Conflict of interest you say, Danny?

[Updated - 1400 hrs 02 Aug 06, as noted]

CBC radio is running a story [link added] this Regatta Day focusing on Liberal party allegations that Danny Williams took a large donation from INCO to help cover the costs of the recent Premier's meeting yet criticized the Liberals for taking a political donation from INCO while it was the government party.

Danny Williams was unavailable for comment, according to CBC, but his personal publicist said the whole concern Williams had had applied only during the negotiations over the Voisey's Bay contract. That's when Williams was concerned about a conflict of interest apparently.  Now?  No problem.

According to CBC, Williams' publicist acknowledged the Premiers' political party had accepted donations from INCO at other times including in 2003 during the provincial general election. As CBC's web story reports,

Williams also banned the company from Tory fundraisers in 2002.

"We didn't want to be in a conflict of interest position, or be perceived as being compromised, quite frankly," Williams said in 2002. [quote added]

Apparently, the fact that INCO is trying to negotiate with the province over the smelter/refinery complex location wasn't in the publicist's notes.

Chevron exploration not linked to Williams

The Globe's Dave Ebner missed some important context when discussing the exploration drilling being conducted by Chevron in the orphan basin this summer. ("Chevron's east coast gamble: $140 million well Canada's most expensive", 31 July 06 print edition)

Some industry players have said Mr. Williams' tactics are discouraging investment, but [natural resources minister Kathy] Dunderdale believes the Great Barasway well indicates that the major oil companies still see good prospects offshore. "Exploration is always very good for the province," she said. "This is pretty significant."

Ebner missed the point - and Dunderdale wouldn't want to acknowledge - the simple fact that Chevron's exploration program pre-dates Danny Williams' term as Premier. The blocks involved were won in December 2003 but the bids for the parcels were based on estimates made before Williams was elected and certainly long before Williams' bizarre negotiating style became widely known.

Dunderdale is right in that the exploration does reflect a certain level of interest among major oil companies in the prospect of large oil and gas discoveries offshore Newfoundland and Labrador. That's a good thing.

But let's not mistake this for anything beyond what it is. Chevron and its partners made certain commitments in 2003 and they have to live up to those commitments or face losing the parcels and forking over unspent cash. Chevron is merely keeping its options open.

This exploration certainly doesn't mean that if the oil companies find commercially viable fields offshore they'll be lining up to meet again with Danny Williams too soon. The fall-out from last spring's spat and Williams' ongoing war of words with ExxonMobil have created an atmosphere of heightened emotion on both sides that will take time to settle down to a point where rational discussion can take place.

So when Ebner says exploration is picking up offshore Newfoundland and Labrador, he is talking about decisions taken three years ago. The full impact of the Hebron failure may only be known when new land offerings come up.

In the meantime, Ebner's article also highlights some of the realities of the local offshore that are missing from the self-excited rhetoric uttered by Premier Williams and his supporters. First, wells offshore are incredibly expensive compared to wells elsewhere. Each of up to 12 Orphan Basin holes that Chevron may drill will cost $140 million each and at best, odds are that only one of those holes will produce oil in commercial quantities.

Second, if there is a commercially viable find, then further wells will be drilled, at $140 million or more a pop, until the field can be well-delineated and its holdings properly estimated. Add to that the other costs of getting an offshore field into production and the risks that oil prices won't stay at US$70 a barrel for the full 20 years some of these fields will be in operation and one can see the magnitude of the financial risks involved.

Taken altogether, we must bear in mind that fallowfield legislation - Danny's latest darling - won't overcome the huge costs of developing oil and gas offshore Newfoundland and Labrador and it certain won't replace the reasoned bargaining that was needed, but sadly absent, from the massive Hebron project.

We must also recall that Williams' other pet project - turning the Crown-owned hydroelectric corporation into an oil and gas company takes cash and a willingness to take risks. Thus far Williams has been unable to show the money or even willingness to take the risks involved in being an oil and gas company. With the cash and risk-taking would come at least some of the rewards he claims would come from the Crown corporation having an "equity" position offshore Newfoundland and Labrador.

Everything else is hot air.

The lure of soft money

In the wake of the Watergate scandal over 30 years ago, the United States Congress implemented the first of many reforms that set limits the amounts of money that can be donated for and spent on elections and that required disclosure of the names of who gave money to candidates in federal elections.

The most recent round of reforms, in 2002 aimed at restricting access to so-called "soft money". This is money that was spent on purposes which were political in nature but which fell outside the rules on election financing. Unlike "hard money" that fell within the rules, soft money is often never disclosed in any way. Donors are invisible to the public. How the money is spent is also hidden or at least partially obscured from public view.

