Media Relations 101 Meltdown

No matter what people tell you, there is nothing that is ever really, truly off the record.

In the case of this e-mail exchange between Craig Westcott and the Premier's communications director over the course of a couple of years, you'd think that the most simple rule of media relations would be foremost in her mind.

Apparently not.

Then there is this comment from an e-mail dated in the middle of 2006.  it leaps out for two reasons, both of which are discussed below.

I feel compelled to point out that for two and a half years, you did not seek the premier out to gain his perspective on issues (despite the fact that the premier personally called you to offer himself up for a chat).

First, this comment is clearly incorrect  - and the comms director knew it was wrong - since there is a clear record of Westcott seeking interviews with the Premier and being told flatly that the Premier would not be accepting any of Westcott's interview requests. Consider this line from the e-mail sent the day before the comment quoted above:  "As per previous correspondence, the premier is not available for your interview requests."

How could Westcott have failed to seek out the Premier's comments when the same person knew that the office was rejecting all interview requests from the reporter?

Second, take a look at the comment in brackets, namely that the Premier had called Westcott personally for a "chat". There's no discussion of the chat, like what it was about, why the Premier was calling and why they didn't connect. Given that Westcott was trying to get the premier on the phone, but the Premier's Office was refusing Westcott's requests, this seems highly unusual.

Of course, cynics out there would be familiar with this "chat" thing.  A recent, former Premier used to practice "the chat" approach when there was a reporter or editor whose work the Premier of the day didn't appreciate. "The chat" may have started with a bit of charm, but usually it was usually a tongue-lashing that was intended to intimidate the editor or reporter into getting on board with whatever media line the government was pushing at the time.

At the very least, "the chat" made it clear that the highest political office in the province was personally displeased. That's a powerful thing and only the ballsiest of the ballsy wouldn't be impressed by the call. That's why the call gets made.  It's intended to intimidate.

In other instances, the recent former Premier would berate reporters in the course of a scrum. he lashed one reporter for daring to ask if it was true that the Premier's wife had recently been hired in a government-related job during the time of a hiring freeze and layoffs. It was a fair question, but the emotional reaction it gained was a purposeful way of marking territory and showing dominance in a very aggressive fashion.

Media relations (MR) is no place for amateurs, the naive or the faint of heart.  it's also often not a job for former reporters, but that's another story.

At times, MR can be an extremely unpleasant world. Nasty things get said.  Underneath it all, however, must be some kind of mutual respect or at least a mental framework in which the individuals can deal with each other professionally. 

The biggest thing is to keep personalities out of it;  sometimes even when you have to deal with arguably the biggest idiot on the planet (either as the comms person or the reporter/editor) you have to find a way of getting on with the job.

Take a look at the list the Premier's comms director cites as examples of Westcott's supposedly "malicious" reporting. They are editorial comments where opinion is accepted.  The biggest thing, though, is that the comments are personal. The Premier's comms director no doubt took her cues from her boss as to what constituted "malice". That's fair.  People on the receiving end of personal criticism usually get upset. 

The comms director's job in that case is not to act as the instrument of the boss' rage.  Rather the director is a buffer between the understandable, emotional outbursts and the larger interests that need to be managed. It's the director's job to sympathise with the boss but talk him or her off the ledge and keep them from doing something monumentally stupid like picking up the phone and having a 'chat' with the object of his or her anger.

You see, the more personal and the histrionic dominates MR, the more likely it is that one day the long sorry history of the exchanges will wind up in print or on the air somewhere.

And, as in this case, it isn't the reporter who comes off looking like a twit.

-srbp-

The nation's infrastructure burden

Anyone paying attention to the news on a cold December must have felt an extra chill to discover that Newfoundland and Labrador is currently facing an infrastructure deficit of $123 billion.

That's the figure contained in a news release from Municipalities Newfoundland and Labrador:

The financial needs of municipalities and the $123 billion infrastructure deficit must be addressed in the 2008 budget said MNL President Graham Letto.

Vocm.com faithfully reported the same figure:

Municipalities are putting the pressure on government to address the 123 billion dollar infrastructure deficit in the province.   MNL president Graham Letto says funding must be allocated in the 2008 Budget.  Letto says government should use the surplus to pay down the debt,  but the province must also take responsibility for the safety and comfort of its residents.  He says covering the cost of supplying basic municipal services like water, sewer, waste management, and safe roads is the single most challenging issue facing local governments.

And why shouldn't a news organization accept at face value a statement made by the organization representing towns and cities across the province?

Well, they shouldn't when the figure is wrong.

The infrastructure deficit figure of $123 billion is actually the Canadian number. It can be found in a news release from the Federation of Municipalities, the national organization to which MNL belongs:

Statement from FCM President Gord Steeves in response to comments made yesterday by Finance Minister Flaherty regarding a municipal report on the $123-billion municipal infrastructure deficit.

