission.
He says he had concerns about some issues when he took over in 2004. Hodder added he felt the big mistake was barring the Auditor General from the House of Assembly in 2000.
Oddly, Hodder gave no indication of the changes he implemented in 2004. Evidently, whatever changes he implemented weren't enough. Of course, Hodder is now claiming credit for something that last week the Premier claimed credit for doing.
But that really won't get him out of the glare of scrutiny since Hodder is, after all, responsible for overseeing the operations of the House of Assembly.
But I digress.
Overall, though Hodder is sticking to the Premier's line and the focus on the Auditor General.
Hodder apparently made no mention to the key decision in 2000 and the real root of the issue. In 2000, IEC gave the former director of financial operations the power to have cheques cut by the Department of Finance without submitting supporting documents. This decision wasn't reversed in 2002 or even in 2004. It may have changed within the past few days, given the Auditor General's findings
The Auditor General notes that this is one of the decisions that facilitated the $2.8 million in questionable spending that continued almost two full years into Hodder's tenure as Speaker. It is also totally at odds with administrative practices in every department of government.
According to Hodder's version of events, it takes the Auditor General to point out that having one person responsible for all financial transactions is a recipe for disaster. That's another point noted in AG John Noseworthy's latest report. No one has indicated yet if the former Auditor General, who sat on IEC in 2004, brought this issue to Hodder's attention either. Maybe all this happened but that there was a concerted effort to hide facts from the people responsible for overseeing administration of the House of Assembly.
Of course, if the AG doesn't get around to auditing your books for over two years, Harvey, a few bucks might go astray in the meantime.
The pernicious frame
Auditor General John Noseworthy has stated he would like to see an audit of constituency claims going back to 1989. That's the year when the constituency allowance was first introduced.
"Go mad" would be the likely response. "Fill your boots if that will get to the bottom of the problem."
Part of the problem with auditing that far back starts from the assumption that the same system exists today that existed in 1989.
Demonstrably it isn't, even on the basis of the limited information on the current House of Assembly spending scandal that is in the public domain. Here's why.
When constituency allowances were first established, they were limited amounts of money intended to cover the necessary expenses of representing the people of the province. The rules stated clearly that a member of the House of Assembly was entitled to claim expenses for pins, a mail-out, Christmas cards for constituents and similar items. The amounts didn't vary from district to district or if they did vary it wouldn't have been by much. On the face of it, a mail-out to residents of a Labrador district with 2, 000 members would cost less than a district in St. John's with over 10, 000.
Members of the House of Assembly appear to have several other allowances to claim against, most of it referred to in the budget as "allowances and assistance". There was a constituency amount - for the pins, flags, and public meetings, but there was also a travel budget and that's the bit that would have varied and been obviously varied widely. It costs a heck of a lot more to get around Torngat Mountains or on the south coast of the island than it would to represent a St. John's constituency on a bus route. There is likely also an entertainment budget and for some members of the House, such as the leader of the opposition, those particular allowances might be higher than those available to an ordinary member.
Based on several conversations over the past week and on the information the Auditor general has made public, Bond Papers has come to the conclusion that what changed was not how the amounts were presented but how the Internal Economy Commission looked at members' spending. Sometime around 1998, the view took hold that members' allowances were to be looked on as a global amount to be allocated as an individual member saw fit. Fewer restrictions were applied and, consistent with the approach taken in Ottawa, the Auditor General was kept out. If a member didn't overspend the total budget - or at least didn't overspend by much - then everything was viewed as being just fine.
That date - 19981 - matches up with the date for the $2.8 million in questionable spending described by the Auditor General on Tuesday. It also predates, but only by a year or so, the changes to the Internal Economy Commission Act in 2000 and subsequent decisions by the IEC that have already been identified has possibly having contributed to the scandalous events.
Another part of the problem auditing back to 1989 - at this point - comes from something mentioned by AG Noseworthy when talking about questionable payments to four companies.
For one thing, AG Noseworthy told the public on Tuesday that the former finance director of the House had the bizarre practice of over-writing his spreadsheets for each year. We have no idea how long this has been going on. As a result, AG Noseworthy and his officials have had to reconstruct the accounting system.
The size of that task would be daunting: hundreds of accounts and tens of thousands of transactions for one hundred or more individuals over the past sixteen years. Rebuilding those records would take years, and this is allowing that complete records of claims and cheques exist back to 1989.
Even at this stage AG Noseworthy could reasonable have only re-built a relatively small portion of the total picture. There may be enough to indicate there is a wider problem but there certainly isn't a clear picture of what the rules were, what monies were claimed and paid and where those monies went. He may have only been able to reconstruct a general outline so far and therefore cannot see the detail in which the various demons will surely be lurking.
The most obvious approach to take from here onward remains the same as it has been since the outset. Given the scope of the problem and the number of people potentially associated with the problem - many of them still sitting in the House - the House of Assembly or cabinet must appoint a public inquiry.
It can run simultaneously with the police investigation with both being supported by the best forensic auditors available.
If there is a need to investigate back to 1989 or even before that, then by all means let's do it.
But let's start with the period in front of our faces.
Let the investigation be conducted, in part, by a commission of inquiry.
The pernicious frame that has been applied to date and lately the unsubstantiated accusations by the Auditor General about events back to 1989 might lead us in the wrong direction.
___________________________________
1 The Auditor General's report released to date follow the practice of referring to the fiscal year by the calendar year in which it ends. For example, the Auditor general would refer to the current fiscal year as FY2007 even though we are in calendar 2006 and the budget approved earlier in 2006 is set for Fiscal Year 2006.
By adjusting the dates given in the Tuesday report, the year identified as 1999 is actually FY 1998 by the way the budget would have been set.
"Go mad" would be the likely response. "Fill your boots if that will get to the bottom of the problem."
Part of the problem with auditing that far back starts from the assumption that the same system exists today that existed in 1989.
Demonstrably it isn't, even on the basis of the limited information on the current House of Assembly spending scandal that is in the public domain. Here's why.
When constituency allowances were first established, they were limited amounts of money intended to cover the necessary expenses of representing the people of the province. The rules stated clearly that a member of the House of Assembly was entitled to claim expenses for pins, a mail-out, Christmas cards for constituents and similar items. The amounts didn't vary from district to district or if they did vary it wouldn't have been by much. On the face of it, a mail-out to residents of a Labrador district with 2, 000 members would cost less than a district in St. John's with over 10, 000.
Members of the House of Assembly appear to have several other allowances to claim against, most of it referred to in the budget as "allowances and assistance". There was a constituency amount - for the pins, flags, and public meetings, but there was also a travel budget and that's the bit that would have varied and been obviously varied widely. It costs a heck of a lot more to get around Torngat Mountains or on the south coast of the island than it would to represent a St. John's constituency on a bus route. There is likely also an entertainment budget and for some members of the House, such as the leader of the opposition, those particular allowances might be higher than those available to an ordinary member.
Based on several conversations over the past week and on the information the Auditor general has made public, Bond Papers has come to the conclusion that what changed was not how the amounts were presented but how the Internal Economy Commission looked at members' spending. Sometime around 1998, the view took hold that members' allowances were to be looked on as a global amount to be allocated as an individual member saw fit. Fewer restrictions were applied and, consistent with the approach taken in Ottawa, the Auditor General was kept out. If a member didn't overspend the total budget - or at least didn't overspend by much - then everything was viewed as being just fine.
That date - 19981 - matches up with the date for the $2.8 million in questionable spending described by the Auditor General on Tuesday. It also predates, but only by a year or so, the changes to the Internal Economy Commission Act in 2000 and subsequent decisions by the IEC that have already been identified has possibly having contributed to the scandalous events.
Another part of the problem auditing back to 1989 - at this point - comes from something mentioned by AG Noseworthy when talking about questionable payments to four companies.
For one thing, AG Noseworthy told the public on Tuesday that the former finance director of the House had the bizarre practice of over-writing his spreadsheets for each year. We have no idea how long this has been going on. As a result, AG Noseworthy and his officials have had to reconstruct the accounting system.
The size of that task would be daunting: hundreds of accounts and tens of thousands of transactions for one hundred or more individuals over the past sixteen years. Rebuilding those records would take years, and this is allowing that complete records of claims and cheques exist back to 1989.