In the relentless pressure of American elections, both candidates and incumbents have become crafty in finding and using soft money. The most recent tactic is for incumbents to establish private charities that are legal, above-board and aimed at a specific purpose within the incumbents own electoral district. Armed with charitable status, the politician's private organization can now receive donations and issue tax receipts. It can spend money, giving the politician full credit - and all the associated publicity - for good work. In some instances, campaign staffers can find employment in between elections with the politician's charitable organization. Perhaps the most well-known of these soft money charities is the Ted Stevens Foundation, "an Alaska non-profit corporation created by Alaskans to recognize and honor the career and public service" of the senator from the most northern state.

Seen in that context, recent revelations that members of the House of Assembly use public money to make private gifts and donations around the province take on a decidedly different colour.

Newfoundland and Labrador has relatively few restrictions on election financing compared to other jurisdictions in Canada. However, the 1991 election reforms did restrict how much may be spent on campaigns during election periods. The spending cap is not high by modern standards but it is based - among other things - on the understanding that in a small place where turn-out on polling day is relatively small, a handful of votes can swing an election in a given district one way or another.

While it may not have been the intention, local politicians have created a particularly pernicious form of soft money spending through their perversion of the House of Assembly constituency accounts. Like all soft money, the gifts and donations are essentially invisible. While they may be backed by receipts, the details of who received money, how much money they got and when they got is not available for public scrutiny. The system set by the members of the legislature themselves is the epitome of unaccountability and opaqueness, no matter how many times politicians insisted otherwise.

And with all due respect to the commissioner for members' interests, our political society is long past the naive, almost child-like view that all politicians are honourable and must be presumed to be so until proven otherwise. For one thing, there is ample evidence from many jurisdictions, including our own, that while the majority of politicians are upstanding and ethical, there are always a few who will skirt the edges of propriety and, in some instances, the law.

For another thing, if the entire system of spending is as comfortably hidden from public scrutiny as the constituency allowances have been, there simply is no opportunity for anyone to demonstrate impropriety. The argument may be convenient, but it doesn't pass the most cursory scrutiny.

In the soft money context, the Williams Family Foundation (WFF) also takes on an interesting cast as well. From every perspective it is legally established, hands out money only to identified and worthy charitable purposes and complies with all the legal requirements; but these are the legal requirements for a charity.

This is no ordinary charity, however. It is intimately tied to an active politician. As the Premier and his staff have demonstrated repeatedly since 2001, they are not above drawing very loud, public attention to the generosity of politician Danny Williams.

We would be naive in the extreme - we would be willfully blind - if we did not understand that news media coverage of a cheque being handed from the "Danny Williams Foundation" did not produce a considerable political effect for politician Williams. It is the same effect, albeit on a much smaller scale, that public money has brought for politician Gerry Reid or a host of other politicians spending public money on gifts and donations.

Danny Williams apparently sustains the WFF with his political salary. Canada Revenue Agency documents appear to confirm this, although there are some questions that arise from the public information that is available. For example, even though WFF obtained charitable status in February 2003, it lists the total contributions for the year as being only $20, 000. It also appears to be missing several donations made after that date and in advance of the election.

Some of the Premier's defenders - many of them no doubt organized by the Premier's Office - have held the view that what the Premier does with his salary is his own business. This would be true were it not for two over-riding factors.

First, the Premier could claim his salary is private if he were a private citizen. He is not. Williams is an active politician and as much as he may whine about the goldfish bowl of scrutiny in which he lives, that scrutiny he finds so burdensome is the heart of the transparency and accountability he claims to embody.

Second, the Premier could claim his salary is private had he not made such a huge public issue of the fact that his overwhelming personal wealth has enabled him to donate his personal salary to charity. Danny Williams himself made the salary a public issue. Williams can scarcely claim privacy now when people are asking where the money goes any more than Brian Tobin, amid accusations Tobin was trying to finagle a job for his wife, could whine about his wife being a private person when Tobin used her as a political prop at every opportunity. One cannot have ones cake and eat it too.

Ultimately though, none of this is to suggest that the WFF is anything more than a well-intentioned charity, funded by Williams himself. He has gained and will continue to gain an undeniable personal advantage from spending public money - his salary - as gifts and donations through the family foundation. But the political and ethical issues raised by the WFF can be addressed by some simple administrative arrangements.

The real problem with this local version of soft money is the precedent Williams and his colleagues in the House of Assembly have set. Even if Chief Justice Derek Greene proposes to ban gifts and donations of public money for incumbetn legislators, Danny Williams and the WFF have given future wiley and unscrupulous politicians a model to use for purposes that may prove to be far less virtuous than those of Danny Williams.

The lure of soft money is a powerful one indeed. If all people were saints, as Chuck Furey assumes of politicians, then we would need no laws at all. However, all men and women are not as pure as we might wish and as virtuous as a single politician and his family charity might be, we cannot ignore the potential that others of much lower ethical standards will not take advantage of the precedent.

