Danny's claims don't match the facts, Part 2

The first process to select a chairman and chief executive officer for the offshore regulatory was a group of public servants appointed by the federal and provincial governments, with Robertson Surette's St. John's office co-ordinating a selection process.

They used criteria approved by both governments that, among other things:

- required a single individual for a single position of chairman and CEO;

- included the criterion that the ideal candidate would have "extensive experience in the operational aspects of offshore petroleum activities..."

This process was interrupted at the point where approximately five candidates were selected for detailed interviews. Andy Wells was not on that list and, based on public information, had never previously been considered for the job.

As revealed in July 2005, the first process was interrupted in June 2005 when Danny Williams proposed it be scrapped and that Andy Wells be appointed to the single, combined position.

When Danny Williams claims he supported Andy Wells from the outset and that he was opposed to industry experience from the outset, his claims are directly opposite to the facts.

The second selection process was a committee, provided in the Atlantic Accord that was appointed by both the federal and provincial governments and chaired by well-known businessman Harry Steele. As agreed by both governments, the panel was given the mandate to select a single person.

Danny Williams claimed in an interview on Wednesday that:

When the panel came back and made a recommendation of Mr. Ruelokke, it was assured to me by the panel that there would be in fact be the recommendation, which did occur, that these two roles would be split. So therefore that Mr. Ruelokke could be the CEO and then of course Mr. Wells could step in as chairman of the board. That recommendation was not followed and therefore then I felt you know basically the process through which the panel had made the recommendation was flawed.

This could not have occurred, since the panel made no such decision. The Premier's memory is false or he is deliberately misrepresenting the situation.

As indicated in the statement of fact in the decision on Ruelokke v. Government of Newfoundland and Labrador and consistent with the evidence presented by both parties to the judge, the Steele panel made the appointment of a single individual for chairman and CEO as directed by the terms of reference established by the federal government and the provincial government.

The Premier is simply wrong when he refers to the Steele panel's decision as a "recommendation." Under the Accord provisions, the panel made a decision which was binding on both parties on the issue of who would fill the single job. Anything else it offered was an unsolicited and non-binding comment.

The first indication that the provincial government, i.e. Premier Williams, wanted to split the single job into two was in late December 2005, two weeks after the Steele panel reached its conclusion and fully six months after the Wells nomination had first been proposed.

When the panel offered an additional suggestion on splitting the job in two, it exceeded its mandate under the Accord implementation act and the wording of their comments in that regard are revealing:

During its discussions regarding the operation of the Board and in interviews
with candidates, the Panel concluded that in accordance with current board governance practices, the roles of Chair and Chief Executive Officer should be separated, with the Chair becoming a non-executive, part-time position. While this matter is outside the mandate of the Panel, we recommend that both governments consider taking this action.

Note that the panel clearly understood it was making a suggestion that was outside its mandate and as such it is distinctly different from what the Premier claimed.

Second, the recommendation is that the two orders of government should consider the approach of creating two jobs where one now exists. This suggests it was not a position the panel felt strongly about.

Third, this is a recommendation or suggestion. Under the Accord implementation act, the panel's choice of Ruelokke is binding on government. Williams' argument on this point was summarily dismissed by Mr. Justice Halley.

Fourthly, and most importantly, the Steele panel suggested the chairman position be reduced to a part-time, non-executive position. In other words, the chairman position under such an arrangement would be the lesser of the two positions in terms of influencing the board's overall operations. The reduced role of the part-time job would also be reflected in the salary which, as in the Nova Scotia board would be less than $15, 000 per year.

Again, as in so many instances on so many matters, the Premier's claims are at odds with the facts as already established.

Danny's claims don't match facts

What Danny claimed on Wednesday in an interview with CBC:

I was adamant from the beginning that I would prefer to have somebody as chair of that board, a very, very important position to the province of Newfoundland and Labrador who did not have a background in the oil industry so that there would be no perception of any possible connection to the oil industry under any circumstances.

What Danny actually approved as the qualifications for the Chairman and Chief Executive Officer before he interrupted the first process with the idea of appointing Andy Wells to the job:

Candidates will have an in-depth knowledge of Newfoundland and Labrador’s offshore oil and gas activities, along with a demonstrated ability to manage an organization with diverse technical and regulatory responsibilities, and to work effectively with senior industry and government officials. Qualified individuals will also have a good understanding of the structure and operation of the Canadian and international petroleum industry. Applicants will have extensive experience in the operational aspects of offshore petroleum activities, including full knowledge of related business, financial, safety and environmental matters, and of federal and provincial government legislation and operations. In addition, candidates will have experience in dealing with industry associations and a wide range of non-government organizations. This position requires exceptional communication skills.

