Thursday, 2 March 2017

ED MARTIN, THE A-G, THE PREMIER, AND THE PETER PRINCIPLE

Nothing more will happen with respect to the severance of former Nalcor CEO Ed Martin. 

Most people will just feel dismay over the role of the Premier and the former Nalcor Board in the affair. They will also let the Auditor General's Report compound their distress and chalk up to immature institutions those things they associate with poor public administration.

Still, Ed Martin’s severance and the handling of the issue by the Auditor General (A-G) deserve comment.

In the first place, the political furor that followed news of the payment forced Premier Ball to refer the issue to someone. It didn’t have to be the A-G.

Ball chose the accountant when someone schooled in the law preferably a Judge would have been a more appropriate adjudicator.

It suited Ball’s interest not to have his bungling illuminated. The Premier didn’t even include in the A-G’s Terms of Reference an assessment of his own culpability in the affair. The Order-In-Council simply asks the A-G to “… inquire into and report on the appropriateness of the severance benefits received by Mr. Edmund J. Martin.” Ball had chosen the right Office. The A-G’s unschooled inquiry into the Humber Valley Paving affair still aggravates.

Undermining the A-G, on the other hand, is his construction of a concept called “constructive dismissal”. The A-G states that “the Executive Employment Agreement does not contemplate termination without just cause by anyone other than Nalcor” but he doesn’t tell us why grounds for “constructive dismissal” need not have a Nalcor origin, too.

Conveniently, the A-G decided that the Government’s failure to give Ed Martin public fealty was the central issue. Even the former Nalcor Board is let off the hook, though they demonstrated their lack of professionalism in having failed to let the incoming Board one with possibly fewer personal ties to the payee deal with the matter. And the A-G should have noted the behaviour.

Nowhere in the A-G’s Report is there reference to the fact that Martin had become a menace to the public treasury. The A-G fails to weigh Martin’s unwarranted recommendation to sanction Muskrat or his bungling of the project.

Isn’t the rise in project costs from $6.2 billion to $11.7 billion evidence, not of accomplishment deserving reward, but of monumental failure and incompetence? Martin wasn’t pouring cement. He was the CEO. His tenure was a disaster. But for the A-G it seems not to have mattered.

Former Nalcor Chair Ken Marshall uses the A-G’s Report as a weapon, claiming it vindicates the former Board members. Likely it never occurred to him that a prudent Board might have fired Martin long before a quisling Premier paid him deference.

“Constructive dismissal” is defined by one source as “a fundamental violation of the rights of an employee, by the employer, so severe that the employee would have the right to consider himself as dismissed, even though, in fact, there has been no act of dismissal on the part of the employer.” A basic requirement of proof of such a violation, however, is described in Volume 16(1b) of Halsbury's Laws of England, (2005, 4th Ed), page 91: “The employee must leave in response to the breach of contract." 

Ed Martin did no such thing.

Instead, he wrote a syrupy “retirement” letter for public consumption, claiming it was a “natural time for me to move on to the next stage of my life.”

Were they not the man’s own words? Had he not spent days on lyrical construction, having forsaken the 'bricks and mortar' kind?

Has the A-G no soul? Was he so mired in legal constructs that he failed to notice that Martin already gone down in infamy now sought resurrection in an enterprise more in keeping with his skills? 

The A-G must have known how Nalcor likes to give grants to the arts community presumably to shut them up from commenting on Nalcor's worst excesses. How could he not see that he had dismissed Nalcor's very own incarnation of Robbie Burns the bard of Muskrat Falls?

I expect, though, the subtlety would not have been missed by a Judge.

No Judge would have found a “natural time… to move on” compatible with the notion of “constructive dismissal”.

The A-G is rightly due criticism. The Report does nothing to exhibit either the intellectual depth required of his Office or the moral courage demanded of government institutions.

That said, the A-G did not cause the province to be out of pocket. He is only culpable for having advanced the Peter Principle.

And, speaking of Peter: the comments made in a June 2016 post entitled "Reflections on the Severance Issue" still apply. I suggested then that “a busy Premier doesn’t waste time on poor performers… Ball’s naivet√©… was that when Ed Martin issued the ultimatum, he didn’t cut him off at the knees that when the issue of severance, and his dignity, was raised the Premier didn't take his keys and escort him to a waiting Jiffy cab!” 