After all, it's not like we haven't seen a set of rules for constituency allowances set tightly and appropriately at one point only to find the rules tossed out the window by a later crowd of politicians.

Another Danny nose-puller

CBC news reports that Danny Williams is off to do battle with Ottawa over Equalization and Hebron.

Good luck, sez you on the Equalization thing since the provincial premiers couldn't agree. If that wasn't bad enough the federal government has been scrambling to get away from its promise to pony up more cash to the provinces by excluding non-renewable natural resources from the Equalization scheme.

But the real nose puller in the CBC story is the bit where Danny Williams claims:
a. that he had the support of the provincial premiers for his Atlantic Accord thing; and,

b. that he has the endorsement of the premiers for his plans to get legislation that would give Danny Williams the sole power to force companies to develop oil fields offshore Newfoundland and Labrador.

Let's start by reminding everyone that at no point did Danny Williams have the support of the other provincial premiers on the Atlantic Accord. Sure Danny told us he did, but he has said a lot of things without evidence that turned out to be of dubious veracity.

Williams claimed he had letters.

He produced not a one.

So that makes Danny Williams' second claim suspect anyway even if we didn't have the actual wording of the "endorsement".

Given today's energy demands and markets, Premiers noted that economically viable energy projects should not be permitted to remain fallow but should be moved towards commercial production.

Now what that says - all it says - is that the premiers agree that commercially viable oil and gas fields should be developed.

At no point does the communique state that the provincial premiers believe Danny Williams deserves the power to force a field into development. The premiers' words could just as easily be taken as an endorsement of NOIA's position that Danny and the companies need to get back to the table and hammer out a fair deal.

So here we go again. There's another claim by Danny Williams that has no evidence to back it up.

We already know Stephen Harper has no intention of handing Danny Williams the powers of a low-rent Hugo Chavez.

So what do we have here? Well, aside from another piece of empty Danny-speak, we have the makings of a fine summer and fall entertainment.

Let's see Danny Williams go toe-to-toe with Harper on anything. Personally, I don't think we'll see Williams do squat to Steve. But heck, if he does, it will be fun to watch the fireworks.

And if Williams doesn't live up to his promise, it will be fun to watch Williams as he rationalizes his lack of action.

Wouldn't it be nice - for a change - to have a politician who just does something rather than talk about doing it, or reminding us of something that happened years ago?

A horse, a horse...

If a camel is a horse designed by a committee, then what is a Telegram editorial?

In the bad old days, Telly-torials were simply a precis of events related to a given topic followed by the inevitable conclusion that, all things being considered, something was likely to happen.

These days, there are editorials that make a sharp point - once in a while - but all too often editorials are like the series some time ago criticizing the Globe and Mail. On those occasions, the Telly editorial writer of the moment finds it more convenient to park higher brain functioning and fall back on whatever the 8th Floor's call-in organizers have approved as the official thought-du-jour.

With that background then,consider the recent Telegram editorial on Sanford's interim director's report ("Not just another annual report", Wednesday, July 26, 2006).

The Telly-torialist excerpts the report, one portion of which took issue with claims the company was being managed against the best interests of the province.

While these suggestions are totally false and cannot be substantiated, the government has chosen to strengthen the FPI Act by requiring the company to increase the number of directors from seven to 13 and requiring the board and all committees of the board have a majority of Newfoundland based directors.

The government has also introduced a requirement that the board must seek government approval for the sale of any assets of the business no matter
where they are in the world. Clearly this and other changes to the FPI Act go against normal business principles and practices and are a total invasion of shareholder rights.

Here we have an assessment of the current FPI situation from a credible source that, just coincidentally, happens to demonstrate that the Premier's comments on FPI and John Risley are something other than factual and accurate.

Rather than add to the commentary, the Telegram first tries to lampoon the Sanford comment. Then it advises we should consider Sanford's comments but only with large grains of salt.

It is disheartening when an influential media outlet such as the Telegram can do no better on its editorial pages than to offer up this intellectual version of rock soup on an issue as important as the continued Fishery Products International mess.

The Telegram, moreso than most news media in the province, has churned out editorials lately on the current administration's resource policy that make Tony the Tory from Open Line sound like one of the Premier's staunchest political opponents.

It would more useful to Telly readers if the editorials became once more horses designed by committee. It would be a damned sight better than seeing - as we have - only the stuff that falls from underneath the horses tail.

Jeff Simpson on Danny Williams

Jeffrey Simpson's Globe column for a Friday morning is worth the read.

Danny Williams and Hebron.

"The bottom line: Newfoundland needs Hebron, if not now, then reasonably soon. That prospect does not appear likely."

The only bit where Simpson is off-base: his claim that there is no one criticizing the Premier for his decisions. It used to be that way, but with all that has gone on, there are more people questioning Williams and doing so openly. There's nothing wrong with that - except in Danny's own mind.

