Danny Williams resignation: Bond Papers news story of 2006

While many stories vied for contention, Danny Williams' resignation is Bond Paper's news story of the year for 2006 and Danny Williams is the newsmaker of the year.

Williams announced his resignation - actually that he would not seek a third term in 2011 - in comments made to VOCM and then repeated in subsequent year-end interviews.

Williams' resignation, likely to come in 2009 or 2010 after a decision on the Lower Churchill, comes at the end of a year of continued set-backs for the premier who has been in equal measures petulant and posturing.

His announcement will further limit his ability to accomplish anything of substance on his own agenda in his remaining time in office. His cabinet and caucus will be reluctant to implement major initiatives that would limit harm their political fortunes and as government members begin to jockey for the leadership, government operations will slow.

Hebron fails

The past year marked a turning point for the Williams administration. The first setback was the collapse of negotiations on the Hebron oil field. After achieving an apparent agreement on January 26 covering royalties and local benefits, Williams introduced new conditions for a settlement including a 4.9% "equity stake" and so-called super-royalties that would see the province collect additional royalties as long as oil prices stayed above US$50 per barrel.

Bond Papers attributed the failure of the Hebron talks to a combination of a miscalculation by the Premier and a fundamental conflict of interest in the negotiations that saw the future equity partner sitting as the province's chief negotiator on benefits and royalties.

The economic impact of the Hebron failure was immediate. Housing prices in the St. John's area dropped dramatically, with some reporting a 25% decline in higher end properties. Oil companies drastically reduced their local offices. Chevron, for example, redeployed the 60 or so staffers working on Hebron, leaving behind a skeleton crew of five or six to oversee Chevron interest in existing production.

In April, Husky Energy's John Lau said the company would sideline its reported interest in natural gas exploration pending release of the province's gas royalty regime in the fall of 2006. By the end of 2006, Williams delayed announcement of the royalty regime and the province's energy plan until sometime in 2007.

The local oil and gas industry looked forward to starting construction of a major new field at Hebron. Construction was expected to pump the better part of $2.0 billion into the local economy and the royalty projections held the provincial government would receive between CDN$8.0 and CDN$10.0 billion in royalties over the life of Hebron production. Industry insiders anticipated the positive mood resulting from a Hebron deal would boost exploration which had recently seen increasing interest.

Instead, activity is likely to shrink with no construction at all and drilling programs. A decision on developing South Hibernia's 300 million barrels of light sweet crude has been delayed, with insiders speculating that the Williams administration will veto any approval of the project by the offshore regulatory board. A recent land sale by the board saw three parcels receiving no bids. In another sale, six of eight parcels received bids with the work commitments being primarily for seismic research. Delineation drilling on existing fields is largely completed and the only exploration drilling planned for 2007 is a pair of wells in the deep waters of the Orphan Basin.

More slipping and sliding in the oil patch

Williams met the Hebron failure with threats of expropriation, a tactic he tried with Abitibi Consolidated and its Stephenville operation. When Williams tried to elicit federal support for so-called fallow field powers, he was rejected flatly by Conservative Prime Minister Stephen Harper. This was one of several examples of Williams' inability to gain support in Ottawa.

Williams was also shut down in efforts to install St. John's mayor Andy Wells as chairman and chief executive officer of the offshore regulatory board. The federal government under Paul Martin was prepared to appoint Wells as chairman of the board, but Williams rejected the offer in favour of an effort to have Wells occupy both positions. An independent arbitration panel rejected Williams' choice in favour of a candidate who met all the provincial government's agreed upon selection criteria.

The successful candidate was forced to take legal action to secure his appointment. Williams fought the action, inventing a definition of one clause of the Atlantic Accord that was soundly rejected by the province's Supreme Court.

Lard of the Rings

In year-end interviews, Premier Danny Williams described the House of Assembly scandal as his single greatest regret of 2006. The province's auditor general alleged that some $4.4 million had been inappropriately spent by the legislature between 1997 and 2005. The accusations - which included members in all parties - cost Williams one of his senior ministers and cast a pall over the entire legislature.