Predictably, I also opined: “Before this Premier ever gets asked to leave for being untruthful, he needs to answer for his stupidity.”

Of course, I might have added that the former Nalcor Board ought to have been stuffed into the same Volkswagen!


As recently as Wednesday Ken Marshall could be heard saying that Dwight Ball asked him to stay on. In the House of Assembly, Dwight said that the Board should have resigned and let the new Board decide on Martin’s termination. The Premier cannot have it both ways. Now the Premier says that he accepts the A-G’s conclusion. He said the opposite a few days ago.

Weak leadership among governmental institutions and the boards of crown agencies give offense to the very idea of a professionally-run government. The Premier’s job is to provide leadership, to help set standards of public administration, and to find the best people available to maintain those standards.

When the Premier himself is a big part of the problem, the public can only expect more of the same.

We could demand, as David Vardy has argued, that the severance issue be reviewed by a judicial inquiry.

But when a Premier can’t even deal with someone of Ed Martin’s ilk, an inquiry with spine is not the first thing that comes to mind.

23 comments:

  1. The whole affair has been complicated by the public view by such terms as "constructive dismissal". The reality is Mr. Martin record was poor.

    - Muskrat Falls Astlaldi - 800 million overrun (1 years revenue for Nalcor). Misled the public on this.
    - WMA Agreement - The loss in quebec courts on the WMA case has seriously limited the business case for MF, that being 900 MW when we need it. Nalcor misled the public with false assurances on this.
    - Failed gated management process. When the project switched to MF first then it should have been recycled through DG2
    - North Spur - Right or wrong, the engineering was done too late.
    - Dark NL - documented failures of management.
    - Emera Sellout - As UG has noted, we will pay for the ML due to Muskrat Delays. Nalcor has provided numerous assurances to the public otherwise.

    There is no doubt Martin had to be changed. Was it resign, fired, constructive dismissal? Moot, his performance likley was not bad enough to be fired, nor good enough to be rewarded with the gold plated severance he was provided. . He did not deserve any more than 10 Months salary for a severance, and his pension. That is it.

    We are loosing common sense in this province. We are a small village in the global scale. Paying 6 million to a civil servant in a small government is just insane, no matter what the consequence.

    ReplyDelete
  2. Be it "six ways to Sunday or however else" either way you cut it Dwight Ball showed an abysmal lack of leadership and continues to do so. It appears Mr. Ball doesn't want to step on anyone's toes on any issue whatsoever. What happened with the Ed Martin fiasco should have been handled with a firm hand. How in the name of God can anyone not see the incompetance of Ed Martin which should have been grounds for dismissal as it would have been in private industry. Martin would not have had a leg to stand on.
    He should have been dealt with by the New Board as the Old Board neglected its responsibility in dealing with Mr. Martin's incompetance long before the MF fiasco got off the rails and when Mr Ball first "came on the scene" he most certainly should have directed the Board to "deal" with the matter and let the chips fall where they may.
    God Almighty, we're a province with a population of 500,000 with a $11.7B dollar expenditure (and counting) on a project which never should have gotten off the ground in the first place. Geez, Donald Trump is proposing a $57B increase in military spending which is only five times what we have wasted and given the population of the US there are serious rumblings as to where the money is coming from yet we continue to spend like drunken sailors with the attitude that the ratepayers can and will pay for it. With leadership like Mr. Ball is exibiting we don't have a "snowball's chance in hell" of ever being a progressive province.
    When Danny Williams first took office he showed he was a "leader" and I had high hopes for NL. It soon became obvious he had a monumental ego which obscured his vision. He turned the province over to Kathy Dunderdale and I strongly believe he was still in control and Ms. Dunderdale complied thus sanctioning Mr.Williams'
    legacy.
    The Ball government will not survive the next election unless he at least starts to show leadership or is dethroned. I suspect we are going to have the Upper Churchill turned over to Quebec Hydro to get us out of the mess we're in. MF will then also be under QH control and we will be left with absolutely nothing. EMERA and Quebec Hydro will be deciding our future from there on in.
    I have absolutely no confidence whatsoever in our future if we continue to put into power those who are in it only for their own benefit. (I think MF was conceived in the first place to ensure Galway had sufficient power). To think it was sanctioned based on incomplete research, half truths and outright lies and nobody willing to hold anyone accountable, boggles my mind. Danny still has a firm grip on the running of this doomed province.
    God help us, please.