The thing Danny needs to watch for is when the question becomes: "How do we get rid of this guy?"

Will Noseworthy Dicks this up too?

As noted here recently, Auditor General John Noseworthy's review of constituency accounts in the House of Assembly dating back to 1989 may prove to be much ado about nothing that he can criticize.

That isn't to say there wasn't bags of inappropriate spending after 1996 when the Internal Economy Commission changed the rules governing spending of these accounts.

Rather, as former finance minister Paul Dicks noted in his recent news release, the spending was approved, receipted, within budget and in keeping with the guidelines.

The guidelines were - and are - set by the House of Assembly's Internal Economy Commission. That's the very group the cabinet appears to want to shield from scrutiny by avoiding a public inquiry into the whole financial mess.

John Noseworthy increasingly appears hell-bent on getting Paul Dicks as pay-back for having the AG's office shut out of the legislature back in 1999/2000.

Why hell bent? Well, despite the admission of two current and one former cabinet minister and the Speaker of the legislature that all have engaged in appropriate spending of their accounts over a considerable period of time, Noseworthy singles out Dicks alleged purchases of wine and artwork as what he wants to uncover.

Here's the condundrum though:

If Noseworthy tries to nail Dicks, then he has to nail every other single example of inappropriate spending.

Otherwise, he'll be tagged as being on a vendetta, not an audit.

If he spreads out to cover inappropriate spending generally, then he'll be exceeding the brief handed to him by the cabinet - at least if we are to accept the version of the brief given by Speaker Harvey Hodder and the abysmal news release he issued last week.

That brief was limited to a hunt for over-spending, pure and simple and it certainly didn't even hint at the power to criticize the Internal Economy Commission. After all, the IEC is technically Noseworthy's employer and he'd be in a spot of bother were he to take them on.

Remember, if he tackles the IEC, the Noseworthy will be criticizing none other than the current Minister of Finance. Loyola Sullivan has been on the IEC through most of the period under detailed review and he is the guy Noseworthy has been reporting to on all the problems he has found to date.

For all his protests about impartiality and being unmoved by outside influences, we'd all be rightfully suspicious that AG Noseworthy won't come within a seven column pad of even hinting at that Sullivan even sat in the legislature during the period under review.

Basically, AG Noseworthy is screwed no matter what he does.

If anyone was genuinely interested in getting to the bottom of the entire scandal and avoiding the constraints and conflicts the AG is obviously operating under, then government would have long ago appointed a public inquiry into the whole mess and called in outside auditors to do the grunt work.

One wonders whose interest is served by the unproductive grunting of Noseworthy and others instead?

It certainly isn't the taxpayers of Newfoundland and Labrador.

Do they make this up as they go along?

Some weeks ago, Derek Greene, Chief Justice of the Trials Division of the Supreme Court was appointed by the Executive Council to conduct a review of parliamentary salaries and other budgets.

Appointed by cabinet.

So why is he now presenting his report to the Internal Economy Commission of the House of Assembly?

Strictly speaking, Greene's report has no more standing than one presented by the MoonMan since Greene was appointed by an extra-parliamentary body. Harvey Hodder could just ingore it if he wanted to; that is if he wasn't taking all his orders from the Premier's Office.

The Greene report was apparently never authorized by the IEC and it certainly wasn't established legally to conduct its review under s. 13 of the Internal Economy Commission Act.

That requires a resolution of the House of Assembly.

The House hasn't been called into session to deal with the scandal as a deliberate part of the cabinet's obvious efforts to maintain political control of what happens in response to the scandal.
A key part of that strategy effort has been avoiding a public inquiry to determine what happened.

No matter what it might appear, Chief Justice Greene simply doesn't have the mandate to find out what happened and he certainly lacks the legal powers to compel testimony from people.

That is unless there has been yet another order in council changing Greene's mandate.

The word strategy is struck out above since, on reflection, it appears the Williams administration doesn't have a strategy for dealing with this financial mess just as it lacks a strategy for most things it does "Strategy" implies a plan. It suggests thoughtful analysis and a consistent application of certain measures to achieve a defined goal.

What has been going on with the House of Assembly - more obviously with each passing - is more like someone ruling by whim of the moment.

Or, to use a local political comparison - we are back to the days of the Premier pulling decisions out of an available bodily orifice.

Can a health care "Future of the People's House" public town hall meeting forum be far behind?

This sure ain't Denmark, but...

So there's a scandal in the House of Assembly in which it is alleged that about $4.0 million in public money has been spent improperly and in some cases illegally.

The group that oversees the House expenditures - its executive committee - is called the Internal Economy Commission.

The IEC made decisions in 2000, 2002 and 2004 that both facilitated the scandal to one extent or another and, in April 2004 created a situation where the Auditor General was somehow constrained in his actions that revealed said spending scandal.