Jumping the shark, Danny style

How many times is the word "counterpart" used in this release that otherwise says absolutely nothing newsworthy?

Hint, Billy: It's called a news release because it is supposed to contain important information otherwise known as "news".

It isn't a rock song. There is no bridge.

You don't get points for repetition in the chorus or for changing key halfway through.

Of course, this thing issued from Tom Marshall's office is just part of the pap offensive to make the government look good during polling weeks.

You know polling week. It's like sweeps week on the networks or the PBS pledge drive.

Next week, Joan Burke will be appearing with Andre Rieux live from the soon-to-be demolished Stephenville Mill for a special farewell concert of classical music.

Tom Hedderson is lined up to do a spot on Danny-vision - otherwise known as Rogers - where Danny's brother-in-law has arranged for Tom to host a local version of the Antiques Roadshow featuring only sundials, clocks and other things you can watch.

So panicked is the government to keep its ratings polling numbers from dropping even an inch that even Shawn Skinner emerged from the nether regions of the government members' offices for the first time in months. He called Bill Rowe's Crap Talk to demonstrate more than anything else that Shawn is either full of crap or totally naive and out of the loop.

Never heard of packing bullshit releases when CRA is polling, Shawn? You obviously haven't been getting the memos sent furiously this week by Danny's personal publicist on her Crackberry.

If nothing else works, I am thinking we'll see Danny jump the shark.

Oops.

Too late.

Danny already jumped it. This morning in conversation with Randy Simms. His publicist pushed him on the phone to defend a flatulent release that veteran newsman Simms spotted as nine paragraphs of stale air with the faint smell of methane gas and rotten eggs tossed in for good measure. other reporters had serious things to talk about but Danny's personal popularity takes precedence.

So Danny starts in about how many meetings he has attended. Meetings are hard work, he assured us repeatedly. Blah. Blah. Blah.

Then Danny hit the ramp.

Heading the offshore board is the most important job in Newfoundland and Labrador, sez The Prem and dag-nab-it, Danny will stop at nothing to make sure that Andy Wells gets the most important job in the province.

Unlike the Fonz, at that point Danny dropped of the edge of the ramp into the shark-pool.

The government is so desperate to avoid any drop at all in Danny's approval numbers, it'll be fun watching them squirm.

The only question is how many sharks will Danny try to jump in the next three weeks?

If Danny was Max's lawyer?

What would the Premier be saying if he were a lawyer in private practice, representing a client who is legally entitled to a position but whose entire life is being held up - without a steady paycheque - by a Premier who is fighting tooth and nail to resist abiding by the law he said he would follow not once but twice publicly?

Unconscionable is likely the nicest word Danny would use if the shoe was on the other foot.

Legislature financial scandal bigger than previously revealed

MHAs overspent constituency allowances by more than half million in '05 alone

[Update: See explanatory note at end]

Financial statements released on Monday by the provincial finance department showed that the House of Assembly overspent member's allowances - the subject of a current scandal - by more than $550,000 in Fiscal Year (FY) 2005 even though Budget 2006 released in March, 2006 reported the expenditures were exactly on the budgeted amounts approved by the legislature.

Fiscal Year 2005 ran from 01 April 2005 to 31 March 2006.

Expenditure in FY 2005 for the line item "Allowances and Assistance" under the House of Assembly operations was budgeted at $5, 090, 800 with actual spending reported at the end of the fiscal year (31 Mar 06) as the same number.

Revised figures released Monday by the finance department show the actual expenditure for members' constituency and other allowances was actually $5, 648, 119, a difference of $557,319. (page 41)

Monday's revised financial statement contains a line called "amended estimates" but the figure given under that column - approximately $5.4 million - is not contained in the Budget 2006 estimates. ¹

The "amended" figures have apparently not been released before. Government's website contains only the Budget 2006 documents, including the estimates, as originally released.

The Budget 2006 Estimates figures for the House of Assembly in virtually every line show expenditures matching budget forecasts to the penny, a circumstance that never occurs. The only variation is an additional $375, 000 for unspecified "Professional Services" under revised spending for FY 2005. In the Estimates, "revised" is supposed to mean the year-end actual spending.

In Monday's financial statement, the professional services amount is shown as actually having been about $374, 000 but no indication is given as to what professional services were purchased.

Government likely knew of problems earlier than previously admitted

The unusual way of reporting House of Assembly spending in the 2006 estimates suggests very strongly that the provincial government was aware of financial problems in the House of Assembly for FY 2005 at least as early as March 2006 and possibly weeks or months earlier.