    ReplyDelete
  3. In 2001 Nalcor's Peak Demand FORECAST for just one year into the future (for year 2002) was 1,602 MW:

    Actual? --- 1,592 MW

    In 2001 Nalcor's Peak Demand FORECAST for year 2016 was 1,836 MW: Actual? --- 1,673 MW

    Given that Vale's nickel processing plant requires approx. 75 MW of power (almost identical to the peak demand increase over the last 14 years), where is the so-called residential demand increase (the basis on which Muskrat Falls was justified)?

    If it were not for Vale, it seems that our peak demand would be virtually unchanged since 2002 (and both total island peak demand and total energy use dropped in 2016).

    ReplyDelete
    Replies
    1. Good to see your site updated for demand and energy use to 2016. Two suggestions.......could you move that to the top of your Demand postings, and as DO we need the power......was the fundamental question and the forecasts the rationale, it is a ongoing display of actual vs forecast.
      And your you add the recent both APril and NOV revised forecasts downward as presented to the PUB.
      You might consider a chart for the past 10 years, now showing the pipping point as 2016 energy is now declined,,,, and is likely to continue that path.........rally at odds with the need for Muskrat.

      Delete
  4. Dispiciable behaviour on the part of all concerned. No wonder the public feel that politicans are akin to slime.

    ReplyDelete
  5. Martin the Menace.......to our public treasury, .........Dennis the Menace (the TV problem child) used to drive Mr Wilson round the bend, but Dennis was a child after all, and not considered really bad in character. But Martin the Menace.......his deeds rumble on gathering steam whose pressure is about to explode unto the whole province. The Tely editor said `more power` to Martin in obtaining his Package, his entitlements. I think he misspoke, not meaning to suggest it was right, but that who among us would not take the golden handshake, deserved or not.
    JFK comes to mind, an inspirational leader in the 1960s with his speech: Ask not what your country can do for you , but what you can do for your country.
    Such ideals seem scarce in our country, and especially our province. We once had a Prime Minister (Bond) who personally but his own money up to save our province, and we had another (Squires) who stole from the provincial coffers. Should one say of Squires `more power to him`. He even took money intended for WW1 injured vets.
    Too soon we forget our history and so are doomed to repeat it. We need more power to the people, but the means seems to escape us.
    Winston Adams

    ReplyDelete
  6. The AG report on Martin's severance is another clear example of an institution entrusted with protection of the public whoring for their political masters.

    The report was bizarre. Finding conflicting evidence it makes no attempt to ferret out the truth. Instead it contrives a fiction, makes unsubstantiated assumptions to give absolution to the lies from both Martin and the board, and concludes all is well. Move along chumps, nothing to see here!

    The report is the Nalcor mantra from the mouth of the AG. The problem clearly is much deeper than the Nalcor rot.

    ReplyDelete
    Replies
    1. And that helps explain why Ball recently said that he would wait for the AG's audit of Nalcor/Muskrat before thinking about a Public Inquiry.

      Delete
  7. I could be wrong but I disagree that the original cost was $6.2B. The initial $6.2 included the NS link. The NL portion was $5 B and that was supposed to have included a 15% contingency. That was the amount Manitoba Hydro used in their assessment and also in the Wade Locke numbers which were essentially just taken from Manitoba Hydro with the $2 B advantage over a 20% increase in load which would be met by $150 oil in Holyrood.

    I understand the $5 B didn’t include interest during construction (i.e. low balling) however the 15% contingency should be enough to cover interest (3.8% for 4 years). The current estimate as I understand it has no contingency so it is close to 140% over budget as I see it.

    The sanction estimate was $6.2 without adding in interest but that was only Politicians and did not relate to any of the initial studies by either Manitoba Hydro or the Joint Review panel (who didn’t accept MF as the lowest cost).