That release was issued on November 23.

The real figure for Newfoundland and Labrador is buried in paragraph three of the MNL release:

A report released last month by the Federation of Canadian Municipalities (FCM) found that nearly 80 percent of the Canada’s infrastructure is near collapse – $3 billion of that crumbling infrastructure is in this province.

Of course, we can likely forgive the local municipal leaders given the propensity of the current provincial administration to refer to the province as a nation.

Someone can restart a few hearts in the provincial cabinet.

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The only equity that makes sense

A profile of local entrepreneur Rob Crosbie.

This is the kind of equity that provincial government policy should be encouraging, the kind that comes from local entrepreneurship.

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So where is Danny, anyways?

Executive Council December 11, 2007

Deputy Premier to Attend Council of Atlantic Premiers Meeting

The Honourable Tom Rideout, Deputy Premier of Newfoundland and Labrador, will represent the province at the Council of Atlantic Premiers (CAP) meeting this week. CAP will be meeting in Halifax on Wednesday, December 12, 2007.

***Premier Williams regrets that he is unable to attend.***

-30-

Danny is somewhere unknown.

Florida, maybe?

Only last week, he confirmed his attendance.

So what happened?  The cave-in on Equalization?

Meanwhile, this guy is in charge.

 

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Tom Marshall's Christmas bunkum: the magical appearing, disappearing 2005 Danny Williams offshore cash

There are some upward and downward revisions to federal transfers. Based upon current projections, the province can optimize cash revenues in 2007-08 by electing to move from the fixed framework Equalization formula to the new formula this year. The province expects that Equalization will increase by $255.1 million in 2007-08, offset by a reduction of 1985 Atlantic Accord payment of $188.6, a net cash gain of $66.5 million. This also means that the expected $305.7 million draw down from the balance of the $2 billion 2005 Atlantic Accord advance payment, originally forecast to be recognized as revenue in 2007-08, will not occur this year.

Government of Newfoundland and Labrador, 2007-08 Fall Update

How many times have you heard a provincial cabinet minister or government back bencher tell you that there was $305 million in new cash in the 2007 budget thanks to Danny Williams and something they like to call the "Atlantic Accord?"

Forgive me.

That question has been asked before.

Well, the answer is way too many, given that it isn't true.  There is a number "$305 million" in the budget estimates as 2005 Atlantic Accord money but that does not represent new cash. It merely accounts for cash already received and spent in 2005.

But if you accepted the original government version, you might be just a wee bit confuddled by the sudden claim on Monday that the O'Brien formula would deliver $255 million in Equalization, which is a net gain of $66 million over the two Equalization offset payments.

Even in Joan Burke's newest new math, $188 million plus $305 million is $493 million.

And $255 million is less than $493 million not $66 million more than.

So what gives?

Well, two things.

First, that $305 million simply never existed as real cash in the current budget estimates.

Yes, that's right.  The finance minister said things that weren't even close to being correct.

In fact, as recently as his shameful assault on former premier Brian Peckford in late November, finance minister Tom Marshall said:

We got this offset payment that made us whole. And as a result of what Premier Williams did in '05, the Atlantic Accord '05, you know, this year we're showing 305 million, which is allowing us to forecast a surplus of 261 billion, I'm sorry, 261 million and to pay down some debt and that's what's made the difference.

Yes, according to Tom Marshall a mere two weeks ago, the surplus was due to Danny Williams and the $305 million. on Monday, we found out it was due to something else entirely, like say super high oil and nickel prices.

And the $305 million? It went poof because it never really existed.

You see - and this is the second point -  the only new offset cash in the 2007 budget was the bit coming from the 1985 Atlantic Accord - the real Accord.  That was set to be $188 million. Under the amendments to the 1985 deal accepted by the provincial government either in the spring or just this past week - Marshall has never acknowledged when the province really accepted the O'Brien Equalization formula and approved the changes to the Real Atlantic Accord - the 1985 Equalization offset payments are wiped out entirely in favour of $255 million in additional Equalization.

The choice the provincial government faced was between $255 million in new cash and $188 million in new cash.

Logically, the provincial government took the bigger number.

And that making us whole thing was obviously bunkum too, but that's really the subject of another post.

-srbp-

 

 

Flip? Meet Flop.

The changing view of gross domestic product for the provincial progressive Conservatives, as documented by labradore.

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Williams caves to Harper on Equalization

There's a reason why Danny Williams has gone to ground in the wake of his meeting with Stephen Harper.

He said "yes to less", yet again.

[Aside: Where is the Premier anyway? ]

Turns out the provincial government is accepting the O'Brien formula and the Nova Scotia Equalization deal Williams lambasted only a few weeks ago.

So much for ABC.

So much for the Prime Minister being "petty and untrustworthy".