The House of Assembly spending scandal was revealed in June, 2006 with the premier's announcement that Government House Leader and natural resources minister Ed Byrne had resigned as a result of an audit conducted by John Noseworthy, the province's auditor general.

The original news release makes no mention of the date when Noseworthy began working, but in subsequent media interviews Premier Danny Williams appeared surprised that financial problems existed until advised of the allegations against Byrne.

Auditor General's first reports left hundreds of thousands in spending missed or unexplained

Noseworthy's reports on certain suppliers and on two current members (Wally Anderson and Randy Collins) of the legislature show questionable payments totaling $769, 058 for FY 2005. However, Noseworthy reported only $116, 765 in overpayments on members' allowances for that year before announcing his review was completed, the first time. Monday's new financial statements show an additional $440, 554 in constituency allowance spending that was completely unaccounted for or unexplained by Noseworthy's previous work.

In a surprise announcement in late July, government announced that Noseworthy would conduct a new review of some House of Assembly spending, despite his earlier claim that his work was completed. His revised mandate does not include any period after 31 March 2004, however.

Monday's financial statements may be evidence that Noseworthy is getting a second chance to review some spending, but only on year's that do not call into question claims by the premier and others that the House of Assembly financial problems do not extend past the end of FY 2003.

Order-in-Council 2006-295, dated 19 Jul 06, invites the Auditor General John Noseworthy to carry out:

- annual audits of the accounts of the House of Assembly from Fiscal Years 1999/2000 to 2003/2004; and

- a review of constituency allowances between 1989 and 2004 further to the Morgan Commission Report, to determine whether overspending occurred at the constituency level beyond funds which were approved, authorized or provided through the Internal Economy Commission policy.

Budget 2006 estimates also cast increased doubt on repeated claims by the Speaker of the House of Assembly, the Auditor General, the finance minister and the Premier that financial problems in the House of Assembly did not continue past March/April 2004.

___________________________

¹ Explanatory Note: The Public Accounts are the statements of provincial government financial accounts. These account statements are required to be made public under the Financial Administration Act and must be auditted by the Auditor General.

Typically they are compiled after 31 March and tabled in the legislature, as required by the FAA, by the fall of the same year. The publication contains several volumes of figures and explanatory notes. For example, Fiscal Year 2004 ended on 31 March 2005. By Fall 2005, the Public Accounts for FY 2004 were produced and made made public.

The Public Accounts reflect the complete and accurate record of the previous fiscal year based on a detailed review and allocation.

Keeping of the public accounts is vested under the FAA in the Comptroller General.

Estimates are the annual budget estimates compiled by the government and laid before the House of Assembly for approval each year. They contain, among other things, a report of the previous fiscal year's budget and actual performance at the end of the fiscal year.

The column labelled "amended estimates" or "amended in Volume III of the Public Accounts should be the same number contained in the budget and presented as "revised" for the previous fiscal year.

For example, a line item in Budget 2004 Estimates may have ben given as 1,000 to be spent in FY 2004. In the Estimates presented for 2005, the 2004 results would have shown "Budget" as $1, 000 and a figure labelled "Revised" that would be the actual amount spent under that line item.

The "revised" from the Estimates is the spending at the end of the fiscal year as shown by all government financial records including those maintained by the Comptroller General.

The "Amended" figure contained in Volume III of the Public Accounts should be the "revised" figure from the most recent budget. Volume II will provide an accurate figure in addition to this which shows what the final financial position of the province is with respect to that line item. It is the result of a detailed calculation by the Comptroller General as reviewed and approved by the Auditor General.

In the past two budgets, FY 2005 and FY 2006, the line item for House of Assembly allowances and assistance is consistently misreported. However, the figures were known or ought to have been known to the Comptroller General and the finance minister at the time the budget estimates were tabled in the legislature for approval.

In previous fiscal years, the variation between the Estimates and the Public Accounts is comparatively small, including for the allowances and assistance item. In FY 2005 and FY 2006, the results are under reported by $450,000 and $550, 000 respectively and inexplicably.

Both the Estimates and the Public Accounts are compiled by the same officials using the same information databases. Both documents are made public since approval of spending by the Crown is a fundamental way the elected representatives of the people of Newfoundland and Labrador hold government accountable on behalf of electors.

Minor variations occur, however, the misreporting of the accounts and estimates - advertent or inadvertent - for the past two fiscal years is of such a magnitude (10% of the line time total amount) that the discrepancy and the consistency of the misreporting are cause to raise serious questions.

The report released on Monday is described in a way that suggest they are intended to replace Volume II of the Public Accounts. However, Monday's report has not been auditted. Volumes I and II of the Public Accounts will apparently be published at a later date.

House of Assembly overspending known and approved?