But the handling of the scandal suggests Williams may be unwilling or unable to address serious problems. The Auditor General's reports account for less than half the overspending during the period. Williams has been contradicted by his finance minister - Loyola Sullivan [left]- on at least one occasion, namely the question of recovering money allegedly misappropriated. Williams favoured waiting until all investigations and reviews were finished; Sullivan moved to recover money from five current and former members of the legislature immediately.

In a broader sense though, Sullivan's continued handling of the file suggests problems within the administration that speak directly to the Premier's inability to control his administration or his reluctance to do so. Either way, the problems are deep.

Sullivan has been a member of the legislature's management committee for much of the period currently being investigated by three separate agencies. As well, he has been minister of finance since 2003 and has such has been or ought to have been aware of overspending. Bond Papers demonstrated that some of the most significant overspending occurred in the years after the October 2003 election.

Yet Sullivan remains as finance minister and cabinet has approved investigations and reviews which specifically avoid looking at actions by the legislature's Internal Economy Commission. As finance minister, Sullivan received the reports from Auditor General John Noseworthy [right] that alleged misappropriations and overspending.

The existence of this fundamental conflict of interest suggest that the premier is either unwilling or unable to take decisive action. The ease with which Sullivan won the fight over repayments suggests Williams is increasingly impotent within his own cabinet.

Sullivan's power: the clash over Equalization

This is not the first or most example of Sullivan's ability to contradict his boss in public and win. In the 2004 federal election, Sullivan endorsed the Conservative's Equalization plans while Williams publicly declared their impact could not be calculated.

In 2005/2006, Williams declared that the provincial government officially favoured inclusion of all provincial revenues in Equalization calculations as part of an overall reform of the major federal transfer to the provinces. Sullivan endorsed Harper's proposal.

By mid-2006, Williams was picking fights with Ottawa but based entirely on the position Sullivan had favoured. Sullivan's political partner, federal cabinet minister Loyola Hearn praised Sullivan as being the best negotiator on behalf of the province. This was a direct and calculated slap at Williams who bills himself as built a reputation for negotiating good deals on behalf of clients and avoiding bad deals.

Williams' political impotence likely to grow

Bond Papers selected Danny Williams as newsmaker of the year for the obvious and significant impact he had on the province and its economy in 2006. That impact will continue in 2007. The full - and likely negative - impact of the Hebron failure will be seen in the years beyond Williams' planned departure. In the same way, the full impact of Williams' announced departure from the premier's office will have an increasing impact on public life over the next three years. For that reason, Williams' resignation is the news story of this year.

By his own calculation, Williams' last years in politics will be focused on developing the Lower Churchill. A "go/no-go" decision is expected in 2009. It is possible there will be a flurry of activity in the months leading up to the fall 2007 general election and immediately after, but experience suggests otherwise.

Williams' administration has been characterised by extreme slowness in implementing even the most simple of initiatives. It took six months after his first cabinet was sworn in to find names for his departments. His own department - Business - languished for three years without staff appointments. The energy plan - inherited from previous Liberal administrations - has taken a further three years to develop under Williams and is slated for release some time in 2007.

An accountability act that was supposedly the centrepiece of Williams' ethics agenda sat un-proclaimed until December. It was only proclaimed after public criticism from the province's auditor general but even then departments and agencies have been given a further two years - until 2008 - to comply.

Typically, though, lame duck first ministers are unable to implement major initiatives the closer they get to leaving office. The reason is simple: those who will carry on, especially his likely successor won't want to take political hits on his behalf. The new leader will want as free a hand as possible to bring in his or her own agenda once in office.

The period from Brian Tobin's departure in October 2000 to Roger Grimes' swearing-in in early 2001 was a period of near complete inactivity within the provincial government. As a general election grew closer, Grimes' administration was unable or unwilling to implement any major initiatives that would likely draw public criticism. Senior public servants grew tired of complaining of the impotence of cabinet collectively.

The same thing occurred in 1988/89 in the period after Brian Peckford announced his resignation. It also occurred in 1979 in the wake of Frank Moores' departure.

