Undisclosed Risk: the cost of freedom is loss

You won’t hear the provincial Conservatives talking too much about an April 2009 deal to sell surplus power from Churchill falls to Emera in New York.

They talked about it a lot when they cut the deal. 

Back then, Danny Williams said the five year contract proved that Labrador hydro power wasn’t isolated any more.  Nalcor wheels Churchill falls power through Quebec to markets in the Untied States.  Nalcor pays Hydro-Quebec a fee for wheeling the power.

And Danny Williams was absolutely right.  Labrador hydro power isn’t isolated.  if Nalcor had customers for Labrador hydro, they could send the power through Quebec tomorrow.

The reason Nalcor isn’t developing the Lower Churchill and shipping the power through Quebec is because there is no market for the power.  Everything else you’ve may have heard from provincial Conservatives in Newfoundland and Labrador and from the local media about a big Quebec conspiracy to block Nalcor is – in a word – crap.

You can see that the Conservatives wouldn’t want to talk about the Wheeling Deal.  it proves that their more recent line, the one that supposedly justifies the Muskrat falls project is – in a word – crap.

Turns out there may be another reason why they aren’t talking about it.

Danny Dumaresque, a former director of Newfoundland and Labrador Hydro, issued a news release on Wednesday claiming that Nalcor is losing money on the Wheeler Deal. The story got decent media coverage across Newfoundland and Labrador and even made it onto the Radio Canada website. There’s also a short story about 20 minutes into the CBC’s Here and Now broadcast on January 5, 2010 and on NTV News from the same date.

Dumaresque looked at the Nalcor annual report and calculated that the company lost money on the deal compared to the previous deal to sell the power to Hydro-Quebec:

Over the past 18 months I have been told various figures of costs and revenue but because these figures were much different than the previous contract with Hydro Quebec, I was reluctant to cite them. However, today I can confirm that this province has lost $15 million in the last 9 months of 2009 under this ‘historic arrangement’ than we would have received from the contract with Hydro Quebec, a reduction of 40 percent.

My information is that results have not been any better in 2010 and up to $20 million will be lost. Therefore, in less than two short years we have lost $35 million of precious taxpayer’s money and the potential to lose up to $100 million over the life of a 5 year agreement which we had with Hydro Quebec!

In addition to this loss of revenue to the province I am also able to confirm that NALCOR has paid nearly $34 million to the Government of Quebec since this deal was done and $7 million to Emera Energy of Nova Scotia. [bold in original]

In the media interviews, natural resources minister Shawn Skinner doesn’t dispute the losses.  In fact he admits that under the deal, Nalcor would lose money when electricity prices are low but it could make them back if prices are high.  Even he uses the line with CBC to the effect that losing money is the price of freedom.  When a politician has to use complete bullshit like that you know he’s been caught out.

There are three things to note from this.

First of all, this is pretty much what you might expect from the deal.  It was clear at the time Nalcor inked the deal that – based on the numbers they released – the deal would only deliver about the same price per kilowatt hour to Nalcor that they were getting under the old fixed-price deal with Hydro-Quebec.  Sure electricity retails for 20-odd cents per kilowatt hour in New York city.  But by the time you take off the wheeling charges to Hydro-Quebec and all the other middlemen, and allow for Emera’s cut, the net for Nalcor was 3.5 to 4.0 cents per kilowatt hour.

As it turned out, electricity prices dropped in the United States what with the 2008 recession and all. They are so low that American producers can sell electricity produced by natural gas from the United States across the border into New Brunswick.  And as it stands right now, prices are going to stay down for the duration of this first contract. 

Newfoundland and Labrador Hydro considered wheeling the power in 1998 but figured out exactly what has happened.  They opted for selling power for the best return as opposed to going the Danny Williams route and losing money.  Pure business genius at work there signing a deal that only works if prices stay high or keep going up.

Second of all, you have to appreciate that this is exactly the same sort of financial wizardry that underpins the Muskrat Falls deal. 

In order for Danny’s retirement plan to work and for the taxpayers of Newfoundland and Labrador not to take it in the derriere, oil prices have to double from their current level within the next decade and keep going from there.

If anything else happens, then the taxpayers get jammed up badly.  The reason is simple:  Nalcor is building the whole project based on the only guaranteed sale being for power inside Newfoundland.  They can sell power to other provinces or to the United States and if the prices fall far short of the cost of production, then the taxpayers of this province will cover the loss through their electricity rates.  That’s exactly what provincial laws – amended since 2006 – require.