There is also the hint of a problem within the Department of Finance involving the Comptroller General either being asleep at the switch or having his hands tied.

One name that runs through the IEC for the entire period?

Loyola Sullivan.

Former Opposition House leader, finance critic and lately the minister of finance and member of the IEC for the enitre period of the detailed audit being conducted by John Noseworthy.

The guy who sided with the Liberals in 2002 against Danny Williams over giving the Auditor General access to the House accounts.

Taken altogether, Loyola Sullivan's work on the IEC would make him a major person of interest to a public inquiry trying to figure out how the scandal occurred and why the response by government has been disjointed, to say the least.

That is, if there was a public inquiry.

Taken altogether, it makes one wonder why the cabinet is adamantly opposed to any public inquiry, the AG is being sent on a snipe hunt...and Loyola Sullivan is suddenly appointed Government House Leader.

and therefore the senior cabinet representative on the IEC.

by the Premier himself, no less. Complete with words of high praise for Sullivan from Danny Williams.

It's enough to make one look about on the parapets for a ghost, eh Marcellus?

The Rule of Opposites, AG style

Regular readers of the e-scribbles will know the Rule of Opposites.

Richard Nixon says: "I am not a crook." Brian Tobin says you can't make up public policy on the fly right after he announces a major policy initiative he pulled out of some unmentionable bodily orifice even cops hate to search for illicit stuff. Toronto insists it is a world-class city.

It's the stuff where the real meaning lies in the opposite of what's being said.

Consider Auditor General John Noseworthy's latest newser. Think of the number of times he insisted that he was not being influenced by anyone, that his audit was his own work, that he had all the resources to do a proper job and that he would call it like he saw it.

Then consider that in this latest scandal Noseworthy has spouted talking points that were remarkably similar to the ones being spouted by the Premier's office and its legion of organized supporters.

Consider the number of times Noseworthy has made some bold statements only to admit later that he didn't have much to base it on.

And consider that he is headed back to re-do work he supposedly already finished and insists it will take him months to do it.

Consider too that he used the words "invited" to do his recent audit and that he answers to no one, even though, as the law clearly states he was ordered back to do this very audit by the cabinet.

John Noseworthy joins an impressive list of people who live by the Rule of Opposites.

He forgets of course, that if he has to tell us what he is, odds are he isn't anything of the sort.

Sheila Fraser never has to tell us how impartial she is.

Think about it.

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.

The fruits of the poisonous tree

"We've released any constraints that would apply to the Auditor General being able to complete his audits...there are no more constraints."

Speaker of the House of Assembly Harvey Hodder, The Telegram, 20 July 2006

This is a noble sentiment except for one problem:

We never knew the Auditor General's previous reports completed within the past month were in any way constrained. To the contrary, we were assured that they were complete and thorough and that the AG was acting with full approval of the appropriate authorities.

So now we have to ask:

What were the constraints?

Who applied the constraints?

Why were they applied?

Hodders comments merely raise more questions that go to the heart not only of the financial scandal itself but now to the Keystone Kops-like way in which government and the House of Assembly have responded.

Hodder's interview with CBC radio Morning Show on Thursday just adds to the questions.

According to Hodder, the Internal Economy Commission met on Monday, July 17, 2006 and rescinded a decision of the IEC from 2000 which had the effect of barring the Auditor General from auditing the House accounts.

Nice enough, except that we ere told some time ago that this decision to let the AG back into the House was taken in April 2004. That's how the AG got back into the House and do the audits he just reported on.

Supposedly.

There isn't a technicality here since the recent reports cover periods before, during and after the IEC decision in 2000. So if the IEC has now lifted the previous order, what did it do in April 2004 and in what way was the AG's work over the past couple of months constrained?

Hodder also indicated that after the IEC meeting, there were "consultations" with the executive - that is, the cabinet - on Tuesday and the cabinet then issued the order for the AG to start his snipe hunt. That's all well and good except that the order should have come from the House of Assembly itself. The only reason to use a cabinet order is to avoid having the House called together to pass the necessary resolutions and thereby expose all the members to media questions on their business.

So after all the double-talk and contradictions from Harvey Hodder here's a plausible explanation for the recent IEC dance that still causes problems but doesn't make the AG's new work a snipe hunt.

If there was no decision taken in 2004 by the IEC to give the AG access to the House, there might well be a legal basis for challenging the information he turned up. He's getting a mulligan to forestall a legal challenge to any prosecution based on the fruits of the poisonous tree.

That's a simple concept that holds that anything resulting from an illegal or improper search can be tossed out of court and never presented as evidence in a prosecution. It would also mean that the police can't delve into things that they would not have been aware of were it not for improper or illegal investigations in the first place. it also means that any statements provided by any of the people interviewed thus far, if not given under oath and with the right to counsel waived would be inadmissible.