    ReplyDelete
  8. Doubtless you are correct that all these individuals have risen to their level of incompetence and two of them are still in the jobs. The next election might take care of one, not sure who decides on the AG or when.

    ReplyDelete
  9. I think we should stop beating up on mr martin after all he is just a simple servant isn't he...controlled by a higher power??????? Or am I wrong?????

    ReplyDelete
  10. Those who have left the project, must live with their own conscience, and the accomplishments and failures of their particularly efforts. Managers and Directors must share the consequent failure of the project, as they made the important appointments of senior personnel. A "Lessons Learned" is the best that can be done on the project history to date.
    What matters now, is how the professionals appointed and remaining with the team, perform the task of succession, including full commitment and diligence to technical and financial protocols.

    ReplyDelete
    Replies
    1. Where does human health and the environment fit into your calculus Robert? Or for that matter the real possibility of a bypass when the spur fails and 15 to 20 billion sits high and dry?

      Delete
    2. I have no answers to these questions. Project risk analysis has been delegated to the project team. They will have to answer to the consequences, for better or for worse. This is a heavy load I for one would be fearful of.

      Delete
    3. The project team will have to answer to the consequences??

      Perhaps you have not noticed the project team has answered to nothing while this project flounders and squanders billions.

      What do you expect will change?

      Delete
    4. Projects such as Muskrat usually end up in court; change orders, overcharges, delay claims, long lists of contract deficiencies, etc, which will take years to resolve. The Churchill Falls project went the route. Clyde Wells gave us engineers contract law seminars on bad contract administration as practiced by engineers at the time. As an Engineering project it was a success, and still operates within its contract statues, and continues to be economic.

      Eventually, Muskrat will follow similar project life characteristics, and it is too soon to determine the outcome; Technical excellence, economics, service factors etc. Maybe we should look at Muskrat, as was done in Ontario with the first regime of nuclear plants. It was after all a "research project", terribly expensive to build, fraught with engineering and management mistakes, some lessons learned, and the ratepayers stuck with the "stranded debt" expense.
      We have all asked for suspension of the exercise, but the powers have no appetite for shutting it down. No, I do not expect any change.

      Delete
    5. Actually Robert I toured the first Pickering reactor before it was commissioned. We were told nuclear power was going to be so cheap it would be too cheap to meter! How did that work out?

      Fifty years on and waste disposal is still a mystery with spent rods sitting in pools below the reactors. God help us when the first one melts down.

      When a full cost accounting of nuclear power is finally in it will be the most expensive power ever conceived. Boiling water with a nuke is the most stupid idea engineers have yet conceived of. Yet fifty years on you have yet to see the light, so to speak.

      Is that the best you can do do justify MF? It will come in as the second most expensive power behind nukes....if it ever works.

      Delete
    6. Don't put words in my mouth Bruno. I am not required to "justify" MF.

      I share most of your own value judgements on what has gone on.

      Delete
  11. I always enjoy reading UG....the posts from Des and the others are giving us the insights into a world of mistruths; deception and egotistically led mismanagement. Even if only "some" of what is written about is the true and has actually happened it is very alarming. I am not saying I don't believe the posts, I am saying that some of what I am reading is, to a point, "unbelievable" - that we have been mislead to this high degree by educated, professional, successful, intelligent, motivated and otherwise respected individuals.

    If all that is written about has actually happened or is happening then where is the uproar from the Nfld. people; where is the media ; where are the truth tellers and whistle blowers who can make a difference in this mess....for God sake....how can this be. If all that has happened or is happening is true and we are heading full speed towards financial ruin (maybe we are already there) then why would our leadership (read Government) have so blindly and incompetently taken us down this path. What greater vision has driven successive Governments to roll out this plan...? What is it that we mere mortals are missing in the big picture.

    We though for a while a few years ago that NL finally had a chance to pull itself up from the mire of debt and dependency. For a while it looked good and we felt good. The place was booming and we had money flowing in like as the water flows into Lake Melville...Did we take stock and shore up for the future...not likely....that would hav ebeen too smart.. let'er go boys. Now it looks bad, real bad, As Kevin Blackmore and the boys say "..if you'd ask me I say she's never been worse."