In hindsight some of the media coverage and Williams remarks about the Nova Scotia negotiations and agreement are laughable.

Heck, the arguments were laughable at the time, much like the ones put forward organizers of the Rally for Danny who claimed it was non-partisan and were likely planning to fight to the death to defend the honour of the Fatherland.

Guess a few people will be having a large portion of crow instead of turkey this Christmas.

The government's decision to accept the supposedly unacceptable goes a long way to explaining why the finance minister refused to release his own department's analysis of the federal budget impact back in May when the Telegram asked for it.

Interesting, in hindsight, though, how close to the truth some earlier remarks turned out to be:

The provincial government knew generally speaking what was going to happen on Equalization about a year ago when it was first reported publicly.

The Premier knew the 100% option was definitely off the table likely before he laced into Steve Harper last October.

He almost certainly knew what was going on (give or take a few details) last December when Loyola Sullivan came back from a finance minister's meeting and had to attend a news scrum with the Premier standing by his side.

What played out from March onwards has been pure political theatre designed to get people in Newfoundland and Labrador agitated about something 99% of Canadians don't understand.

In the end, the Premier will just do what he planned to do once the feds announced exactly what they were going to do in march: flip from one plan to the other to maximize the cash flows.

There's no way the Prem can lose cash. Under every likely scenario, the provincial government continues to make more. It was only just a matter of how much more. look at the 2005 deal. he settled for way less than he started out looking for. In the end - as he admitted himself - it came down to what the cash advance amount was going to be.

He's a smart guy. That's why he places the angles on the cash and plays the public like a violin.

Why else has he all but given up on the 100% option? He knows it's impossible to get.

Why isn't he looking to get the caps removed from the Accords? That's the part that maximizes the cash to the province. Likely because his administration already consented to amending the 1985 deal and therefore doesn't have a leg to stand on.

There really isn't any other explanation for his using the weak "Steve lied" argument instead of taking down the feds with an iron-clad example of perfidy.

In the end, there'll be some extra cash in the provincial treasury and no one will recall the current racket six months after the last polls close.

Playing to the galleries always works in the theatre of Newfoundland politics. That's why so many politicians do it. Danny Williams just does it better than just about any thespian we've elected to the office.

Sadly, though, treating politics like a sordid little melodrama is why the financial ending is always the same.

That's from Bond Papers this past May.

Sometimes, these things are so obvious it's scary.

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In a nutshell

1. The finance minister admitted today in comments to reporters that the government had paid scant attention to the provincial debt thus far in its mandate. The government will apparently use the bulk of the 2007 budget windfall (estimated at more than $800 million) to reduce the public debt. Check the video when it comes available. Tom Marshall's comments show the hollowness of his previous claims about debt fighting.

2. Words to watch out for: "Once we account for the change in capital assets, the balance will reduce the province’s net debt." It's a question of assets and liabilities. Since the equity position contains both, let's see how the provincial government accounts for those in its upcoming budget. The windfall might actually go out the door with the debt only appearing to be reduced.

3. The only principle is cash. Not in the media reports by mid-day, but the provincial government is accepting the Harper Equalization deal, as amended by the agreement with Nova Scotia.

There's a gigantic surprise.

Not.

4. The finance minister still likes to pump out nonsense: "It is also important to acknowledge the Atlantic Accord 2005, which was successfully negotiated by Premier Williams, and its remarkable contribution to the overall improvement to the province’s fiscal position."

The improvement in the province's fiscal position is driven entirely by the results of the 1985 Atlantic Accord (the real one), three offshore development deals signed before 2003 and high mineral prices flowing from deals signed before 2003.

As the government statement said: "the change is due to much higher oil prices, increased production from the offshore projects, higher royalties for the White Rose project and higher than expected mineral prices."

Update:

5.  A portion of the finance minister's remarks are available from CBC [ram file].  Marshall refers to the cabinet decision to put $55 million of the last budget against the debt as being "not enough".    That isn't what Marshall said at the time of the budget.  In fact, his budget speech trumpeted the great strides in debt reduction he and his colleagues had made.  Rather than quote the Telegram editorial (even though the words are worth heeding), Marshall might well have pointed to those of us who have been drawing attention to the current administration's debt-reduction nakedness for some months now.

Turns out the Emperor and the entire court had no clothes and knew it all along.

6.  While you're listening try asking yourself a simple question:  who is Marshall trying to convince that paying down the debt is a good thing?  Is his audience inside cabinet or outside?

-srbp-

Turf War: did Danny give Steve the secret of fake popularity in exchange for future billions?

Isn't it odd that across the country a whole raft of people spontaneously wrote letters to the editor wanting an end to the Schreiber mess without any further inquiry?

And they all use very similar language.

Almost like they were getting messages from the same central hub.

"Charade". "Waste of money". "Dragging up" things from the distant past. "Going back 15 years". "Send Schrieber back."

