The strange case of Harvey Hodder

Anyone who has been following the spending scandals in the Mother of Parliaments and in the Bow-Wow parliament cannot help but be struck by the contrasts.

For starters, voters in the United Kingdom actually know where the money went and who spent it.  In Newfoundland and Labrador, voters have no idea where the bulk of the money went even three years later.

Then there is the matter of Mr. Speaker.  In London, Speaker Michael Martin has been forced from office.  In St. John’s Harvey Hodder – who took office two years before the scandal broke - stayed in place and has even been called as a witness in one of the criminal trials under way coming out of the scandal.

Hodder is a curious figure, even as speakers in the Bow-Wow parliament go.  He did not prove himself particularly adept at keeping control of the House when it was in session.  He never strayed far from partisan politics, even in his supposedly non-partisan role as Speaker. Things got so bad at one point that the opposition had to try and embarrass the old fellow out of the chair.

His curious behaviour once the scandal broke, showing up at the hospital bedside of the guy at the centre of the scandal and apparently deferring repeatedly to direction from the Premier’s Office, prompted a post here that called for his resignation.  That’s just one of the many unfortunate moments in this mess when Hodder had the chance to do one thing but elected to do something else.

Even as he finally retired, Hodder couldn’t resist offering up a few self-serving explanations for his own spending habits.

All that makes it very odd that Hodder turned up as a witness in a court case but even the odd took a bizarre twist as Hodder’s comments appear to contradict many of the things already known about the scandal and his role.

For example, Hodder told the court  funder oath that

… he wanted to look at the books that former legislature finance director Bill Murray, who also faces fraud charges, was keeping.

Hodder testified his request met with resistance, and Murray did not want to share his records.

Hodder said he was later reassured by the former clerk of the house, John Noel, that everything was fine, and Hodder should concern himself with other things.

Leave aside for a moment the obviously lackadaisical leadership style Hodder displayed by allowing his subordinate to refuse a direct request.  Consider instead that when the scandal broke Hodder had a completely different explanation for his apparent inaction despite his own claims that he had misgivings about the House accounts:

"Early on, I expressed misgiving about some of the financial management practices," said Harvey Hodder, who became Speaker after the Progressives Conservatives took office in 2003.

But he said he was initially satisfied when a private accounting firm found nothing untoward in the legislature's spending and didn't flag what turned out to be nearly $3 million lavished on trinkets, gold rings and other baubles over the past seven years.

Was Hodder reassured by the Clerk or by an audit?  There’s a big difference in the implications flowing from the two stories. The one continuous thread, though, is that Hodder was aware of problems but found some reason to go back to his office and not bother to exercise the control which he held by virtue of his office as Speaker.

He turned a blind eye.

And then once the scandal had been exposed, Hodder set about to blame others, first his predecessor and the members of the House executive committee in 2000 and then Hodder’s subordinate:

"That could only happen where one person is responsible for controlling the information," Hodder said.

One person wasn’t responsible, of course.  He was allowed to function as he did by Hodder and others who have never been called to account for their inaction.

Hodder made some other curious claims under oath.  Like this one about his knowledge of the system:

Hodder testified that MHAs were keenly interested in issues surrounding constituency allowances, poring over spending breakdowns and the limits published just after their annual release.

If this meant the breakdowns for each member then he should have noticed something much earlier than anyone else.  But even if Hodder got fudged records, there is no mistaking the accounts maintained by the province’s comptroller general and published each year as the Public Accounts.

If Hodder indeed had such a “keen” interest then he would have noticed that in 2004 and 2005, the budget laid in front of the House of Assembly falsely reported that the members’ accounts were bang on budget when the Public Accounts showed them to be out of whack by about a half million each year.

Bond Papers noted this in August and December 2006 and the accounting was confirmed by the Green report on the spending scandal. neither the province’s auditor general nor anyone else has explained the overages in those two years as well as the discrepancy between the budget figures and the Public Accounts. The auditor general made no reference to these discrepancies in his annual reports for those years.

Then there’s another claim about the diligence with which Hodder kept his own track of his own spending:

Hodder testified he kept copies of every receipt, claim form, payment stub and other supporting documentation during his long career in provincial politics.

The auditor general’s report on constituency allowance spending by all members after 1989 showed that Hodder:

• double billed the legislature (albeit for $129)
• made donations of public money totalling over $30,000, and
• made alcohol only purchases out of his constituency allowance totaling over $1,100.

None of this was permitted under even the lax rules that applied during the scandal period.  If Hodder kept as close a track of his spending as he said under oath, then he knew about his own inappropriate spending. When the report was released, incidentally, he attributed the alcohol purchase to a mistake in accounting.  He also is in a position to identify specifically all the donations he made during his term in the legislature.

Now Hodder wasn’t the worst when it came to using public money for gifts to unnamed individuals and groups, but it is a bit rich for him to pass judgment on others when his own record is far from stellar.  While Hodder may not have known of criminal activity, he certainly was aware of the sordid practice of using the constituency allowances as what amounted to a slush fund.  He did nothing about it, by his own admission.

Did nothing, at all and yet Hodder found no shame in making this sanctimonious statement as he left politics:

"It is regrettable that there are hungry children in this province, in my former constituency, who could've benefited from some of that money."

That’s not all that is regrettable about the House of Assembly between 1996 and 2007, as the strange case of former Speaker Harvey Hodder shows.

-srbp-

Today in history…

On this date in 2006, then natural resources minister Ed Byrne left the annual NOIA conference and went off to discuss with Premier Danny Williams the auditor general’s review of the House of Assembly accounts and specifically some problems discovered in the records for Byrne.

It was a Tuesday.

The next day – over 24 hours after that chat with Byrne – Williams told the rest of the province about what became the House of Assembly spending scandal.

How much had changed from a little over five years before when Williams took the reins of the Tory party from Byrne at a convention in St. John’s (left).

Byrne remained a major force within the party up to his resignation on June 21.

To mark the third anniversary of the scandal, Bond Papers has collected together links to the posts on the spending scandal.  You’ll find them if you scroll down the right hand column.  There are a lot since the scandal is huge and continues to reverberate to this day.  The are so many, we’ve had to break them down by year.  The first couple of months worth are ready as this post goes live.  The rest will follow in short order.  Unlike the last link list on the scandal, this one will be a permanent sidebar feature.  Interest in the issue hasn’t abated.

The are arranged chronologically beginning with the first one, posted the evening the Premier told the rest of us some of what he already knew.

The story has gone through a number of twists and turns as more information came to light.  Still, three years later, the people of Newfoundland and Labrador do not have a complete tally of how much cash went out the door nor do they have any idea where most of it went.

Along the way there have been some moments of personal satisfaction for your humble e-scribbler. 

In a post in August 2006 – two months into the scandal -  Bond Papers pointed out how much of that the Auditor General missed in his reports.  Chief Justice Derek Green confirmed it in his report in mid 2007. The Auditor general has never corrected his figures or explained his glaring oversights.

While the Green report turned out to be a significant turning point in the whole affair, the response was less edifying.  As Bond Papers reported first in “One last trip to the trough?” the members of the legislature adopted the Green bill quickly but made sure they didn’t have to live with the chief justice’s spending rules until after the fall election. 

Then- government House leader Tom Rideout proved a source of great entertainment as he tried to explain how in June the legislature had decided to implement the legislation “tomorrow” but in the language of parliament “tomorrow” was not the next day but a day five months later.  Only a title lifted from Get Smart – “Chaos in Control” -  could cover such a piece of hilarity.

Then there was a moment of unease.  In reviewing the posts, you will find one written early on about the use of public money for partisan purposes.  At that point it was only a suspicion. The suspicion was confirmed when Ed Byrne pleaded guilty to the charges levelled against him.

