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Monday 4 July 2016


Some people need to be hoisted on their own petard.

Individuals who are paid from the public purse, and who use a public platform from which they derive credibility, should be held to account when they use poor judgement by choosing to favour political interests over the public interest.

A society looks to all leadership, especially those who occupy important positions in our institutions. Memorial University’s Wade Locke is one such example. Such people are often given the privilege to counsel the highest leadership, and to influence public policy.

Others, like the Consumer Advocate, hold an official Office.

Such an appointee is thought to speak for the public at the exclusion of all other interests. The presumption is that he will keep his distance from those who would influence him for a less than honourable purpose.  

It is true that the explosion of “consultancy” roles in government and its agencies, especially during the recent years of free spending, has given rise to a new kind of “boondoggle”. Yet the proliferation of paid “advisors” does not justify the lowering of professional standards nor condone any less than the highest levels of integrity in those performing such roles.

To err, as the saying goes, is human. But real professionals who make mistakes of judgement, potentially harming the public interest thereby — whether due to their underestimation of the capriciousness of their political benefactors, poor research, or having put their pay packets first — will acknowledge their error and express contrition.  

That is what the Head of the Department of Economics at Memorial, Dr. Wade Locke, and the Consumer Advocate, Tom Johnson, ought to have contemplated in advance of their respective PR outbursts last week.

But the pair offered neither regret nor anything close to the unveiling of a Damascene moment. Indeed, their expostulations seem to have had an opposite intent.

I suppose had either of them offered to repay unmerited fees they were paid, in an effort to help offset the economic and human cost of $11.4 billion and 21.4 cents per kWh power, the offer might have earned  them advancement in a plan of social rehabilitation. But, alas, their mission contained no restorative component. In the way of inflated egos, their media relations exposed merely a search for justification, not an offer of contrition or recompense, and certainly not to forge any bond containing forgiveness.

The Telegram reported last week Locke stating the Muskrat Falls’ “sanctioning decision in 2012 was made with the best information available at the time, and just because it turns out that things have gone very badly doesn’t mean it was the wrong decision, based on what was known back then.”

The best information available to whom? To Nalcor?

Didn’t Locke essentially parrot Nalcor’s data at the time? Even then, did he not forget to include the cost of the transmission line, leaving it to Nalcor to correct his flawed analysis a couple of days later? Did he not fail to reveal that his conclusions might be coloured, directly or indirectly, he having been in the pay of Nalcor and the Provincial Department of Finance at various times?

Besides, didn’t Stan Marshall say recently that the project’s “capital cost estimates were really aggressive and optimistic”; that “false assumptions” were employed, that the project was held up by “false underpinnings”? Did he not say “there were clearly more affordable options”?

Such conclusions were not those of the “naysayer” or the partisan but of the Head of the Crown Corporation responsible. Weren’t they the obverse of the conclusions which Locke took to Memorial’s Inco Centre and other platforms?

Even in the world of economics, a field given credibility not by “cheerleaders” but by serious practitioners of the discipline, it is tough find any grey between “boondoggle” and the “analysis” which Locke asserts. How can such a term ever be validated with the claim that it was the “best information at the time”?

One is forced to ask: why is Locke not lamenting that he was duped by Nalcor officials? Because he agreed with their assumptions in whatever manner they were contrived?

Where is the admission that his research (if he conducted any) was poor, or that he may have been irrationally exuberant, having failed to employ the academic rigour of a freshman — let alone that demanded by the serious practitioner of his discipline?  

Of Muskrat’s current $11.4 billion price tag, Locke told the Telegram: “I mean, had we known these numbers at the start, we probably wouldn’t be saying that was a viable project.”

This from the Head of Memorial’s Economics Department!

When do we ever have “all the numbers” at the start of anything, especially on a large and complicated project? Why do we employ economists, and specialists from other disciplines, if not to spot what Stan Marshall characterizes as “false assumptions”?

No economist can forecast the misjudgements made by an inexperienced management team. But his analysis was used to garner public approval (Wangersky’s Saturday column reminded us of Premier Dunderdale invoking Locke’s analysis) and to defeat cries for independent review. It was a role that a willing Locke played with enthusiasm.

Bear in mind that this is the same economist who continued to counsel the short-term cyclicality of oil prices and continued strength in iron ore prices, too, though his expertise in these areas always seemed to lag his seemingly effortless and timely support of the Government’s projects including for Alderon.