Notice that none of the other players involved lose anything.  Emera gets cash no matter what.  For $1.2 billion they get 35 years of essentially free power to sell to Nova Scotia.  They can sell other power for less than the cost of production and even at the end of the 35 years they will pay less for the power than it cost to produce it in 2017 when the first power is supposed to flow.

It’s the same as the Wheeler Deal.  Hydro-Quebec gets its fees for carrying the juice to the border.  Emera gets its fees and commissions.  The only people who come up short on the deal are the taxpayers of this province who – one way or another – have to cover Nalcor’s losses.

Not bad, eh?

Now the thing is that nobody mentioned this at the time Danny Williams announced the deal in April 2009. Danny never said taxpayers could lose money at all. He never even vaguely hinted at it.  In fact, while he acknowledged prices at the time were low, Nalcor boss Ed Martin said that

[b]ased on current electricity prices, Newfoundland and Labrador could earn about $40 million to $80 million in profits annually….

That’s the third thing and it is the biggest thing of all:  it’s called undisclosed risk. And in business circles, failure to disclose significant risk to investors -  or the de facto owners in this case - is a pretty big deal.  It goes straight to the trust that the ordinary people of Newfoundland and Labrador have placed in these politicians who are now acknowledging, in effect, that there are very important things about these deals that they haven’t bothered to tell people about.

It makes you wonder what other little secrets, what other little time bombs there are ticking away.

What other undisclosed risks are the people of the province facing that they didn’t face before 2003?

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High oil prices threaten economic recovery

Via the Globe and Mail:

"Oil prices are entering a dangerous zone for the global economy," the IEA's chief economist, Faith Birol, told The Financial Times. "The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers.

This warning, the newspaper said, will ramp up pressure on OPEC countries to boost their production.

The strength in oil, chief economist David Rosenberg of Gluskin Sheff + Associates said today, does not reflect stronger consumer demand in the United States, but rather external forces and heightened investor demand.

Wow.

Who knew?

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Connie Leadership 2011: editorial kick-back

From the Thursday Telegram, comes a rather nasty editorial comment on the charade that is the Conservative caucus plan to replace Danny Williams:

By comparison, Danny Williams announced his candidacy for the Tory leadership on Dec. 6, 2000, but nominations didn’t close until Jan. 31.

Some will point out that anyone interested in the leadership has known it was coming since Williams resigned at the end of November. Then again, Ed Byrne announced his resignation in June, giving possible candidates seven months to make up their minds about running.

In the coded language dominating political life in Newfoundland and Labrador these days, this editorial is a pretty sharply worded rebuke.

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Connie Leadership 2011: Persistent Rumour Department

All Christmas.

Jerome! will announce he won’t be running for re-election.

Sometime before the end of January, he’ll make a statement. 

Yes, yes, everyone knows that Jerome!’s already said publicly he’ll be running again but this rumour has survived that pretty clear statement.  After all, Danny insisted he was running again but that turned out to be not quite what happened.

And it only took the Old Man a week or so to go from telling Debbie Cooper that he was constantly re-evaluating his future to flinging his gear into the truck and heading for the hills.

If Jerome doesn’t run again, he doesn’t qualify for a politician’s pension. That could be a powerful incentive to stay on for another term.  

There’s pretty much no hope of a seat on a federally-appointed court.  His buddies could appoint him to the Provincial Court but they’d have to give him a pretty senior and largely made-up appointment.  No one expects that Jerome! is going to be sitting in Goose Bay or anything like that. That would also lead to lots of guffawing in the legal community as the guy who slagged political patronage appointments to the bench became one.

If Jerome doesn’t run again, then he’d have to go back to the old law practice or find some other business to pay the bills.

And then people could wonder who might run for the Conservatives in his place. 

For now, though, it is still just a rumour.

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Just imagine…

For some reason, the Conservative government of Danny Williams wanted to smash Fishery Products International and sell off the bits and pieces.

FPI used to be a large and successful fish processing company based in Newfoundland and Labrador.
Now it doesn’t exist any more and the most lucrative bits and pieces wound up in the hands of people who don’t do much business in Newfoundland and Labrador.