Only five individuals were charged in the scandal.  One pleaded guilty.  Another case is currently before the courts and three more are due to start over the summer and into the fall.

Since the scandal broke in the Bow Wow parliament, other similar stories have emerged elsewhere.  In Britain, the scandal of account mismanagement in the House of Commons has ended political careers sparked numerous investigations and may ultimately topple the Labour government.  The public has received details of the spending and reacted with appropriate anger.

Yet, three years later, and despite a series of investigations, there has not been a full public accounting of the money or where it all went.

There may never be.

-srbp-

The persistence of patronage politics

Former auditor general Elizabeth Marshall made the news this past week in her new capacity as a Conservative senator from Newfoundland and Labrador.

Senator Marshall racked up $51,000 in airfares in a three month period, making her the senator from the province with the highest spending on travel.  According to Marshall’s staff the whole thing was for business class travel between St. John’s and Ottawa.  It’s really expensive to commute to work these days, especially when you live the better part of half a continent from the office.

Some people might credit Senator Marshall with uncovering what became known as the House of Assembly spending scandal.  She was trying to audit one member of the legislature almost a decade ago when the committee overseeing the legislature barred her from finishing the job.

When the scandal finally erupted into public view in 2006, the scandal shook the province’s political system.  Four politicians went to jail, along with the legislature’s former chief financial officer.  Millions of dollars of public money remain unaccounted for, despite an extensive police investigation, supposedly detailed reviews by Marshall’s former deputy and an investigation by the province’s top judge.

In one of those great cosmic coincidences, a local businessman involved in the scandal found out this week he’d be going to jail for upwards of three years. John Hand pleaded guilty to defrauding the public of almost half a million dollars.

Marshall didn’t actually uncover the spending scandal. She was focused on a particular member of the legislature whom she felt was using public money to purchase win and artwork for himself. A subsequent review by Marshall’s successor didn’t add significantly to what others had already found.

The more significant story, though, lay somewhere else.

Between 1996 and 2006, members of the legislature gave themselves the power to take money set aside to help them do their jobs as members of the legislature and to spend it on just about anything each of them deemed appropriate.  While some enriched themselves, and a few spent public money on women’s clothes, season hockey tickets or perfume, virtually all members of the legislature in that decade gave money to their own constituents.

In his lengthy report on the scandal, Chief Justice Derek Green described the practice  - and the problem - as eloquently as anyone might:

“First and foremost, the practice of making financial contributions and spending in this way supports the unacceptable notion that the politician’s success is tied to buying support with favours. Such things, especially the buying of drinks, tickets and other items at events, has overtones of the old practice of treating - providing food, drink or entertainment for the purpose of influencing a decision to vote or not to vote. As I wrote in Chapter 9, it demeans the role of the elected representative and reinforces the view that the standards of the politician are not grounded in principle. In fact, I would go further. The old practice of treating was usually undertaken using the politician’s own funds or his or her campaign funds. To the extent that the current practice involves the use of public funds, it is doubly objectionable.

Related to the notion of using public funds to ingratiate oneself with voters is the unfair advantage that the ability to do that gives to the incumbent politician over other contenders in the next election.”

For his part, former Speaker Harvey Hodder made plain his own attachment to the system this way:

"Some members, myself included, paid some of my constituency expenses out of my own pocket so I would have more money to give to the school breakfast program ... I don't apologize for that."

And former auditor general Elizabeth Marshall saw nothing wrong with the practice of handing out cash, often without receipt, with no established rules and for purposes which duplicated existing government programs.

What Chief Justice Green called “treating” is actually the old practice of patronage.  That isn’t just about giving party workers government jobs.  It’s basically one element of a system in which citizens trade their status as citizens for that of being the client of a particular patron.  The patron gets political power and the ability to dispense benefits of some kind.  In exchange, the client gives the patron support.  Explicitly or implicitly, as the Chief Justice stated, there's a connection between the favour and support.

In a model government bureaucracy, the rules that govern how a particular program works are well known.  Everyone in the society who meets the requirements would typically get the benefit of the program. 

But in a patronage system, the rules are hidden or there are difference between the formal rules and the ones that are actually used to hand out the benefit. The patrons and their associates control access to the benefits and so can reward people who comply with their wishes or punish those who do not.

There are as many variations on the patronage idea as there are societies.  The notion is well known in Newfoundland and Labrador politics. As political scientist George Perlin put it in 1971:

“Historically, the dominant factor in the Newfoundland context has been the use of public resources to make personal allocations or allocations which can be made in personal terms, in return for the delivery of votes.”

More recently, political scientist Alex Marland had this to say about the House of Assembly:

A final, but perhaps most critical, theme is the politics of deference towards charismatic power-hungry men and an outdated paternalistic ethos. Backbenchers, bureaucrats and journalists are scared to be on the wrong side of the executive for fear of harsh repercussions that can harm their careers. A massive spending scandal  occurred because, unlike Peter Cashin had done years before, nobody in the legislature had the courage or whistleblower protections to speak up about questionable expenses.  Political participation is sufficiently limited that interest groups prefer to meet behind closed doors and family networks continue to hold considerable sway within party politics. There is a historical pattern of democratic fragility and of  Newfoundlanders and Labradorians trusting elites to represent their interests.

Marland is understandably scathing in his criticism of politics in the province in the early years of the 21st century.  His assessment of the contributing factors  - way more than the paternalism mentioned above - is thorough and accurate even if his conclusion is a bit pollyannaish.

What’s more interesting is the way that seemingly unconnected events can relate to each other.  Those relationships explain much about the state of politics in the province.  Next, we'll add another element to the picture and discuss the Conservative leadership fiasco.*

- srbp -

*  In the original version this sentence read "Tomorrow" instead of "Next".  The second installment of this mini-series on patronage and local politics is going to take a bit longer to complete since so many rich examples can be found in current events.

.

A cause for grave concern #nlpoli

The Office of the Auditor General is an independent and reliable source of the objective, fact-based information that the House of Assembly needs to fulfill one of its most important roles: holding the provincial government accountable for its stewardship of public funds.

That’s a paraphrase of the description of the auditor general’s job found on the federal auditor general’s website.

Let’s add a bit of a twist to that description, though. The Auditor General’s office is not just an officer for the legislature alone; the AG office is one of the officers the public must trust to ensure that government spends your tax dollars and mine properly.

Aside from anything else, the people of Newfoundland and Labrador must have confidence that the person who serves as Auditor General is not a partisan for any political party and is functioning free of any favour or threat from the government itself.

John Noseworthy likely shattered that confidence for a good few people in the province on Tuesday when he became the second Auditor General in a row to leave office and enter politics.

In this case, Noseworthy announced his new political career a mere 16 days after leaving the job that he wants to run as a candidate for the ruling provincial Conservatives in the fall general election.

But that’s not the whole story.

Noseworthy had a year or more left  in his term when he announced last June that he was quitting to pursue “other professional opportunities.”  Asked about political ambitions at the time, Noseworthy merely told reporters he was ruling nothing out.

News reports on Tuesday mentioned his role in uncovering the House of Assembly spending scandal.  In interviews, Noseworthy was quick to call his own reports on government spending “scathing” and noted that he was critical of government.

That’s as maybe. The timing alone creates the impression of an unseemly haste to leave his job early in order to enter politics.   His comments appear self-serving and - in light of some of his actions over the past seven or eight years - dubious.

Noseworthy has been a bit of a media darling since 2006 and the spending scandal.  What that means is that local reporters have not questioned him even when there was good reason to doubt his comments, claims and conclusions.