Budget documents and reports on the provincial government's public accounts contain glaring discrepancies, a review of financial statements revealed.

Beginning in Fiscal year 2004, members of the House of Assembly had their constituency and similar allowances capped at a total of $5, 090, 800.

However, Volume III of the Public Accounts, an annual compilation by the Comptroller General shows the account was overspent that year by more than $479, 000. (page 43) The next year, the accounts were overspent by over $550, 000 according to a new report introduced by finance minister Loyola Sullivan purportedly to improve budgeting and accountability of government spending.

"This government is committed to accountability and transparency and this is just another mechanism to keep the people of the province in tune with our province's financial picture," Sullivan said in a news release.

Despite the details contained in the Public Accounts, both Budget 2005 and Budget 2006, the estimates - which contain reported actual spending for the previous year - the House of Assembly spending is shown as being exactly on budget.

The Public Accounts are released some time after the budget period, however, the figures should match since the data used comes from the same sets of records in the Department of Finance, including records maintained by the Comptroller General.

The discrepancy is too great for two years in a row to suggest mere coincidence or problems in addition.

Under section 58 of the Financial Administration Act, the Comptroller General is required to maintain the records of the Consolidated Revenue Fund and under s. 29, to ensure no payments are made in excess of appropriations by the House of Assembly. The Comptroller General is also required under that section to report instances of overpayments to the treasury board for action. Treasury board is an executive committee of the cabinet responsible for the financial administration of government.

One of the continuing mysteries of the current scandal is how $3.9 million of public money could be disbursed by the Comptroller General over a five year period without being noticed.

Details contained in the Public Accounts suggest that some individuals were aware of the discrepancies and that the overspending was sanctioned either by treasury board, the House of Assembly's Internal Economy Commission or both. The Internal Economy Commission is the executive committee of the legislature that, like treasury board for government, handles the financial administration of the legislature itself.

The Comptroller General obviously was aware of significant budget overpayments since they are reported faithfully for FY 2004 and FY 2005. The finance minister and president of treasury board would ordinarily also be aware of the overpayments since he or she typically sits on both IEC and treasury board.Itt would beunusuall - especially under the current circumstances - if the finance minister was not briefed on these specific discrepancies.

None of the reviews approved by cabinet will examine the operations of treasury board, the Comptroller General and the Internal Economy Commission to determine what, if anyapprovalss were given during FY 2004 and FY 2005 for overspending.

The Auditor General's previous reports suggest that at least half of the $3.9 million in questionable spending took place after April 2004. Under Order in Council 2006-295, Auditor General John Noseworthy's second review will not examine accounts after March 2004. The order in council directs Noseworthy "to determine whether overspendingoccurredd at the constituency level beyond funds which were approved, authorized or provided for through Internal Economy Commission policy." [emphasis added]

If overspending was approved by IEC , treasury board or both, then the spending is legal unless other criminal acts took place such as fraud or forgery.

A quickie rejoinder to Ron Penney

So Ron Penney thinks Andy Wells - Ron's boss - is qualified to head the offshore regulatory board.

Then he says two things that are odd, if not contradictory. First he says that all the heads of the board to date haven't had a background in regulatory agencies - or for that matter oil and gas. Therefore, the chairman doesn't need to have an oil and gas background, or indeed any knowledge of the industry at all.

Second, Penney says there's a need to make a change in the board's leadership because the board hasn't been doing a good job, led as it has been, by guys who don't know the industry.

Ok.

Well, the stated qualifications - agreed to by Danny Williams from the outset - called for a change in direction for the board's leadership by specifying that the new chairman and chief executive officer would need extensive knowledge of the oil and gas industry, as well as technical knowledge given that the board is a technical regulatory body.

So the critieria used to judge Andy's candidacy already reflect Ron's supposed desire for change.

Here's the specific set of criteria since Ron clearly hadn't read them before he made his comments:

Candidates will have an in-depth knowledge of Newfoundland and Labrador'’s offshore oil and gas activities, along with a demonstrated ability to manage an organization with diverse technical and regulatory responsibilities, and to work effectively with senior industry and government officials. Qualified individuals will also have a good understanding of the structure and operation of the Canadian and international petroleum industry. Applicants will have extensive experience in the operational aspects of offshore petroleum activities, including full knowledge of related business, financial, safety and environmental matters, and of federal and provincial government legislation and operations. In addition, candidates will have experience in dealing with industry associations and a wide range of non-government organizations. This position requires exceptional communication skills.

On that basis, Wells is not qualified for the job.

Now, that's not just my opinion.

It's not just the opinion of Mr. Justice Halley.

Danny Williams said it when he signed off on the qualifications listed above long before he decided Andy Wells was the guy for the job.

