TODD STANLEY TELLS MF INQUIRY MORE THAN HE INTENDED?

Former senior bureaucrat Todd Stanley was on the witness stand at the Muskrat Falls Inquiry last Monday, October 22. All witnesses at the Inquiry are interviewed by Commission Counsel, but his interview is noteworthy for several reasons.

Mr. Stanley's constituted the most frank appraisal yet of the relationship that existed between public servants and Nalcor senior executives when approval of the Muskrat Falls development was being whisked through the Government's  approval process.

A 17-year veteran (2001–2018) of the public service, Stanley rose to the position of Deputy Minister of Justice. He also served as Counsel to the Department of Natural Resources in the early days of the Muskrat Falls development.  

An important role of public servants is to assess and analyse public policy initiatives of all kinds, and to give advice to the Government. When an entity like Nalcor is permitted to by-pass normal bureaucratic processes — having been given free access to the Premier's Office — not only is the process of public policy review undermined, but tensions are sure to emerge, and not just because the traditional power structure is threatened.

Stanley's interview is noteworthy for a different reason, however. On the witness stand, under examination, he was challenged by Co-Counsel, Barry Learmonth, for ostensibly having "backtracked" from some of the comments made by him during the same interview. Stanley had offered characterizations of Nalcor that included "fiefdom," "runaway train" and a "classic example of the tail wagging the dog." 

Former Deputy Minister of Justice, Todd Stanley

Whether Stanley actually succeeded in backtracking on his comments is moot. Responding to a visibly upset Learmonth, Stanley ventured that his comments had been too "flowery," that he "would have used less conventional language" had he considered that his remarks would become so public.

Three things are clear. First, Todd Stanley was a senior public servant at the time Muskrat was pursued. He had first-hand knowledge of the issues and the people involved, and interacted with them. Second, Stanley was, during that time, a lawyer and senior public servant — not some middle- or lower-level policy analyst who is often not privy to high-level discussions or the most politically sensitive issues.   

Third, because of his qualifications and experience, Stanley knew (or ought to have known) that an interview given under Oath or Affirmation — to a duly constituted tribunal — is not a place for bar chatter.

By any measure, therefore — notwithstanding the weight the Commissioner may apply to the interview — we have to treat Mr. Stanley's reflections as having been both an accurate and forthright appraisal of his observations.  

Most certainly, they are an insightful commentary on a time when the public service became not just dysfunctional but corrupted, at least insofar as normal review, administrative and oversight processes are concerned. In that respect, alone, the public is given a portal into a process in which basic public policy processes were crushed in the rush to project sanction.

Even more, Stanley's assertions cast a long shadow over whether the Commission of Inquiry will come into possession of the review and analysis which former Premier Williams claimed — under Oath — actually exist. 

Here are some of the key excerpts from Todd Stanley's interview, the full text of which is found HERE. The webcast of his examination before the Inquiry is found HERE for the AM; the afternoon Session is found HERE.  

Now, let's peer into Mr. Stanley's most revealing interview with Commission Co-Counsel. Here are a few of his verbatim remarks:

From pp. 18-19:

MR. STANLEY: So you could have circumstances where Na1cor do - come into government and make a presentation on the eighth floor, go get the instructions and approvals, go back and then they'd call the government departments and tell them what they were doing. And the government departments would find out through Na1cor what had been approved on the eighth floor, and may not necessarily think the eighth floor had all the information in front of them that they should have when they made that decision and not agree with the decision. So the whole issue of how Nalcor's operating versus how government was operating, and the level of control or insight or - that was a constant issue at lower levels of government than I - than like, sort of,the Premier's office. I'm not sure I'm putting that well.

MR. LEARMONTH: And assuming that relationship exists, whereby Nalcor could go straight to the Premier's office-

MR. STANLEY: Hmm.

MR. LEARMONTH: - and have some decision made without the Department of Natural Resources or another department. In that - is that an unusual type of situation, in your experience?

MR. STANLEY: Yeah, we usually - yeah, usually any client department coming through - any

decisions that were being made would receive the benefit of analysis of the people in the departments involved.

MR. LEARMONTH: Hmm.

MR. STANLEY: You know, there were instances where we went over to Hydro, or Nalcor, for a briefing on something as to how the Muskrat project would be structured - this was fairly early days - and they  would tell us it's gonna be A, B or C.

I remember a meeting where we went - and I can't remember what the briefing was, the topic of it - but the instructions were, like, you know: And it's gonna work like this. And the government people were sitting there and were like: Well, who said it's going to work like that? That's, you know, the perceived, at least, concerns about how that would be. And Nalcor's response was, this was approved by the premier. And one of the Natural Resources people who was there said: Oh, that's interesting, I don't remember writing the policy analysis on that.

The comment was facetious. There was no policy analysis on it. Right? It never came through the experts at Natural Resources to say: Okay, here's the wrinkles, here's the hairs on that, here's the problems with it. Nalcor came and got approval from the Premier's office. We're gonna do this; marched off and had their instructions and their approvals. So that was unusual.

From Page 20

MR. LEARMONTH: You said Minister Kennedy didn't have a good relationship with Nalcor, can you give me examples of that -

MR. STANLEY: Well, he-

MR. LEARMONTH: - or your understanding of the reasons for it?

MR. STANLEY: That would presume insights in Minister Kennedy's thinking that I'm not sure I'm gonna put on the record.

MR. LEARMONTH: Okay.

MR. STANLEY: He, I think, viewed them as being, as a number of people in government did as you're getting into 2000 - I can't remember when he was there 2011, '12, I think. You know, they were sort of viewed as being a little bit of a runaway train that we didn't have any control over. You know, so they'd and I need it all done by Tuesday.

And you get these calls and then you'd be looking at it going this is, you know, three months work and massive policy issues, blah, blah, blah. But Nalcor's like I don't - we just need it done. So that personality differences, that kind of stuff, he gave them a hard time or purported to give them a hard time on matters. I don't think he had much of a personal fondness for them or the project and the like.

From page 22:

Mr. Stanley: Like, there was no one whose job was Muskrat. So the assumption that you would have had – that government had a handle on what was going on - would have required government, internally, to have people in place who could question what was being told to them by Nalcor and have access to resources to stress test or analyze or critique.

And my perception was that, though no such resources existed in government, government was actually decreasing resources across the board by doing budget cuts, and that there wasn't much of a political will to do that anyways.

From pp. 23-24

Mr. Stanley: I know that at the officials' level- so you're talking two or three rungs down the ladder in both organizations - there was significant resistance to sending any information over to government about the financial information to how things were going. In part, because of the concern that - I think from Nalcor used to say: Once we give it to government we don't know where it goes. Losing control of their financial information: subject to ATIPP, disclosure, leaks, they - all kinds of stuff.

But it was an antagonistic relationship, as I understand it at the time, between government and Nalcor in terms of trying to establish insight into what Nalcor was doing, at a very granular level, you know, monthly reporting. The - so the information - if, you know, if you were to talk to someone who's involved in the Oversight Committee, the information the Oversight Committee gets now evolved over time. It was not being provided willingly by Nalcor at first instance when they established the committee, as I understand. 

From page 29:

MR. STANLEY: They - that election, you know - that election was on - and talking well outside my brief as lawyer here, but just frankly - that election was gonna be on the Lower Churchill Project. So they were basically locked into the Lower Churchill Project and what the guys at Nalcor were telling them was gonna be the cost estimates and the like.

And they had inherited a project and a team and a corporation and a structure where everybody was told all the time that they were the best people in the world that had ever been tasked to do this stuff, and they all the time that they were the best people in the world that had ever been tasked to do this stuff, and they were world experts and they were gonna do it right and we had every contingency covered, and if you talked to Nalcor, it was nothing but confidence expressed 

From page 30:

MR. STANLEY: Yeah. The political- you know, there was no desire there for - to walk into

somebody's office to say we need a I5-person team here, put over there, to do nothing but question everything that comes from Na1cor, vet it, and the resources, there was no appetite to hear that, let alone, you know, to be the person walking in the office to propose it. And there was no funding. We had no money to do any of that –

From page 32:

Mr. Stanley: That may have been in part, because as I said before, what Nalcor was doing to generate those numbers, for the cost estimates for construction and the like, were largely - as, like I said, it's a black box. Government had no insight - you know, I didn't see any insight by government into what Nalcor was doing. And I don't think government had the expertise to say to Nalcor, send me over everything, I'm going to do an independent cost review. There's nobody in government to dictate that email, right? Nalcor was producing - they were engaging in various processes internally to stress test all this stuff.

They talk about cold eyes review - they had experts, they had outside people - and they were coming up with these cost estimates. And once they came out ofNa1cor, I don't remember there being much questioning of what the cost estimates were.

Final  Comment:

Many people who have followed the journey of the Muskrat Falls project from the time of Danny Williams' announcement at the Fairmont Hotel through to the sanction process and afterwards — and as the wheels came off the bus, so to speak — have long wondered how an ill-equipped public service could have helped pilot the project through the normal channels of review and public policy analysis into Cabinet. They need wonder no more. Based upon Mr. Stanley's dissertation, if anything it was a sham process.

In fact, every time Nalcor needed a political decision to advance the project, the Nalcor CEO had open access and made a bee-line to the Premier's Office. Public servants, by and large, were mere functionaries. They prepared Cabinet Papers and obtained largely predetermined Cabinet Orders. Of course, it is important to note that certain senior officials facilitated this process. Some of them will be heard at the Inquiry in the coming days.

I have not heard a narrative which suggests that any public servant attempted to apply the brakes to the folly, or spoke truth to power.

And we await the reports and analysis which former Premier Danny Williams states — with certainty — were carried out at the senior level of the public service.