Relax, your government knows best

Russell
Russell Wangersky
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And now back to a topic rudely interrupted by the fact that a provincial government that touts itself as one of the most open and accountable in the country wouldn’t even talk about what has the potential to be a multi-million-dollar provincial contract for a St. John’s law firm originally started by former premier Danny Williams.

The contract in question is to be the legal representative for the province in the provincial government’s lawsuit against tobacco manufacturers.

First, a bit of history. In 2002,

the then-Liberal government announced it planned to sue tobacco manufacturers to recover the health-care costs related to tobacco use. At the time, the province hired a Missouri firm, and said it would do the work for a 30 per cent contingency fee — in other words, for every $100 the province got from a settlement or a verdict, the law firm would get $30.

So, what kind of money are we looking at? The province of British Columbia, suing over tobacco use in that province, wants $10 billion. A 30 per cent commission, should that suit be successful, would be $3 billion.

Ontario wants $50 billion. You can do the math.

Here, the only number that the provincial government has ever bandied about is something in the area of $1 billion. With a 30 per cent contingency fee arrangement, that would be a healthy $300-million legal bill.

At the time, then-justice minister Kelvin Parsons said the law firm — Humphrey, Farrington and McClain of Independence, Missouri — would pick some legal help in this province: “They, of course, will be engaging some local counsel here themselves and that’s within their ambit to decide upon who they want to be their local counsel,” he said.

Fast-forward nine years or so, and things have changed. The old deal is off, and the new law firm on the case — instead of being picked by Humphrey, Farrington and McClain — has been hand-picked by the provincial government. The province didn’t ask if other firms were interested and didn’t issue any kind of proposal call.

The choice this time is St. John’s firm Roebothan McKay Marshall, which will consult with Humphrey, Farrington and McClain.

The province has said it picked the firm for straightforward reasons: “The provincial government required a lead counsel who had the necessary capacity to handle this large, complex file, as well as a firm that had the experience required.  Roebothan McKay Marshall was retained because of their size as well as their extensive experience with handling complex medical cases and injury claims. … As well, a number of local firms are conflicted as they represent the tobacco industry.”

The new deal has the province also suing for the cost of its legal fees — but it’s hard to establish what kind of ballpark those fees will be in.

Making their pick

How those in government made the decision — and even when it was made — is something the government simply won’t talk about.

Surprisingly, it wasn’t the provincial cabinet.

At least, not officially.

I asked the Department of Justice for a copy of the minute in council that recorded how the St. John’s firm was selected.

The department’s response?

“There is no Order in Council associated with this file.”

A deal potentially worth hundreds of millions of dollars, and cabinet didn’t make the decision?

Here’s the Department of Justice’s response:

“An Order of Council is not legally required for the retention of legal representation. It is in the purview of the attorney general to appoint legal counsel.”

So I narrowed the question

down even more. A deal can be announced any time; signing it is something else. Was it signed last week or last year? I asked simply for the date when Justice Minister Felix Collins signed the contract with Roebothan McKay Marshall.

The answer?

“The details surrounding the contract with counsel, including date of retention, will be made public at the conclusion of the action. The department is not disclosing the specifics of the agreement at this time, as it is part of an ongoing legal matter.”

Interesting.

Maybe this time it isn’t a contingency deal. But if it’s a straightforward contract (especially because it’s for work being done in future years and it’s not in this year’s budget documents) the province’s Financial Administration Act would require that fiscal pre-commitment to be tabled at the next sitting of the House of Assembly, not at the “conclusion of the action.”

If it’s another contingency deal, the Department of Justice might be able to make the argument it doesn’t have to release details because the amount of money hasn’t been set or paid out, even though in practical terms, it amounts to a multi-million-dollar precommitment.

But leave all that aside: why on Earth would a provincial justice minister be making such a huge deal all by himself?

And more to the point — what’s so important about the date the contract was signed that it’s some kind of state secret?

It would be interesting to ask the minister, except that Collins has refused The Telegram’s requests for interviews. His office says he has nothing to say. Since then, of course, he has agreed to a seven-minute, sit-down television interview on the subject with Rogers’ Television’s “Out of the Fog.”

Perhaps the reason for such reticence can be found in a court case over the last court case: the province laid out many details of the last deal publicly, and Imperial Tobacco sued under access to information legislation, and won, to get the dirt on the deal.

The judge’s verdict? “Having decided to go down the road of wrapping itself in the twin flags of fiscal responsibility and transparency with a view to convincing the public of the appropriateness of its actions, it is not unreasonable to assume that the government was essentially saying that its financial arrangements with its lawyers were an ‘open book’ and should be used as a basis for public judgment on its decisions. As such, it cannot pick and choose as to how much it will disclose in its ‘defence.’ Otherwise, it would be tantamount to saying ‘you can’t see all the evidence; just trust us.’”

You can’t see the deal.

Not even the date it was signed.

Just trust us.

Russell Wangersky is The Telegram’s editorial page editor. He can be reached by email at rwanger@thetelegram.com.

Organizations: Department of Justice, Financial Administration, Imperial Tobacco

Geographic location: Independence, Missouri, British Columbia, Ontario

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Recent comments

  • Political Patronage is a scourge and is totally wrong.
    March 04, 2011 - 07:35

    Political Patronage is a scourge and it is totally wrong. When a government captures all jobs under its control and places them in the patronage tool kit to delve out to those of us it favours for one reason or another, then it practising pure corruption. The particular government is preventing the rest of the electorate from applying for that job and in essence it is shafting its electorate. When the ruling party members indulge in this type of corruption, the ordinary person of the electorate who could have all the skill sets and could be much more proficient individual to perform a certain job is then left out in the cold. Spent politicians or bureaucrats should be looked upon no differently than anybody else when they are seeking a position that comes up under government control. They should have to go through the stress of competing for the job with all others in the general community, who are interested and who could prove the most deserving because they could possess the best skill sets for the position. If the electorate were wide awake and more aware of what was going on concerning the scourge of political patronage, they would stop this corruption in its tracks. When we accept 'politicial patronage', we are in essense accepting a form of corruption. Let us, the electorate, stop that process and thus give everyone a chance at getting a good paying job!

