Thursday, 17 October 2013

OVERSIGHT, TRUST AND THE PROVINCE'S REPUTATION

“Reckless” is not normally a word ascribed to governments in Canada.  Increasingly, though, it is how people refer to the NL Government of Premier Kathy Dunderdale. 

Her rejection of pleas, from her former Finance Minister, for an “Oversight” Committee on the Muskrat Falls Project is bewildering; it is not how responsible governments act.  (See: DID JEROME KENNEDY BITE HIS TONGUE?)
Jerome Kennedy is a major figure in the oversight issue but only because he can still influence the outcome.  He may still be biting his tongue, but I believe the public would like him to do more. 
Will he clarify his dispute with the Premier?  I don’t know.  Some people who know Mr. Kennedy think he is engaged in a fight between his heart and his head. That he was permitted to leave with the latter may embolden him to think more clearly.

His reputation is one of a fighter, one developed in the law courts and refined in politics, by pillorying his critics.  Having suffered the bruises of an overbearing and unwise Premier he might, too, be better able to weigh the risks of her quixotic and risky agenda.

Some people have asked if I was surprised by the events on ‘the Hill’.  I could never have anticipated the timing or the reasons for this end to Mr. Kennedy’s political career.  Then, too, all my experience in Government failed to prepare me for the worse decisions of this Administration.

Readers may recall my having dealt briefly with the issue of ‘Oversight’, in March, in an article called HIGH PRIESTS HAVE BOUNDARIES TOO.  It had a relationship with another Post entitled NEW DEPUTY MINISTER OF FINANCE NEEDS TO BE ONE TOUGH COOKIE.  These were not accidental scribbling.  I was aware, a long time ago, that no oversight on Muskrat existed in the Department of Finance. 

When the current Finance Deputy was appointed, my first thought went to the large sums of money being advanced Nalcor and the inability of the Deputy to account for them.  I wondered how she would comply with the requirements of the Financial Administration Act (FAA) which, arguably does not vest power in her position,  certainly imposes enormous responsibility and demands for accountability. 

I did wonder if the new Deputy had prodded Minister Kennedy to action.  I would be surprised if she did not.  I expect that her responsibility, under the FAA, is one to which she requires no reminding.  It is a matter worthy of a future Post.

Nevertheless, at the risk of seeming repetitious, the Premier’s acceptance of Nalcor’s counsel, alone, is so unwise that it still shocks.  “Oversight” is fundamental, in Government, just as it is in private business. 

When you have considered all the reasons why it is necessary, including the public interest, you still have to return to the fact that it involves personal responsibility, personal liability and plain ass-covering.  Rejecting oversight, on a multi-billion dollar project, is worse than mad.  It is a dereliction of duty.

In Canada, individuals enjoy a relationship with their governments based primarily on what might be called “institutional trust”. 

Trust, in a government or in any authority, does not imply one based on “blind faith”.  Indeed, despite all the oversight authorities, in Ottawa, we still find ourselves immersed in the Senate scandal. 

A great deal of our trust, in government, is borne out of a confidence in the existence of a system characterized by checks and balances.  It is found not just in Opposition Parties but in myriad institutions whose sole purpose is protection of the public interest.  

Legislative committees, the Office of Auditor General, the Budget Review Office (federally), the Public Accounts Committee (and a host of others, in more mature Legislatures) are all examples of legislatively sanctioned oversight.  They are the basis of our fundamental belief in the integrity of our governments (for this purpose we will omit reference to an independent Judiciary).

Of course, many are “after the fact” processes.   

In this Province, expenditure review is conducted by the Auditor General and a poorly-managed Public Accounts Committee of the House of Assembly.  In time, we may catch up with the practices of older legislatures.

A prudent Government is expected to take steps to ensure overbearing risks are levelled, and protection is secured through the appointment of a professional public service.  If the skill set is not available in-house, experts (consultants) are frequently engaged to review estimates, forecasts and analysis and make recommendations.  The cost of such expertise is chump-change when counted, in this case, against the billions of dollars at risk!

That argument might have been at the core of Mr. Kennedy’s intercession with the Premier.

Though he supported the government’s decision to side-step the Public Utilities Board, it should have been the tip-off for him, and for us, as to the Premier’s disregard for oversight.

It should be noted that the ‘trust’ enjoyed between individuals and their government is the same trust that governs relationships which are government-to-government and business-to-government.  Implicit is the belief that all governments, in a modern sophisticated society, embrace high standards of transparency and governance. Trust is so important that, throughout the world, it is more than a trademark; it is a ‘currency’.

When a government engenders confidence by showing that it is civilized, prudent and respectful, such behaviours are rewarded with respect in powerful places, not just in Ottawa, Edmonton or Vancouver, but among the money lenders on Wall Street and the bond rating agencies, too.  It is why we are not treated like Greece which is broke, or some African country that is both broke, impoverished and ungovernable. 

When a Premier informs her Minister, on a multi-billion dollar project: “I refuse to permit Oversight”, don’t think for a minute that her reputation or that of her new Finance Minister (or the reputation of the Province) is enhanced.

While we don’t have to re-elect the Dunderdale Administration we might wonder (and worry) how much damage she will leave in her wake.

3 comments:

  1. Des... This is perhaps you most important missive to date. I commend you for talking about the issues which is not getting enough review within the mainstream media. We are at a crossroads in this project, where politicians must take a stand, otherwise muskrat will become like the senate scandal, or the expenses scandal in the HOA a few short years ago. The notion of an oversight committee should be a firm and absolute requirement. Yet we have none. The pub should be regulating the process, like they do in Nova Scotia. Yet that body has been relegated to being an observer. Independent reviews like CEAA have indicated the project is not economic, yet we push along.

    The canaries are in the coal mine. But people are not listening.

    What is forgetten, is that a change or government will likely lead to a royal commission on this boon dongle. Kennedy and others will be called in front of this royal commission. The actions they take today, will define how clear of a conscious they will be able to speak to in the future,

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    1. Anonymous,

      Equating the "so-called scandals" (media terms btw) with MF is plain silly. MF could very well be financially catastrophic for NL. Those other two "scandals" ae chicken feed compared to this debacle.

      Otherwise your comment is on-the-money.

      Keith Ryan

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  2. Mr. Sullivan, your final sentence pretty much sums up my worries and concerns. How much damage, indeed, will this Administration leave in its wake? I shudder to think of the true cost of their abysmal decision to proceed with Muskrat Falls "come hell or high water", despite all kinds of evidence to demonstrate the folly of the project.

    Evidence in the form of cost overruns, myopic projections of current and future power needs, an Emera "partner" that is now demanding access to most of the extra power at a fraction of its production and distribution costs, a PUB fiasco that was a public relations nightmare, a lack of markets elsewhere, oil prices that won't behave as projected, and so it goes.

    A royal commission may give us our pound of flesh and pillory, not only the current administration but, the former Premier who tried to ram this project through. Unfortunately, none of that can, or will, undo the damage caused by a myopic and ultimately stupid administration....or, worse yet, one utterly devoid of principles when it comes to looking out for the common good.

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