Turning down the heat

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At least there’s going to be an impartial investigation.

Thursday, Premier Tom Marshall said he’s asked the province’s auditor general, Terry Paddon, to investigate the circumstances surrounding a highway paving contract that has dominated question period in the House of Assembly all week.

The case is an interesting one: Humber Valley Paving (HVP), which had been run by incoming premier Frank Coleman, went to the government to be released from a Labrador paving contract that it was having trouble completing. HVP got paid for the work it had done, and was released from penalties that the province could have imposed for its failure to finish the work. The decision to release the company’s bonds — insurance that the work would be completed — was made by a provincial cabinet minister after a meeting with Frank Coleman’s son. Both Coleman and his son have since left HVP.

From an ethical point of view, it’s the right thing to do: Transportation Minister Nick McGrath can go on and on about how he did nothing improper in having a one-on-one meeting with Coleman’s son, Gene, but that doesn’t do anything to clear the air.

It’s also the right thing to do from a political point of view: the Tories have been getting hammered in question period over the paperless deal. With the case now before the auditor general, the government has essentially tamped down the debate. If they’re asked questions about the situation now, look for them to smugly say, “The case is under investigation, Mr. Speaker, and we’ll be making no comment until that investigation is complete.”

That’s the double-edged sword of calling for an impartial investigation of a political case. To their credit, so far, the provincial Tories have continued answering the opposition’s questions even after calling in the auditor. There’s also the danger for the opposition that an independent arbiter may come back and say there’s nothing to their new favourite issue.

There are some real problems you can foresee with the auditor general’s review, though.

The main issue? The fact that so much of the case hinges on a recordless discussion between McGrath and Gene Coleman.

McGrath, oddly, has been trumpeting the absence of a paper trail from the beginning of the case. On Monday, he was already stressing that there were “verbal conversations.” When Liberal Andrew Parsons asked on Tuesday, “Despite all the negotiations and discussions between March 13 and March 21, does the minister still stand by his statement yesterday that there was no written documentation whatsoever relating to these discussions?” McGrath answered “Yes, Mr. Speaker.”

The auditor general, then, will have to establish what was said in that meeting from the recollections of the participants, and decide whether what was discussed was improper or unusual.

It certainly appears to be unusual.

Other people who do business with government point out the situation is far from the regular order of business: meeting a cabinet minister to argue your company should be released from its contractual obligations without penalty is not the normal course of action. Normally, the government insists the terms of the contract be met, and there are plenty of companies who suggest they’ve had very different treatment.

Having no political eyes assess the process will be worthwhile; it will be interesting to see which edge of the sword ends up doing the cutting.

Geographic location: Labrador

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  • Maggy Carter
    May 11, 2014 - 16:09

    Your editorial misses a very important point. This decision - one involving some $31 million in total - appears to have been made in the absence of any formal review or written record of the reasons for it. If that proves to be the case, it will at very least prompt harsh criticism from the AG to the effect that government had abrogated its fiduciary responsibility to the public. But for those who might expect the AG to condemn Mr. Coleman's actions or those of the company he controlled, that is simply not in the cards. Providing the AG is acting within the scope of his legislated mandate and not some additional authority granted to him in respect of this review, he must largely confine himself to the actions of government. Any aspersions cast at Mr. Coleman or his company will be indirect. For example, if the AG concluded that government had violated its own rules, it would then be up to the justice system to determine whether there had been any malfeasance or commercial impropriety. In all likelihood this transaction will not be determined to have been criminal in nature (based on everything we know at this point); nevertheless it has the potential to have a profound impact on public confidence in government. Barring any exculpatory evidence to the contrary, the AG might find that public officials had used extremely poor judgement and had ignored normal protocols in what some might regard as a rush to confer a significant financial benefit on one of its own. The AG might well conclude that, given the obvious potential for conflict, a government acting prudently and in the best interests of the taxpayer would insist that there be a paper trail, that the reasons for the settlement and release from surety be well documented, and that ministers base their decision on independent legal advice. Decisions of that magnitude, complexity and potential for controversy are simply not made on the strength of a phone call by a minister who gives anything more than lip service to transparency, accountability and integrity.

  • Fair Play
    May 11, 2014 - 12:08

    The AG should also investigate the terms of sale in HV Paving to see if the share price was contingent on the release of the bond.

  • Taxpayer
    May 10, 2014 - 22:35

    If you check the PPSA, CADO and Registry of Deeds..you can connect a lot of dots concerning Humber Valley Paving...and what about his other bonded job on the west coast of NL that was suppose to be finished last year. Will they be released from that job as well.

  • Cyril Rogers
    May 10, 2014 - 10:36

    Nothing about this matter suggests that it is the normal course of business…. and the lack of any paper trail….if indeed that is the case….suggests a coverup, or total incompetence on the part of the Minister. Yet, we are expected to believe that this is somehow a normal process. The optics are terrible and smacks of political favouritism for a company that was owned, until just prior to this incident, by the incoming Premier. That the current Premier has not asked his Minister to step down is very telling…... and is indicative of the very poor judgement, at a minimum, of the whole administration. Their inability to see the obvious conflict of interest in this affair says much about how they have and will continue to operate.

  • citizen kane
    May 10, 2014 - 04:10

    It is quite simple really. Who had the surety for the massive bonds? Just the company or did Frank Colemen and or Peter Byrne have a personal surety for some of those millions of dollars? If F Colemen had a personal surety for any of that money then clearly his statements that he had no personal gain were wrong and he is entirely not fit for the job of leader of the Province.