Blah. Blah. Blah.

Even in the winter, Conservative astroturf still springs up looking real but still being as fake as fake can be.

You know astroturf. It's the stuff that turns nature on it's head: manure that looks like grassroots but still smells really bad.

Hey,maybe this is what Danny and Steve traded during their meeting: the secrets of faking public opinion. You'd swear these same comments have turned up on local open line shows whenever there's been a whiff of local political scandal involving their team.

The war is over and as a token of good faith, Danny gave Steve a taste of what the poll goosing machine looks like in full operation.

Sounds silly doesn't it? 

Poll goosing and astroturfing are silly ideas, but the local Tories still devote huge amounts of energy to the campaign, don't they?

Anyway, take this letter as a starting point:

I have a comment about the Schreiber hearings going on in Ottawa over the last two weeks. Can it be that our elected officials are so out of it (P. Martin, A. Nevil, J. Washalesalies?) that they cannot see this man has nothing on his mind other than making a mockery of the Canadian government and staying in Canada as long as possible to avoid prosecution in Germany?

I am amazed that they are not giving him a kiss on the cheek every morning. It's pathetic. It shows the average person how much the opposition parties will drag things on to try to get something on the current government. They are going back 15 to 20 years in hopes something sticks to Harper. What a waste of time and money.

I say send him back to Germany as quickly as possible to face his bribery and fraud charges, so the government can get back to the business at hand.

Doug Cowlthorp

Winnipeg

Then there are the rest:

The Telegram 08 Dec 2007

Enough with the Schreiber charade I am wondering if anyone can explain to me why millions and millions of our tax dollars are being spent on this Karlheinz Schreiber charade. It was more than 15 years ago. How far back do we want to go?

Why aren't we investigating any of the multitude of Chretien scandals or his tax-sheltered, morally questionable follower, Paul Martin? It's history.

Ninety-nine per cent of the evidence is the testimony of an aging, foreign man who specializes in creating scandals and, by his own admission, has made an entire career of shadowy payments and nebulous affairs, and is forever extending his stay in Canada to avoid his impending criminal trial in Germany.

Extradite him already, and stop wasting my money and pre-empting more intellectual TV like "The Simpsons." This is simply misuse of our tax dollars by the opposition to grab more votes.

Brendan Hynes

Salvage

****

Re "No cash for PM" (Dec. 5):

Federal politicians are particularly brilliant at making our entire government look like fools. And the Canadian media repeatedly fall over themselves to wallow in any whiff of scandal on Parliament Hill, no matter how far-fetched. Karlheinz Schreiber, on stage for his 15 minutes of fame, should be awarded a theatrical performance medal for making both institutions look like total jugheads.

Jim McDonald

Caledon East

****

The Daily Gleaner

05 Dec 07

Schreiber inquiry not needed

Karlheinz Schreiber has avoided extradition to Germany for more than eight years, so delaying and denying justice. His competent lawyers were skilled in the appeal process. Mud slinging, character assassinations and a circus atmosphere in Ottawa are evident.

Canadians realize that the thousands of pages in the upcoming inquiry report could cost taxpayers more than a million dollars. It will conclude that our former successful and competent PM behaved in a bizarre, secretive, desperate, greedy, unsavoury, reckless and unprincipled manner.

We have serious economic issues in forestry, manufacturing, health, etc. where our focus and ingenuity are needed. Is spending money wisely important in our Parliament? Police should be responsible for resolving this issue.

Harold Phalen

Fredericton

****

The Telegram 05 Dec 07

Axe the inquest

Prime Minister Stephen Harper has appointed Prof. David Johnston to decide how the public inquiry into the financial dealings between Brian Mulroney and Karlheinz Schreiber should be conducted.

Prof. Johnston would, after careful consideration of all the facts, do the country a great service by recommending that a commission of inquiry is unnecessary and a scandalous waste of taxpayers' money.

Burford Ploughman

St. John's

****

 Edmonton Journal

 04 Dec 07

Schreiber saga a waste of time, money

Re: "Schreiber starts paper shuttle between home and jail:  Will resume testifying before Commons committee on Tuesday," The Journal, Dec. 1.

Am I the only one who is tired of reading about Karlheinz Schreiber complaining that he did not have time to peruse the 35,000 pages of personal documents -- the equivalent of 50 700- page novels -- to refresh his memory about the $300,000 or $500,000 he allegedly gave former prime minister Brian Mulroney for doing, as Schreiber alleges, absolutely nothing?

How much is this hearing by the Commons ethics committee costing taxpayers? Schreiber had been ordered deported to Germany, where he is wanted on tax evasion, fraud and other corruption-related charges. I say put him on a plane and let him go. Our courts are backlogged with cases while Schreiber not only ties up valuable court time, but also wastes taxpayers' money.