One big difference in this second go 'round and in any police investigation: everyone possibly implicated will lawyer-up faster than you can say "soft money".

Now this is a legal hypothesis offered up by a non-lawyer. Take it for what it's worth. But if it is accurate, then we have yet another reason for a public inquiry.

And yet another reason for genuine openness and transparency from the people who now appear to have knowingly provided information that was less than accurate.

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.

National CBC Radio copy written by Premier's spin machine?

How many facts can one reporter get not only wrong but wrong in a way that sounds like the story was written by Liz Matthews?

Check Vic Adopia's piece on CBC national radio this morning on the House of Assembly spending scandal.

As soon as I can get a transcript, I'll go through it in detail.

In the meantime, just realize that while local reporters are past the bullshit, some people can obviously still get taken in.

Too bad an erroneous report gets carried across the country.

The Power of Sheila Compels You

Speaker Harvey Hodder and members of the House of Assembly have been taking a hammering for weeks now for not releasing the details of how they spend their parliamentary budgets.

The politicians don't like it one bit, being accused of being unaccountable on the one hand and on the other hand actually hiding documents and other so they won't have to reveal who has been pocketing the public's cash.

The excuse offered was that the expense and travel claims might be involved in a police investigation ongoing into alleged overspending by four members. The Auditor General finished his work recently pronouncing everyone else to be clean for the period he audited. Basically the Speaker's legal advice about police investigations looked like a not-so-clever dodge.

So what did the Speaker do in the face of all that pressure?

He announced the auditor general is coming back to investigate all those files people want to see.
Yep. The Exorcist is heading back to confront the demons of impropriety possessing files and papers in the House of Assembly.

Oddly enough the files can't be made public while the AG is working them over...yet again. Hell, Noseworthy won't even let people being audited see which document he is talking about when he askes them to explain that document.

Oddly enough too, the AG is likely to emerge with little if any new information, the local high priest of the Church of the Balance Sheet can say he has exorcised them and they are free of taint.

Then Harvey can go back to withholding the documents but assuring people there was no information in them anyway.

Gee, Harve. What a clever way to hide documents while claiming to be open, transparent and accountable. I wonder who came up with that dodge.

The Keystone Kops of Konfederation Building

Two odd things turned up in a news release today from harvey Hodder announcing that John Noseworthy is going back to the House of Assembly to conduct either a mulligan or a snipe hunt in the ongoing legislature spending scandal.

The first one is in the opening paragraph, itself a masterpiece of abysmal writing:

Following a meeting of the Internal Economy Commission and conversations with the Auditor General, Speaker Harvey Hodder announced today that, in accordance with Section 16(1) of the Auditor General Act, the Auditor General has asked for and received cabinet direction to conduct comprehensive annual audits of the accounts of the House of Assembly from fiscal years 1999/2000 to 2003/04.

Section 16(1) of the Auditor General Act provides that, based on an order from the Lieutenant governor-in-council or a resolution the House of Assembly, the AG may "inquire into and report on a matter relating to the financial affairs of the province or to public property or inquire into and report on a person or organization that has received financial aid from the government of the province or in respect of which financial aid from the government of the province is sought."

This special audit isn't something the AG would ask for; rather it is something that either cabinet or the legislature directs.

As well, there is a separation of the cabinet and the House for good reason. Normally the cabinet would order a special audit into an entity entirely under its control. That means a department of government or a government agency or Crown corporation. Problem with Hydro or the forestry department? Cabinet calls in the AG.

Since the government is accountable to the legislature, and the government has no legal authority to control the House of Assembly or inquire into its operations, any special audit of the House should come only from the House of Assembly. Money missing in the House? The legislature calls in their own employee to sort it out.

This issue is big enough to get all the members back for a quick sitting, at least one long enough to approve a resolution authorizing the Auditor General to sort out the financial mess.

So basically, the release starts out by having the AG ask to do something he is supposed to be told to do. On top of that he is being directed by the cabinet even though there is no statutory basis for cabinet directing the Auditor General to inquire into the legislature. Basically, cabinet has seized control of the elected representatives who are supposed to hold the cabinet to account on our behalf.

Pesky thing the constitution, but the rules are there to be followed not broken. Apparently in this instance though, the way to deal with rule breaking is further rule breaking.

The second thing is inadvertent humour. At the end of the release, Speaker Harvey Hodder tries to wax poetic on the need for accountability and transparency. Of course, no one is fooled by Hodder's sudden conversion to the cause of openness in government.

His argument in favour of keeping accounts secret took yet another savaging in The Telegram's editorial pages on the same day he made the announcement of the AG's latest foray into Hodder's office looking for baloney or snipe.

For the record, here's the poetic speaker in full flight:

Trust and confidence is fostered where public disclosure and transparency permeates the principles upon which public funds are received and where the expectation of public accountability and disclosure is understood and practiced.