The growing leadership fight within the Progressive Conservative party will be one of the other sources of friction within an administration already known for gear-grinding tardiness. Prospective leaders will devote increasing amounts of time to luring political support. Even if Williams requires declared candidates to resign from cabinet, political attention will inevitably turn increasingly away from governing and towards leadership issues for 12 to 18 months before Williams departure.

None have declared yet but early speculation suggests several current ministers will look to replace their current boss. Loyola Sullivan is a former party leader with a strong power base. Tom Rideout [left], currently fisheries minister and deputy premier, is a former premier who has longed to get his old job back. InTRD minister Trevor Taylor has potential.

Williams may shuffle his cabinet early in 2007 to change assignments. In the current cabinet configuration, any leadership fight involving Sullivan and Rideout - for example - has the potential to paralyse cabinet with two senior ministers jockeying for advantage. A change of assignments would also allow Williams to shrink from public scrutiny and focus on the one thing that may be his legacy: a Lower Churchill deal.

No matter how you assess the situation, there's no escaping the conclusion: Danny Williams' resignation is not only the news story of 2006, it will be be at the heart of news for the next three years.

-srbp-

Kingsley quits

Except for the fruit loops at the National Citizens Coalition and the other fruit loops who believe there are Liberal conspiracies in the media, in the bureaucracy and in the atmosphere just floating around, the sudden and cryptic resignation of Jean Pierre Kingsley as chief electoral officer for Canada is a bad sign.


[Right: Local planted Connie caller sits on hold waiting for Randy to return to the air on Monday morning, so he can explain why Kingsley was a kitten-eating alien Liberal agent.]

Law firm name of 2006

Atlantic regional law firms Patterson Palmer and Cox, Hanson, O'Reilly, Matheson announced in March that they would be merging effective in August.

Ok. Well, it's December and the firms are still operating separately if their separate websites are any indication.

But that's not the important bit.

The new firm will need a new name, since PPCHOM or some combination of those letters will be just too much for any letterhead to bear.

According to some sources, the firms have apparently settled on a new name for the merged firm, once it finally springs fully formed from the broodings of way too many corporate anal-retentive lawyers.

The name they've reputedly settled on: Cox, Palmer.

The stories Bond Papers has been getting could be apocryphal - the polite word for bullshite - but then again, you never know.

Over in the land God gave to Lucy Maud, the authorities were seriously considering naming a new post-secondary school the Samuel Holland Institute of Technology until someone wrote down the new acronym.

You may note that the two firms hired a Halifax-based ad agency - the cleverly named Extreme Group - to carry out the branding exercise for the new creation once the lawyers have finished the due diligence piece.

Whistling past the graveyard?

Maybe Danny should be paying attention to Bond Papers.

His comments on oil and gas to vocm.com run directly contrary to every indicator as Bond Papers posted just this morning. The petroleum industry globally is looking pretty well anywhere except Newfoundland and Labrador.

If we wanted to say it politely, we'd say the Premier is whistling past the graveyard.

The Venezuelan ideal

Danny Williams sorta likes the comparison to Hugo Chavez.

Danny's ersatz oil and gas company executives like to talk about how much of the world's oil and gas is run by state-owned enterprises.

Well, here's another view of the Venezuelan model, courtesy of the Washington Post.

"This [artificially low gasoline price] is something that really does not benefit the public," said Eddie Ramírez, a former state oil company executive who believes poorer Venezuelans shoulder much of the burden because they do not own cars. "It helps the privileged. But it's a theme that has always been taboo."

Gas demand drops

Demand for natural gas is forecast to drop in the United States next year and analysts say interesting in natural gas exploration is dropping.

In Newfoundland and Labrador, a natural gas royalty regime remains elusive. originally talked about in 1998, it has languished under successive administrations. The most recent policy dithering under Danny Williams has seen the policy largely ignored for the better part of three years. It will now be included in the energy plan - due sometime next year, having been proposed several times in 2006 and delayed inexplicably each time.

Local CBC names AG top newsmaker

Ok.
We can all buy the rationale.

But at what point will local media start looking more closely at Noseworthy himself and the management of the overall story?