You and I are paying for this indirectly through government lawyers, etc. Good riddance.

Don Marcus, Edmonton

[No, Don, you aren't alone. The rest of the Connie plants are moaning too]

****

Times & Transcript

 03 Dec 07

Inquiry just a waste of money

To The Editor:

A large number of Canadians will be disappointed in the prime minister if he allows the Schreiber inquiry to go forward. Nothing definitive can possibly come from people like Schreiber and Mulroney. Parliament should not be interfering in the judicial system.

The German system wants Schreiber behind bars. Let them have him and save Canadians the expense. As for Brian Mulroney, the public made up their mind on him some time ago.

The country did quite well while he was PM, but he does have a darker side to him. Old news.

I submit that most people are hoping that Mr. Harper cancels this whole inquiry and saves taxpayers $30 million. The Opposition will howl, but so what! It is Christmas; let's spend the money on another convention centre for the country or, better yet, a dozen new curling rinks.

Robert MacDiarmid, Moncton

****

National Post

03 Dec 07

Send Schreiber back to Germany

Re: Lawyer Claims Case Is 'Purely Political,' Dec. 1.

From my point of view, the "utter waste of time," as Karlheinz Schreiber's lawyer Edward Greenspan put it, is that Mr. Schreiber is still in Canada at all. He should have been back in Germany in 2000 at the latest. The eight years of haggling has been a gross waste of everyone's time.

If Mr. Greenspan is so concerned about losing his client and the attached fees he represents, perhaps he should apply to the German bar so he can represent Mr. Schreiber at his trial in Germany. Note to the Canadian government: phone Lufthansa, book a seat on the next available flight and send Mr. Schreiber home.

Enough of this charade.

Jim Anderson, Victoria.

****

The London Free Press

01 Dec 07

SCHREIBER'S STRATEGY SHOULD END IN A WEEK

Karlheinz Schreiber's game plan is obvious -- an attempt to extend the meeting of the ethics committee and avoid extradition to Germany to face the justice that he so richly deserves.

How can one believe, in such circumstances, anything that he has to say?

My recommendation to the committee is that Schreiber be given a maximum of one week to provide his testimony, starting Monday, following which he would be placed on an airplane for return to Germany.

At present Schreiber is in the driver's seat, playing his game with MPs. Let us resume control of the matter in hand.

Michael Cornell London

****

National Post

01 Dec 07

'The gods must be shaking their heads'

Re: A Man Eager For An Encore, John Ivison, Nov. 30.

The only "political point" that the ethics committee members scored with me is to reaffirm that our politicians continue to waste our valuable tax dollars. What a joke they make of themselves, what a waste of time and money, and what a shame when you think of all the serious problems in our country that they should be working on.

Lynn Clark, Grimsby, Ont.

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For the record: 2003 Tory commitment on lobbying

From the memory pit of the Internet, recall the Progressive Conservative commitment on lobbying and lobbyists.

Don't try to go to the party website to find the commitments from the 2003 election.  They've vanished as if they didn't exist.  Thanks to the Internet, though, the promises have been preserved for posterity and the occasional use, like this one.

There was a consultation and then new legislation, which came into force on October 11, 2005. What's interesting is how the legislation has worked in practice.  That's the subject of another post coming this weekend.  'Til then, here's the specific commitments from the 2003 general election:

A Progressive Conservative government will commission a process of public consultation to develop legislation for the registration of lobbyists operating in this Province.

The primary objectives of the legislation will be to:

• Establish a registry so the public will know who is lobbying and who is being lobbied.
• Require lobbyists to report their activities. It may also require those who hold public office to disclose circumstances in which they have been lobbied.
• Require lobbyists to file their general objectives and/or their specific lobbying activities.
• Differentiate between those who are paid to lobby government and those who represent volunteer or non-profit agencies.
• Impose significant penalties for those who violate these provisions.

-srbp-

2006 Newfound project shut down in Ireland by enviro concerns

Newfound Group tried to establish a resort complex in Ireland but was turned down by the local planning board, according to a story carried by the Sunday Business Post online edition in its July 2006 edition.

The project would have included 'holiday homes", a 100 room hotel and a golf course. objections were raised on environmental grounds with intervenors against the project including the Irish environment department. The planning board rejected the project...

on the grounds that it would "adversely affect the habitat of the area, especially that of the Lesser Horseshoe Bat, the pine martin and the red squirrel."

It also concluded that the proposed golf course "would represent a significant intrusion into the historic landscape" and that, without a hydrogeological study, it was unknown whether the project would be a "potential threat to the underlying groundwater".

The main opponents of the proposed development were An Taisce, the Department of the Environment, Heritage and Local Government, and the Cavan/Leitrim Environmental Awareness Network (CLEAN).