Just imagine if certain powerful interests in the province hadn’t destroyed the company.  FPI might be doing what one of its former competitors is now doing:  trying to buy into the Iceland fish business.

High Liner announced late Tuesday that it made an unsolicited offer worth ¤340-million ($445.4-million) to acquire Icelandic, one of the three biggest value-added seafood processors to the U.S. food service market. It wants the company simply to bulk up its own business.

That wouldn’t normally be front-page news. But in this case, it was the main story in at least two major media outlets. Why? Because Icelandic is owned by a public pension consortium run by the Framtakssjódur Íslands fund. And the owners have excluded the Canadians so far from the takeover process. High Liner piping up publicly was akin to a foreign company telling Iceland’s politicians to smarten up and open up the sales process to more bidders.

There’s a fascinating story in the Financial Post on the whole thing.

The world is only as small as people imagine themselves to be and, for the past seven years, this province has been dominated by people whose vision is incredibly myopic.

The consequences of such limited thinking are all around us, from the fragile economy that worries the cabinet minister who helped create it to this sort of lost opportunity in the fishery.

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Connie Leadership 2011: democratic deficit

The latest twists in the Conservative leadership story are starting to look a bit more like a soap opera than usual even in a place where the last seven years in politics have centred on how tightly knotted The Leader’s sphincter was at the moment.

With a mere three working days left to go in the very short deadline for nominations, convention co-chair Shawn Skinner wound up encouraging people to file nomination papers.

Now the comment only lasted until about noon on Wednesday and only on VOCM, the voice of the cabinet minister. Here’s what he had to say although the story has since been officially disappeared by VOCM:

Progressive Conservative Convention Chair Shawn Skinner is encouraging people to come forward as the deadline for nominations for the PC Party leadership, this coming Monday, quickly approaches. So far Acting Premier Kathy Dunderdale is the only person who has come forward. Skinner says the PCs are hoping someone else with some interest will enter the race for the party's top spot.

Only a half day hardly makes for a serious effort to scare up nominations and after all, Shawn knows full well the party isn’t really looking for a leadership contest.

If the Tories really wanted a leadership contest then he and his mates wouldn’t have busily done the back-room secret deal to keep Kathy Dunderdale in the job. 

And if Shawn and his pals really wanted an open and fair competition like the kind real political parties have in a democracy, then they wouldn’t be talking about how scared they are of a blood bath.

Shawn’s comments came after someone [Shurely not Tom Rideout] complained about the process to VOCM and the gang at VO reported the tale.

Shawn mumbled something into the microphone about how the party constitution is the reason for the really short nomination process.  As copies of the constitution started turning up on the Internet, though, that lame excuse disappeared faster than a completely spontaneous “Draft Steve Kent” movement started up last month.

What must really be troubling the crowd running the Conservative Party, though, must be a story that ran on NTV.  Political science prof Alex Marland is concerned about the lack of democracy inside the Conservative Party.  Marland makes a number of solid points, not the least of which is the importance of renewing and reinvigorating a political party through a leadership contest. The Conservatives are very consciously avoiding that renewal.  You can add to that the simple point that the Conservatives are also going to head into the next election with a leader everyone knows will not be the leader three years from now.

With the words “democratic deficit” swirling around the Conservative Party already, 2011 is shaping up to be a very interesting year in provincial politics.  There’s little fear of a new personality cult emerging and the fallout from the old one may just be starting to show up in public comments about the ruling Conservatives.  Bill Rowe made a rather telling observation the other day about how quick people are these days to say uncomplimentary things about the Old Man now that he’s out of power. 

Bill must be having a sense of deja vue. The locals are used to dealing with bossism.  They may say one thing when The Boss is in power but once he’s gone their true feelings have a nasty way of turning up.

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The Fragile Economy: finance minister complains about his own policies

Finance minister Tom Marshall thinks its time for the private sector to step in and boost the economy around Corner Brook.

“Other than construction, I would like to see more economic investment; I would like to see more businesses coming in and investing here,” he said. “It is jobs ... What we have seen is government spending, in a massive way, in this area.”

That’s from a story in last Friday’s Western Star.

Two observations come readily to mind.

First of all, that’s a great big “D’uh” there, Tom.  Your humble e-scribbler has been banging out post after post after post over the past six years on this very subject.  The number of posts on it has gone up in the past two years because the fundamental situation is getting fundamentally worse. 