For starters, Noseworthy has never accounted for millions of dollars of overspending that took place during the scandal period from 1996 to 2006.  Instead, he looked at other issues.

Nor has he explained why his own reports actually ignored the overspending. You’ll only find reference to the actual degree of overspending here at SRBP and in Chief Justice Derek Green’s report on the spending scandal.

In the parts he did report on, your humble e-scribbler raised questions about his public comments at the time and how he was conducting his reviews.  Chief Justice Green even recommended significant changes to sections of the law governing the Auditor General as a result of the inappropriate - and in some instances unfounded – accusations Noseworthy levelled at members of the legislature.

Then there’s the question of how both he and his old boss, now Tory Senator Elizabeth Marshall never made any comment on the level of overspending in the House of assembly accounts until 2006.  They may not have had access to the House books for a part of the scandal period but they did have access to the Comptroller General’s records for the whole time and he wrote all the cheques used to shell out the cash. And they never raised the issue once, except for the one time when Marshall’s attempt to investigate a single cabinet minister – Liberal as it turns out – got shut down.

Noseworthy’s also been known to polish his own knob and that of his future political associates.  In a 2009 report, Noseworthy actually made up a fictitious report recommendation and credited the government with following it.

A 2007 report claimed that the same agency produced a deficit and a surplus at the same time.

Nothing was quite as bizarre, though, as Noseworthy’s sudden decision to try and audit the offshore regulatory board.  At the time, Noseworthy’s office did not include the board in a list of government agencies the Ag felt he had the authority to audit. 

Noseworthy made quite the stink about getting inside the board offices, issuing a special report.

But once he got in, the whole thing vanished.

No subsequent reports.

No updates.

No letters.

Nothing.

Not until your humble e-scribbler brought up the question of the vanished Earth-shattering issue and reporters trotted off to Noseworthy’s office to see what gives.

Access problems, Noseworthy harrumphed.

But no word on his silence on the whole matter for the better part of two and a half years.

There was just a little cock-up in a story on the whole thing by one local radio station.

Funny thing in that little episode as it turns out. Natural resources minister Shawn Skinner wound up reminding everyone of the sweeping changes to provincial laws that wound up effectively shielding so much of Nalcor’s operations from public oversight.

Noseworthy didn’t say boo about any of that as it sailed through the legislature and it didn’t make any reference to it in any of his comments since June when he announced his retirement.

Maybe Noseworthy will be like his predecessor Beth Marshall who, after entering politics, didn’t find any problems with giving politicians access to bags of cash they could hand out to constituents, often without receipts.

Ah yes, old-fashioned patronage politics and the importance of having a member on the government side to dole out the goodies.

And, by gosh, didn’t John Noseworthy mention just that - having someone on the government side  - as he launched his career in politics.

Incompetence?

Normal practices?

Bias?

Whatever the cause, John Noseworthy’s announcement on Tuesday is the finest example yet of why our province desperately needs a fundamental, democratic revolution.

- srbp -

Spending Scandal: when “facts” aren’t true

The agreed statements entered in some of the trials resulting from the House of Assembly spending scandal are remarkable, if for no other reason than by the incorrect information contained in them.

Take this one from the statement entered on Tuesday in the Bill Murray trial:

In simplest terms, that statement is not true.

The finance department’s Comptroller General continued invariably over the whole scandal period to maintain accurate records of the total amounts paid under the allowances budget item each year.  

The Comptroller General’s figures were reported in the provincial government’s financial statements which were – it should be noted – audited each year in the scandal period by first Elizabeth Marshall and then her successor John Noseworthy.

Even a cursory examination of the Public Accounts shows overspending well in excess of what was subsequently reported by John Noseworthy once the scandal story broke.

In fact, as documented at Bond Papers and in Chief Justice Derek Green’s inquiry report, the overspending was obvious.  The BP post from December 2006 indicated that the total overspending amounted to more than twice as much as anything Noseworthy ever indicated.

In the chart from that post (above), red indicates the overspending as reported in the public accounts.  Yellow is the figure reported by Noseworthy for a given fiscal year. It only includes money identified by Noseworthy as being made to four members of the House of Assembly.

No one – least of all Noseworthy – has explained the massive discrepancy between the available evidence and what Noseworthy reported or the consistent failure of any audit officials to make public reference to the evident overspending.

-srbp-

Related:

• “AG reports leave serious unanswered questions” (July 2006) – discusses problems with Auditor General’s reports on four politicians, including inconsistencies in the way travel expenses were allocated by the AG’s office for the four MHAs.
• “Legislature financial scandal bigger than previously revealed” (August 2006)
• “The little things” (September 2007) – Among other things, the Ag did not offer any comment on the diversion of constituency funds for partisan purposes, something which was improper at the least and potentially illegal at most.
• “NL AG hoist by petard of own misleading statements” (February 2008)
• “AG report makes up old recommendation…” (November 2009) – Notes that an auditor general’s update on previous reports included a fake recommendation which he claimed had been acted on instead of the five on which no information was proved.

Getting off the road to hell

In the spending scandal at the House of Assembly, the frame placed on the issue by the members of the House of Assembly - and by cabinet - has focused on overspending, breaches of the public tendering process and possible criminal activity.

Certainly those issues can be addressed, to some degree, by changes to the House's administrative processes and by the police investigations currently underway.

But comments by deputy premier Tom Rideout and Speaker Harvey Hodder this past week expose an even more significant issue in how the members of the House of Assembly spend public money intended to pay for their office operations. As noted here at the start of this scandal, the frame which elected officials want us to accept simply does not cover all of the problems the scandal entails.

Specifically, both Rideout and Hodder acknowledged that they and other members of the House of Assembly routinely make donations to groups in the community from public funds. We are not speaking of purchasing the odd ticket to a dinner for a church group. Rather we are talking, in some instances of single donations of thousands of dollars or the purchase of advertising "compliments of" this or that member of the legislature.

There are several problems with this.

Firstly, on the face of it, the money for operation of a parliamentary office should not be spent on any purpose other than that intended. It doesn't matter that members of the legislature granted themselves an exemption from the ordinary and accepted practices of government spending and thereby followed the rules.

The rules that allowed such spending were wrong.

Some of the donations apparently took the form of advertising. But the advertising we are speaking of here is not related to parliamentary business. What was intended in 1989, when these operations budgets were created, was the kind of advertising that tells constituents how to contact their member in the legislature. What members have apparently been purchasing as advertising is nothing more than personal promotion for the individual member and that is an entirely inappropriate use of public funds.

We went through this sort of waste in the free-spending years of the Peckford and Rideout administrations in the 1980s. At that time it was only cabinet ministers who had the budgets to allow for that type of waste. What occurred in 1996 was a return to the waste of the past, but in the new form all 48 members of the legislature were given the ability to waste public money on personal promotion.

In the example used by Harvey Hodder, he could easily have purchased a ticket to the school play in his district. That sort of spending is already covered in one way or another as the type of expense a public official will incur as part of his or her official responsibilities. It would also be far less costly than the personal advertising he has purchased untold times out of public money.

It is also useful to look at the alternatives Hodder used. Rather than spend money on a constituency newsletter, Hodder feels it is better to buy advertising for himself.

Note how many members of the legislature maintain constituency websites, for example.¹ These days such a simple device is an inexpensive means of keeping in touch with constituents and informing them of a member's activities as their elected representative. It is exactly what constituency allowances would cover yet one wonders how many legislators opted to fund a little personal promotion - as Speaker Hodder would approve - instead of informing constituents on important issues.

Secondly, spending by members of the legislature under their district budgets is largely secret. While receipts are supposedly collected and kept on file, the only detail disclosed by the Internal Economy Commission (IEC) is the total. Voters - the people to who legislators are responsible have no idea how money is being spent and who is receiving the public cash.