Even at this stage AG Noseworthy could reasonable have only re-built a relatively small portion of the total picture. There may be enough to indicate there is a wider problem but there certainly isn't a clear picture of what the rules were, what monies were claimed and paid and where those monies went. He may have only been able to reconstruct a general outline so far and therefore cannot see the detail in which the various demons will surely be lurking.
The most obvious approach to take from here onward remains the same as it has been since the outset. Given the scope of the problem and the number of people potentially associated with the problem - many of them still sitting in the House - the House of Assembly or cabinet must appoint a public inquiry.
It can run simultaneously with the police investigation with both being supported by the best forensic auditors available.
If there is a need to investigate back to 1989 or even before that, then by all means let's do it.
But let's start with the period in front of our faces.
Let the investigation be conducted, in part, by a commission of inquiry.
The pernicious frame that has been applied to date and lately the unsubstantiated accusations by the Auditor General about events back to 1989 might lead us in the wrong direction.
___________________________________
1 The Auditor General's report released to date follow the practice of referring to the fiscal year by the calendar year in which it ends. For example, the Auditor general would refer to the current fiscal year as FY2007 even though we are in calendar 2006 and the budget approved earlier in 2006 is set for Fiscal Year 2006.
By adjusting the dates given in the Tuesday report, the year identified as 1999 is actually FY 1998 by the way the budget would have been set.
The case for a public inquiry
With the latest revelations from the Auditor General of Newfoundland and Labrador, it is difficult to imagine that cabinet will not appoint a public inquiry to get to a complete picture of what happened in the administration of the House of Assembly.
The report from Auditor General John Noseworthy describes unusual circumstances surrounding payment of more than $2.6 million to three suppliers and a further $170, 000 paid to a company owned an operated by the former director of financial operations in the House of Assembly.
This brings the total of allegedly misappropriated and misspent public money to almost $4.0 million. In all likelihood, that number will go higher.
Unfortunately, the public has only a very limited amount of information. The Auditor General's reports, suggestive as they might be, are actually grossly inadequate as a guide to any further action or as an audit by a legislative auditor. Where there should be portraits in sharp focus, we sometimes find stick figures.
The epitome of this type of work is that conducted by Auditor General Sheila Fraser into spending at the Office of the Privacy Commissioner. It is thorough and well documented. AG Fraser's conclusions are, in every respect, supported by the information contained in the report itself.
By contrast, AG Noseworthy's report on Edward Byrne merely demonstrates that something unusual occured. There is no discussion of administrative practices within the legislature, nor does the report identify the nature of the claims allegedly submitted by Mr. Byrne. The report on payments to certain suppliers contains a number of comments that suggest a substantive problem within the legislature and potentially with relationships between the legislature and the Department of Finance. These are not to be addressed by AG Noseworthy, nor will they be dealt with by the police investigation currently under way.
AG Noseworthy has also made claims that are not yet supported by any evidence. He has suggested collusion - a criminal term - yet he has provided insufficient detailed information to support the contention.
Likewise, AG Noseworthy has advocated an audit of member's spending dating to 1989. He does this despite fairly clear evidence in what he has provided to the public that this
circumstance dates from about 1998 and continued and indeed may well have been facilitated by certain decisions taken by the legislature and by the Internal Economy Commission in Fiscal Year 2000 and afterward. Investigators can certainly go back to 1989 or even before that if they wish, however, there is a prima facie case for focusing attention a little more recently.
At his news conference today, AG Noseworthy was asked a sensible question by one reporter: "how did this happen?" His answer provided general and largely superficial comments. His report does give some clues to the issues that AG Noseworthy's work will leave unaddressed and which the police are simply not empowered to deal with.
Much of the latest report seems to lay responsibility for the mess solely at the feet of the former financial operations director. However, the fact remains that the former director was accountable to the Clerk of the House who was in turn responsible to the Speaker and the Internal Economy Commission who were in turn answerable to the legislature as a whole. Perhaps the most remarkable aspect of the most recent Auditor's report is that questionable practices not only continued after April 2004 but accelerated from previous rates over the subsequent 21 months. Yet this is an aspect of the current scandal - in some respects the very heart of the entire matter - that AG Noseworthy will not be addressing at all.
If all that were not enough, somehow we must establish how the private sector auditors employed by the legislature after FY 2000 either were negligent or were duped.
Apparently the Auditor General will only be doing enough audit work to establish something odd occured. It will fall to the police - by AG Noseworthy's own comments - to look into any criminal activity. However the broader issues of administration, management and accountability will be handled some other way or ignored altogether. Those who had legal and moral responsibility appear to be escaping notice. They may have done nothing wrong; they may have been deficient in their actions. As it stands right now, they will escape any public scrutiny.
If we are left with these thin Auditor General reports and the widening police investigation, significant aspects of the House of Assembly scandal will not be addressed. Clouds will hang over more than ought to be overshadowed. This is unacceptable if our goal is genuine accountability. It is an unconscionable circumstance if our goal is to find the problems, fix them and restore the integrity of the legislature.
The only way the public can be assured of full and proper accounting is with a public inquiry. It need not be a long or complex inquiry, but it is - simply put - the only way of getting answers to all the questions raised by this complex and troubling episode. As argued here several days ago, in addition to a police investigation, itself supported by the finest forensic auditors available and experienced legal counsel, a public inquiry should be appointed.
The commission of inquiry would comprise ideally three individuals who, "by virtue of their considerable political and other experience, unimpeachable personal integrity, and commitment to parliamentary democracy can recommend all the measures needed to put the House in a proper state and begin the process of restoring public confidence in the most important of our public institutions."
Three individuals that come to mind are the current chief justices of the Supreme Court Appeals and Trial Divisions. A third individual is John Crosbie: member of the Privy Council, former minister of finance of Newfoundland and of Canada and former minister of justice for Canada. Others, such as Lynn Verge or retired Justice Bill Marshall have the requisite qualifications.
Make no mistake: AG Noseworthy's inquiries and the police investigation will not root out the answers to all the questions raised by this scandal which itself is without precedent in the province for over 80 years.
The case for a public inquiry has been made repeatedly in the past week. It now remains for the cabinet to make full and proper use of the Iron Fist which the legislature has provided in the form of a public inquiry. Anything else would be pulling punches.
The report from Auditor General John Noseworthy describes unusual circumstances surrounding payment of more than $2.6 million to three suppliers and a further $170, 000 paid to a company owned an operated by the former director of financial operations in the House of Assembly.
This brings the total of allegedly misappropriated and misspent public money to almost $4.0 million. In all likelihood, that number will go higher.
Unfortunately, the public has only a very limited amount of information. The Auditor General's reports, suggestive as they might be, are actually grossly inadequate as a guide to any further action or as an audit by a legislative auditor. Where there should be portraits in sharp focus, we sometimes find stick figures.
The epitome of this type of work is that conducted by Auditor General Sheila Fraser into spending at the Office of the Privacy Commissioner. It is thorough and well documented. AG Fraser's conclusions are, in every respect, supported by the information contained in the report itself.
By contrast, AG Noseworthy's report on Edward Byrne merely demonstrates that something unusual occured. There is no discussion of administrative practices within the legislature, nor does the report identify the nature of the claims allegedly submitted by Mr. Byrne. The report on payments to certain suppliers contains a number of comments that suggest a substantive problem within the legislature and potentially with relationships between the legislature and the Department of Finance. These are not to be addressed by AG Noseworthy, nor will they be dealt with by the police investigation currently under way.
AG Noseworthy has also made claims that are not yet supported by any evidence. He has suggested collusion - a criminal term - yet he has provided insufficient detailed information to support the contention.
Likewise, AG Noseworthy has advocated an audit of member's spending dating to 1989. He does this despite fairly clear evidence in what he has provided to the public that this
circumstance dates from about 1998 and continued and indeed may well have been facilitated by certain decisions taken by the legislature and by the Internal Economy Commission in Fiscal Year 2000 and afterward. Investigators can certainly go back to 1989 or even before that if they wish, however, there is a prima facie case for focusing attention a little more recently.