    The current crop of leaders are giving us very little "hope" that we can recover. For young families living here, raising children and working hard every day to make a living - it must be demoralizing.

    There is a saying that "when you are dead you don't know you are dead....its the same thing with being stupid"....when I read all the papers posted here on UG;...and the explanations and opinions given regarding the many negative aspects of project I have to conclude that this phrase must apply to the people who made these decisions and who voted collectively to carry them out.

    God help us.

    ReplyDelete
  12. Frank, there was the initial question of DO WE NEED THE POWER. We were told we do because of our electric heat usage. In the 1960, we had to install 10 watts per sq ft because we had no insulation, and poor quality windows and the wind blew through. After the 1973 oil embargo things changed, the federal government subsidized insulation, windows got better, codes improved, and then along came heat pumps that reduces electricity use by less than half.
    Nova Scotia was aware of this and moved with the times. A new house now can heat with less than 1 watt per sq ft. A passive house is going ahead in Flatrock to use 0.5 watts per sq ft.
    While thousand of Nflders are jumping on this band wagon to reduce energy, the power companies still promote the 10 watts per sq ft shit from the 1960s, trying to increase demand, and use reset thermostats that increase peak demand.......stupid is as stupid does.
    Meanwhile the promised power demand increase is plumeting, aided also by the slowing ecomomy.
    Go to Vision 2041 blog under the DEMAND heading and see the energy and demand use from 2001 to the present. Then read Russell`s latest piece in the Telegram showing the demand to drop further..... and Russell admitted last week that he installed these new fangled minisplit heat pumps himself........to help reduce the demand ( not sure if he realised that, as he just needed to save money) but he too helped put a nail in the coffin of the case for Muskrat: as we never did need the power, but we were not engaged or have the foresight or have smart leaders as Nova Scotians.
    Yes, Houston, we have a problem........ the boondoggle has landed. And the tooth fairy is a fraud, a fable for children.
    Our power use will continue to drop. You may not get blood out of a turnip, but Ball and Bennett can sure tax the hell out of us, and destroy our economy and our childrens future, and all our services will go down hill.
    But I`m sometimes wrong......Trump may start a war, or spend a trillion on infrastructure and maybe open the bases again in Nfld.......who knows. Look what Hitler and Churchill did for us. Something just might come along to make Muskrat a godsend .........to aid the devil`s work.
    But I wouldn`t wish for Trump to save us, or any of that.......I still think UG is right .......put Muskrat on ice, and do prudent things like Nova Scotia did. Gosh.......give them all of Muskratfor nothing and let them finish it and have all the power, and give us something back after 35 years, it could save us another 6 billion and save us from the dole.
    Winston Adams

    ReplyDelete
  13. Are we losing our culture.......
    Pete Sucey seemed instrumental in bring back the word CULTURE in one of government departments. Culture seemed unimportant to some, it seems, and some might wish to let it die, like rural Nfld might.

    Why not Google: `Lyrics On a grey foggy day`, then click You Tube and listen and read the words.

    Summer days they were warmer then
    When we laughed
    With old fisherman
    And they cursed when the fog rolled in
    And they went to make up the hay

    And we waited for the sun to shine
    On a grey foggy day.

    Listen and read the whole song.

    Then read Russell`s piece in the Telegram. And it`s like another grey foggy day, with the Muskrat scandal, as we wait the sun to shine again.

    Much of our hardship in this province gets into our music and songs and becomes part of our culture.
    This song is pushing toward 400,000 hits, just behind Sonny`s Dream, but not yet up with John Lennon, at 40 million.
    Uncle Gnarley is closing in on 1 million, a milestone we will soon see.

    I suppose our loss, our sorrow, our anger, our joy, ends up in our songs and music. Thank you Pete for standing up for the good in our culture.

    Winston

    ReplyDelete
  14. The Peter principle, which states that people rise to their level of incompetence is only true to a point. What it misses is that the incompetent continue to rise, sucked up the corporate ladder as those above them move on. In most of the government departments I have worked in, you could demote incompetent people two or three levels and they would still be incompetent. In Newfoundland, nepotism and corruption are far more important for a lucrative career than skills, education or ethics.

    ReplyDelete