Newfound chief executive Brian Dobbin is quoted as referring to the decision as "bizarre". His remarks in defeat are hardly likely to have endeared him to the locals, given the references to the area as "rundown" and an "unemployment blackspot with a dwindling population." As The Business Post reported,

An Bord Pleanala said the scheme was contrary to proper planning because it would breach the Roscommon county development plan, which seeks to improve and protect high-amenity areas.

Dobbin said he had no plans to resubmit a planning application for the site.

‘‘I’m not going to waste any more of my time and my money – certainly not until the issues between the local authority and the Department of the Environment have been resolved,” he said.

‘‘If the department is trying to ensure that Lough Key park remains rundown and that this area stays an unemployment blackspot with a dwindling population, then it is doing a good job of it.”

The local county council approved the deal in 2005. Dobbin spoke in glowing terms of the project similar to the way his company has described its other projects.

Despite Dobbin's comments, the Lough Key project is apparently not dead. There is a specific reference to Lough Key in a July 2007 release from Newfound, promoting the companies Caribbean initiatives.

-srbp-

Cod war heats up...20 years ago

The e-mail inbox these days is a bit like an Advent calendar. 

Every day there is a little surprise.

The only difference between the e-mail and the Advent calendar is that the little surprises keep coming 24/7, 365 days a year.

Like this little blast from the cod war past, which includes some details on the 1987 deal with France that Brian Peckford forgot in his recent recitation of the "evidence" of cod being traded for other people's products to the supposed detriment of Newfoundland.

No wonder Danny called out a political hit on his predecessor last week.  We can't have two 'bad-boys' of Confederation running around using the same tactics and same language, can we? people might actually start to realise how much of the Williams' schtick is just recycled Peckford.

The Montreal Gazette Wednesday, September 30, 1987, p. B4

Cod War heats up as Peckford trades shots with fellow Tories

ST. JOHN'S, Nfld. - ST. JOHN'S, Nfld. (CP) - The northern cod is a grey- green fish with a barb under its chin, found in abundance in the chilly waters around Newfoundland.

Sometimes called Newfoundland currency, cod is to Newfoundland what wheat is to the Prairies, timber is to British Columbia and automobile plants are to Ontario. You don't mess with the cod fishery.

It's as emotional as the seal hunt, and as staunchly defended as the island's outmoded narrow-gauge railway. And as Newfoundland Premier Brian Peckford knows, cod makes good bait.

After learning this month that Canada had formally offered France some cod to settle a boundary dispute around the French-held islands of St. Pierre-Miquelon south of Newfoundland, Peckford pulled in his lines.

The self-described "bad boy of Confederation" said he was taking the Newfoundland government out of further involvement in the Canada-France negotiations. That put opposition parties on election alert and led senior Newfoundland MP John Crosbie into a political sparring match with Peckford, a fellow Conservative.

The Crosbie-Peckford clash, one of the high points of the so-called Cod War, has some Tories wondering about party unity and federal-provincial relations.

"I do think many people must be confused," said provincial Justice Minister Lynn Verge. Peckford says Newfoundland, Canada's poorest province, should not have to give up some of its cod to settle an international boundary dispute. France claims a 200-mile territorial limit around St. Pierre-Miquelon while Canada recognizes a 12-mile boundary.

For the past two weeks, the sometimes wild-eyed premier has been using television, radio and newspaper ads, including a 15-minute prime-time television broadcast, to urge Newfoundlanders to "stand tall" on the issue.

Crosbie staged a similar 15-minute province-wide broadcast Monday, accusing Peckford of engineering a phoney crisis.

The amount of cod formally offered in negotiations so far is less than what the French are now taking out of Canadian waters under an agreement with the European Community that ends this year, the federal transport minister said.

Crosbie also said the French have the right to take Canadian fish under a 1972 agreement. Peckford says that agreement doesn't specify the French can have cod - the most sought-after species on the Grand Banks.

If a settlement of the St. Pierre-Miquelon boundary is not negotiated, the dispute may go to international arbitration. Crosbie says Canada could then lose more fish than it has offered.

Peckford's actions have made the provincial Liberals and New Democrats nervous. In the past, Peckford has called elections on emotion-charged battles such as the offshore oil agreement.

But Norman Whelan, provincial Liberal party president, doubts the Cod War is enough to hang an election on, especially since offshore oil activity is at a standstill, the provincial debt is skyrocketing and Peckford is only 2 1/2 years into his term.

"He hopes to create a wrap-yourself-in-the-flag issue so he can win another election," said Whelan. "I don't think he's going to, because it ain't flying."

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Newfound Group lobbying province apparently without lobbyist registration

Newfound Group has been lobbying the provincial government for assistance with the Humber valley resort yet no lobbyists have been registered, as required by provincial law. [Update: See correction below]

Interviewed by CBC Radio's David Cochrane, Jeremy White, president of Newfound Group said the company has been working with the province to have the province lobby Air Canada to restore a direct flight between St. John's and London.