It is getting fundamentally worse – to hit the second point – as a direct result of government policy.  In everything from its energy policy to its disastrous seizure of private sector assets in 2008, the current administration has shown itself to be relentlessly opposed to creating an economic climate that attracts investment, promotes innovation and rewards entrepreneurship. 

The current fragile state of the provincial economy  - “fragile” is a word Tom Marshall used not so long ago, by the way - is a direct consequence of government policies.  Only a fundamental shift in those policies can move the province off the course it is currently on.

As it stands in early 2011, the current administration is firmly committed to continuing the policies that have contributed to putting the economy in its current parlous state.

We have seen the enemy, says finance minister Tom Marshall, and he is us.

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Connie leadership rigged?

The fix is in and it must be getting really smelly and obvious if VOCM – aka voice of the cabinet minister  - is reporting it:

A man claiming to be contemplating a run at the Tory leadership doesn't like the process. The potential candidate, who prefers to be unnamed for the time being, says he has as much or more experience than Kathy Dunderdale. The man cites a lack of public notice and public disclosure as reasons for his displeasure, and goes so far as to call the process "rigged" and "perverted."
Nominations opened December 30 and will close on January 10. The potential candidates point out the Progressive Conservative office was closed for several of those days because of the holiday schedule. He also says there is a $5,000 fee and a requirement of fifty party signatures to seek the party's top spot. All this, he suggests, makes it virtually impossible to apply for the PC leadership, unless they are already in.

VOCM got a comment from convention co-chair Shawn Skinner to the effect that “he arbitrary timeframe for party nominations had to be set based on the party's constitution, and that everyone should have known from the time Williams announced his resignation on November 25 that the party would be seeking another leader.”

Some observations:

1.  Where is the party constitution?  If, as Shawn Skinner claims, the whole process is dictated by the party’s constitution surely he and his mates could have posted the constitution for all to see.  It’s called being transparent and open.

As it stands, the Conservative Party website doesn’t give any information on the constitution at all.  Anyone checking the website wouldn’t even know that there was a constitution.

2.  The news release announcing the nomination process gives absolutely no details on the requirements.  It doesn’t give any links to go to find information.  This 5K and 50 signatures would come as a complete surprise to anyone who had a week or so to scrape everything together.

In fact, here’s the complete news release, as issued December 30:

Progressive Conservative Party President John Babb and Convention Co-chairs Minister Shawn Skinner and Minister Joan Burke announced that nominations for the leadership will open at 12:00 noon, today, Thursday, December 30, 2010, and will close at 12:00 noon on Monday, January 10, 2011.

Delegate selection meetings to commence after the close of nominations. Details related to the date and location of the leadership convention will be announced at a later date.

There’s a contact name and number on there as well but other than that information – nominations are open and that they close with more information to follow there is exactly zilch in the way of meaningful information.

Well whaddyaknow Update: Turns out there is a link in the upper right hand corner that gives a bunch of forms.  Essentially, the information there is the same as the stuff in the VO stuff:  a 5k deposit and 50 party members in good standing.

If you want the constitution you have to contact the office.


3. “fifty party signatures”  WTF?  This is a party that has open nomination meetings:  anyone can go and vote.  So how exactly does one find out who are “party” people to contact so that one could collect signatures?

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Leadership by fiat

The Telegram editorial last Friday took issue with the upcoming coronation of Kathy Dunderdale as leader of the provincial Conservatives and, by default, the Premier of Newfoundland and Labrador.

Check it out. 

You won’t be disappointed, right down to what appears to be the date code buried the editorial’s URL – 1969-12-31.

December 31, 1969.

There is, however, one small issue that deserves some comment:

There is an unwritten code of leadership campaigns in governing parties: a departing premier will seek a capable senior caretaker who is not interested in the leadership, so that no advantage will be conferred on the person holding the office in the upcoming leadership race.

Since 1949, there’s only been one case in which an incumbent Premier resigned and left behind a caretaker leader in his place.

Brian Tobin high-tailed it back to federal politics in October 2000.  he left with such speed that the Liberals had no choice but get someone in the job while they organized a party leadership fight.

In 1978-79, Frank Moores stayed in the job until his party found a successor.  As it turned out, that was Brian Peckford.  In 1988-89, Peckford did the same thing.  The Conservatives turned up Tom Rideout.