The Telegram version was more understandable and more credible:

Actions speak louder than words.

Harvey needs a dose of plain language training.

Our accountants can work wonders...

but they must have receipts.

The Telegram editorial this hot summer Wednesday nails down another aspect of the House of Assembly spending scandal, namely the unwillingness of members to disclose their expense claims.

Perhaps those same politicians have forgotten the most important adage of all: that actions speak louder than words.

Here's the fact - we offered the province's MHAs an opportunity to show that they weren'’t involved in constituency allowance misspending.

Not one MHA felt confident enough to actually have public scrutiny of the propriety of their constituency spending.

Like it or not, any MHA who decides to hide behind the Speaker's legal opinion will have earned the reputation they wear.

The Telly will not be winning any friends in the House of Assembly with this editorial, but then again, editors don't make their money saying things that arecomfortablee all the time.

As the host of one radio call-in show noted this week, it's ironic that all those faithful, loyal and unquestioning supporters of the current crop of politicians praised a local newspaper whenever it slagged Liberals and took up the cudgels on the Premier's cause du jour. These same people are now turning savagely on the same paper for printing stories that are - explicitly or implicitly - critical of the Premier.

The Telly-torialists make an oblique reference to The Independent in the editorial this week. While the Indy has not exactly been scoring coups with its coverage and in some instances has provided inaccurate and incomplete information, at least they have asked a few questions. Hopefully, it hasn't poisoned the well of information out there nor has the Premier's savage reaction deterred others from asking simple questions.

The Telly editorial today makes the point simply and eloquently when it points out that when it comes to disclosure (the congenital twin of transparency), actions speak far louder than mere words.

The Premier and the charitable impulse

A check of the Canada Revenue Agency (CRA) website reveals there are currently 389 family foundations in Canada with charitable status. That means they can grant tax receipts for donations received.

There are two family foundations in Newfoundland and Labrador. The Johnson Family Foundation supports the Grand Concourse Authority and the Geo Centre, among other things. The Williams Family Foundation Inc, (WFF) featured this past weekend in The Independent, provides assistance to groups and individuals focusing on poverty reduction and education.

Family foundations, like many charitable groups are organized to conduct philanthropic workin a variety of areas of social concern, while providinga fromal grant-making structure, legal and financial safeguards and financial benefits. They are designed to support and encourage philanthropy in Canada.

Some of the family foundations are endowed; that is, they have assets and use the revenue from those assets and from donations - usually from family members - to give financial support to groups and individuals that meet the foundation's criteria.

Other foundations are smaller or merely operate on the basis of annual donations. Both the Johnson and Williams foundations appear to operate in this way, although the Johnson foundation has annual revenues more than 10 times that of the Williams foundation in the most recent year for which reports are available from Canada Revenue Agency.

Of the 389 registered family foundations in Canada, though the Williams family Foundation is different in one significant respect. It is the only family foundation, and apparently the only grant-making foundation at all in the country, that is associated with a serving politician let alone a sitting premier.

For that reason alone, the operation of the Williams family Foundation would merit public scrutiny for reasons discussed below.

But the Premier himself put his family's foundation in the public spotlight when he committed three years ago to donate his entire salary as first minister to charity through the Williams Family Foundation. The public has a right to know how much has been donated to charity, even if the individuals receiving the money are known only to the foundation and to federal taxation authorities.

The first problem, unfortunately, is that we don't know where the premier's salary has gone. CRA filings by WFF indicate that the WFF received only $20, 000 in donations in 2003 and $110, 000 in 2004. Both amounts do not match the approximately $150, 000 pre-tax salary provided to the premier.

The second problem that arises from the Williams Family Foundation is that it apparently is not run at arms length from the Premier's Office. In the first year following the October 2003 election, a member of the Premier's Office political staff appared in the Western Star presenting a WFF cheque in the city represented by the Premier in the legislature. This past weekend members of the Premier's Office provided official comment on behalf of the foundation even though the Premier himself is not a registered director of the charity.

This second problem is the crucial one. It is rare, indeed likely unprecedented, for a politician in Canada to be so closely associated with an organization donating over $100, 000 per year to groups and unnamed individuals in the province. Some of it is apparently directed to registered charities but at least half the funds distributed by WFF in 2004 went to unnamed individuals.

It is rare since the act of charitable gift-making on such a scale raises concerns about a conflict of interest between the politician and the recipients. Were the foundation run at arms length from the Premier himself, one would have almost no argument. But given that the Premier is apparently intimately associated with the operation of the family foundation, there is the very real potential that the Premier's charitable work - as sincere as it is - also carries with it a conflict in the recipient between his or her direct, personal need, his or her political choices and a natural desire to display gratitude for assistance received.

In short, every private gift from the Williams Family Foundation - no matter how worthy - places the recipient in an unacceptable position given that it comes openly, and without doubt from the Premier.