Danny Williams said he when he endorsed these or similar criteria to be used by the binding arbitration panel.

Using Danny Williams' own criteria, the arbitration panel decided Andy Wells isn't qualified for the job: Max Ruelokke is.

For a guy who supposedly played a key role negotiating the Atlantic Accord (195) - the real Accord - Penney doesn't seem to know the document very well. Penney told the Telegram the board needs a shakeup because it hasn't done a good job of delivering benefits to the province.

As Ron knows - or ought to know - that is not the offshore board's job.

It never was. Not even when Ron was inking the deal in 1985.

The job of setting and delivering benefits to the province rests with people like Danny Williams, on whose behalf Ron was obviously speaking.

On that basis, and given the internal contradictions in his comments, Ron Penney is wrong both on the background to the offshore board and on Andy Wells.

After all, Ron's "rationale" was almost exactly the same one Danny's been offering, contradictions, serious factual errors and all.

Just like Danny.

Right down to the self-massage.

Mainland drivel

Only a reporter not from Newfoundland and Labrador could write the drivel found in a recent Macleans profile of Premier Danny Williams.

If Macleans has laid off the fact-checkers that helped to keep the magazine on the top of the reporting pile, they might want to reconsider and get them back on the job pronto.

Among the dubious - in some cases laughable - claims:

- that Danny Williams is likely the only Premier of the province to suffer a lower quality of life as Premier;

- that Williams' personal popularity has gone up since he lost a deal on Hebron in April;

- an unquestioning repetion of Williams' ludicrous claim that Hebron meant $10 billion to the federal government. It meant at least that much to Williams but nothing even close to that to the federal government;

- that Williams came out on top during his Larry King Live appearance with the Maccartney's over the seal hunt. Even some of his staunchest supporters have come to udnerstand the poor boy got snookered into the appearance and then got screwed at every turn by a show that was skewed to Heather and Paul; and

- that brinksmanship with Paul Martin "allowed Williams to drag Newfoundland from the edge of bankruptcy". High oil prices did that, not Danny Williams. Macleans' business reporters might want to take a look at Williams spend-happy government to get a more accurate take on this one.

It would almost make one believe that Williams negotiated on-going flatulent coverage from Macleans as part of his deal to sell Cable Atlantic to Ted Rogers. Rogers owns Macleans..

Oh well, since Williams has started to blacklist local reporters who ask him tough but fair questions, the poor guy will have to take the ego-stroking he apparently craves wherever he can get it.

"We're lovers and we're fighters," Williams says. "Newfoundlanders and Labradorians like to be loved."

L'etat c'est moi, indeed.

This week's Spindy

1. Front page article on some ministers' helicopter rental expenses. Not much detail, missing consideration of ministers' overall travel expenses, but still a cute little story.

My favourite is the 5K spent by one minister - Paul Shelly - to get to a career fair in Harbour Breton, the Town the Premier Forgot.

2. Column by Ryan Cleary in which he advises that the Premier has put the Indy on a blacklist. The crime: asking questions the thin-skinned petulant former hero of the Indy thought were "inappropriate" and a "personal attack".

The Premier's personal publicist - she who communicates only via Crackberry e-mail - either agrees with the bullshit decree or lacks the professional judgment and business stones to talk some sense into her client. (As an aside, between the comments from the Telly this week about government's directors of mis-"communication" and the vapid letter co-authored by several of my colleagues taking the Telly to task, I gotta admit I am with the Telly.)

Cleary's best line is the one where he notes - for Danny the Wonder Pony's benefit, no doubt - that the come-out-swinging at everyone all the time thing gets a bit old after a while.

Ryan is right. Problem is, Ryan, when you are a one trick pony, taking away your trick doesn't improve the show. He doesn't have time to learn a new trick as he orders his personal publicist to blacklist you, blackball you and other wise try to bollocks you up for daring to do your job.

Let's face it people: if Danny has turned on the Indy - and does it in such a chickensh*t way - odds are good, other media in town have been or will be getting similar treatment. That is they'll be blacklisted unless they conform to Danny's idea that their role is to be cheerleading for him.

Anyone remember when Danny explained that cheerleading was everyone's job in the province? He makes the decisions. We stand behind him and tell him how wonderful he is.

Ryan must have missed that memo.

3. Missing this week: a column from Radio Hydro Queen. The ramblings seem to have taken their toll on Ryan Cleary's time and patience. Instead, note the letter to the editor from former CBC producer Bill Kelly in which he lambaste's the former columnist for her lack of credibility.

Bill just recites a bunch of well-known stuff about the woman who built her name on radio call-in shows but seems to have abandoned them in a snit. Well, at least the VOCM ones. No talk-balk line at CBC is safe from her rantings these days. Would somebody at VOCM apologize to her? Puhleese.