On December 28, 1995 – 15 years ago last month – Clyde Wells announced he’d be leaving politics.  He’d stay on only as long as it took the party to sort out the leadership.  By the end of January, Wells handed over the reins to Brian Tobin.

And that’s it.

Look across the country and you’ll see the same pattern.  Go back into the pre-Confederation history of this place and you’ll find Premier handing off to replacement, not to some sort of stand-in.

There’s another part to this, as well.  The outgoing leader left it to his or her party to figure out who would replace him. And in each instance, the party leadership did their job.  

In some respects it shouldn’t surprise anyone that a guy who wanted to abolish free speech in the province’s legislature took it upon himself to anoint his replacement. 

Through all of this, there is a thread that runs very deep.  It is the thread the Telegram’s editors found:  it’s the thread of democracy, of the fundamental belief that ordinary people pick who gets to lead. Ordinary members of political parties should get to pick the leader from choices at a contest.

And then later on, in a general election, ordinary voters who may not belong to that political party get to make a choice about who runs the whole place.

There’s more to this than just a nod to some mouldering and out-dated idea:  a party leadership contest helps to sort out the poseurs from the people with the gravitas to do the job of representing the entire province and all its people as the head of government.

Kathy Dunderdale’s coronation continues a tradition alright, the sad tradition begun in 2003 that undermines the province’s democratic institutions.

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Undisclosed risk: financing the Lower Churchill

“We had discussions about loan guarantee, and if they’ll do that, we think we could drive hydro rates down even lower and save millions.”

Finance minister Tom Marshall, December 2010

Ah yes, it is all so simple.

One little loan guarantee and everything is solved. 

Borrow billions and save millions.

The provincial government could issue bonds to cover the billions it will take to build Muskrat Falls.  No sweat.  Apparently, someone told Marshall the bonds would sell out in 15 minutes.  Well, at least that’s what Tom said in December.

Of course government-backed bonds would sell out in 15 minutes. Investors can’t lose.  Governments don’t evaporate in a cloud of financial pixie dust like companies do. Governments  - especially provincial governments inside big G-8 countries - always pay off. 

And that’s where Tom’s assessment starts to go off the rails:  disclosure.

Fin min admits power rates are sensitive issue

Finance minister Tom Marshall admitted last week that electricity rates resulting from the Danny Williams Legacy project are a very sensitive political issue.

In a year-end interview with the Western Star, Marshall said that he’d recently spoken with the federal finance minister about a federal loan guarantee for the project:

“We had discussions about loan guarantee, and if they’ll do that, we think we could drive hydro rates down even lower and save millions.”

Until now, the Marshall and his colleagues insisted that the project would be great from rate payers even without a loan guarantee.

Marshall’s comments mirror those of Premier Kathy Dunderdale in what is fairly obviously a concerted effort to allay concerns about massive increases in electricity rates resulting from the Williams’ legacy project.

.

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Dunderdale admits financials are problem for Muskrat project

In an interview with NTV news, Premier Kathy Dunderdale admitted last week that costs for consumers are a sensitive political issue with the proposed Muskrat Falls memorial project to Danny Williams.

Dunderdale said that the provincial government is interested in a federal loan guarantee for the project because it would lower the interest rate Nalcor – the provincial government’s energy company - would have to pay to develop the project. She said that the provincial government would pass on any savings resulting from the loan guarantee to consumers.

Until now, Dunderdale has insisted that the project would be a financial boon to ratepayers in the province by keeping  electricity rates down from what they might be without the project.

 

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Pater knows best

Telegram editor Russell Wangersky has some suggestions for the provincial Conservatives now that Danny is gone:

• “Reform the province’s access to information legislation so that citizens of the province actually have a right to information, rather than depending on the divine right of cabinet ministers to release what they deign fit. …”
• “Whistleblower legislation….”
• House of Assembly sittings….”  More of ‘em, says Russell.
• “Provide more information on just what is happening with Muskrat Falls, the single largest project on this province’s horizon and one that could topple us into Irish-style superdebt.”

Wonderful ideas.

Great ones, in fact.

There’s only one teensy problem.

The Conservatives didn’t get to their awesome standing in the province by letting these sorts of pesky things like transparency and accountability get in their way.

And what’s more, Russell said that was cool:

“I voted for him, and, truth be told, I would have voted for him again. Premier Danny Williams, that is.”