At his news conference today, AG Noseworthy was asked a sensible question by one reporter: "how did this happen?" His answer provided general and largely superficial comments. His report does give some clues to the issues that AG Noseworthy's work will leave unaddressed and which the police are simply not empowered to deal with.
Internal controls relating to purchases were basically non-existent:These internal controls were not solely the responsibility of the former director to implement. There were others within the House who had clear authority to provide direction on these matters. That such a situation continued for years is inexplicable unless further inquiry is made. A simple question on the signing and approval authorities within the House, asked for example the by IEC established in April 2004, answered truthfully, could have revealed the depths of the problem. We need to know if it was asked and if not, why not. We need to know also if it was answered truthfully.
- no segregation of duties - the former Director of Financial Operations ordered goods, indicated receipt of goods and approved company invoices for payment;
- and although payment authorization was made on the Government's financial management system, it was most often performed by an official without seeing the original documentation.This comment, almost cryptic in the Auditor's report, refers to a decision apparently taken by the IEC in 2000 and confirmed by subsequent IECs that the former director of financial operations need not provide any supporting documentation to the Comptroller General in order to generate payments. At the same time, however, we might wonder how it could be that some individuals apparently received overpayments on the order of 10 times the entitlement - something apparent even without documentation - yet no one detected this at all or apparently raised questions about it.
Much of the latest report seems to lay responsibility for the mess solely at the feet of the former financial operations director. However, the fact remains that the former director was accountable to the Clerk of the House who was in turn responsible to the Speaker and the Internal Economy Commission who were in turn answerable to the legislature as a whole. Perhaps the most remarkable aspect of the most recent Auditor's report is that questionable practices not only continued after April 2004 but accelerated from previous rates over the subsequent 21 months. Yet this is an aspect of the current scandal - in some respects the very heart of the entire matter - that AG Noseworthy will not be addressing at all.
If all that were not enough, somehow we must establish how the private sector auditors employed by the legislature after FY 2000 either were negligent or were duped.
Apparently the Auditor General will only be doing enough audit work to establish something odd occured. It will fall to the police - by AG Noseworthy's own comments - to look into any criminal activity. However the broader issues of administration, management and accountability will be handled some other way or ignored altogether. Those who had legal and moral responsibility appear to be escaping notice. They may have done nothing wrong; they may have been deficient in their actions. As it stands right now, they will escape any public scrutiny.
If we are left with these thin Auditor General reports and the widening police investigation, significant aspects of the House of Assembly scandal will not be addressed. Clouds will hang over more than ought to be overshadowed. This is unacceptable if our goal is genuine accountability. It is an unconscionable circumstance if our goal is to find the problems, fix them and restore the integrity of the legislature.
The only way the public can be assured of full and proper accounting is with a public inquiry. It need not be a long or complex inquiry, but it is - simply put - the only way of getting answers to all the questions raised by this complex and troubling episode. As argued here several days ago, in addition to a police investigation, itself supported by the finest forensic auditors available and experienced legal counsel, a public inquiry should be appointed.
The commission of inquiry would comprise ideally three individuals who, "by virtue of their considerable political and other experience, unimpeachable personal integrity, and commitment to parliamentary democracy can recommend all the measures needed to put the House in a proper state and begin the process of restoring public confidence in the most important of our public institutions."
Three individuals that come to mind are the current chief justices of the Supreme Court Appeals and Trial Divisions. A third individual is John Crosbie: member of the Privy Council, former minister of finance of Newfoundland and of Canada and former minister of justice for Canada. Others, such as Lynn Verge or retired Justice Bill Marshall have the requisite qualifications.
Make no mistake: AG Noseworthy's inquiries and the police investigation will not root out the answers to all the questions raised by this scandal which itself is without precedent in the province for over 80 years.
The case for a public inquiry has been made repeatedly in the past week. It now remains for the cabinet to make full and proper use of the Iron Fist which the legislature has provided in the form of a public inquiry. Anything else would be pulling punches.
27 June 2006
The frame and the iron fist of cabinet
Less than a week after cautioning residents of Newfoundland and Labrador not to make hasty judgments about the financial scandal affecting the House of Assembly, Premier Danny Williams announced today measures that he claims will address the matter. The actions he is taking are guided, as much as anything else, by the frame he has placed around the issue.
That frame focuses on the Office of Auditor General and on moving forward from here with the Premier being seen as acting decisively to correct a problem.
Take a look at the release. It fits the frame perfectly. In a news release, the most important information for the reader is contained in the first sentence - sometimes called the lede - and in the opening paragraph. Here's the lede for the latest news release:
Overall, one must know what occured and why before one can take corrective action on any problem. In this instance, the Premier is acting without knowing very much of anything save that something has occured. The Auditor General is still furiously reviewing the House accounts and producing tiny reports with the ink still wet. His copious media interviews contain claims but his one report thus far says little of substance beyond demonstrating that something wrong occured.
As well, the police investigation is only now underway and the larger issue of how the Internal Economy Commission operated will simply not be examined (see below).
Let's take the Premier's initiatives in order.
As far as the Auditor General is concerned, while this has been a key element of the Premier'’s frame for the House of Assembly misappropriation issue, it is not really the most important one in understanding what happened and why. The Auditor General can only detect problems after they have occurred. Since the Auditor General was allowed back to review the House books, the Premier'’s change to the IEC Act proposed on Monday is largely a cosmetic one.
Chief Justice Greene'’s task is one of the most curious aspects of a very curious approach to handling a scandal of this magnitude. Firstly, the Premier'’s news release makes it clear that while Chief Justice Greene will review salaries and allowances of members, the Chief Justice will not be acting with powers under the Public Inquires Act.
Under section 13 of the Internal Economy Commission Act, the House may appoint a committee of no more than three persons to review salaries, indemnities and other benefits with the powers of a public inquiry. The review is to be completed within 90 days and handed to the Internal Economies Commission for action. This confirms that the House is master of its own destiny and that members of the House are collectively responsible for appointing an independent commission to review salaries and benefits.
The Premier's charge to Chief Justice Greene is significant since it specifically prevents the Chief Justice from reviewing any aspects of the current scandal which may have arisen from the way in which the IEC discharged its responsibilities and which may affect any recommendations he makes. Since the Chief Justice does not have the powers of a public inquiry he cannot compel evidence from a witness or cause the production of any records. His powers are being clearly limited; the purpose of the limit is far from clear.
In short, Chief Justice Greene has been given a task that appears to be similar to requirements under the House of Assembly Act for setting salaries and benefits however he is reporting in this instance to the Premier and the cabinet to determine salaries for the House of Assembly.
As for the administrative changes, the Premier'’s news release on Monday makes it clear that the House of Assembly practices that likely contributed to the current scandal did not change in 2004. Rather, the only thing changed was the access to the legislature accounts for the Auditor General.
This is a significant acknowledgement on the one hand, however, it raises at least two unanswered questions that have potential significant implications. The most obvious question is why the IEC in 2004 did not put in place the simple administrative checks and balances which were obvious as long ago as 2000 when the IEC Act was changed.
There is also no potential for determining if the nature and amount of allowances is appropriate but that the IEC acted inappropriately. This is something Chief Justice Greene cannot determine since his powers have been purposely limited.
More importantly though, the second question is what, if any, misappropriation took place after 2004. The Auditor General has stated he is reviewing spending by the House of Assembly for Fiscal Years 2003 and 2004. This would cover the period from April 2003 to March 2005, given the government'’s fiscal year system.
However, the attachment to the Auditor General'’s one page report on Ed Byrne misidentifies the time period for the audit. The headings are for FY 2003 and FY 2004. The dates, though, are for FY 2002 and FY 2003. Only two payments appear to have been made in FY 2004 however it would appear, on the face of it that these payments actually relate to FY 2003.
This is no small matter. The Auditor General may have reviewed spending since May 2004 but his reports thus far have not indicated if he actually reviewed FY 2004 and found nothing or if he has simply not audited the period at all.
If administrative practices had actually changed in March/April 2004, then there would be no need for the Premier to announce those changes in 2006.
In "Reframing the issue", the Bond Papers raised the concern that, in his sincere desire to address an obviously grave issue, the Premier has effectively usurped legal powers he does not have. Monday'’s release confirms that this practice is continuing, although the Premier is suddenly conscious of this aspect. His news release concludes:
It would be interesting to know if former New Democratic Party leader Jack Harris still holds the view he held in 2004, when he told the House of Assembly that the legislature made "provision for the Internal Economy Commission so the House of Assembly was not subject to the iron fist of the cabinet in telling the House of Assembly what to do."”
