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.


  1. The disturbing part of this entire affair is that the PC Party, The Government and even the bureaucrats must believe the electorate to be idiots. We are not idiots...

  2. the report seems to have been set up to be "just damning enough" to allow one person to walk away with the sins of the village; a 21st century scape-goat.

    Mr. Sullivan is correct: the standing instructions for all Deputys is that they are obligated to report anything that can bring the provincial goverment into disrepute to the Clerk and the Chief of Staff in the Premier's office. It is simply not credible that this was not reported to anyone. I don't for an instant believe that to be true and at this stage think that only a judicial inquiry or a police investigation will clear the air.
    All governments get wonky as they fall out of power. Rideout and Grimes faced similar stresses, but they had enough "gravitas" or experience or brains to keep some semblance of order. This just stinks.

  3. I agree the voters are not idiots, but for sure very few have faith or show any interest in the system over which they have the last say at the polls. Could it be the AG the Premier/s are all looking conveniently away because his thundership Danny was heading the whole mess?

  4. Who was pulling the strings in all of this? McGrath and Obrien were at the lower end of the strings. There is definitely someone at the top.

  5. There is little, if anything, that can or will be done as follow up on this horrendous abuse of power and possible injustice. Marshall is out of public life and unreachable. McGrath has disappeared into the woodwork of the Confederation Building and Davis has taken control of Justice by appointing a former Chief of Police as Chief of Staff and PC unelected supporter/lawyer to head up what's left of the Justice Department.

    Move on folks....nothing to look at here,

  6. Glad to see the question of the duty of the Deputy raised. Are we to believe that she failed to report such a sensitive decision to the Premier or to officials reporting to the Premier? If so, why isn't her head rolling on the floor?

  7. It is time for the people of this province to wake up. We are 500,000 people, and declining. We are running a deficit of 500,000 million dollars a year. The size of our public service is out of control, and inefficient. Our traditional industries are in crisis. This includes mining. Oil prices are dropping. Meanwhile we have the absolute worse government in the history of this province, with a daming legacy initiated by the completely insular Williams. Meanwhile the liberals are an alternative in name only. They are awaiting for their own turn at the trough.

    We need a common sense revolution in this province. Starting with
    1) Downsize of the number of MHA's to something more representative (ie 25 or so)
    2) A 10-20% reduction in the size of the public service
    3) Immediate reform of election finance rules
    4) Immediate modernization of government's procurement procedures for consulting, marketing, and other services which rewards the supporters of government.
    5) Modernization of the House of Assembly to have working committees.
    6) A wake up on our health spending in the province, including a curbing of the pure luxery which doctors have in this province. Stop comparing to the US, and start comparing to Europe and other jurisdictions with publically funded health systems. Doctors should not be in the top 5% of earners in society just because they are doctors.
    7) Separation of Nalcor, and the State. Nalcor need to function on their own accord, and they should be listed, so that they have to deliver in accordance with normal expectations of such an industry.
    8) We need to come to the realisation that rural Newfoundland as we knew it is dead. It is not dying... it is dead. We need to plan for the future and stop putting our heads in the sand.
    9) We need to start working with NS, NB and PEI on the marketing of our seafood. We need to have an umbrella brand that markets the real opportunity. This is wild, organic, fresh seafood. We need to consider the other atlantic provinces as an ally, more than a competitor. We need a regional approach to marketing Atlantic Canadian Seafood. We would all be better for it.
    10) We need to review how the hell we could have made this decision to proceed with MF in its current form. It makes no economic sense, and people should be held accountable. We need to start working with Quebec. We have spent billions to teach them a lesson.

    Yet the pundits are focused on an unelected lawyer entering cabinet. Get over it. She is very likely the smartest person around that table. We need more smart people getting into politics to actually start thinking about the real issues we face.

    We have some grown up decisions to make,.

    1. Bill Barry knew what had to be done. The PC party said no way for any number of reasons. Que sera sera.....

  8. I agree with 9 of 10 comments. He is not right on fish marketing. On another point why was brett meade not fired? He had a duty to advise the premier. Of course this assumes Premier was not advised.