This is the antithesis of accountability and transparency, despite the number of times those words have been tossed about over the past three weeks or in 2000 to justify changes to the IEC Act. We simply do not know what groups are being favoured, as at one observer has described the activity, nor do we know if the individuals involved are or have been political supporters of the individual legislator involved.

This leads to the third issue, namely that this money has been or could be used as a form of vote buying or other political corruption. This does not mean that members have actually been up to no good; rather there is an apprehension - a reasonable suspicion - that such behaviour could be taking place.

The image of the self-interested and corrupt politician is corrosive in our political system. Yet while Speaker Hodder and some other members of the lesiglature seem worried - lately - that their reputations are being tarnished, they have done nothing at all to dispell the concerns. Rather, Speaker Hodder is encouraging members to withhold details of the spending, claiming legal advice that these records may become part of the current police investigations.

In this instance, there is no meaningful way in which the disclosure of what we are assured are legitimate expenditures could compromise a police investigation into wrongdoing. What Hodder and others have been doing may be inappropriate, but it isn't likely to land them in jail. Instead, disclosure of members' spending details - even at this late stage - would help to persuade sceptical voters that Mr. Hodder and his colleagues are indeed spending publicly money appropriately. One wonders why such an obvious point can be so easily over-ruled by a lawyer's standard advice.

The fourth problem with this spending comes from the explanations being offered by Speaker Hodder, among others. Put bluntly, it doesn't matter at all that, in the instances we know of, recipients of the money are doing good work in the community.

Good works do not preclude the possibility that the gifts from Mr. Hodder and others carry with them or may be perceived as carrying with them some conditions that are less than desireable. No matter what the intention, Mr. Hodder and others have created a climate in which voters are compromised by receiving public money inappropriately.

If these programs are worthy of public financial support, then there ought to be specific votes in the government's own budget through the appropriate department. In this way, all such groups in the province would have equal and fair opportunity to receive public financial support. Any public spending ought to be done in as open, fair and equitable a way as possible. It must be devoid of even the appearance of impropriety. Sadly this not what has been occuring.

What has opened up in recent weeks is clear evidence that the rhetoric favoured by our province's politicians is a far cry from their actions. Rather than being genuinely accountable, open and transparent in spending of public money, members of the legislature have been secretive.

Only such information as members wish to disclose is actually made public and even that - as in the IEC reports such little information as to be all but meaningless. That is, they would be meaningless even if, as the Auditor General recently alleged, the House accounts were falsified in at least four cases. Our politicians give us only the information they want us to have. Genuine accountability would give us the information we deserve.

Money has allegedly been misappropriated, but as more information comes forward, we find that misspending goes beyond just overpayments to individual members. We have found that members are spending scarce public money on personal promotion. By their own admission, members are handing out donations to community groups using money that was never intended to be spent on anything other than the operations of parliamentary offices.

If there was ever a doubt about the need for a far-reaching public inquiry, then both Harvey Hodder and deputy premier Tom Rideout have given us fine and ample reasons to probe further into how members of the legislature have been handling public money.

A public inquiry is the only way we can get off the road to hell that has been paved, if Hodder and others are to be believed, with the good intention of helping fill children's bellies before starting school each day.

---------------------------------

¹ An alert reader tells me there are three.

Legislature financial scandal bigger than previously revealed

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

[Update: See explanatory note at end]

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

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

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

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

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

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

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

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

Government likely knew of problems earlier than previously admitted

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

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

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

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

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

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

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

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

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

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

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

___________________________

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Changing the channel

In politics, they call it changing the channel.

That's when an incumbent is taking a few smacks in the skull without let up. So he starts talking about something else entirely.

It's especially important when the provincial pollster is in the field.

Like right now.

After all, this Premier does nothing if he doesn't try to goose polls to demonstrate how much support he has. He needs those numbers to dazzle people, like say a columnist for the Globe.

The provincial government issued 55 news releases last week in an effort to change channels from the by-election loss and the ongoing spending scandal in the House of Assembly. That's the latest aspect of the spending scandal, which of course is different from the previous scandal, as Danny Williams will tell you.

It is different of course since this aspect of it happened since he became Premier and despite earlier assurances that all inappropriate spending was stopped on 22 October 2003.

But I digress.

Let's put that 55 releases in a week in some kind of perspective.

Since the government started it's online news archive in 1996, last week was the seventh heaviest week of releases.

Those 55 releases are the second highest number for Danny Williams' administration. Only Budget 2005 beat it out, but only but two releases.

The typical number of news releases for February over the past two years is around 34. During the same week in 2004, the provincial government issued on 19 releases.

Yessirreee Bob, that's a serious effort at changing the channel.

The deep roots remain

Harvey Hodder is the outgoing speaker of the House of Assembly.

His comments on the House spending scandal on Monday make plain that the people who endorsed, condoned, approved of and participated in the excesses simply do not appreciate that what they were engaged in was ethically wrong.

"Some members, myself included, paid some of my constituency expenses out of my own pocket so I would have more money to give to the school breakfast program ... I don't apologize for that," Hodder told a news conference at the legislature, saying the donations were the actions of "sensitive, outreaching, loving people."

"It is regrettable that there are hungry children in this province, in my former constituency, who could've benefited from some of that money."

As much as Hodder crowed about the new rules and the new standards, his own self-serving defence of inappropriately directing public money as cash gifts to individuals and organizations goes a long way to explain how the old system - which had rules - was systematically dismantled by the members of the legislature themselves.  Far from being a star chamber, the old House management committee comprised the senior leadership of the legislature, including successive Speakers.

If there was criminal activity, they did not know of it.  But they knew and condoned the excessive, and inappropriate, spending.  The allowances and assistance budget of the legislature was overspent by almost $1.0 million in the first two years of Hodder's tenure as Speaker. He and his colleagues knew that. They knew of the "donations" system and, as Chief Justice Green revealed, they overwhelmingly endorsed it. Newfoundland and Labrador was the only jurisdiction in North America and certainly the only one in Canada where elected officials had access to what amounted to a slush fund to dispose of as they saw fit.

The members of the legislature directed public money to whatever group or organization or individual they alone deemed worthy. They did so out of the public eye. They gave not a moment's thought - as Hodder makes plain - that the recipients of the legislator's largesse with public money were very often groups that received funding from the provincial government through established programs that were far more fairly and transparently administered than the legislature's scheme. 

As the school lunch association's annual report noted in 2003-04 (the last year available on line) "[e]ach year the Government of Newfoundland and Labrador contributes $75,000 to the program." The members of the legislature had it within their considerable power to increase funding through proper channels if there actually were "hungry children."  They had the ability to fund health care transportation or volunteer fire departments properly.  Instead, they elected to keep a fund available to themselves to hand out personally and largely secretly. If there are indeed hungry children in Hodder's district since the donations scheme was exposed, then that is because Hodder and his colleagues failed utterly to discharge their considerable responsibilities appropriately.

Hodder's staunch defence of inappropriate actions - even as he introduced new rules designed to undo the old scheme - should give every single voter in Newfoundland and Labrador considerable concern. While Hodder will soon be gone, his colleagues from all parties who participated in and enthusiastically endorsed the donations scheme have been re-elected.  Beth Marshall - the former auditor general - is even more strident than Hodder in her defence of of the inappropriate spending. There is no sign the re-elected legislators have changed their minds on what is appropriate and what is not, when it comes to spending public money any more than Harvey Hodder has.

And as the summer of pre-campaign love demonstrated, some politicians were quite willing to use public money for donations and to do so in a partisan fashion.