…

“That being said, for the last seven years, Danny Williams has been the right choice to run this province, and, regardless of any number of complaints, he’s done it well.”

You see, the same guy who Russell thinks was just neat-o had no time for all those things Russell writes about.

He didn’t.

He said he was all about accountability and transparency. 

But as we all know,  his actions spoke volumes louder than any words he ever uttered.

You just can’t endorse political strong-men on the one hand and then wonder where the democracy went on the other.

And as for the gang who held Danny aloft and who now run the place in his stead?  Well, just expect more of the same.  Politicians go with what works and, as Russell so ably demonstrated, nothing succeeds around these parts like old-fashioned paternalism.

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Month-end Traffic Report for December 2010

1. Is Gerry Byrne completely nuts or what?
2. Williams to head Rogers sports empire?
3. Connie Leadership 2011
4. Williams’ abrupt departure “shocking”:  Dunderdale
5. Conservatives to give back seized hydro assets
6. Williams’ disgraceful Christmas cards
7. Who isn’t running in 2011
8. All your incoherence are belong to us
9. Connie Leadership 2011 – Mid-December night’s ruminations
10. The return to “normal”

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The Traffic Week-ender for December 27-31, 2010

1. Is Gerry Byrne completely nuts or what?
2. Kathy Dunderdale:  the New Paternalism
3. Pop Drop 2010 continues
4. Williams to head Rogers sports empire?
5. Media trends:  the technical term is “suckass”
6. For the love of three oranges
7. Counting your chickens
8. The politics of history  - editorial version
9. The World the Old Man lives in
10. Court docket now online – Lawyers:  update your bookmarks:
    Provincial Court  and Supreme Court (Trial Division)

 

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Connie Leadership 2011: Fear and Loathing in the Caucus Room

Most people now realise that Kathy Dunderdale is staying on as leader and Premier a result of some secret backroom deal within the Conservative Party.

As nottawa notes, the Connies are giving potential rivals a mere 11 days to come forward.  That compares to the couple of months Yvonne Jones’ potential rivals had.  In other words, the Conservatives will go through a complete charade including what they are calling a leadership convention.

Despite this rather obvious political fraud, the people of the province know that they have a new premier thanks to a secret deal – not even a vote – cut by unnamed people in dark rooms.  It is like the good old 1920s all over again when administrations came and went over-night based on shifting alliances and unspoken promises.

And the people of the province can sleep soundly knowing their fate and that fate of the public treasury is determined by shadowy figures and endorsed by the Connie caucus.

Well, virtually all, according to the semi-official news agency VOCM – voice of the cabinet minister.

That word “virtually” suggests that some members objected or at the very least didn’t display the requisite enthusiasm.

Now there may well be nothing to that beyond an inexperienced reporter’s careless use of words.  But then again, there might be a bit more to it.  Politicians are, by nature, an ambitious lot.  Some of them have been forced to curb their tongues for upwards of seven years.  Their personal ambitions took a back seat to the Old Man’s interests and his iron grip on the caucus and the Confederation Building. Now they are told to sit on their ambitions yet again for another period of time.

Some other members of the Conservative caucus may well be uncomfortable with the decidedly anti-democratic way that Kathy Dunderdale is getting the job.  Some may recall the anointed Connie kingpin Danny Williams’ attacks on Roger Grimes over a far more democratic selection in the Liberal Party in 2001.  Hypocrisy never bothered Williams like it does others, but that is another story.

That lack of unanimity may well explain why Dunderdale held such a low-key announcement of her candidacy:  a scrum, attended by none save a single aide and the local media. it had the air of being a lash-up job.

That lack of unanimity, of course, is what this backroom deal is really all about.  Conservatives in St. John’s are clearly afraid that a leadership fight over the next two or three months will make for a Conservative of repeat of what they characterise as the divisive 2001 Liberal contest.

There are divisions within the Conservative Party.  Those divisions must be deep.  They must be deep enough to put the fear of God into the back-room boys.

Were it otherwise, the Conservatives would have a contest as they did  - successfully - in 1979 and 1989.  Instead they are afraid and loathe to tempt fate.

And for the record, the Liberal campaign in 2001 was divisive.  All leadership fights are.

