The Uncle Gnarley Blog has a new website. Click here to visit to view the latest posts!

Monday 19 December 2016


The appointment of Stan Marshall as CEO has not diminished the culture of secrecy at Nalcor. It was born under former CEO Ed Martin and current V-P Gilbert Bennett and is entrenched in a number of insidious ways, each of which ought to be exposed. The more prescient examples are ones that receive the greatest attention – this post describes one more. Still, no one should think they are outcrops of randomness even if discussion of the larger problem awaits.

What should be clear to all, however, is this: if Stan Marshall has brought change to Nalcor’s governance practices they elude the most ardent observers.

Likely, Marshall is more preoccupied with deciding on which knee the CEO of Hydro Quebec will sit - as he come to grips with the reality that a “bad” and a “necessary” deal are one and the same.  

That, too, is an important subject especially given the negotiations underway with la belle province. Marshall likely intends to “excise” the Muskrat Falls project – remove - cut it out -from the “Liberal” narrative; Ball not having had the good sense – let alone the instinct – to keep it grafted onto the Tories’ hide.

CEO Stan Marshall
Worrisome, to be sure, is the price Hydro Quebec will extract for this convenience. But the endemic deception is a guarantee that when the “deal” is done the “perpetrators” – that's the right word - of the Muskrat Falls project will be excused from responsibility and exposure.

Likely – unless the public demands a full judicial inquiry into why the project was contrived using false assumptions and false DG-2 estimates - issues which preceded bungling by inexperienced project management – it will be buried in a labyrinthine legal construct. The deal is likely to include, apart from Muskrat and Gull Island, some of this province’s rights to the Upper Churchill. 

The agreement will be written by Hydro Quebec lawyers, too – the thunderous jeering directed at Nalcor’s overpriced beagles by the Justices of the Quebec Superior Court - having barely died down.

There is much to be buried – and it will be buried – because so many people are complicit.

The latest emblem of a failed project – one that V-P Gil Bennett had hoped to give subterranean treatment - is the leaky cofferdam.

Long dubbed “the cable guy” few could comprehend, at the start, his suitability to manage a megaproject. But as if to confirm that he prefers making omelets without breaking eggs Stan Marshall kept him around. 

Nalcor V-P Gilbert Bennett
The temporary cofferdam is a very basic civil works job. When you can’t get even that right, when your quality control regime will allow kilometers of faulty transmission line to be shipped and strung, when most everyone, except Gil Bennett, acknowledges the presence of quick clay at the North Spur – there is little to claim, except cover-up.  

I can still hear Ed Martin’s exhortations of the “hundred year project” as a giddy media drank in the spin master’s braggadocio. Now, it is difficult to imagine Muskrat will ever get a chance to age given the multiplicity of problems – including frazil ice - that cause further delays.

None of this has subdued the Nalcor PR machine, however. Again, they are in high gear, getting ready to exhort new beginnings, and to give caution to bloggers using expressions uncomplimentary - like “avaricious” – as Hydro Quebec offers to hide bad judgement, waste, extravagance, and incompetence in return for a “deal” expected to masquerade as “burying the hatchet”.

Of course, the perfect way to bury a ‘crime’ is to change the narrative of Muskrat Falls. Revise history. Excise and expunge the “boondoggle”. Bury it deep enough to make it appear it had never existed. All the better if the cost of the waste and incompetence are deferred to the next couple of generations.

Recently, David Vardy learned the extent to which Nalcor will go to keep their “boutiller” (screw-up) buried. The former public servant whose tenure included Clerk of the Executive Council, President of the Marine Institute, Chair of the Public Utilities Board, and critic of the Muskrat Falls project - set out to have the November 2, 2016 Report of the Independent Engineer  laid bare.   

Vardy’s story is disconcerting, as are so many others. Fortunately, it is supported by written correspondence – not the easily denied verbal kind – thanks to the Access to Information and the Protection of Privacy Act.

This is how the exhumation went down.

David Vardy wrote Nalcor on October 5, 2016 stating:   

On November 2, 2016 Nalcor responded to Vardy:

Nalcor dithered for almost a month before informing Vardy it did not wish to release the Report.

Then what?