_____________________________________
1 The Access to Information and Protection of Privacy Act was passed by the legislature prior to the 2003 general Election but not proclaimed by the grimes administration.
That frame focuses on the Office of Auditor General and on moving forward from here with the Premier being seen as acting decisively to correct a problem.
Take a look at the release. It fits the frame perfectly. In a news release, the most important information for the reader is contained in the first sentence - sometimes called the lede - and in the opening paragraph. Here's the lede for the latest news release:
In light of recent findings of the Auditor General into the finances of the House of Assembly, Premier Danny Williams today announced that his government will build upon the successful reforms already implemented since forming government. The Williams Administration [sic] committed to transparency and accountability, and has demonstrated this commitment with several initiatives including passing the new Transparency and Accountability Act, Lobbyist Act and Access to Information legislation.1The second paragraph then builds off the first, confirming that the Premier is satisfied he was right all along and is doing all that needs to be done to handle the problems that have been made public. The actions announced on Monday include changes to the Internal Economy Commission Act that will clearly state the Auditor General can audit the House accounts, the appointment of Chief Justice Derek Greene of the Supreme Court Trials division to review member’s' salaries and allowances on a "“go-forward basis"” and implementation of other changes needed to correct the House of Assembly's internal controls and compliance.
Overall, one must know what occured and why before one can take corrective action on any problem. In this instance, the Premier is acting without knowing very much of anything save that something has occured. The Auditor General is still furiously reviewing the House accounts and producing tiny reports with the ink still wet. His copious media interviews contain claims but his one report thus far says little of substance beyond demonstrating that something wrong occured.
As well, the police investigation is only now underway and the larger issue of how the Internal Economy Commission operated will simply not be examined (see below).
Let's take the Premier's initiatives in order.
As far as the Auditor General is concerned, while this has been a key element of the Premier'’s frame for the House of Assembly misappropriation issue, it is not really the most important one in understanding what happened and why. The Auditor General can only detect problems after they have occurred. Since the Auditor General was allowed back to review the House books, the Premier'’s change to the IEC Act proposed on Monday is largely a cosmetic one.
Chief Justice Greene'’s task is one of the most curious aspects of a very curious approach to handling a scandal of this magnitude. Firstly, the Premier'’s news release makes it clear that while Chief Justice Greene will review salaries and allowances of members, the Chief Justice will not be acting with powers under the Public Inquires Act.
Under section 13 of the Internal Economy Commission Act, the House may appoint a committee of no more than three persons to review salaries, indemnities and other benefits with the powers of a public inquiry. The review is to be completed within 90 days and handed to the Internal Economies Commission for action. This confirms that the House is master of its own destiny and that members of the House are collectively responsible for appointing an independent commission to review salaries and benefits.
The Premier's charge to Chief Justice Greene is significant since it specifically prevents the Chief Justice from reviewing any aspects of the current scandal which may have arisen from the way in which the IEC discharged its responsibilities and which may affect any recommendations he makes. Since the Chief Justice does not have the powers of a public inquiry he cannot compel evidence from a witness or cause the production of any records. His powers are being clearly limited; the purpose of the limit is far from clear.
In short, Chief Justice Greene has been given a task that appears to be similar to requirements under the House of Assembly Act for setting salaries and benefits however he is reporting in this instance to the Premier and the cabinet to determine salaries for the House of Assembly.
As for the administrative changes, the Premier'’s news release on Monday makes it clear that the House of Assembly practices that likely contributed to the current scandal did not change in 2004. Rather, the only thing changed was the access to the legislature accounts for the Auditor General.
This is a significant acknowledgement on the one hand, however, it raises at least two unanswered questions that have potential significant implications. The most obvious question is why the IEC in 2004 did not put in place the simple administrative checks and balances which were obvious as long ago as 2000 when the IEC Act was changed.
There is also no potential for determining if the nature and amount of allowances is appropriate but that the IEC acted inappropriately. This is something Chief Justice Greene cannot determine since his powers have been purposely limited.
Did abuse continue after 2004? AG misreports date of audits
More importantly though, the second question is what, if any, misappropriation took place after 2004. The Auditor General has stated he is reviewing spending by the House of Assembly for Fiscal Years 2003 and 2004. This would cover the period from April 2003 to March 2005, given the government'’s fiscal year system.
However, the attachment to the Auditor General'’s one page report on Ed Byrne misidentifies the time period for the audit. The headings are for FY 2003 and FY 2004. The dates, though, are for FY 2002 and FY 2003. Only two payments appear to have been made in FY 2004 however it would appear, on the face of it that these payments actually relate to FY 2003.
This is no small matter. The Auditor General may have reviewed spending since May 2004 but his reports thus far have not indicated if he actually reviewed FY 2004 and found nothing or if he has simply not audited the period at all.
If administrative practices had actually changed in March/April 2004, then there would be no need for the Premier to announce those changes in 2006.
In "Reframing the issue", the Bond Papers raised the concern that, in his sincere desire to address an obviously grave issue, the Premier has effectively usurped legal powers he does not have. Monday'’s release confirms that this practice is continuing, although the Premier is suddenly conscious of this aspect. His news release concludes:
The Premier noted that the IEC is an autonomous body with representation from the Progressive Conservative and Liberal parties. Any changes to the operations of the House of Assembly would require approval of the SpeakerÂ’s Office and the IEC, and Premier Williams said he will be instructing his caucus members to ensure appropriate measures are undertaken.Having already taken responsibility for decisions that are actually not his to make, this last paragraph raises even more questions. The Premier'’s news release on Monday suggests that he will ensure that salaries and benefits for the House of Assembly will be set by cabinet and imposed by the power of the government caucus. Even with the acknowledgement that the Premier lacks the legal power to do what he has undertaken, his comments suggest he will do it anyway.
It would be interesting to know if former New Democratic Party leader Jack Harris still holds the view he held in 2004, when he told the House of Assembly that the legislature made "provision for the Internal Economy Commission so the House of Assembly was not subject to the iron fist of the cabinet in telling the House of Assembly what to do."”
_____________________________________
1 The Access to Information and Protection of Privacy Act was passed by the legislature prior to the 2003 general Election but not proclaimed by the grimes administration.
26 June 2006
The Commission of Internal Economy - background
Like all legislatures that follow the parliamentary tradition, the House of Assembly in Newfoundland and Labrador uses a committee of members to manage the operations of the legislature.
The Internal Economy Commission Act establishes the membership and powers of the commission. House of Assembly operations include television broadcast of the legislature, production of a record of debates known as Hansard and maintenance of a legislative library to support the Speaker and the members in their duties.
The Act also provides other powers, such as the mechanism for reviewing members' salaries, allowances and other benefits.
Prior to 2000, money for House operations was maintained in accounts run by the legislature itself. Budget allocations were made each year but the House of Assembly maintained its own accounts as it had done since 1855. The Auditor general had full access to the accounts and supporting documents for expenditures.
In 2000, the House of Assembly approved amendments to the IEC Act that provided, among other things:
- money for House operations would come from the Consolidated Revenue Fund, maintained by the finance department through the Comptroller General, thereby eliminating the requirement for the House to maintain its own accounts;
- power for the IEC to determine who would audit the House accounts; and,
- power for the IEC to determine what, if any, documentation/information would be provided to the Comptroller General to support requests for funds in order to make payments.
The amendments bill went through all three legislative stages in a single day - May 11, 2000 - without amendment. There were surprisingly few comments by members.
Beaton Tulk, then government House leader said this - and only this - on second reading:
At no point has anyone asked the former members of the IEC why they decided no documents needed to be sent to the Comptroller General, a practice which apparently remained in place until 2004 or may have remained in place until very recently. Itt was this decision which frustrated the checks and balances built into standard government administrative practices. As much as anything else, this decision facilitated any misappropriation of funds that may have taken place.
Since a number of people have been curious, following is a list of members of the IEC in 2000, 2002 and 2004. This list was compiled based on the official record of the House of Assembly.