The roots of the House spending scandal are far deeper than most have been prepared to acknowledge.  The roots  - the very deep roots  - obviously remain.  Perhaps the new rules will starve them.  The people of the province can only hope the roots will rot.

Voters in the province would be justified in keeping a very close eye to make sure that, rather than starve the weeds, the politicians might find a way to nurture them to bloom in a new pot of public money.  Politicians who can see nothing in wrong in what they did, re-elected with what they may take an as overwhelming public endorsement of their actions, might find a way to bring back the old scheme in a new place.

As Harvey Hodder demonstrates - indeed as virtually all the old hands have demonstrated - self-serving rationalizations are never far from their lips.

-srbp-

A rose by any other name would still stink to high heavens

Pity Clayton Forsey.

He’s the Conservative member of the provincial legislature from the district of Exploits. Like many of his colleagues, he visited a town in his district recently and handed out a cheque from the provincial government as a “donation” toward the town’s up-coming tourism festival.

The regional weekly newspaper covered the event and described it this way:

Denise Chippett is the chairperson of the Come Home Year committee. She said the celebrations was enjoyable for all; what also helped were substantial donations from Exploits MHA Clayton Forsey and the town's volunteer fire department.

This week the Telegram picked up that line and started poking into it. The story appeared in the Saturday edition this weekend but sadly it isn’t available on line. The Telegram noted that Chief Justice Derek Green’s report into the House of Assembly spending scandal recommended that members of the legislature not make “donations” from their constituency allowances or with other government money.  If they did so out of their own pockets,  the politician is supposed to make it clear where the money came from.

Forsey is clearly bothered by the Telegram’s questions and, as the Saturday quotes him,  Forsey is quick to distance himself from that scandal.  The money is from a government department, Forsey says.  There’s a small fund in the municipal affairs department to help out with anniversary celebrations, as in this case.

"I've always presented cheques on behalf of departments. Ministers
don't always get out to these districts," Forsey said.

Of course you have to pity Forsey on two counts.  On the the first, he is merely getting nailed publicly for what his fellow government caucus members do on a regular basis.  As Forsey says, he “always” hands out government cheques. it isn’t really fair that he gets singled out in this way.

On the second, you have to pity Forsey for not appreciating that what he and his Tory buds are doing is exactly what the House of Assembly mess was really all about;  they are just using a different means to get there. You see, the main problem with the spending scandal was not that a few fellows defrauded the Crown, although that was bad enough.  The allowances system that existed in the House between 1996 and 2006 allowed individual members to engage in the old political practice of doling out goodies to constituents.

In his report, Green calls it “treating – providing food, drink or entertainment for the purpose of influencing a decision to vote or not to vote.”  That’s not exactly what this is, but the idea is related to the term more people know:  “patronage”.

As George Perlin described it nearly 40 years ago, “the dominant factor in Newfoundland politics has been the use of public resources to make personal allocations or allocations which can be perceived in personal terms….” The objective of this exercise is to connect the politician personally with the distribution of government benefits and garner political support in the process.

Consider that in this example, Forsey holds no government office and therefore has no right to hand out a cheque for government funds in preference to anyone else. Do opposition politicians get the same consideration?  Doubtful.  It’s more likely that a backbencher from the majority party caucus would carry the cheque.

In truth, the money did need to come in a cheque at all.  These days, the money could just as easily have come in a bank transfer from the department to the town.  Nor was there any need for a politician to have anything to do with it.  After all, as Forsey explains, there is a small fund available to any town holding some sort of anniversary celebration.  All the town had to do was fill out a form and wait for the bureaucrats to process it. The same thing should happen no matter where the town is, that is, no matter the political stripe of the person sitting in the legislature for that district.

But there’d be no political value in that, hence Forsey and his colleagues carry right on in the fine old tradition of pork.

The real value – the political value  - of the whole set-up, after all,  can be easily seen in the comment the chairperson of the anniversary committee gave to the paper.  It tied the money to Forsey.  And as Forsey noted he does this sort of thing all the time. Of course he does; so do his colleagues.  The money comes from municipal affairs or from the tourism, culture and recreation department where a bunch of small grant programs keep Tory politicians busy with cheque presentations.

There is absolutely no difference in what Forsey and his colleagues are doing and what virtually all of his predecessors  - leave the convicted criminals out - did with their constituency allowances between 1996 and 2006. All that happened in 2007 was that the pork-barrelling and patronage became the exclusive domain of the majority party in the legislature.

And in the end, that wasn’t really much of a change at all.

- srbp -

Tory-gate: the PC party election spending scandal

1.  The Chief Electoral Officer’s statement on why he is refusing to investigate.

Note that CEO Paul Reynolds apparently only spoke with unnamed Progressive Conservative Party officials after he told CBC’s David Cochrane that he would not be investigating the matter as he felt the by-election had been conducted properly:

They [unnamed party officials] indicated that they became aware of this issue when the statement of facts relating to the Ed Byrne Constituency Allowance fraud case was brought forward by a CBC reporter, this being the same time that my office was made aware of the situation.

2.  The legal argument against Reynolds:

306. (1) No person other than the chief financial officer of a registered party or candidate shall authorize election expenses for that party or candidate and no election expenses shall be incurred except by a chief financial officer or a person designated in writing by a chief financial officer for that purpose.

So if Mr. Reynolds' assertion is correct, why are there no charges, and why is there no investigation?

3.  The logical argument against Reynolds:

Given the severity of the potential breach of justice, the lack of initial evidence does not constitute a prima facie case against a full investigation into whether stolen money was indeed used to fund a provincial election campaign.

Reynolds' statement contains 4 attempts of negative proof, otherwise known as argumentum ad ignorantiam. For a pithy explanation, see Fallacy Files: http://www.fallacyfiles.org/ignorant.html

The case against this type of argumentation is simple: a lack of evidence by itself is no evidence.

4.  Three years after the House of Assembly spending scandal story broke, the people of Newfoundland and Labrador still do not know the answers to simple questions:

• Who knew?
• What did they know?
• When did they know it?
• Where did the money go?

It’s not like someone didn’t suggest this at the outset:

Make no mistake: AG Noseworthy's inquiries and the police investigation will not root out the answers to all the questions raised by this scandal which itself is without precedent in the province for over 80 years.

-srbp-

There are duties and then there are duties

Finance Minister Loyola Sullivan says the comptroller general has a legal obligation to collect any money that's owed to the province.

Sullivan (right) made the comment when announcing today that the comptroller general would be sending letters to the five current and former members of the House of Assembly demanding repayment of alleged overpayments in the House of Assembly spending scandal.

Perhaps the finance minister should read all of the Financial Administration Act and acknowledge that significant details of the House of Assembly scandal have not been properly investigated and disclosed to the public.

For example, the comptroller general has a legal obligation to maintain the public accounts under terms set out in s. 27:

27. (1) The comptroller general shall keep a ledger in which shall be entered the departmental appropriations by Heads of Expenditure and by subheads and subdivisions in accordance with the subhead and subdivision allocations exhibited in the estimates for the fiscal year concerned, as amended in accordance with this Act, against which shall be charged all authorized expenditures.

(2) The comptroller general shall establish and maintain a record of commitments chargeable to each appropriation in the form that the board may prescribe.

(3) The comptroller general shall furnish to each deputy minister or other officer charged with the administration of a Head of Expenditure a statement of the charges entered against the Head of Expenditure or a subhead or subdivision of a Head of Expenditure and those statements shall be furnished at those periods that the deputy minister may reasonably require and shall show the charges made during the report period together with the balances at the credit of the Head of Expenditure or subheads or subdivisions at the end of each period concerned.

(4) When a subhead or a subdivision is exhausted, the comptroller general shall at once notify the deputy minister concerned and the comptroller general shall not sanction a further charge to be entered against that subhead or subdivision except as provided in this Act.