1.   A Nalcor staffer called Vardy to inquire if he would agree to withdraw his ATIPPA request…now that his Application was rejected. Vardy refused. Certain that Nalcor lacked the authority to withhold the Report, the former Cabinet Clerk planned to appeal the decision to the Information and Privacy Commissioner - which he did.

2.    Nalcor invoked section 29(1)(b) of the Act as the basis for withholding the document – the particular section is reproduced as follows:

Nalcor had claimed that the Report constituted a “formal research report” or an “audit report” when, in fact, it was neither. In his letter to the Information and Privacy Commissioner Vardy suggested it was merely a report – no more no less - to which the lenders and the federal government, as “guarantor” of the Federal Loan Guarantee, were entitled under part 4.9 of the “Term Sheet”. That document describes the obligations of the province to those parties. The following snippet confirms Vardy’s contention:

Note the last sentence of this part 4.9” “The Borrowers (Nalcor) ….shall have no contractual or other relationship with the IE other than ….to pay the fees of the IE”.

Yet, Nalcor was claiming not just that the IE Report constituted a “research” or “audit” report for them, but implicitly that they were “the head of the public body” claiming ownership of the Report. Only proof of such a status would have entitled them to declare the Report “incomplete” which, in turn, would have entitled them to make an “order for completion”. On any other basis Nalcor could not refuse Vardy’s request.

The absurdity – and the dishonesty – is that the Federal Government, not Nalcor, appointed the IE (MWH Global Inc).  The terms of the loan guarantee explicitly demand that Nalcor conduct an arms-length relationship with the IE – except to pay the company’s fees.

It is noteworthy that during the time Vardy was corresponding with Nalcor and the Information and Privacy Commissioner, he was also corresponding with the Minister of Natural Resources on a tangential matter, namely the acquisition of MWH Global by Stantec, a major contractor with Nalcor. Part of Sioban Coady’s reply to Vardy is reproduced below. Says the Minister:

In her response to Vardy, Minister Coady also indicated: “Nalcor Energy and the Government of Canada are making arrangements to address the issue to ensure the continued independence of the IE.”

Vardy later noted for this post that he found Nalcor’s involvement in resolving this conflict was in itself indicative of the unusual control which Nalcor appears to have over the IE, including a role in finding a successor to MWH Global.

David Vardy
In any event, had Vardy not persisted and informed Nalcor of his intention to appeal their decision to the Information and Privacy Commissioner, the IE’s Report could have been delayed until December 23, 2016. Vardy would have had to re-apply under the rules of ATIPPA – and wait a second time.

What happened next?

Vardy explained that on December 3rd, 2016 he was “rummaging” through documents posted on Nalcor’s web site and “came across” the November Report of the Independent Engineer – the one Nalcor would not give him – the very one under appeal to the Information and Privacy Commissioner.

Nalcor had refused Vardy even the courtesy of an email advising him that they had relented and released the document. A less petulant V-P Gil Bennett might also have sent him a copy of the Report as an attachment.

The IE’s Report wasn’t all that Vardy found. Posted, too, and dated December 2, 2016 (likely the very same day the Report was released) was a letter addressed to the (fake) oversight committee. It seems, having failed to get the IE to change its Report to reflect Nalcor’s view, the V-P took the peculiar step of writing to that committee instead.

Bennett stated he was providing “some additional context…in relation to some comments made by the IE in the November 2, 2016 report”.  Since the oversight group relies totally on Nalcor and conducts no investigations of its own – the letter is the equivalent of Gilbert Bennett talking to his mirror.

Bennett’s letter notes the Tube # 2 falsework failure (the cribbing which collapsed immersing a group of workers in concrete) on which the IE had commented critically. He states that the input of the IE was that of an “observer”.

It is ironic that when it is convenient Nalcor describes the role of the IE as that of an auditor but at other times they are simply “observers”. Granted there were insurance issues at stake in the comments on the falsework failure. But it makes using grounds - clearly in violation of access to information legislation - for withholding the report from disclosure appear very contrived.

Bennett’s defensiveness is surely a warning Quebec Hydro is sniffing out his grand bousiller (big screw-up).

Stan Marshall and Dwight Ball just want Muskrat off their plate. They want it over - whatever the cost.

The secrets kept hidden won’t bother them when Gilbert Bennett’s mirror answers him - en francais.