Bill can expect a string of e-mails from said Hydro Queen, most of which will be incoherent strings of phrases. Don't bother deciphering them. Just delete them, Bill. It saves time.

4. Best piece of all: Ivan Morgan's piece on a former Canadian army sniper from Newfoundland. Doesn't need description. Just read the piece.

Canadians in Afghanistan, yet more

This video clip is additional footage to the 02 Aug 06 post on operations on or about 08 Jul 06 by 2 PPCLI.

This footage is considerably more rough and shows both the Canadian fighting alongside Afghan forces and footage from the next day showing Canadians inspecting the Taliban/insurgent position they were attacking.

Note the Afghan soldiers firing RPGs (rocket propelled grenades) and mention of an airburst, along with the sound of the incoming round and explosion.

Again, this footage shows the very close quarters in which fights take place.

This is not work or family-friendly due to language and violence.

Canadians in Afghanistan, still more video

Video of elements of 2 PPCLI ambushed by Taliban forces, Sangin, Helmand province, 15 Jul 06.

This not family or work friendly due to language and violence. Note at one point, a grenade being tossed less than 50 metres from Canadian positions.

This video and others posted demonstrate the close-in nature of the Canadian operations, with action occurring in very confined spaces. Grenades are commonly used.

At one point toward the end of this clip, notice a heavy thumping bang coming from the left of the Canadians' position as they advance. This appears to be the 25 mm canon on the LAV-III providing covering fire.

RPG is a Russian-made rocket propelled grenade; it was designed originally as an anti-armour weapon but has come to be used as a form of light artillery. in Chechnya, anti-Russian forces have been known to fire the rocket upward like a mortar. In Somalia, local fighters found them to be useful anti-helicopter weapons.

Frag refers to a fragmentation grenade. Soldiers will shout "frag in" or "grenade" to warn nearby comrades that a grenade has been thrown.

Canadians in Afghanistan, more video

Footage of a dawn assault by soldiers of Alpha Company, 2 Princess Patricia's Canadian Light Infantry, 13 Jul 06. Location given as Hydarabad, Helmand province.

Note this is rough footage and is neither family nor work-friendly owing to language and violence.

At one point in this video, soldiers are warned to take cover as an air-burst is coming. Listen for the whistling noise as the round (artillery?) approaches, followed by a small explosion and a puff of black smoke in the air. This shell has sprayed the area immediately underneath with small pieces of metal.

Of course, I think my boss is the greatest guy in the universe

City solicitor Ron Penney is in the Telegram today insisting, among other things that Andy Wells is more qualified than anyone to head the board regulating the province's offshore industry.

We'll deal with the serious shortcomings of Penney's analysis over the weekend.

In the meantime, at left is a photograph of the group that negotiated the Atlantic Accord (1985) along with the provincial and federal ministers involved. The crowd standing are a mix of federal and provincial officials. Seated, left to right, are: Bill Marshall (provincial energy minister), Brian Peckford, Brian Mulroney and Pat Carney (Marshall's federal counterpart).

Ron Penney is the second from the right, standing. Andy Wells other chief advisor on oil and gas matters - besides Penney - is the fellow in the beige suit standing with his hand on Brian Peckford's chair. That's Cabot Martin, for those who don't recognize him.

The best quote of the entire piece comes right at the end:

"This is an important public policy debate. It's important that people have the views of somebody who is knowledgeable about this issue."

The first sentence is absolutely correct. That's why the debate has been raging for a year now. It's also why we'll deal with the substance of Penney's views in a later (and sadly longer) post.

If Penney's assessment of his current boss' sterling qualifications had merit, Penney wouldn't need to swell himself with the gratuitous self-massage of the second sentence.

Federally-funded rugby centre doesn't fit program specs

A new $6.3 million recreation complex attached to a privately owned rugby club doesn't seem to fit the criteria for the federal-provincial program from which most of the funding will come.

Loyola Hearn, Newfoundland and Labrador's federal cabinet representative announced $4.0 million will be spent on the project by Ottawa and St. John's out of the Canada-Newfoundland and Labrador Municipal Rural Infrastructure Fund.

Established in 2005, the municipal infrastructure fund was intended to support development of infrastructure in rural parts of Canada, with an emphasis in Newfoundland and Labrador on so-called "green" projects.

Touted as a provincial recreation centre, the new complex will include additions to an existing privately-owned rugby club facility in the heart of the province's largest city and within easy commuting distance of several publicly owned or publicly-accessible sports facilities.

The national programs main website shows just how unusual it is to see funding for an urban sports complex under the rural fund, particularly one closely associated with a private sports venture.