John Efford and his team built part of Efford’s support on discontent over the way Brian Tobin and his close associates supposedly ran the entire party from St. John’s.  The party rank and file were passed over, according to some, in favour of those chosen by the old leader and his cronies.  Whether it is true or not is another matter, but there certainly were Liberals who felt abused.

And yes while Roger Grimes initially had some strong words about John Efford’s man Danny Dumaresque, wounds healed up before the 2003 campaign.  Grimes made a couple of appointments and everyone got on with business.

That’s what happens in politics. People have different opinions.  Leaders get paid to deal with those differences openly and cleanly, if possible, but certainly in a way that doesn’t let grievances fester.  Successful leaders are the ones who can bring a party together after a fight.  If a leader cannot unite his or her party then he or she is really not up to the job of being premier.

It is a simple and irrefutable train of logic.

By cutting a back-room deal, though, the province’s Conservatives have wound up in a very odd, and very troubling spot. 

Yes they’ve taken an anti-democratic approach. That is obvious. But then again their entire administration since 2003 is built on some of the oldest, most backward, and most pernicious political traditions of the province. It isn’t surprising they’d lurch back to the 1920s for inspiration when times got a bit tough.

More importantly, they sought to avoid what they perceived as a Liberal mistake and in the process have blundered into a much bigger one.  They have a caucus that is not united. That is never good.

To compound that, they now have a leader who is – at the very best – a caretaker until after the next general election.  Dunderdale was due to retire:  they all know that.  She is at the end of her political career. 

After October 2011, Dunderdale is gone.  It is only a question of how long she will hang on and then the Conservatives will be back in the same boat again.

In the meantime, Dunderdale has no plans and no ideas.  She is merely holding things together for an unknown period of time.

Kathy Dunderdale is a leader with no plans and – even worse - with no real political authority.

Kathy Dunderdale has her job because other people agreed to let her have it. It is not as though they were given a chance and decided not to run of their own accord.  They were persuaded not to run and that is a very different thing.

In a tough spot, Kathy Dunderdale cannot pull a Danny and lay down any laws to anyone. She cannot even build a consensus based on her own political constituency of supporters. Nor can she truthfully build a consensus based on her savvy.  She has blundered too badly in public too often for that to have any real effect for her cabinet mates. People who thought Roger grimes came out of his leadership beholden to every one of his caucus can now look on Kathy Dunderdale put in exactly the same spot, or a worse one.

Kathy Dunderdale will also have a tough time disciplining those who step out of line. Since she serves at the pleasure of her caucus she can also be dismissed by them as easily.

How much will it take to crack the veneer covering the Conservative Party?

Time will tell.

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Another fundamental shift

Rob Antle is leaving the Telegram to take up a new job with Atlantic Business Magazine.

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The Year-end Traffic Wrap Up 2010

Here are the top Bond Papers posts for 2010 as determined by readers. 

If you clicked these pages and read them specifically, here’s what you helped push to the top of the pile.

1. Court docket now online! (Do lawyers know how to bookmark stuff?)
2. Five years of secret talks on Lower Churchill:  the Dunderdale audio (The conventional media ignored it, but people found it anyway)
3. General and master corporal face charges over relationship (Betcha forgot this one!)
4. Williams to head Rogers sports empire? (Apparently, he isn’t but lots of people think it’s an interesting idea)
5. Connie Leadership 2011 (this is the first of the series of updates – you can find a bunch more here)
6. Conservatives to give back seized hydro assets  (A short session but another December reminder of just how badly the Conservatives shagged the people of Newfoundland and Labrador with this little fiasco)
7. Williams abrupt departure “shocking”: Dunderdale  (Shocked is one word to describe provincial Conservatives’ reaction.  Sh*t-baked was another)
8. Williams’ disgraceful Christmas cards (The guy writes his own political obit!)
9. Bell 206 Crash:  photo interpretation (There are many sides to srbp readers)
10. The World the Old Man Lives In:  larger picture  (If this one had been on tee shirts and mugs, your humble e-scribbler could have bought a condo in Florida right next to the Old Man’s place.)

 

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Kathy Dunderdale: The New Paternalism

Dunderdale has sought to continue key points of the Williams government, including development of the Lower Churchill megaproject, but she has already shown a different approach on labour relations.

She ordered ministers to settle a 13-month strike involving a small group of support workers on the Burin Peninsula, and later asked ministers to end a nearly two-year negotiation with physicians that concluded last week with ratification of a new pay package.