Some of the donations to registered charities create similar potential problems. In two years, the WFF gave money to foundations associated with health care boards in the province. The directors of these boards ought to be able to speak openly and to take issue with government policy from time to time. That is what they get paid to do. However, these directors and senior officials are placed in an unacceptably difficult position when their foundations receive grants from the WFF.

In the same way, advocates for health causes such as the cancer society, the school lunch program or the arthritis society may be compromised in their ability to advocate openly on behalf of their clients when cash donations are being received from the Premier's family foundation.

No one should question the Premier's motives in establishing the Williams Family Foundation or doubt the work the Foundation does.

However it is entirely inappropriate for a serving politician, let alone the province's first minister to be directly associated with providing money to anyone in the province, except through the provincial government's budget.

Anything else represents a compromise of the politicial system that is every bit as serious as allowing cabinet ministers to actively conduct any other type of business from their ministerial offices.

After all, how can a voter hold the Premier and his administration properly accountable for their decisions when he or she is simply so thankful that the "Danny Williams foundation" ensured her aging mother did not lose her eyesight? It obviously never occured to a recent caller to Night Line that the Premier and his administration ought to cover such medical treatment for everyone under the province's medical care plan.

The premier must move quickly to place the family foundation at arms length from his office.

Otherwise he may well be damaging our political system, taking it back to a point where it has not been in the better part of a century or more.

Dubious donations

On the growing ethical issue of politicians and charities, check these online commentaries:

1. Dubious donations by C-SPAN corporate vice president general counsel Bruce Collins notes concerns that American politicians are using their personal charitable foundations as a way of circumventing American campaign finance laws.

2. A 2002 article from the National Center for Policy Analysis points to the number of American politicians who have been creating charities and then securing federal funds to support the charities. "Government funds for local pork projects usually flow to local government entities -- but setting up these charities eliminates the government middleman and allows politicians to receive the credit."

3. "Limits urged on political charities" is a news report from Boston on growing efforts to curb the use of charities by politicians as a way of evading American campaign finance restrictions.

The Mile One Foundation?

Did anyone else find it strange that the Premier's Office was taking questions about the operation of a private charitable foundation?

There doesn't seem to have been any effort to direct questions about the operation of the Williams Family Foundation, Inc. (WFF) to the foundation itself or its lawyers.

Nope. The Independent got comment directly from the Premier's Office.

We'll be posting more on later on the idea of a serving first minister being so intimately connected to a charitable gift-making organization.

For now, let's just note that The Independent missed a bunch of relevent information:

1. The registry of companies records that the WFF started life as the Mile One Foundation.

2. The Indy also didn't take issue with the official spokesperson's comment that the WFF couldn't receive donations until 2003 once its charitable status was approved. That isn't strictly true.

The WFF could have taken donations at any point after it was incorporated in 2000. It just couldn't issue tax receipts until its charitable registration was approved by Canada Revenue Agency. It looks like the Williams family waited until it could get tax receipts before it started using the WFF.

3. The Indy also missed the slight discrepancy between the spokeperson's insistance that, in addition to the registered charities reported, the WFF gave money "...to individuals and familes in need who are not registered charitable organizations" and the gift apparently made by the WFF to a school science group in Harbour Grace - apparently in 2003/04.

4. The Indy didn't notice either that the WFF apparently has no assets and exists purely based on the donations it receives from unspecified sources. In 2004 - the last reporting year available from Canada Revenue Agency - donations into the WFF totalled $110, 000.

5. Related to that, the question still remains as to where the Premier's salary goes. All along he has insisted it goes to charity. If so, where does it go and how does it get there? no matter how you slice it, $110, 000 in 2004 doesn't appear to be the right number if it represents the Premier's salary.

6. The Indy did note that in the CRA filing the WFF reported for 2004 over $66, 000 in donations to "qualified donnees", that is other entities with charitable status, yet its list of "qualified donnees" amounted to only one third of that amount. But they just mention it in passing without raising the question as to why the filing is out of whack.

There's no indication the list is a sample. The previous year's filing has the two amounts matching. Check another similar foundation, like say the Johnson Family Foundation, and the numbers all match.

Most likely the discrepancy is an oversight, but still, it's worth asking.

7. The one thing that was unmistakeable from the Indy's coverage though, was that Danny Williams hated - viscerally loathed - having to answer any questions about the WFF whatsoever.

That's too bad, really, because the disclosure of accurate information helps to fight the twisting of facts and misrepresentation the Premier was correct to criticize last week.

But when disclosure is accompanied by so much protest, it just fuels suspicion that something inappropriate is being done even where none may be warranted.

And when the Premier speaks publicly on behalf of an organization that he is not officially supposed to be speaking for - he isn't a registered director - then it just fuels more suspicion and speculation.

Which of course only survivies because of the limited amount of information the Premier grudgingly provided.