Notice that the comptroller general is responsible to track expenditures and to advise the deputy minister concerned - in this case the Clerk of the House of Assembly - that a line item has been overspent.

Under s.27.(4), the comptroller general "shall not sanction a further charge to be entered against that subhead or subdivision".

In the House of Assembly scandal we simply do not know what, if anything, the comptroller general did to discharge this responsibility. Had this responsibility been properly discharged, we likely wouldn't be looking at the mess we have today. If the comptroller general did his duty but was overruled by others, then the public has an incontrovertible right to know and to hold accountable those who sanctioned the overspending.

We do know that in from 1998 to 2005, the allowances and assistance budget for the House of Assembly was overspent to a total of $3.2 million. The Auditor General has only identified $1.58 million in excess spending. The table above shows the excess spending compared to the budget (red line) compared to the totals identified by the Auditor General (yellow line). Over half the overspending remains unaccounted for even after two supposedly thorough investigations by the Auditor General.

But wait.

It gets better.

Under s. 29, the comptroller general has further statutory obligations:

29. The comptroller general shall ensure that no payment of public money is made

(a) for which there is no legislative appropriation;

(b) for which no other appropriation has been provided under this Act;

(c) which is in excess of an appropriation; or

(d) which is in excess of sums that may have been deposited with the government in trust for a person,

and the comptroller general shall report to the board a case which comes to his or her notice in which liability has been incurred by a minister, deputy minister or other officer or person which contravenes this Act and the board may take whatever action in the matter that it considers necessary. [Emphasis added]

The comptroller general is specifically enjoined not to disburse money in excess of an appropriation. He is also obliged to report overspending to the treasury board. That is in addition to reporting to the appropriate deputy minister of equivalent.

Even if the deputy minister involved fails to act, there are others above him or her who have legal duties: the members of treasury board, all of whom are cabinet ministers.

One of the key members of treasury board is the president, which for several years is a position occupied by the minister of finance under successive Liberal and now Progressive Conservative administrations.

We know that significant overspending - about $1.0 million - occurred since Loyola Sullivan has been finance minister, president of treasury board and a member of the House of Assembly's Internal Economy Commission. Over $800,000 of that amount remains unexplained.

We have a right to know what happened.

Loyola has a duty to tell us.

When can we expect that duty to be discharged?

Has anyone seen Hedley Lamarr?

Not even two weeks ago, the planted callers on radio call-in shows were reading from their prepared lines and telling us that the province did not need to waste untold millions on a public inquiry into the financial mess at the House of Assembly.

Now this week, Auditor General John Noseworthy told the people of Newfoundland and Labrador on Monday that his mulligan/snipe hunt at the House of Assembly will require his hiring new staff.

He also said that to repeat what appears to be the same work he has largely already done will take an unknown number of months beyond November of this year.

Some people seem to want to cast the local auditor general as some sort of hero from a Western, like a character from the Hollywood version of the Seven Samurai. What we have instead - apparently from script-writers employed by government - has been more like The Magnificent Seven Column Pad.

Following the latest script from on high, Noseworthy gave nothing at his news conference if not further reason for the government to appoint a Royal Commission of inquiry into the spending scandal itself.

Noseworthy also gives an excellent reason to have the Royal Commission review the entire government response to the scandal over the past month or so.

As for Noseworthy, let's give him a rest while Sheila Fraser - the real "best auditor general in the land" - takes a look at both the House of Assembly and at Noseworthy's office. As The Telegram editorial noted last week, the sort of audits needed in this case are considerably more complex than merely adding up numbers and dealing only with overspending, as appears to be the case for Noseworthy's work.

The House of Assembly scandal involves more than mere overspending. It involves considerably more mis-spending than the grudge match Noseworthy likes to mention, especially in light of public admissions of dubious spending of parliamentary accounts by two current and one former cabinet minister and the Speaker of the House himself.

The people of Newfoundland and Labrador deserve considerably better than they have been offered these past four weeks by the elected members of the House of Assembly. They deserve justice of the kind handed down by a pale rider or a preacher.

Instead, they seem to be getting endless repetitions of the campfire scene from Blazing Saddles.

Kremlinology

Years ago, your humble e-scribbler studied Soviet politics.

The tightly controlled, secretive, autocratic society of Bolshevik politics, gave rise to a whole bunch of western academics who tried to figure out the workings inside the seat of power – the Kremlin – by studying all sorts of seemingly insignificant details.

They’d study photographs to see who was standing next to the acknowledged powerful in order to spot either the rise or fall of certain people within the leadership.  They’d study the wording of documents to see how things changed and see if that meant something.

There’s a pattern to regimes and so these Kremlinologists would look for changes in the patterns.  Then they’d try to figure out what the changes meant.

Sometimes it’s fun to play the old games again.

Like say studying a news release of government money for a project to see if there is anything that doesn’t fit the usual pattern.

Lookee here:  a news release announcing that a regional municipal service organization on the Northern Peninsula is getting an $232,000 of provincial money to help it fight fires and look after garbage disposal.

The money is called an “investment.”

Nothing strange there.  The current provincial administration doesn’t spend money.  It invests public cash in all sorts of things.

Taking out the town trash is called “waste management”.

Again, another classic piece of modern bureaucratese.

Given any government’s record of spending public cash on dubious projects, some wags would suggest that the act of government spending is itself really an exercise in “waste management”, but that’s another tale.

Back to the case at hand:

Things are actually looking pretty innocuous so far.

Quotes?

Yep.

Two.

One from the minister responsible for helping towns fight fires and haul away their refuse, the Honourable Diane Whelan, she of the multiple announcements of money she didn’t actually have.

Another one from the guy running the local crowd that are getting the “investment”.

Another couple of checks in the standard boxes.

Wait a second.

Where’s the quote from the member of the House of Assembly for the area?

If there’s one thing any government of any stripe does, it’s give the local boy credit for “investments” especially when said local boy is one of their own team.  Just this week alone, Harry Hunter got a quote added to spending on a school in his district.

Flower’s Cove and environs is in the district represented by Whelan’s cabinet mate ,Trevor Taylor.

Now, Trevor is no ordinary fellow.  He ran once for the New Democrats and then, in 2001, was elected for the provincial Conservatives in one of two by-elections on the Great Northern Peninsula. 

That two-fer was heralded by newly minted Conservative  leader Danny Williams as the first ripples of a Tory tsunami that would sweep the Liberals out and put the Tories back into power.

Trevor’s been in cabinet a while and has carried the can for a number of projects, good and bad.  He’s been a loyal soldier and right now he’s got a few thousand constituents up in arms over everything from the downturn in the forest industry to the downturn in the fishery.

The loggers blocked a road this week trying to get a meeting with Trevor.  The fisherman plan a protest aimed at the provincial government’s lack of help  this week now that they’ve already protested about the federal government’s lack of help.

And it’s not like lesser mortals than cabinet ministers don’t get to hand out the pork.

Tory backbencher Derrick Dalley  - a recently appointed parliamentary secretary to the education minister - turned up in the Lewisporte Pilot back in April handing out a cheque from the provincial government for money from a grant program to support sports initiatives.  The money was described as a “donation”, the new term for government program spending that isn’t an “investment”.

Derrick’s likely not alone, by the by.  Since the spending scandal dried up the slush fund that used to be constituency allowances, the government crowd seem to have discovered the political usefulness of letting the crowd on the back benches do some bacon-doling.  His colleagues are out there with cheques, too;  they just don’t always make the local paper.

Anyways…

No quote from the cabinet minister of some seniority about spending in his own district at a time when the guy could use the good coverage.

And it’s not like Trevor hasn’t had other shared announcements.