Internal Economy Commission, 2000
Chairman: Speaker of the House of Assembly Lloyd Snow
Members: Doug Oldford, Deputy Speaker
Beaton Tulk, Government House Leader
Paul Dicks, Minister of Finance and Justice
Kevin Aylward, Minister of Forestry and Agriculture
Loyola Sullivan, Opposition House Leader
Tom Rideout, Opposition member
Secretary: Clerk of the House John Noel
Internal Economy Commission, 2002
Chair: Lloyd Snow
Members:
Bob Mercer, Deputy Speaker
Tom Lush, Government House Leader
KevinAylwardd
Joan Marie Aylward, Minister of Finance
Ed Byrne, Opposition House Leader
Loyola Sullivan, Opposition member
Internal Economy Commission, 2004
Chairman: Speaker Harvey Hodder
Members:
Roger Fitzgerald, Deputy Speaker
Ed Byrne, Government House Leader
Loyola Sullivan, Minister of Finance
Elizabeth Marshall, Minister of Health and Community Services
(replaced Nov 04 by Tom Marshall, Minister of Justice)
Kelvin Parsons, Opposition House Leader
Percy Barrett, Opposition member
The Internal Economy Commission Act establishes the membership and powers of the commission. House of Assembly operations include television broadcast of the legislature, production of a record of debates known as Hansard and maintenance of a legislative library to support the Speaker and the members in their duties.
The Act also provides other powers, such as the mechanism for reviewing members' salaries, allowances and other benefits.
Prior to 2000, money for House operations was maintained in accounts run by the legislature itself. Budget allocations were made each year but the House of Assembly maintained its own accounts as it had done since 1855. The Auditor general had full access to the accounts and supporting documents for expenditures.
In 2000, the House of Assembly approved amendments to the IEC Act that provided, among other things:
- money for House operations would come from the Consolidated Revenue Fund, maintained by the finance department through the Comptroller General, thereby eliminating the requirement for the House to maintain its own accounts;
- power for the IEC to determine who would audit the House accounts; and,
- power for the IEC to determine what, if any, documentation/information would be provided to the Comptroller General to support requests for funds in order to make payments.
The amendments bill went through all three legislative stages in a single day - May 11, 2000 - without amendment. There were surprisingly few comments by members.
Beaton Tulk, then government House leader said this - and only this - on second reading:
Mr. Speaker, I don'’t intend to belabour the points in this bill much except to say that some of the language that we see in laws governing the Internal Economy Commission Act dates back to responsible government days. What this bill clearly does is set out the duties of the IEC and the kind of duties that the IEC should carry out. They are more clearly defined in this bill. I would ask my colleagues to quickly move on passing the bill.His Opposition counterpart, Loyola Sullivan said merely the following:
I have just a few brief comments because it is pretty straightforward and pretty routine. It does include that the accounts here shall be audited annually. I think as members of the House we have no problems with being subject to an annual audit here, and as elected representatives I guess we should be accountable there. We certainly endorse that increased accountability of Members of the House of Assembly, and we support that.The longest comment came from Jack Harris:
I think it is symbolic in a way that the funds of this House were looked after by this House, that whatever was voted for the House was looked after internally by the House of Assembly, and that was recognized by the provision that had the Clerk physically handle the funds of the House. That is obviously being changed to bring it into line with the Consolidated Revenue Fund and the normal handling of accounts by government, with provisions to ensure that the Internal Economy Commission and the House retains its autonomy.In the controversy over the Auditor General's access to the house accounts in 2002, Sullivan reportedly sided with his fellow members of the IEC and backed keeping Elizabeth Marshall from her investigations. He now denies this, although there does not appear to be any public record of his objections anywhere.
Similarly, we have a new provision which requires an annual audit of the accounts of the House of Assembly which I think is appropriate; that there be accountability through an annual audit. We are satisfied to support this bill and that the Internal Economy Commission should ensure that this annual audit is done, and that the auditor be appointed by the Commission as is provided for in the legislation.
At no point has anyone asked the former members of the IEC why they decided no documents needed to be sent to the Comptroller General, a practice which apparently remained in place until 2004 or may have remained in place until very recently. Itt was this decision which frustrated the checks and balances built into standard government administrative practices. As much as anything else, this decision facilitated any misappropriation of funds that may have taken place.
Since a number of people have been curious, following is a list of members of the IEC in 2000, 2002 and 2004. This list was compiled based on the official record of the House of Assembly.
Internal Economy Commission, 2000
Chairman: Speaker of the House of Assembly Lloyd Snow
Members: Doug Oldford, Deputy Speaker
Beaton Tulk, Government House Leader
Paul Dicks, Minister of Finance and Justice
Kevin Aylward, Minister of Forestry and Agriculture
Loyola Sullivan, Opposition House Leader
Tom Rideout, Opposition member
Secretary: Clerk of the House John Noel
Internal Economy Commission, 2002
Chair: Lloyd Snow
Members:
Bob Mercer, Deputy Speaker
Tom Lush, Government House Leader
KevinAylwardd
Joan Marie Aylward, Minister of Finance
Ed Byrne, Opposition House Leader
Loyola Sullivan, Opposition member
Internal Economy Commission, 2004
Chairman: Speaker Harvey Hodder
Members:
Roger Fitzgerald, Deputy Speaker
Ed Byrne, Government House Leader
Loyola Sullivan, Minister of Finance
Elizabeth Marshall, Minister of Health and Community Services
(replaced Nov 04 by Tom Marshall, Minister of Justice)
Kelvin Parsons, Opposition House Leader
Percy Barrett, Opposition member
Reframing the issue
The Liberals dealt with the issue by simply asking the AG’s office to stop the audit work and leave, [Auditor General John Noseworthy] said.
Asked if it smelled of a coverup, he said: "They asked us to stop our work and leave. So they certainly didn'’t seem interested in knowing what else was going on."
...
Premier Danny Williams, vowing to restore transparency within government, decided in 2004 the AG should be permitted access to the legislature's financial records.- "Earlier AG investigation quashed”, The Telegram, June 24, 2006, p.1."This has surfaced as a result of the initiative my government took in basically having the auditor general go in and look at this matter," [Premier Danny Williams] says.
"I have a responsibility as premier and leader of the province to put these things on the table...but I think they [the people of the province] need to know that as their leader I will certainly be decisive and I'll act on it very quickly."- "Ripe for abuse", The Independent, June 25, 2006, p. 4.
Think about how many times in the past week you've heard or read these comments or ones similar to them coming from either the Premier, the Auditor General or, as in The Telegram story, reported as a matter of fact.
In political circles, what you see here is an example of framing the issue. Language is selected, certain facts are highltighted and both are repeated by several, apparently independent or credible sources. A frame is a way of managing an issue. it is a way of guiding a discussion by telling what ought to be looked act and either deliberately or inadvertently leaving out other
aspects.
The frame is a way of influencing how issues are perceived, and in many cases is a way of pointing to the resolution that will follow.
The frame used in the examples above is very familiar. There is a problem and the Premier, personally, will resolve it. In fact, the current Premier - not of the party that was there before - made the crucial decision in 2004 to allow the Auditor General back to the House of Assembly to audit the legislature'’s accounts.
The problem with the Premier has placed around alleged misappropriation of funds from the House of Assembly is that it is wrong.
It is wrong for at least three reasons of fact. First, no Premier can make decisions about how the House of Assembly administers its funds, or oversees the administration of the House of Assembly itself. That job falls to a committee of members appointed according to the Internal Economy Commission Act.
Second, the frame used by the Premier and others is wrong because it suggests a partisan origin to the problem, when in fact the Internal Economy Commission is made of members of the House of Assembly from both the government and from the opposition. In 2002, the IEC voted unanimously to bar the Auditor General from auditing the House books.
Third, the frame is wrong because the decision to allow the Auditor General to review the House accounts did not prevent the alleged abuse of funds in the first place. It merely allowed the abuse to be detected after the fact. The root of the problem here, as Auditor General John Noseworthy has hinted, is the decision taken initially in 2000, reaffirmed by the IEC unanimously in 2002 and continued by the IEC after March 2004 to allow House of Assembly officials to request money to pay expense claims by members without submitting receipts to the province's Comptroller General. Apparently, they didn't even have to indicate whose claim or claims were to be paid by the money requested.