There's a lot more to the House scandal than meets the eye.

Maine gas plant files for regulatory approval

DownEast filed Friday for certification of a US$500 million facility in Maine that would re-gasify 500 million cubic feet of natural gas per day for the American market.

The environmental certification application is likely to be opposed by environmentalists in New Brunswick.

Think of it this way

Will Gill Deacon be filling in for Mansbridge?

So then why...?

You know what I am driving at.

Ford dies; Reagan surprise

Former American president Gerald Ford died Tuesday, aged 93.

The guy who made Chevy Chase's career became president with Richard Nixon's resignation. He is generally regarded as a principled, capable president who led the United States through one of the most difficult periods in the country's political history.

In other news, recent scholarship has revealed that Ronald Reagan and Mikhail Gorbachev came close to completely eliminating their nations' nuclear weapons arnsenals at the Iceland summit in 1986.

The story originally aired on CBC's The Current back in October, but your humble e-scribbler only caught the interviews on Boxing Day. Here's a link to the audio file.

In 1986, some of us were headed to graduate school for more work on defence and foreign policy, so arms control was right at the heart of what we were doing. And yes, some of us felt that while there could and should be dramatic reductions in the size of nuclear arsenals, it was almsot impossible for two countries to reduce to zero unless every country reduced their arsenal to zero at the same time. The issue is a little more complex than either The Current's host and her schollar-guests acknowledge.

Nonetheless, the work they talk about sheds an entirely new perspective on a very important international political event.

It should also help some people to dramatically revise their views. If one prof in particular is still teaching international security and arms control courses at Memorial's political science department, he'll have to go back to the drawing board. One of the favourite demons in his analysis turns out to have been the opposite of the characture he liked to draw.

The Reykjavik Files can be found here at George Washington University's website.

NL hospitals included?

It's nice to hear about the medical capabilities at hospitals in the "Maritimes", but will any hospitals in Newfoundland and Labrador be accepting casualties from the next rotation in Afghanistan?

Some aspects of this story sound like a Canadian Press staffer living in Halifax writing Christmas filler.

Yuletide amusements

1. From John Gushue, a little quiz on local politics and current events in the past year. Your humble e-scribbler missed two questions. John is a wicked quiz compiler.

2. From NORAD, their annual live tracking of Santa as he travels around the world on this Christmas Eve. The site is fun and the wee ones in your household will delight in the videos of Santa as he travels to New Zealand and Australia (already done).

Happy Christmas!

Now that the annoyance is over, enjoy these contrasting examples of the mummering tradition. The first is from Dorset, the West Country county whence so many Newfoundlanders are descended. The second is a tiny snippet from Newfoundland.



Sadly, this was the only Newfoundland example of mummering available on Youtube. The local tradition of mummering is much more informal than the Dorset one, at least as described in the notes accompanying the clip above.

Leftovers from polling period

Government news releases must be on the quota system.

Either that or some departments just felt the need to clear out their backlog of bumpf on this, the last working day before Christmas.

How encouraging it is to know the provincial government is committed to safe communities.

That last government grant to roving gangs of murderers and rapists had me worried for a second.

Sheesh.

Oh yes.

One last thing.

It's nicely written, Bill.

But public onanism - even in written form - is still a crime that can land you in jail. Look up s. 173 or 175 of the Crim Code. There's a good chance someone in your office has a copy.

Twisted Christmas

1. There's a Santa who looks a lot like Elvis. ram file; great little parody of a song made famous by Bing Crosby.

2. Weird Al: Christmas at Ground Zero

Retilling the much ploughed patch

From the Financial Post, this article on the movement of aluminum production to the Middle East and Asia.

The big attraction is low-cost power and the giant manufacturing markets that need aluminum. In the past decade, China's share of world aluminum production has gone from 9% to 25%. Canada's share has declined by a couple of percentage points; ditto Europe (including Iceland). The American share has dropped as dramatically as China's has risen.

This seems like an opportune time to quote an observation by the late Don Jamieson, left, once deputy prime minister, minister of external affairs and at one time minister of regional economic expansion in the Government of Canada.

