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Tuesday, 30 September 2014


At the outset, let me state that anyone knowledgeable of how government operates will not be pleased with the Office of Auditor General let alone his Report into the Humber Valley Paving (HVP) affair.

I have read the Report.  I am quite certain this is the stuff of Judicial Inquiries. One should be called forthwith. 

How Premier Paul Davis responds to the findings will constitute the standard of integrity that will mark his Office. 

The A-G’s Report, despite its shortcomings, leaves little doubt that the public purse was of secondary importance alongside the Minister’s political imperatives in advance of Frank Coleman’s nomination for the P.C. Leadership.

I cannot remember a time when a Cabinet Minister presided over such evidence-based proof of an abuse of power.  Though the Premier denied having been informed in advance or that he was a party to the cancellation of the contract, it bears remembering that Premier Marshall stated, following the revelations, he believed Minister McGrath made the right decision. Perhaps, now the media will stop eulogizing his short tenure and acknowledge his terrible lack of judgement. We should all be grateful he is gone.

Still, questions remain which the quick resignation of Nick McGrath do not resolve.

This Post should be entirely about the Minister and the other parties who played supporting roles in an affair that stinks.  Instead, my comments are directed towards the Auditor General, the necessity for which, I find disconcerting.  I am sure I will get back to the subject of Nick McGrath later.

I do not criticize the Office of the Auditor General flippantly.  The institution is an important one. But key aspects of the HVP Report undermine him and his Office.

Four comments are in order:  

First, the Auditor General (A-G) far too easily absolves his former boss.  When the A-G was Deputy Minister of Finance, former Premier Tom Marshall was his Minister. The A-G arrives at “Findings”, specifically #s 32 and 33, which are unwarranted, given the complete absence of ‘documentary’ evidence linking the Premier and his Minister, Nick McGrath.

He cannot support the contention found in Finding #32 in which he states: “The Premier first became aware of the termination of the contract for Project 1-12 on April 27, 2014”.  In Finding #33 he says: “Minister McGrath knowingly withheld information from the Premier……(t)his meant the Premier was not given the opportunity to evaluate the impact of this decision.” 

These are assertions for which the A-G has no proof.  Hence they are merely opinions. He can take Marshall and McGrath at their word.  But, he ought to know that does not account for much right now. 

The A-G’s comments constitute political cover for Tom Marshall.  The effort is transparent; it is blatantly political and unacceptable.  

Second, the A-G downplays the failure of the Deputy Minister of Transportation and Works to execute his duty as Head. That the Deputy failed to report to his boss, the Premier, is a serious omission.  The A-G’s Report states: “we are satisfied that the Deputy Minister was convinced, based on the Minister’s response, the appropriate people in the Premier’s Office had been made aware of what was occurring”. (P. 57)

The Deputy Minister chose not to inform the Clerk of the Executive Council.  

That would have constituted the correct action within the normal administrative processes of Government and the 7.5 hour time constraint set down to have the paperwork and the "fix" completed.  The Clerk has easy and direct access to the Premier.  In his absence, she would have been expected to inform the Premier’s Chief of Staff.  Alternatively, the Deputy could have chosen to contact the Premier, who is also his boss, without deference to the Clerk. Ostensibly, at least, he chose to ‘assume’ the Premier was informed, though he knew he was dealing with a significant matter of public money. 

Bonds totalling $19 million are involved, the Minister wants to rush the paperwork through in one work day; the matter involves a potential P.C. Leadership contender.  Not just the Deputy, a moron would have understood the political implications. 

Third, the slowness of the A-G to seriously commence his investigation suggests he may have been the wrong one to investigate it, in the first place. 

The A-G is given an instruction to inquire into the HVP contract on May 8, 2014 but Page 13 of the Report notes that first interviews, with the relevant parties, did not begin until July 21, 2014. 

The A-G’s investigation involves essentially one contract (described as “Contract 1-12”).  It was  awarded to HVP under one piece of legislation “The Public Tender Act”, and administered under one Minister of one Department. 

The Report, given its gravitas, ought to have been completed in advance of the date Frank Coleman was scheduled to become Leader of the P.C. Party on July 5th. It is one thing to be removed from politics; that is not the same as being oblivious to it.

The A-G clearly had no intention of holding an incoming Premier to account.  Perhaps, he thought it fine that he handed it to Coleman directly, had he stayed on!  

That is not all.  

The Report is held through the entire tenure of Premier Tom Marshall.  It is released, co-incidentally, exactly ONE day before Premier Paul Davis is scheduled to appear at Government House with his new Cabinet. 

The A-G and no one else should be blamed if cronyism is charged. Who would be convinced the Report's release was co-incidence?

Fourth, the A-G fails to disclose the buyer of Frank Coleman's shares in HVP.  We are left to wonder what other party, in addition to Frank Coleman, may have brought political influence to bear on the Minister. 

What does all this say about the Auditor General?

Did he not feel a heightened sense of concern having written “Finding #27” which reads:

There is no documentary evidence to indicate what prompted two Ministers to call the Deputy Minister of Transportation and Works the morning of March 13, 2014 to enquire about HVP, which, coincidentally, was the day before the close of nominations for the leadership of the Progressive Conservative Party of Newfoundland and Labrador.

The possibility of a major conflict-of-interest might have compelled him to bring in the RCMP.

That prospect, it seems, was unlikely.

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If the A-G did not have the staff to complete an expeditious Report, given those unusual but serious circumstances, why would he not have pulled staff from other files, sought professional assistance, or requested secondments from the A-G’s Office of another Province?

Instead, he takes nearly six months to complete the Report as a conflicted and surely incompetent Minister is permitted to retain his Cabinet Post. 

The release is timed to permit Tom Marshall to be gone from the public spotlight and away from embarrassing questions.

It arrives, as if on cue, permitting the new Premier to say: if McGrath had not resigned…I would have fired him; that’s an example of my leadership!

Mr. Auditor General: This matter stinks and you, Sir, have not done enough to separate yourself, or the Office you represent, from a corrupt Administration.

I believe you have failed in your public duty, Sir.

Will Premier Paul Davis call a Judicial Inquiry?

Not while the media are drooling over the resignation of Nick McGrath all the while forgetting the HVP issue is a far bigger issue than just he.