Hmmm.

It’s not like he’s Ray Hunter or something, either.

Ray’s the guy who showed up in the legislature this past sitting to find his desk and chair moved right next to the exit door.  He probably had to keep shifting to avoid getting the door in the head every time someone went out for a leak or a smoke.

Ray’s also had to defend himself publicly from accusations by angry constituents that he is not allowed to speak freely within his caucus.  Of course, that pretty much confirmed them.

Hmmm, indeed.

Now the thing about kremlinology is that it is one of the more dismal of dismal sciences.  Think of it as economics but without the accuracy.

This omission could be nothing at all.

Or it could be a sign.

A sign of something very important.

-srbp-

Jacks and the Auditor General

What is it about Dipper leaders named Jack and their problems with having the Auditor General check over their expense claims?

Here’s Jack Layton using a worn out excuse that hasn’t been tried since well before the spending scandals in legislatures in St. John’s, Halifax and among Jack’s political brethren in Westminister:

"Well, those are already audited, so I don’t know why wasting money on a second audit of something that has already been audited would make sense," he said.

Yep and there were audits in the House of Assembly too during the peak of the spending scandal.  Layton should ask his defence critic Jack Harris who, as it turns out, is the former leader of the New Democrats in Newfoundland and Labrador. Here’s what he had to say in voting for a government bill that proved to be a key foundation stone for the spending scandal:

Similarly, we have a new provision which requires an annual audit of the accounts of the House of Assembly which I think is appropriate; that there be accountability through an annual audit.

That proved to be so incredibly effective, as a subsequent review by an Auditor General revealed. Heck, Jack Harris’ old bench mate wound up going to jail for his part in the whole business.

The days of the kind of unaccountable political privilege the two Jacks  and the rest of the Ottawa Dippers are clinging to is long over.

A little sunshine in dark corners goes a long way to killing off any untoward activity that is taking place, the glare of public scrutiny also helps to keep it from taking root.

Imagine what might have been prevented if political donations were scrutinised more closely.

-srbp-

Power, politics and change

People should not be afraid of their governments.

Governments should be afraid of their people.

'Tis that time of the year once more, dear friends, when the political origins of an ancient commemoration once more slips a wee bit more from the popular view. This is a shame since in the events marked by bonfires in many parts of the Commonwealth we may find a timely inspiration.

The Gunpowder Plot was an attempt at violent political change and the book and movie from which the opening quote is taken contained its share of violence. Yet, violence is not as sure a means of effecting political change as knowledge and words.

Discovery of the Plot set back the cause of Roman Catholic emancipation in Britain for some two centuries, yet experts will equally argue that had the plot succeeded in killing the King and the Protestant members of parliament, it may well have led to a period of even greater repression of Roman Catholicism throughout the United Kingdom.

Compare that experience with events in India before 1947 or in the United States when the power of non-violence coupled with information produced far more dramatic and positive social and political changes.

The truth is that governments in the past century of human civilization do fear their people. They fear not so much the potential for violent revolution, although that has occurred. Rather if we look to Pakistan of just the past few days, we see the actions of a government declaring martial law because it feared the prospect of a change in government administration through legal, i.e. peaceful means. The pretext for martial law is a particular decision of the country's Supreme Court, but the struggle between the courts and General Pervez Musharraf go back many months. The rule of law has been frustrating the General's plans and, in some respects, it may only have been a matter of time before Musharraf or another member of the armed forces that has ruled the country for too many years seized power.

Closer to home we may also see evidence of a government that fears its people. The Prime Minister recently ruled out the prospect of an inquiry into allegations against one of his predecessors, not because the allegations have already been reviewed, but because such an inquiry would be "dangerous".

Yet neither the Prime Minister nor his predecessor found the prospect of public inquiries into other matters to be "politically driven", or in the case of Paul Martin sufficiently dangerous to his own political fortunes to serve as an excuse for not appointing an investigation.

The Prime Minister, we would contend might be afraid of the implications such an inquiry might have for his own administration. He is almost certainly afraid of undermining his own politically driven use of past misdeeds.

Closer to home, we find another government and another first minister seemingly afraid of the people. The struggle in this instance is waged with words that are effectively stripped of any real meaning. The legislature is kept closed while the evidence makes plain that the excuses offered by the cabinet are nonsense.

People are warned against demanding increased public spending on one or another cause they consider good because of "the debt." Never mind that the debt has increased and that public spending under the current administration has kept pace with the flow of petro-dollars; the spending of course, is on things which the government considers important. People should scarcely need reminding that this same administration has refused to tell the people what they will actually be charging developers for the right to develop public natural resources and fought for the longest time to prevent an inquiry into spending on fibreoptic cables. These are actions, we are reminded of an open, accountable and transparent government.

Therein lies the clearest example of how governments show their fear of the people who they would rule. Culture and history are malleable and the very meaning of common words may be altered to the point where even reasonable people cannot grasp the inherent contradictions in what they claim.

I like the fact that our current premier seems intent on appealing to the strengths and skills of the people of this place. I like the fact that his government beefed up the rules for MHAs in the wake of the constituency-allowance spending scandal, based on Chief Justice Derek Green’s recommendations.

or from the earlier column:

He preaches that the solution lies not with him, but with us.

How "he" alone accomplishes this we do not know, especially when the political program is designed to increase government control over resources rather than creating an environment in which enterprising individuals may flourish. How "he" should be credited with introducing those rules when, as anyone may well see, "he" allowed the inappropriate spending - the allowances not the alleged criminal activity - to flourish until discovery of the latter revealed the former; let us not forget either that implementing those rules was delayed, as the columnist's own paper reported, while people were led to believe something else. The "solution" - no problem is defined - cannot rest with "us" when the entire premise of the administration is founded on "him" being in charge; "us" should dutifully follow and offer only positive suggestions in support of whatever is decided by "him" and "his" ministers.

Words can have no meaning in a world where they are changed at whim, where information is withheld from the public and where, as it turns out, even editors have let slip the mooring lines of fact.

I remember how the meaning of words began to change. How unfamiliar words like "collateral" and "rendition" became frightening, while things like Norsefire and the Articles of Allegiance became powerful. I remember how "different" became dangerous.

Another writer called it Newspeak, but in other works, George Orwell demonstrated his clear appreciation of how language may be perverted to obscure meaning and thereby frustrate public understanding. In some countries, governments show their fear of people with violence. In others, they show fear by doing violence to language and history.

Both fears are rooted in the understanding that power rests ultimately the individuals within a society. Yet in any democracy worthy of the name, there is no legitimate reason for fear nor for the response it seems to engender from the governors toward the governed.

In Pakistan, the country has taken a step backward from democracy and only time will tell how the Pakistani people will respond.

In Canada, we may continue to work for change and to exercise our power as citizens in a democracy in the country as a whole or within the province. We must reject the debasement of language and history.

True power, after all, does not come from the barrel of a gun. It comes from the exercise of basic freedoms, despite what some governors may ponder.

As individuals in a free society, we should remember that true power comes from the mind.

-srbp-

Beth and Expenses #nlpoli #cdnpoli

All this talk of Senator Beth Marshall and her hefty annual stipend for chairing a committee that has met once in two years brings to mind the good senator’s role in the House of Assembly patronage scam, a.k.a. the spending scandal.

Marshall is credited with first sniffing something was amiss when she went hunting for Paul Dick’s expenses in 2001-ish.  She was barred from the House by the legislature’s internal economy commission.  The members were Liberals and Tories and, as accounts have it, they unanimously wanted to keep Beth’s nose out of their files.