White also said his company was seeking provincial government assistance with its marketing program. He said the provincial government had offered to help defray some of the company's annual marketing program. White indicated that the company the government had been working closely together to deal with the company's financial issues.

However, the provincial lobbyist register contains no entries for anyone or any company related to Newfound.

The provincial lobbyist registration act requires that a company lobbying the provincial government register within 10 days of starting any lobbying activities. [Correction: The 10 day rule applies if the company is using a consultant lobbyist.] The online registry is current as of 21 November. An in-house lobbyist must register if his lobbying activity constitutes 20% or more of his or her time during a three month period.

In July 2007, Humber Valley Resort hired former tourism minister Paul Shelley as its new general manager. Shelley retired from politics on July 13 and was replaced in cabinet in January, having signalled his intention not to seek re-election in the fall. Shelley was human resources minister at the time of his departure from cabinet.

In addition to any political heights Shelley has scaled, his days at Humber Valley have included the odd rock wall, as this video shows. This and other videos on the resort can be found on the resort blog.

Shelley isn't the only Humber Valley executive with ties to the current administration. Humber Valley chief executive officer Brian Dobbin serves on the provincial government's Irish business partnership board. He is also publisher of The Independent newspaper.

Neither Shelley nor Dobbin is listed in the provincial lobbyist registry.

-srbp-

Good question, Ron. Too bad you can't answer it.

Considering a subsidy of a mere $150,000 from the City of St. John's to the Aquarena, councillor Ron Ellsworth is quoted by CBC news as saying:

"It's a regional facility providing a regional service, so why aren't they going to other municipalities and getting this money that's needed?"

So why exactly doesn't Ellsworth take the same attitude to forking out 10 times as much in a direct subsidy, and upwards of 20 times that amount in total outlays for the Money Pit, a.k.a. Mile One?

Ellsworth said his opposition to the Aquarena subsidy is based on a business case.

How about showing the taxpayers the business case, Ron?

-srbp-

Of cheese and evidence

The Great Fish Trade Myth - and its recent proponent Brian Peckford -  as demolished by the editorialist at the Telegram.

This should generate as much hate mail for the Telly as Russell Wangersky's sensible critique of the "How Irish are we" mythology.

-srbp-

Newfound NV update

At an extraordinary general meeting held on 04 December 2007, Newfound NV shareholders approved an arrangement that would see the issue of shares to two directors at a value of 7.0 million pounds sterling. This gives the company needed operating capital.

As well, the company has raised an additional 3.6 million pounds sterling through a share placement to unspecified institutional and other investors.

A corporate news release stated:

The proceeds of the Placing, together with those of the Subscription, will be used for general working capital purposes and to allow the Company to pursue its revised business strategy. The Company's strategy is to:

* Focus on the conservation of working capital in the near term, including, inter alia, reduction of overheads at Humber Valley Resort;

* Further develop its current projects to build additional value and returns, which will include, inter alia, the development of relationships with branded operators and resort funds, driving sales growth through marketing led development, finalising the Nevis masterplan and obtaining outline planning permission, and the pursuit of debt financing for ongoing resort development supported by the assets of the Group;

* Review and assess opportunities for bulk land sales, sales of legacy plots and re-sales;

* Expand holiday sales through direct and specialist tour operators and partnerships with holiday sales companies for Humber Valley Resort;

* Expand the resort portfolio in the long term.

-srbp-

Mainlander sees Williams as abandoning confrontation

it's always interesting to see the difference in the way mainlanders view the premier, versus some of the locals.

Like the editor of the Packet who finds it necessary to invent excuses rather than simply accept Danny Williams 'shut up and go away' as being exactly what he meant to say.

A good democratic society welcomes opinions from all quarters, including those of former politicians.

Re-examine your assumptions, Barbara. 

A good democratic society does welcome opinions.

Since opinions aren't welcome here? 

Figure it out.

Meanwhile, in Saskatchewan, Randy Burton thinks the heavens are coming into alignment foretelling the solution to the equalization strife.  One of his signs?  Let's let Randy tell it:

The third reason progress now seems possible on the equalization file is that at long last, Newfoundland Premier Danny Williams now appears ready to deal. A few days after his conversation with Boyd, the prime minister was in Newfoundland to meet with Williams.

There was no breakthrough, but for the moment at least, Williams is ready to talk about some other kind of federal transfers that might offset what he's losing under a new equalization deal that caps payments to the provinces.

Williams emerged from their meeting to say he gave the prime minister some options, which is a new tack for the normally confrontational premier.

Seems the farther one is away from the object being viewed, the more clearly one may make observations.

-srbp-

Murphy Oil an attractive buy for investors

But will either a private sector investor or the new provincial energy corporation be in a buying mood?