  • sarah
    March 03, 2011 - 15:22

    I think this is terrible. This should have gone through a proper tendering process and the people of NL should cry fowl. They should be outraged. Isn't this deal kind of like Ross Perot (billionaire who was interested in politics) in the US sending business back to his own pockets and to his own people and the firm he created. Good god. Not that I have anything against any of the law firms, as many are credible. Just because Danny was a millionaire does not give him or his staff (his new premier now) the right to do this. I hope it is stopped in its tracks. Someone should sue government for doing his. This is a form of corruption as usual, people lining their own pockets when they see an in through the back door, so as not to get caught. Shame on gov. Would you (prov gov) want to go down in the history books like Frank Moores and Brian Mulroney.

  • MHA plausible
    March 02, 2011 - 19:06

    What was it danny said...." This deal is that good! That I'd put my own money into it." I never forgot that and wondered what he meant. I looked at all the figures I could find and figured that I had to agree, since the provine was the only thing with anything on the hook. Like the MOU, maybe they can't talk about it until they can comfirm they will still have their pay cheques after the election. I bet he would.

  • Mark
    March 02, 2011 - 12:59

    Brad - had the PC Party accepted your nomination papers, would you be happy about the exposure of this 'rot' or would you be clamouring to lead it?

  • Mike
    March 01, 2011 - 18:32

    How dare you question the integrity of our Government? How dare you challenge its right to select its own friends to represent us in these complex legal matters? So what if the firm stands to make untold millions and millions. Our government doesn't have to explain itself to you or anyone else. No other government before it did. Quit your whining and sit back and let this happen. Government knows best who to give this type of contract to. What's wrong with you all? Be grateful you still got some of them left. Danny's gone and if you keep looking for dirt why, so will Kathy.

  • Brad Cabana
    February 26, 2011 - 13:13

    Thank-you Russell for the continous exposure of the rot that is this provincial government. The lack of openess in political systems leads to corruption and duplicity. It is the job of a free press to expose and remain a check on power - especially the absolute power that this government wields.

  • Political Patronage must Stop.
    February 26, 2011 - 12:01

    If Political Patronage doesn't end in all political systems in this country, well then how can we call our government system a Democratic one? Governments that practise patronage are no more than Kleptrocracies or Dictatorships. As we know it keeps a province like Newfoundland and Labrador at a severe disadvantage, especially when politicians and bureaucrats from this province are tempted to take on a political patronage by the Federal Government so as to skew matters, which it puts our province at a severe disadvantage. When a Government Member appoints somebody or some entity to perform jobs or take on Contracts that pay out Millions of Taxpayers dollars without going through a meritious process that should be expected of a Democracy, well then that is a CORRUPT Style of Government and we have to demand that it end right now. This type of corrupt business has been on-going for far too long under the radar, long before this particular group of politicians came into power, but now that we have a better insight into what is and was happening, we have to ensure that its stops.

  • Ursula Dowler
    February 26, 2011 - 09:49

    YAHOO Russell , you are on a roll , don't stop now ! This law firm is just doing what law firms do, business as usual . Is it just a coincidence that a former politician and former premier has connections to that firm ? This is directly connected to how and why we elect our governments in this province , the primary flaw is that we believe that politicians are there for our benefit . This is not always the case . Opportunists are in every walk of life , some are compassionate and are able to help others on their climb , still others use the very people they are meant to help , on their way to the top . It is the people who have to use their "smarts" , in recognizing which is which ...

  • gerard
    February 26, 2011 - 09:34

    Trusting them about the mill in GrandFalls ? The score to date according to the Municipal Matters website , is about 127 million dollars of hydro produced savings from not having to burn oil in Holyrood , going into Nalcors coffers. Plus the loss of a grant in lieu of taxes that the Central towns received from Abitibi, but the gov only continued it , at reduced amounts for three years, 2011 being the last, if Abitibi or another company were still opperarating, then the grants would continue. Plus Central's valuable blackspruce fibre is endlessly being given to thepapermill in CBrook , and there is no sight of a forest industry ever returning to Central to replace some of the 700 top paying full time mill jobs that dissappeared as expremier Williams and ministers watched the backs of Abitibi's heads as they strongly encouraged them to close up shop and leave. And the funny thing is, the three local PC mha's in Central , refuse to admit any harm was done to GFW and Central and actually believe they will have no problem being re-elected . talk about not seeing the forest for the trees...or is it just plain ego and taking voters for granted..

  • rant
    February 26, 2011 - 08:16

    Just trust them eh? Well how did that work out for the Mill in Grand Falls?

  • Mike
    February 26, 2011 - 08:14

    While the Tories lack of transparency is disgraceful, the awarding of a contract to a law firm in which the former Premier was a senior partner, smacks of pure political patronage. But political favouritism has a long history in the province - regardless of which party controls the House. When the Liberals were in power, the senior positions of crown corporations were filled by defeated Liberal candidates and other backroom party organizers and lackies. It is true today for the Tories – although the current administration seems to have taken patronage to a new level. But two wrongs don’t make a right. And those self-righteous Liberal hacks who take pleasure in pointing out the flaws of the present government should take a look back in time - and a long look in the mirror.