Aside from those matters of fact, we have to be careful about the frame we accept on this issue because of the wider implications.
At the most fundamental level, if we accept the frame already applied to this issue we will miss the legal responsibilities of the members of the IEC for overseeing the legislature‚’s administration. Each member knew or ought to know about the checks and balances provided by law. Each knew or ought to have know of the generally accepted practices designed to ensure money is spent properly and that only the amounts voted by the legislature are spent on the the things they are to be spent on.
When the IEC decided after 2000 not only to bar the AG from auditing the books but also to request money without the checks and balances provided in the Financial Administration Act and elsewhere, they created the very environment which led to the problem with which we are now are now faced.
The IEC members are not just anyone. They are the most senior members of the Opposition; those who sat on the IEC four and five years ago now hold the most senior positions in the current administration. The IEC also included experienced and senior members of the former administration, including a future Premier and the then-Minister of Finance and President of Treasury Board. It is difficult to imagine they were not familiar with the province‚’s financial administration laws and with the government's own internal administrative practices, all of which are designed to frustrate attempts to misappropriate public money.
In dealing with the issue now in front of our eyes, we would be remiss if we did not review the actions of the IEC in the period after 1999. Full accountability demands no less. For those who want to look for a guide to how broad this investigation should be, take a look at Auditor General Sheila Fraser's report into spending practices at the Office of the Privacy Commissioner. While it may be that a review will find the IEC acted generally in a proper way, we cannot ignore the possibility that, to paraphrase Fraser, certain individuals willingly or by omission turned a blind eye to the potential for the abuses now alleged to have taken place.
Beyond that, however, by accepting the notion that the Premier - any Premier of any political party at any time - can personally and individually dictate rules for the House of Assembly we would be continuing the steady erosion of the most fundamental check on public spending on which our democracy is based.
The Premier is the head of the government administration. However, the cabinet he or she leads derives authority to spend public money based on the consent of our elected representatives in the House of Assembly. The legislature is separate from government to ensure public oversight of government activities in every respect. These representatives are accountability to us, as it is our money they are spending to advance our interests.
The Auditor General summarized this idea as succinctly and eloquently as anyone in her report for Fiscal Year 2000:
Full accountability requires that Government, its departments, agencies of the Crown and Memorial University of Newfoundland be held accountable to the House of Assembly for their use of public money and the delivery of their programs. The need for true accountability dates back to the time when the democratic system of government was established. A democratic form of government requires as a minimum that government, its departments and agencies of the Crown report annually to the House of Assembly, the same body which provided the monies to fund their programs, on their financial and operational results.Over the past decade, we have seen successive government administrations make more and more decisions without any scrutiny by the elected representatives of the people of our province.
In 1997, the Premier'’s Office gained de facto control over spending by the Lower Churchill project office. Over $57 million of public money - from the Hydro corporation‚’s funds - was spent by 2003/2004 without a proper accounting of the spending to the Hydro board of directors and without any but the most vague oversight by the House of Assembly. Even after this was brought to public attention shortly after the Williams administration took office, the Lower Churchill project office continues to operate in generally the same fashion as it has in the past.
The Auditor General also criticized the practice of creating Crown corporations using simple administrative means rather than through legislation, as has been the practice for decades. In the same report that raised the issue of auditing the House of Assembly accounts, the Auditor General - now the member of the House for Topsail - noted that up to 2001 fully 16 Crown corporations had been created solely under the Corporations Act. The Auditor General felt that these corporations were incurring public debt without appropriate legislative authority. It is curious to note that while some of the 16 were incorporated as far back as 1950, half were created in 1996 and the years after.
Times have not changed for the better. In this past session of the legislature alone, the cabinet was handed the authority to approve the break-up of Fishery Products International without any further reference to the legislature. In the last days of the last sitting, cabinet was also given the power to turn the Hydro corporation to whatever purpose it felt the corporation should do. As a result, cabinet now has the authority to incur as much debt and engage in as much spending of public funds as it sees fit and all without a requirement to seek the cursory approval of the legislature, let alone provide a complete accounting of its actions.
This current issue allows the opportunity to correct the erosion of the legislature's responsibilities but, unfortunately, the limited frame offered by the Premier has been too readily accepted. Hasty decisions are being made. The Premier, who cautioned against making snap judgments, will impose new policies this week before many of the investigations have even gotten underway.
No less an influential group than the editorial board of the province’s largest daily newspaper has already proposed that the legislature's spending be overseen by an unelected group: the epitome of an unaccountable and antidemocratic measure if ever there was one. The same editorial board has engaged in the cheap and easily cynical condemnation of all politicians, irrespective of facts, advising those who have taken issue with the Premier'’s usurpation of authority to "shut their mouths and stop whining."
The position taken by The Telegram is exactly what John Crosbie was talking about when told The Independent this weekend that this issue will “confirm for many that politicians in general are "a bunch of sleveens out for themselves. That's the biggest danger of all this. It hurts the province in the sense of distrust of politicians"…It's quite a blow."
John Crosbie is right. Unfortunately, the frame for this issue offered by the Premier serves to reinforce distrust of politicians. His approach, even fueled as it is by his own strong sense of ethics and his own integrity, may lead us to a situation which actually reinforces the very trends that led to this situation in the first place. His frame may well prevent us from looking deeper into this matter and dealing with all the issues we find.
Full accountability and the rehabilitation of our tarnished democracy demands that the members of the House of Assembly take control of this matter. A special committee of the legislature should be struck in an emergency public session to oversee a two-pronged investigation.
One prong is the police investigation which ought to be supported by both the ablest of forensic auditors and a judge of the federally- or provincially-appointed court with experience as a Crown prosecutor. This approach alone would ensure that the investigation can proceed and be seen to proceed without any potential hint of impropriety.
The second prong is to inquire into the House of Assembly itself. The best people to do this would be eminent members of the community who, by virtue of their considerable political and other experience, unimpeachable personal integrity, and commitment to parliamentary democracy can recommend all the measures needed to put the House in a proper state and begin the process of restoring public confidence in the most important of our public institutions.
The issues raised by allegations of misappropriation of public money cannot be addressed by any one person. They can only be addressed by collective action.
They can only be addressed by reframing the debate from a very limited one imposed in haste, even with the best of intentions.
--------------------------
Revised 26 June 2006. A later post will look at the Premier's announcement made on Monday morning.
23 June 2006
The unnamed scandal: Day 3
Ok.
Here's the latest CBC online story on the scandal in the House of Assembly.
So far no one has been able to put a name on this one. The easiest way has always been to attach "-gate" to it, as in Watergate, Strippergate, Heidigate.
We could call this one Glacier-gate. No it has nothing to do with a local arena. Nor does it have anything to do with a large block of ice.
In this case, Glacier-gate would refer to the oddly slow way things have developed. Like when the story broke: the Premier had sufficient details on the morning he met with Ed Byrne.
For some reason he took a whole day to let the rest of us in on what happened. Official excuse: the Prem had to meet with the Speaker of the House and the Auditor General. Apparently these guys were busy so they told Danny to cool his jets. The AG apparently met with the Prem after Danny's call to a radio call-in show. That was a mere two hours before Danny told the media "immediately" and about six to seven hours after Danny got Ed's resignation.
But then he only told us part of it, hinted at some more and told us to wait until the next day when the Auditor General would say more.
Then the AG shows up almost 24 hours later, releases a one-pager with few details and goes on the interview circuit with plenty of claims but based on what he himself would have to admit is a far-from-complete investigation.
Then the matter gets turned to the police: two full days after the Premier first became aware of the issue.
All this over a matter every bit as serious as the Hollis Walker inquiry scandal in the 1920s (that's how far back we have to go in Newfoundland and Labrador to find something this shocking).
And the investigation has been proceeding like a snail on a glue pad.
So the thing is either a glacier...
Or maybe it is being run by the Admiral from Get Smart:
"Would someone give me a little push?"
All jokes aside, this is a serious issue. A bigger post dealing with the issue, how it's being handled and what needs to happen is on the way.
Here's the latest CBC online story on the scandal in the House of Assembly.
So far no one has been able to put a name on this one. The easiest way has always been to attach "-gate" to it, as in Watergate, Strippergate, Heidigate.