-srbp-

Lone 2007 offshore parcel awarded

The lone offshore parcel available in 2007 went to Corridor Resources, Inc, the Canada-Newfoundland and Labrador Offshore Petroleum Board announced today.

The Western Star incorrectly reported that the provincial government made the announcement. CNLOPB is a joint management board of the federal and provincial governments.

The C-NLOPB accepted a bid from Corridor Resources Inc. in the amount of $1,521,000 for the parcel which is composed of 51,780 ha. The Bid represents the expenditure which the bidder commits to make in exploring the parcel during the initial 5-year period of a 9-year term exploration licence.

The provincial government merely issued a news release stating that the land sale was a positive sign and attributing positive developments to the recently released energy plan.

Horse hockey. One solitary parcel is a sign of an offshore that is suffering a serious lack of interest from developers.

We'll need to see what happens in the next few years to determine if the energy plan has had a positive effect. The energy plan won't be complete and therefore won't have an impact until both the gas royalty regime and the oil royalty regime are finalized.

Update 05 Dec: The Star has corrected the reference in the current online version.

-srbp-

It must be a good idea.

Andy Wells opposes it.

Councilor Frank Galgay suggested selling the Mile One money pit at a council meeting last night. he was attacked immediately by Mayor Andy Wells. The boorish mayor demanded that Galgay tell him how much someone in the private sector might pay for the facility. Then His Boorishness proceeded to lament the sorry state of the province's educational system.

The start of the conversation was tabling of the financial reports for the Money Pit.

A loss of $640,000 in the last fiscal year.

Bear in mind that council deliberately increased the subsidy to the Pit last year claiming that somehow a financially successful money pit actually needed more free cash.

But here's the thing.

If one considers the $500,000 added subsidy as part of the shortfall, then the Money Pit's operating shortfall in Fiscal Year 2006 is...

wait for it...$1.14 million.

The deficit from the previous year? Why one tenth of that figure.

It's not reported in the story linked above but other reports have the shortfall from the previous year at around $130,000.

Wow.

The $640,000 shortfall is bad enough, but the real shortfall is staggering. It becomes stupefying when one considers that the annual subsidy before the boost was about $1.0 million.

In other words, the stadium lost as much money in 2006 as the taxpayers of St. John's pumped into it in subsidy.

But really that subsidy is an operating loss as well.

The taxpayers of St. John's don't make any money on this venture. They get the privilege of paying - this number will shock you - $1.5 million in subsidy plus the $640,000 shortfall for a total loss of $2.14 million.

Holy crap.

And what does the mayor think?

"It's well in the mix, so this is not — contrary to what some people are saying — this is not a major drain on the taxpayers of St. John's. It's working pretty well."

Working pretty well, huh.

At least no one will need to ask the mayor the same question he posed to Galgay at last night's meeting.

Suggesting that Mile One is working pretty well makes the answer plain.

Sell the Money Pit.

No matter what cash we'd get for it, the taxpayers will be better off in the long run.

-srbp-

Update: Andy Wells is proud of Mile One, so proud he claims the stadium has a per-user subsidy like the Mews Centre or the Wedgewood Park Centre.

Apples? Meet Oranges.

For those who don't know, the latter are community recreation centres operated by the city for the benefit of residents. It's fair to talk about a per-user subsidy for those facilities which are, by definition, used by citizens individually for their own personal fitness. If my family goes to the place, we get the direct benefit of it in the way of improving our fitness and health. We should expect the place to break even but, in the event there is a shortfall in operating expenses, it's reasonable for council to provide a small subsidy of some kind.

Mile One is completely different.

It's a facility built as a commercial venue for concerts, ice hockey and a variety of similar large events. Using some kind of "per-user" comparison for subsidies is more than a bit misleading.

For the purposes of determining cost and benefit, it would be more useful to look at Mile One as a commercial venture and look at how much money it loses. It should be making a profit. Breaking even, the goal we should set for all taxpayer-owned facilities, would be acceptable but profit would be nicer.

$1.5 million in operating subsidy, plus covering the $640,000 shortfall on the last fiscal year.

More than $2.0 million.

Hmmm.

Not good.

Then we look at the general trend.

Definitely bad, since the loss to the taxpayers resulting from operating the facility seems to be going up. It's pretty bad when losses go up in an otherwise good year economically in the region. To see losses climb by 10 times (the inflated subsidy is really a mask for the deeper operating problem) and you've got a pretty - obviously - significant problem on your hands.

To make matters worse, the mayor expects that expenses for the stadium will always exceed revenue. In that environment, the residents of the city can only expect things to get worse. The mayor not only tries to find excuses for the loses, he actually thinks they will go on and on as some sort of natural occurence. City officials have no incentive to make things better and officials at the stadium/conference centre have no incentive to improve. The mayor has the excuses already written out.

Where else but St. John's would this sorry excuse for municipal government be allowed to continue?