Perhaps I am overstating the demands on the profession. Perhaps the Department Head simply believes that economists make better cheerleaders — though I am quite certain his colleague, Dr. Jim Feehan, would vehemently disagree.

Indeed, Locke could have taken instruction had he simply trotted down the hall and consulted with Feehan. The latter had written solid academic papers arguing how changes in electricity pricing, conservation measures, and regulation could help resolve the power demand peaking problem, which doubles in February as compared with August.

Feehan also maintained a detached — (un)conflicted view — possibly believing that plum consulting jobs with an outfit seeking favourable reviews was not worth the risk on a project he termed “risky from the very beginning”.   

Then there is Tom Johnson, the Consumer Advocate.

Johnson has frequently come in for rebuke on this Blog. He is a truly tiresome subject, his behaviour equally as transparent as his motivation. Johnson is of a type that reminds us that even virtual ink eschews ennui. Hence he long ago merited the summary conviction entitled, dismissively, "The Lap Cat Has No Claws". So, I will keep this segment short.

After all that has been said about the Muskrat Falls project — the threat of $11.4 billion capital cost (and counting), the financial and economic costs of 21.4 cents per kWh power, the threat to growth and jobs, the quite public failures of Nalcor, even the possibly that the PUB will demand the restoration of Holyrood to protect the Island’s economy and society from catastrophic Transmission Line failure — you could still hear Johnson on several media this week, ignoring all those grim realities.

The Consumer Advocate assumes everyone has forgotten that at Nalcor’s early price of $6.2 billion, even then Nalcor concocted a “Power Purchase Agreement” that attempted to avoid “sticker shock” during the early years of commissioning. The public aren’t supposed to know “picky” details such as the one that commits a future generation to a payment on just the powerhouse of $1.2 billion, in year 50 of the financing period. What is it, now that the project is nearly double the cost?   

Johnson nailed his colours to the Tory mast early, even getting ahead of Manitoba Hydro International in the race for top cheerleader of the Muskrat Falls project.    

Ignoring the travesty that has unfolded since, Johnson is confident that the price will come down, presumably because the difference will be picked up by taxpayers. After all these years, he has never figured out that taxpayers and ratepayers are not a different species.

Johnson comforts the public with the argument of “green power,” unmindful of either the impact of methylmercury or of the threat from an unstable North Spur. He invokes the final claim of former Nalcor CEO Ed Martin — when every other failed — that Muskrat would still be producing power a hundred years from now.

His specious renderings are repulsive not least because financing anything over a period of 50 years makes no economic sense. Emera, as a shareholder in the Labrador Island TL, insisted that it should be financed over 35 years. Like Emera, anyone who owns a house knows that maintenance-free is a myth. The capital needs to be paid in the early years because the asset will continue to incur significant and costly maintenance.    

But the Consumer Advocate, perhaps like Wade Locke, has an agenda that is less about advocacy or public information. For him, the latest PR gambit is about the avoidance of public recrimination and an attempt to justify, perhaps on Danny Williams’ behalf as much as on his own, a decision whose false underpinnings have been exposed. 

His term of his appointment as Consumer Advocate will expire soon. Perhaps he thinks that Premier Ball will be foolish enough to re-appoint him. Perhaps Ball is.

I am not fond of those who accept payment for services poorly delivered. As an Advocate, Johnson was supposed to have spoken truth to power. Instead, he was happy just to be a booster of expensively crazy ideas. Johnson liked being a friend.

Are Locke and Johnson due a public flogging (metaphorically speaking, of course) for the role they played as purveyors of a “boondoggle”? Isn’t there a time when the advisors, boosters, and shills should enjoy ignominy — a minimum cost to be sure, but a good start for the exercise of their poor judgement?  Were they not part of the “team” that has helped impoverish an ordinarily decent, albeit a frequently passive, society?

Must the public endure their mutterings still, as if they were relevant? Must we let them prove that we have earned the less-than-noble attribute manifest in the phrase “silence of the lambs”?

We can best deal with Wade Locke by ignoring him ever mindful, if he pops his head up again, we should inquire as to his conflicts knowing it is likely not the public that is being served.

But the Consumer Advocate is a different matter. If the Premier re-appoints him, we can assume that there will be no early cure to the rot in our public institutions.

Both deserve a public flogging.

They should count themselves lucky if they get off so lightly.