But if you go back and look, you’ll have a hard time finding any indication Beth thought something else was on the go.  While we didn’t know it at the time, subsequent information confirmed that members had been handing out public cash pretty generously by that point. Yet Marshall has never, ever indicated she felt something more than a few wine and art purchases might have been amiss.

That’s important because of Marshall’s record once she got into the House herself as a member in 2003.

A mulligan or a snipe hunt?

Some two weeks after telling the people of Newfoundland and Labrador that he had finished his audit work at the House of Assembly, Auditor General John Noseworthy apparently asked for and received direction from cabinet to go back to the House of Assembly and conduct further audit work.

This is just the latest turn in a sordid tale of inappropriate spending, alleged criminal activity and alleged overpayments to members of the provincial legislature that has already seen numerous contradictory comments from the Auditor General and members of the House on the scope of the scandal and on measures that have supposedly been taken to prevent further impropriety.

That is, it is a further twist if the latest news release from Speaker Harvey Hodder is to be taken at face value.

The only thing that can be said with certainty about this latest news release is the the extent of public outrage at the scandal, dissatisfaction with efforts by politicians to contain the fall-out and growing support for a public inquiry prompted someone in Confederation Building and the House of Assembly to order up some further action.

But that's where the story becomes murky.

According to the news release, AG Noseworthy will be conducting "comprehensive annual audits of accounts of the House of Assembly for fiscal years 1999/2000 to 2003/04." [Note: in common government usage this would be FY 1999 to FY 2003.]

Noseworthy's one page "report" on alleged payments to former cabinet minister Ed Byrne covered FY 2002 and FY 2003, although Noseworthy mis-indentified the years involved. At the time he released the report on Byrne, AG Noseworthy indicated he had some unspecified indications of additional overpayments to Byrne for two previous fiscal years. That would take the review already conducted back to FY 2000, at least for Byrne.

When he met with news media in June to discuss the Byrne report, Noseworthy said:

"What we're seeing here is an end of an era and I don't think this sort of era will come again," Noseworthy said.

"This is over, I think."

He also stated unequivocally that changes made to the House administration by the new Internal Economy Commission (IEC) would prevent further misspending past April 2004.

That was before he released four further reports.

Reports on Randy Collins, Wally Andersen and former legislator Jim Walsh covered the periods FY 2002 to FY 2005, although once again AG Noseworthy misidentified the years involved. Another report, on payments made to four companies, covered the period from FY 1998 to FY 2005. Again, Noseworthy's reports mis-identify the years.

The total amount of dubious spending from FY 1998 to FY 2005 was almost $4.0 million.

All this is to point out not merely the inconsistencies in Noseworthy's comments but the discrepancies among the periods already auditted and the extent of the audits already conducted.

Presumably, if Noseworthy had focused on four current and former members of the House and then announced his work was done, he had looked at all the accounts and pronounced clean all but the problems he announced.

But if those inconsistencies were not enough to give pause, Speaker Harvey Hodder told The Telegram, the province's largest daily newspaper, that in fact he had received no reports from the Auditor General despite the news conferences and the release of reports that included letters of transmittal addressed to Hodder.

And so we are told on Wednesday that AG Noseworthy" has asked for and received cabinet direction" to do work that covers, in largest part, work he supposedly had already done.

It is possible that Nosworthy is being given a mulligan, a do-over. That would mean the first audits and reports were incomplete and so Noseworthy is being given the chance to go back and get it right. That would also have an impact on the police investiagtions resulting fcrom his first reports although whether his mulligan would forestall or widen the police investigation is unclear.

It is also possible Noseworthy is being sent on a snipe hunt, or its Newfoundland equivalent the search for The Wild Baloney. [Left: erstwhile snipe hunter displays proper posture]

Noseworthy will look at how money was spent but, since he already eliminated all but four for overspending, he will find little else. After all, as long as members of the House of Assembly did not overspend their accounts, a great many dubious expenditures seem to have been approved by the Internal Economy Commission after the legislature's administrative rules were changed in June 1996.

Noseworthy has mentioned his suspicion that one former member purchased wine and art from his constituency allowance. Criticism of this alleged spending is based on the rules for this allowances which Noseworthy has quoted as being:

the payment of expenditures incurred in the performance of constituency business and may cover such items as office rental, equipment, supplies, secretarial and other support services, information material such as newspapers, advertising, purchase of flags, pins, etc..

However, what is the difference between those alleged purchases and the admission by the current Speaker, two current cabinet ministers and one former minister that they had spent their district budgets on everything from personal advertising, outfitting sports teams with new shirts, gifts to seniors homes, supporting volunteer firefighters to making donations to the Royal Canadian Legion?

Since all those expenditures fell within the spending approved by the IEC, Noseworthy will have difficulty reporting negatively on them unless the members involved overspent their accounts. After all, since Noseworthy is aware or ought to have been aware of these expenditures in the course of his recent audits, he already ha dplenty of opportunity to comment on them.

The likelihood Noseworthy is on a snipe hunt is reinforced by the charge he has been apparently given to review constituency allowances from 1989 to 2004. Firstly, there is no evidence whatsoever to suggest ther were any impriorieties with their accounts before the IEc changed the rules on this spending in June 1996.

Estimates 1994, for example, shows clearly that these allowances were underspent in 1993 by a significant amount. This was in a year when Noseworthy's predecessor had full access to the House accounts. By contrast, forthe years Noseworthy has already covered, the annual estimates show at least two years of significant budget overruns. In another year, the estimates show the accounts as being exactly - miraculously on budget, even though Noseworthy's reports allege that at two members received signifcant amounts more than they were entitled to in the same fiscal year. These were years when the Auditor General was not allowed access to the House accounts.

Secondly, this looks like a snipe hunt since Noseworthy is going over old ground and can't look any more recently than March 2003. Even though his previous work showed significant mis-spending continued until as recently as December 2005, the Auditor General's latest audit will simply stop dead almost two full years short of when evidence already suggests accounts were being fiddled.

Thirdly, Noseworthy's task looks like a snipe hunt since he is specifically being sent back to the past to "determine whether overspending occured at the constituency allowance level beyond which [sic] was approved, authorized or provided through the Internal Economy Commission policies."

He isn't looking for inappropriate spending. Noseworthy is just looking for people who got too much money. If a members were allowed by the IEc to buy art or pay their mortgages with constituency money, there won't be much Noseworthy can say about it since that is beyond his limited mandate. Noseworthy can judge whether or not the rules were followed but he can't tell us if he thinks the rules were wrong in the first place.

There is an outside chance that Noseworthy is actually being sent to do solid work. His "comprehensive" audits might actually include a full review of IEC policies. His work this time might actually call to account the various memebrs of the IEC including the two current senior cabinet ministers who sat on the IEC in 2000 and afterward when it apparently made some of the most significant decisions related to the current scandal.

Don't count it though. The members of the legislature, the Speaker and the cabinet have worked diligently to prevent a public inquiry which is the only way to get to the bottom of the entire House of Assembly mess. There is a police investigation to be sure, but the police will not look at the House administrative practices. There is a judge looking at allowances but he has been specifically told not to look at what occured in the past and can offer no opinion on whether or not what happened before June 2006 was right or wrong: it's beyond his very carefully limited brief.

Those in authority have also structured this latest mission of the Auditor General to look at only a portion of the issue, leaving out the bits that will likely involve many of the people in positions of responsibility having to account for their actions. They have sent him to look like he is looking for something.

Public pressure does seems to be having an effect, though. Perhaps the embarrassment of having this scandal dominate the news while provincial premiers are in St. John's next week will prompt a complete inquiry.

Wonder what would happen if premier after premier was asked if he and his fellow legislators could make gifts out of their office budget to ringette teams just like Danny Williams and his colleagues can do?

We might just get a public inquiry after all.