We could call this one Glacier-gate. No it has nothing to do with a local arena. Nor does it have anything to do with a large block of ice.
In this case, Glacier-gate would refer to the oddly slow way things have developed. Like when the story broke: the Premier had sufficient details on the morning he met with Ed Byrne.
For some reason he took a whole day to let the rest of us in on what happened. Official excuse: the Prem had to meet with the Speaker of the House and the Auditor General. Apparently these guys were busy so they told Danny to cool his jets. The AG apparently met with the Prem after Danny's call to a radio call-in show. That was a mere two hours before Danny told the media "immediately" and about six to seven hours after Danny got Ed's resignation.
But then he only told us part of it, hinted at some more and told us to wait until the next day when the Auditor General would say more.
Then the AG shows up almost 24 hours later, releases a one-pager with few details and goes on the interview circuit with plenty of claims but based on what he himself would have to admit is a far-from-complete investigation.
Then the matter gets turned to the police: two full days after the Premier first became aware of the issue.
All this over a matter every bit as serious as the Hollis Walker inquiry scandal in the 1920s (that's how far back we have to go in Newfoundland and Labrador to find something this shocking).
And the investigation has been proceeding like a snail on a glue pad.
So the thing is either a glacier...
Or maybe it is being run by the Admiral from Get Smart:
"Would someone give me a little push?"
All jokes aside, this is a serious issue. A bigger post dealing with the issue, how it's being handled and what needs to happen is on the way.
22 June 2006
Is dat you, Bill?
Apparently your humble e-scribbler turned up on Back Talk today with a reference from both Bill and a caller.
Nice to know people are reading the Papers.
Nice to know people are reading the Papers.
Byrne resigns; serious questions appear
Premier Danny Williams announced Wednesday evening that he has requested and received the resignation of Ed Byrne [Left. Photo: CBC] as minister of natural resources, effective immediately.The action came as a result of an audit of the House of Assembly conducted by the Auditor General of Newfoundland and Labrador.
There is no indication that Byrne has also resigned as government leader in the House of Assembly.
The poorly written release can be found here, at gov.nl.ca.
"I am not prepared to comment further on this matter, as I have referred it to the Department of Justice on the advice of the Auditor General," said Premier Williams. "I immediately requested Mr. Byrne‚’s resignation until the matter is resolved, as I take our government‚’s obligation to be accountable and transparent very seriously."
The Premier did comment further, in a media scrum that was broadcast live across the province at 6:15 pm. Williams told reporters the auditor general submitted a report persuant to section 15(1) of the Auditor General Act. That sections reads:
15. (1) Where during the course of an audit, the auditor general becomes aware of an improper retention or misappropriation of public money or another activity that may constitute an offence under the Criminal Code or another Act, the auditor general shall immediately report the improper retention or misappropriation of public money or other activity to the Lieutenant-Governor in Council. [Emphasis added]Williams also told reporters that the auditor general reported on several other members of the House of Assembly. He said the auditor general's report has been turned over to the Department of Justice. Presumably, the report is now in the hands of the attorney general and may be turned over or has already been handed to the police for further investigation.
[UPDATE: According to a debrief on CBC radio, Byrne's resignation comes as the result of the first complete audit. Other members of the House of Assembly may be subject to further investigation. Logically, therefore, there may be no further investigation other than the review of Byrne's actions.
The CBC report this morning is significantly different than the implication from the Premier's comments on Wednesday that other members of the House of Assembly were - definite, not conditional - also under investigation. By definition an audit of the House of Assembly covers all members and hence involves all parties. However, if only this one problem has occured, then Williams has case the net of supicion wider than indicated by the facts at this point.
This would not be the first time the Premier made a statement which was untrue or used words and phrases with ambiguous meaning that appear designed to mislead.]
Byrne's departure from cabinet and the important natural resources portfolio removes one of the Williams administration's more competent ministers at a sensitive time. Work is underway on the province's energy plan, which is supposed to include a royalty regime for offshore natural gas.
Williams announced that Byrne will be replaced by John Ottenheimer, minister of intergovernmental affairs. Ottenheimer was moved from the high-pressure health portfolio to the less demanding intergovernmental affairs slot. It is unclear if Ottenheimer will be expected to tackle the full workload in natural resources or if Williams himself will serve as de facto minister.
During the media scrum Williams indicated he met with the Speaker of the House of Assembly and discussed the issue. Williams said he requested Byrne's resignation at a cabinet meeting on Wednesday morning.
There is no explanation why Williams chose to announce Bryne's departure live on province-wide television during the supper hour news programs of both major television stations, despite the fact that Byrne had apparently resigned over six hours earlier.
[UPDATE: The CBC debrief on Thursday refered to the Premier taking decisive action. This comment and references to other resignations resulting from investigations by auditor general John Noseworthy fit the Premier's Office contention from the news release and from the Premier's scrum that the Premier takes "our government‚’s obligation to be accountable and transparent very seriously".
It is interesting to note that in the Tulk case in 1998, Brian Tobin presented himself as taking decisive action. However, it was apparent from his own statements in the House of Assembly that an active police investigation had been underway in the Tulk matter for fully two weeks before Tobin and Tulk acted.
At this point, and given the dirth of accurate and detailed information, the best that can be said is that Byrne has resigned. It would be entirely inapproriate to attach any intepretation to the Premier's comments and actions beyond the facts presented. Taking this as part of a pattern involving other matters or repeating the Premier's accountability and transparency comments in an unqualified manner would constitute an unsubstantiated intepretation that fits the convenient political intepretation being applied by the Premier's Office, but not necessarily the facts as known at this point.]
Williams had been avoiding media interviews earlier in the day following his derogatory comments about the association representing the province's offshore supply and service companies. Williams did find time in his schedule to call Back Talk, a local radio call-in show, to defend himself against accusations that he had criticized NOIA before actually hearing what the association said at its news conference at midday Wednesday.
Williams called Back Talk at around 3:45 PM and spoke with program host Bill Rowe for about 10 minutes. He repeated his criticism of NOIA and also hinted - bizarrely and cryptically - that the offshore association was interfering in ongoing negotiations between government and the consortium that had been proposing development of the Hebron field.
There are no negotiations, a fact acknowledged on Tuesday by Ed Byrne. Speaking at NOIA's annual offshore petroleum conference, Byrne said the door was open to a resumption of talks been government and the Hebron proponents.
Williams made the rounds at NOIA's conference gala Tuesday night buttonholing delegates and making clear his displeasure at NOIA's recent calls for government and the oil companies to resume talks on the Hebron project. He also reportedly expressed the view that NOIA had no business commenting on Williams' refusal to follow the Atlantic Accord Implementation Act and appoint a chairman and chief executive officer at the Canada-Newfoundland and Labrador Offshore Petroleum Board.
In the scrum, Williams compared Byrne's resignation to that of Beaton Tulk, a cabinet minister udner Brian Tobin. Members of Tulk's immediate family and some of his office staff had been accused of accepting favours that, if proven, would have been a breach of section 121 of the Criminal Code. No charges were laid following a police investigation.
In the Tulk case, a police investigation had actually been underway for two weeks before Tulk resigned. Tobin requested Tulk's resignation only after Tulk's office received a media inquiry about the matter.
21 June 2006
Such a clever dick
Danny Williams wouldn't like it if NOIA started pressuring him to get back to the table and restart negotiations on the Hebron project.
That project, based on the 500-odd million barrels in Hebron alone would have produced upwards of $10 billion in royalties for the province on top of between $3.0 and $5.0 billion of construction most of which would be done in the province. There are at least an additional 230 million barrels in two other adjacent structures, both of which are likely to be developed over time.
Danny turned up his nose at the deal when the proponents asked for $500 million in tax concessions and when they turned down a 4.9% ownership stake in the development that Williams himself admitted was worth only $1.5 billion in total.
Speaking to CBC Radio, Williams said that if NOIA - representing the offshore service and supply sector - wants to start pressuring him they should change their name to "Annoya".
Danny Williams is such a clever dick.
That project, based on the 500-odd million barrels in Hebron alone would have produced upwards of $10 billion in royalties for the province on top of between $3.0 and $5.0 billion of construction most of which would be done in the province. There are at least an additional 230 million barrels in two other adjacent structures, both of which are likely to be developed over time.