The majority of projects already announced in other parts of Canada cover water and sewer installation and upgrading, fire service improvements, and road and bridge work. In March, the Governments of Canada and New Brunswick announced two ice skating complexes costing a total of $30 million for Fredericton, the province's capital city, based an application by the city council. That appears to be the only project of its type.

The provincial government isn't listed as one of the eligible applicants on the Newfoundland and Labrador program website. According to the information there, eligible applicants include:

Local governments including towns, regions, or local service districts; Inuit Community Councils; and non-governmental organizations whose application is supported by a resolution from a local government.

Read the actual agreement though and you see that the provincial government can apply and own the infrastructure, even though the provincial government sits on the joint management committee that approves applications.

Today's announcement contained no details of the management arrangement for the new complex even though it will include privately-owned space. Nor has it been revealed which organization applied for the federal and provincial funding.

Hearn doles out pork; soldiers still waiting - Updated

Loyola Hearn will announce today that the federal government will pump cash into a new "provincial" recreation centre being built on Crosbie Road in St. John's to replace a facility at the former Torbay air base.

[Update: According to the news release, the provincial and federal governments will contribute a total of $4.0 million from a jointly funded rural infrastructure agreement. Another $1.3 million will come from the City of St. John's and another $1.0 million will be raised by Sport Newfoundland and Labrador, a local rugby club and other fundraising. The provincial recreation centre project will apparently include a major addition to a privately-owned rugby club facility.]

The City of St. John's has already committed cash to the new building.

Meanwhile, Hearn ignores - as his predecessors have ignored - the need for a new headquarters and offices for the Regular Force presence in St. John's, cadets and four of the army and communications reserve units in the province sit in buildings slated for disposal.

Estimated cost of the project is $68 million to house Canadian Forces Station St. John's, cadet headquarters, The Royal Newfoundland Regiment, 56 Field Engineer Squadron, 36 Service Battalion and 728 Communications Squadron.

It's hard to understand why the federal government would pump cash into a building that is entirely the provincial government's responsibility to build yet a much larger and more important project that is entirely a federal responsibility sits stalled somewhere in the depths of the federal bureaucracy.

What's worse, the reserve units and CFS St. John's are responsible for considerable economic activity in the St. John's area, far more direct economic activity and benefit than the provincially-owned and operated facility will create.

Hearn might toss up the O'Connor defence plan to drop a new reserve unit in St. John's as a reason for the delay. That is just an excuse. None of O'Connor's pork-spending has been costed or approved and it may well take years before we see the first soldier of that unit in uniform, if we ever see him or her.

[Update II: As Back Talk host Denis Molloy noted, Hearn apparently assured everyone that the new DND headquarters is under active consideration. The problem is that it has been under "active" consideration for the better part of a decade through administrations both Liberal and Conservative. The hang-up in approval for such a necessary project remains inexplicable.]

In the meantime, the members of our Canadian Forces work away in buildings left over from the Second World War that are slated for disposal and that should have been demolished years.

Hearn should show a bit of interest in this project rather than gaining some publicity for himself pumping cash to support a provincial government the feds shouldn't be supporting and announcing millions for communities from a program put in place by the previous Liberal administration - and needlessly delayed by the provincial government.

Insights into the Premier's mindset

From the decision of an Ontario judge on a lawsuit filed by Henley Capital against Cable Atlantic, Inc. in a dispute over fees owed to Henley for advice and support provided Danny Williams and Dean MacDonald in selling Cable Atlantic to GT Group Telecom and Rogers in 2000:

"We are adamant that your client is not entitled to any additional compensation and will only pay same if ordered to do so by the Supreme Court of Canada.

Judge yourself accordingly!"

Danny Williams to solicitor for Henley Capital, January 5, 2001.

At that point, Cable Atlantic had paid Henley slightly more than $65,000 against an invoice for services rendered that eventually totaled almost $400,000.

Williams, who apparently had not seen the agreement between Henley and Cable Atlantic until after the sales were concluded, contended in the letter that the fees agreed upon were considerably less than Henley billed and that Cable Atlantic hadn't really needed Henley's assistance since the company principals - Williams, MacDonald and other senior officers - knew enough to conduct the sale themselves without Henley.

At several points in the decision, the judge notes that Williams and MacDonald considered Henley's work to have been a "hobble", local slang for a small, inconsequential job.

The pattern in this case is interesting on several points.

Firstly, Henley's work is diminished by Williams and MacDonald to the point of near insignificance despite evidence that Henley's work and his advice garnered significant financial benefit to Williams and MacDonald. The court was told and repeats the characterization that Henley's contract was considered a hobble.