That’s the way cbc.ca/nl described Kathy Dunderdale on a story Wednesday that did everything but explain that the Conservative caucus met on Wednesday to endorse the deal that had already been cooked up in order to avoid a leadership contest.

Note that last paragraph, though.  It shows how readily conventional news media are already absorbing the new Conservative Party political narrative about the kind of leader Kathy Dunderdale will be.

It’s right in line with a comment by Conservative parliamentary assistant Steve Kent, as reported by VOCM:

Kent describes Dunderdale as a compassionate, thoughtful, and principle-centered leader.

The new premier may well be all those wonderful things but the point to notice here is that in the construction of the whole idea Dunderdale personally directed that ministers clear up not one but two embarrassing situations.  She has the positive qualities.  She personally bestowed benefits.

Incidentally, this is exactly how Dunderdale described her role at the news conference in which she announced the deal with doctors.  There’s no accident to this:  lines like that are worked out in advance and comments don’t wind up on the page in some sort of arbitrary fashion.  They are selected to convey very particular ideas.

Dunderdale’s prepared statement describes opening the lines of communication with doctors as “my first priority…”. According to Dunderdale’s prepared remarks, the two ministers directly involved in the negotiations merely played a role.

This is essentially the same construction used by Danny Williams:  he did things or directed them, especially when they were beneficially. Ministers took orders in a clearly subordinate role.

You can see the same sort of construction in the way his most ardent supporters describe Williams:  he personally bestowed pride, courage and so forth on the poor benighted people of Newfoundland (and Labrador). Take as an example this comment on a post by Nalcor lobbyist Tim Powers over at the Globe and Mail:

2:12 PM on November 27, 2010

I know we have to believe there are strong leaders out there who will step forward and continue the work of Danny Williams. Quite frankly, with the news of his departure, I felt somewhat orphaned, a sense of being left alone surrounded by those who will, again, try and rob us of what we have achieved. …

Williams is a father figure, in the classic paternalist sense.  His departure orphaned his children.

What this political line ignores, of course, is the role that Kathy Dunderdale played in the Williams administration,  She was Williams’ hand-picked Number Two and his hand-picked successor. Like Tom Rideout before her, she represented a direct link to the older Conservative Party and its supporters who predated Williams.

Had she felt strongly about the doctor’s dispute or about the Burin situation she was in a position to change the government’s position. She didn’t. She supported it consistently. Similarly, both Tom Marshall and Jerome Kennedy held ministerial portfolios that gave them both legal and political power to resolve the matters long before the government finally settled both. The truth is that cabinet changed its approach to these two issues for reasons other than the arrival of a new leader who is compassionate.

In other words, the reality of how political decisions get made is considerably more complicated.  It’s also not something politicians really want people to know about, let alone discuss.

Instead, politicians fall back on time-worn attitudes to politics that people quite readily accept without even realising what the words actually mean.

Premier Kathy Dunderdale is no change from the resurgence of paternalism in Newfoundland and Labrador politics.

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2010: The year in review

For the year-end post, you’ll have to wait until Friday to find out what the readers picked as their favourite stories of 2010.

For today, here’s another view.  Your humble e-scribbler has picked one Bond Papers post or topic from each month as a reminder of the year’s events.  I f you take the time to wander back through the archives, you’ll find all sorts of things from the UFO story that ran among last winter to a couple of posts on education.  There are also posts on the fishery that got some public attention – h/t to CBC’s Fisheries Broadcast.

So much more happened in the province than people seem to remember and the stuff they do remember is often not the most important things.

In any event, here’s the Year in Review:

January:  Spending scandal:  when “facts” aren’t true

February:  Three on one topic:  Deep Throat, Deep T’roat and Deep Throats

March:  The Fragile Economy:  staying the course

April:  Jon Lien:  mensch

May: The search for meaning challenge – yet more unfounded news media claims. 

June:  Roger Fitzgerald’s bias – the House of Assembly is at the point where partisan bias openly displayed by the Speaker is now commonplace.

July:  Calamity Kathy’s story doesn’t add up.  The local media are already praising her political genius.  Here’s another example of how short their memories are or how low are their standards.

August:  Good to the last fish

September:  The politicisation of public emergencies

October:  Breasts:  they’re not just for gawking at

November:  Reversing the entrepreneurial drive

December:  How to win without news media – Part 2

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