Danny turned up his nose at the deal when the proponents asked for $500 million in tax concessions and when they turned down a 4.9% ownership stake in the development that Williams himself admitted was worth only $1.5 billion in total.
Speaking to CBC Radio, Williams said that if NOIA - representing the offshore service and supply sector - wants to start pressuring him they should change their name to "Annoya".
Danny Williams is such a clever dick.
09 June 2006
Pilot pulls Bond Papers off the rocks
The following was received on Friday as an e-mail with attachment and speaks for itself.
We stand suitably corrected.
____________________
Atlantic Pilotage Authority Exempts Offshore Supply Boats
Halifax, NS - – Human error has been identified as the key causal factor in 75%-96% of marine accidents. These are the facts that make pilots and pilotage services the most important elements of safety in narrow waterways and ports. Due to their training for a specific area and their experience gained during everyday operations, pilots can minimize human error.
Until May 17, 2006 port stakeholders in Atlantic Canada and the residents who live and work along these waterways had the comfort of knowing that all ships above 1,500 gross registered tonnes were required to have a licensed marine pilot, or a pilotage certificate holder onboard, who was responsible for the safe navigation of the ship.
Effective May 17 at 12:01 a.m., the Atlantic Pilotage Authority and Transport Canada eliminated this safety margin for 96% of the vessel transits by Canadian ships operating at the 16 compulsory pilotage areas, in Atlantic Canada. [Amendment to the Atlantic Pilotage Authority'’s regulations under Subsection 4(2)(C)].
All Canadian-registered offshore supply vessels up to 5,000 gross registered tonnes are now free to operate in compulsory pilotage waters of the Atlantic Provinces without the requirement of having a licensed pilot or a pilotage certificate holder onboard.
The Canadian Marine Pilots'’ Association is puzzled by the APA'’s drive to turn over its responsibility to stakeholders and the public to the offshore supply boat operators.
"“Direct responsibility for public safety now lies with the private operators of offshore supply vessels to self-regulate their own standards in these confined waterways and we believe that is cause for concern,"” says Capt. Andrew Rae, Vice President, Atlantic for the Canadian Marine Pilots'’ Association.
"“Industry has always had the clear alternative not to use the services of pilots and pay pilotage fees by having their masters obtain pilotage certificates. This certification process has been in place to protect the public interest by providing for safe navigation within confined waterways. It is endorsed by the Canadian Transportation Agency (CTA),"” says Captain Andrew Rae, a marine pilot with 19 years experience at the Port of Halifax.
"“Safety concerns in narrow waterways and ports are accentuated by the continuing increase in marine traffic. The attendant growth in cargo volume has likewise increased the scale of the potential hazards to life, property and the environment that could result from just one catastrophic marine accident."
Economic growth potential for Atlantic Canada is directly tied to its ports. Canso and Saint John have received environmental approval to proceed with developing LNG terminals. Post-Panamax containerships are regular callers in the Port of Halifax. Approximately 90 million tonnes (90 billion litres) of petroleum products transit through the region'’s waterways, annually. Amending section 4 applies unilaterally to all APA compulsory areas in the region, including the port of St. John'’s, NL -– home to Atlantic Canada'’s busiest offshore supply base.
The Atlantic Pilotage Authority was established in 1972 pursuant to the Pilotage Act. The mandate of the APA is to establish, operate, maintain and administer, in the interest of safety, an efficient Pilotage service within the designated waters of the Atlantic region.
The Canadian Marine Pilots'’ Association'’s mandate is to foster public awareness of the role of marine pilots in protecting public safety and the environment, and to work with other marine stakeholders to further the common goal of ensuring a vibrant and healthy marine sector.
We stand suitably corrected.
____________________
I am writing to clarify some confusion that your article brought to light. "The Placentia Pilot" is the name of the 17 metre long launch that transfers the marine pilot to and from the pilot boarding station. The launch master and crew are not pilots; they are hired by the Atlantic Pilotage Authority (APA) under a private contractor arrangement. The qualification for the launch master, as set by the APA, is a minimum requirement of a 60 tonne master'’s certificate.Attachment:
It is the Placentia Bay Marine Pilots who physically board the ships that are transiting the compulsory pilotage zone and are responsible for the vessels'’ safe navigation, not the pilot boat crew. Pilots are seasoned master mariners with over 20 years of combined nautical training and sea experience. The minimum requirement is an unlimited tonnage certificate.
Candidates undergo rigorous testing followed by a long apprenticeship, studying every aspect of the waterway for which they will be responsible. Once a pilot has qualified, they continue specialized training, ensuring that they are capable of handling the most up-to-date navigational equipment.
The Canadian Marine Pilots'’ Association'’s (CMPA) mandate is to foster public awareness of the role of marine pilots in protecting public safety and the environment, and to work with other marine stakeholders to further the common goal of ensuring a vibrant and healthy marine sector. I am attaching a recent media release issued by the CMPA that speaks to just the type of environmental concern that you mention in your article.
Capt. Patrick Careen
Chairman
St. John'’s/Holyrood/Placentia Bay Pilots'’ Committee
Atlantic Pilotage Authority Exempts Offshore Supply Boats
Halifax, NS - – Human error has been identified as the key causal factor in 75%-96% of marine accidents. These are the facts that make pilots and pilotage services the most important elements of safety in narrow waterways and ports. Due to their training for a specific area and their experience gained during everyday operations, pilots can minimize human error.
Until May 17, 2006 port stakeholders in Atlantic Canada and the residents who live and work along these waterways had the comfort of knowing that all ships above 1,500 gross registered tonnes were required to have a licensed marine pilot, or a pilotage certificate holder onboard, who was responsible for the safe navigation of the ship.
Effective May 17 at 12:01 a.m., the Atlantic Pilotage Authority and Transport Canada eliminated this safety margin for 96% of the vessel transits by Canadian ships operating at the 16 compulsory pilotage areas, in Atlantic Canada. [Amendment to the Atlantic Pilotage Authority'’s regulations under Subsection 4(2)(C)].
All Canadian-registered offshore supply vessels up to 5,000 gross registered tonnes are now free to operate in compulsory pilotage waters of the Atlantic Provinces without the requirement of having a licensed pilot or a pilotage certificate holder onboard.
The Canadian Marine Pilots'’ Association is puzzled by the APA'’s drive to turn over its responsibility to stakeholders and the public to the offshore supply boat operators.
"“Direct responsibility for public safety now lies with the private operators of offshore supply vessels to self-regulate their own standards in these confined waterways and we believe that is cause for concern,"” says Capt. Andrew Rae, Vice President, Atlantic for the Canadian Marine Pilots'’ Association.
"“Industry has always had the clear alternative not to use the services of pilots and pay pilotage fees by having their masters obtain pilotage certificates. This certification process has been in place to protect the public interest by providing for safe navigation within confined waterways. It is endorsed by the Canadian Transportation Agency (CTA),"” says Captain Andrew Rae, a marine pilot with 19 years experience at the Port of Halifax.
"“Safety concerns in narrow waterways and ports are accentuated by the continuing increase in marine traffic. The attendant growth in cargo volume has likewise increased the scale of the potential hazards to life, property and the environment that could result from just one catastrophic marine accident."
Economic growth potential for Atlantic Canada is directly tied to its ports. Canso and Saint John have received environmental approval to proceed with developing LNG terminals. Post-Panamax containerships are regular callers in the Port of Halifax. Approximately 90 million tonnes (90 billion litres) of petroleum products transit through the region'’s waterways, annually. Amending section 4 applies unilaterally to all APA compulsory areas in the region, including the port of St. John'’s, NL -– home to Atlantic Canada'’s busiest offshore supply base.
The Atlantic Pilotage Authority was established in 1972 pursuant to the Pilotage Act. The mandate of the APA is to establish, operate, maintain and administer, in the interest of safety, an efficient Pilotage service within the designated waters of the Atlantic region.
The Canadian Marine Pilots'’ Association'’s mandate is to foster public awareness of the role of marine pilots in protecting public safety and the environment, and to work with other marine stakeholders to further the common goal of ensuring a vibrant and healthy marine sector.
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