He once observed a common trait - a faulty perception really - among so many in Canada. The following excerpt is from his memoir, No place for fools: the political memoirs of Don Jamieson, volume 1, (St. John's: Breakwater, 1989), p. 158:

He [Joe Smallwood] was the victim as well of a delusion I have observed frequently among leaders at many levels. He thought that the area where he held sway was larger and more important than it actually was. Newfoundland was Smallwood's life, his universe and he developed exaggerated, unrealistic expectations for it. If other provinces and regions could have steel mills and similar heavy industries, so could Newfoundland. Likewise for secondary manufacturing and resource upgrading. Smallwood saw himself breaking new ground with this approach; in fact, he was retilling a much ploughed patch and, subconsciously, seeking to outperform previous Newfoundland leaders.

These days some use this sort of delusion to drive an entire blog-worth of posts or calls to talk shows in which, inevitably, Confederation would be blamed for the economic rise of China or for the misfortune of Newfoundland not being adjacent to the Asian giant.

Another kindred spirit runs the province on much the same delusion as some of his predecessors. No wonder the blogger is so critical of the other; they are fighting for same shop-worn turf.

(h/t to Offal News' Simon Lono for recalling Jamieson's wisdom)

The problem for Stock Day

Forget the fractured syntax.

Forget the racial overtones.

Stock Day obviously thinks in Stone Age terms if he refers to "down-east spearchuckers".



Here's what those "down-east" types think of when it comes to missile weapons, political or otherwise:




You keep on living in the past Stock and we'll see you at the polls.

Iceland's miracle: the other side

For some people, Iceland has replaced Ireland as the model du jour that we should be aping as quickly as possible.

Yada yada yada.

None of the proponents of the Iceland model actually talk about the Iceland model as it actually is; they just talk about what they fantasize it means. That's largely just an excuse to avoid dealing with local issues in a practical way, of course.

Well, one of the costs of Iceland's supposed economic miracle is a currency that is dropping against the Euro. As a result, the Icelandic central bank has raised interests rates to 14.25%. It's been about 15 years since we've seen those kinds of interest rates in Canada.

Investors are keeping a close eye on the Iceland situation since the whole economic tension is coming from a government deficit on current account that is running at 27% of gross domestic product in the third quarter.

To put that in context, that's the equivalent of the provincial government here running a deficit - in a three month period just ended - of around $1.35 billion. That's just in one quarter, and assuming the economic output in the economy right at the moment is about $5.0 billion per quarter.

At that rate, Newfoundland and Labrador would add another $5.0 billion or so to its debt in a single year. The current consolidated accrual debt at the moment is estimated at $11.0 billion. The whole government budget this year is in the neighbourhood of $5.0 billion.

Iceland might be able to manage that in short term. For Newfoundland and Labrador, that kind of economic mess would rival the stuff that led to the collapse of responsible government in 1934.

The story has been picked up as far away as Shanghai, based on the Bloomberg story.

This is the 18th time the central bank has raised interest rates since May 2004.

Christmas in Dannyland 5

Christmas in Dannyland 4, an unsolicited contribution by WJM, can be found at labradore.

Here's the next instalment from Bond. Maybe your humble e-scribbler will get a gig writing for Revue '06.

[Tune: Santa Claus is coming to town]

Danny's jaw is clenching again

He's gettin' annoyed.
He's royally upset.
Emotionally,
he's nearly a wreck.
Danny's jaw is clenching again.

He's showin' his angst
at Randy, not Bill.
The blood pressure's up.
He just cannot chill.
Danny's vein is throbbing again.

Refrain:

He's ticked off at the teachers.
He's riled at the PM.
The Opposition's got him miffed
pushin' Dan around the bend.

He's pissed off at Grimes.
Big Oil is bad, too.
He'll tell you
he's got lots better to do.
Danny's temple's throbbing again.

Pachelbel's Canon in D sucks bigtime

This guy has it right on.

As someone who suffered through the canon during his wedding - but managed to sneak "God Save the Tsar!" into the lineup - your humble e-scribbler brings you this hysterically funny take on what many of us feel: