Monday, 1 July 2019


Listening to Brendan Paddick, cable guru and Nalcor Board Chair, testifying at the Muskrat Falls Inquiry two weeks ago, constituted one of those “pinch me” moments when people esteemed for their successes, broad range of business and life experience, simply disappoint. 

That is not to dismiss or diminish Mr. Paddick’s accomplishments. Indeed, he may well be an inspiration to entrepreneurs seeking to discover the dimensions of their business acumen. And, it is right to acknowledge his and the Board Member's pro bono service which, while poor public policy, especially on heavily demanding Boards, still carries the obligation of their best work. 

We live in in a post-megaproject era, a time when a fiscally-challenged NL society reluctantly comes to grips with the trepidation of financial insecurity. The Crown Corporation of which Mr. Paddick is Chair has played an integral role in fomenting that condition, a fact not fully quantified at this stage and, for that reason, not the full spectre of mitigation costs either.
Nalcor Board Chair, Brendan Paddick

In addition, Mr. Paddick’s arrival before the Commissioner occurs not at the start but very nearly the end of nine months of gripping and often disturbing testimony. The Commission has heard evidence of how the Nalcor Board and the Government were kept ignorant of cost overruns, including during project sanction and “Financial Close” when it was possible to re-think the scheme.

It has heard testimony of interference in independent reviews and analysis — all of which have been held out as benchmarks of approval by Nalcor and by an intellectually-impoverished government (equally as deceptive in its disclosures) — when they ought to have been judged a debasement of both ethical and best practices.

And, most fundamentally, we have heard of a thoroughly concocted business case, godawful management decisions including the composition of the project management team, the choice of contractors, secrecy under the aegis of “commercial sensitivity” and a self-aggrandizing leadership willing to be reckless.

That testimony is not related to some third-world despotic regime but to the body corporate Brendan Paddick now serves.

Also related:
What would you lose losing Nalcor? (Part I)
Why we should dismantle Nalcor (Part II)

Those indisputable facts — often repeated — ought to have influenced Paddick’s appraisal of all matters Nalcor and, hence, his narrative on the Witness Stand .

If the role of Chair is merely an opportunity for ego to compete with nonsense, then his suggestion of Nalcor as a ‘downtrodden organization’ that should be returned, ostensibly, to its former unearned glory makes as much sense as does his suggestion that “everyone put the jersey on.” The troubling part is that that very idea requires the acceptance and support of a corruptible paradigm in which less-than-admirable ethics and mind-numbingly stupid business practices are not just condoned but applauded.

In addition — and Mr. Paddick seems to forget this most obvious fact — even when fans “put the jersey on” and engage in the testosterone-driven hoopla of fraternities, whether in the Raptors’ boardroom or in other such corporations (public and private) — the noise of fandom is banished to the exigencies of the balance sheet, to oversight, to best practices and, of course, to the future if, in the case of a publicly-owned Corporation like Nalcor, the Government warrants it such a destiny.

In any such context, however, the Chair is not expected to be a cheerleader. They are a mentor — to the Board Members and to the CEO — providing leadership that is weighed with wisdom, reflection, and guidance. The Chair will, when asked, provide advice to the Government, too, preferably the kind laden with experience, focussed within a public policy framework, and with the knowledge that that their election to high office confers on those politicians far more responsibility than it does wisdom. The public, by and large, expects no less.

“If it gets to the point where a transport truck blows over in Wreckhouse and that’s Nalcor’s fault, or it’s raining on May 24th weekend, that’s Nalcor’s fault, and nobody wants Nalcor to succeed for whatever reason… guess what? It’s not going to succeed,” Mr. Paddick told Commissioner Richard LeBlanc in what must have seemed a huge distortion of the public distrust of Nalcor and a cringeworthy moment for him.

Indeed, for anyone — especially the Chair of the Nalcor Board — to suggest that Nalcor’s woes are the product of simple-minded or negative thoughts exposes a shallowness of comprehension best characterized as subterranean in its judiciousness.

In particular, Paddick’s assertion of the requirement for Nalcor’s success is that everyone has to want it to work, speaks to a fundamental misunderstanding of how wealth is created — including the essential requirement of accountability for other people’s money, and prudent behaviours that invite oversight rather than repudiate it, as Nalcor has done. Besides, so far, Nalcor has created nothing, unless we include the Muskrat debacle.

Though Nalcor reports annual earnings, every asset it holds has either been transferred from another government-owned entity or government has given it taxpayers’ money (equity) for the purpose. In short, Nalcor has performed more poorly what could have been performed by a Government Department. It has engaged in capital destruction on a massive scale, which will manifest when responsible auditors transfer to the “Net Debt” of the province much of the amount currently classified as “self-supporting”.

At the Inquiry, Mr. Paddick spoke of “image” studies being undertaken by Nalcor’s communications team and of “changing the narrative, when the time was right.” Those comments are as unfortunate as they are sad. The very idea that the image and reputation of a Crown Corporation whose management decisions have devastated the public Treasury can be remediated with a new logo — and possibly a new jersey — isn’t funny, though I don’t think it was meant to be. It does, however, reflect a misunderstanding of why Nalcor employees are dispirited, along with everyone else.

Again, this is a crossroads time in Newfoundland and Labrador. Because of Nalcor’s failure to consider essential risk/reward consequences in the mandate it was given, every member of the public will be need to be a policy wonk soon, all of the choices unpalatable.  

It’s too bad that someone of Paddick’s experience is not engaged in helping make that public policy road easier. Playing Chair — rather than cheerleader — would have been a better place for him to begin.