Secondly, Williams is described in the decision as going "ballistic" when seeing Henley's invoice. Williams' temper is legendary.

It is almost incomprehensible that MacDonald did not show the Henley contract to Williams . Since the court has accepted this as fact, there is nothing to do but marvel at the notion that such a failure would occur. Perhaps Williams never paid the final settlement and the legal costs out of his own pocket, requiring instead that MacDonald foot the bill.

Thirdly, as in the quote above, Williams is prepared to take firm positions - perhaps in the heat of the moment - and then to sustain that position despite the costs.

In this instance, had Williams as majority shareholder decided to settle the account at the outset, the total outlay would have been around $400, 000 on a gross profit of close to $300 million in cash and stocks.

Even if Williams had settled this matter after trial - the decision was rendered on 31 May 2004 - the total costs would have been considerably less than the final tally.

Instead, Williams expended considerably more than that over a five year period in legal fees and associated costs including giving evidence in a Toronto courtroom. The case went through a first hearing and a subsequent appeal to the Ontario Court of Appeal that rendered judgment in a succinct four paragraph judgment in late June 2006.

There is holding to a position on principle; then there is holding to a position despite the financial and other rationales in favour of settlement.

This entire court case is odd since Williams' law firm based its insurance business on the simple premise that, in almost all instances, insurance companies are prepared to settle for a quantity of cash based on a rational cost/benefit assessment. In Williams' case, he apparently operates on the basis of never changing a position and never settling under any circumstances until there are simply no alternatives.

Fourthly, there is an interesting comment on Williams' memory of events or his account of events. At one point, henley gave evidence, supported by testimony from John Tory, then heading Rogers, that Tory had contacted Williams on a particular date to make another offer on cable Atlantic. Williams denied having spoken to anyone from Rogers on that date.

Fifth, MacDonald is described in the 2004 decision as having amended his testimony or altered his testimony as evidence was presented contradicting his statements during discovery.

Sixth, overall, it is interesting to note that at no point did Williams or MacDonald attend to negotiating a final version of the initial contract, addressing performance bonuses or, after the deals were concluded to achieve a resolution of the dispute other than through court.

The initial decision notes that MacDonald's response to an e-mail from Henley containing a draft services contract was "bantering", but apparently not substantive. Subsequently, and despite repeated efforts by Henley to talk cash with MacDonald on additional fees and charges, no discussions took place. Finally, when the dispute arose over the invoice, neither Williams nor MacDonald ever met with Henley face-to-face in an effort to resolve the dispute short of court.

This fits the seat-of-the-pants approach taken to the federal government in 2004/05. At that point, no firm proposals were presented to the federal government until November 2004.

It also suggests that similarly slap-dash negotiating style that would have contributed ultimately to the collapse of the Hebron talks. Poor communication could easily have led to both parties misunderstanding what had been agreed upon. Ultimately, Williams tendency to take firm decisions and not back off them - irrespective of the consequences - can easily be seen to parallel the experience with Hebron. Once he had decided on an equity position, he would easily sacrifice $10 billion for a mere $1.5 billion in the same way that in Henley v. Cable Atlantic he was prepared to pay out twice or three times the disputed invoice in total costs only to ultimately wind up losing the battle.

For Max Ruelokke, the implication here is that we may well see the matter headed to a higher court. We may also see the appeal period played out and an announcement made settling the matter as quietly as possible. The only thing certain is that Williams is unlikely to comply with the recent Supreme Court decision unless he absolutely has no alternative.

For Hebron, it's hard to know what henley might indicate other than giving a better understanding of how the supposedly masterful negotiator could fail, without a good reason. Once he locked his mind into a position, there simply is no shifting him, no matter how irrational the consequences are.

Lord doomed in NB?

Bernard Lord will ask the Lieutenant Governor to send New Brunswickers to the polls on September 18 as the boy-king of Canada's only bilingual province seeks a third term as premier.

Given that he only won last time by a single seat, let's say the fight will be close this time.

Good money would be on Lord heading for the Opposition benches.

What he said

Offal News on Kathy Dunderdale, Danny Williams and the delay on the Max Ruelokke file.

It's called negligent discharge

Accidental discharge in a case like this is like describing a suicide as "killed while cleaning his weapon".

It doesn't describe what happened. In order for the weapon to fire, there had to be a round in the chamber. That's risky enough considering that even if the safety was on, it can easily become dislodged in an vehicle accident.

That's when bad things happen.

Like in this case.

Let's get a board of inquiry going right away and make sure the weapon doesn't have a problem and the battalion standard operating procedures are the right ones.

Radio Free Terra Nova

One man's take on a local media outlet and its presentation of news from The Hill.