ST. JOHN'S, N.L. — Former Nalcor Energy CEO and president Ed Martin says he fully informed the provincial government of his actions as he worked to deal with troubled Muskrat Falls contractor Astaldi Canada, before and after the 2015 election.
At the Muskrat Falls Inquiry Thursday, Martin rejected a lawyer’s assertion that, by 2015, he was sitting down to negotiate with Astaldi, and mistaking his personal authority as he did so.
Martin suggested it was a basic step for him to go to the government before any negotiation, and there was no point in not having some sense of what the government would want to see. He would need the approval of the board of directors and cabinet for a final deal.
He said his general approach to negotiations was also to have the government in the loop along the way, to be sure he was clear on parameters, on what might be acceptable. It would be awkward for him to face rejection and have to go back to the table, losing power in the eyes of whoever was on the other side.
“I was always working extremely hard to make sure I wasn’t caught out on that,” he said.
Lawyer Peter O’Flaherty — representing Premier Dwight Ball and Natural Resources Minister Siobhan Coady — posed a series of questions, setting a scene.
In 2015, he confirmed, Martin was aware Astaldi was running into financial problems in addition to fighting to recover from early project delays. Nalcor had a strong position in terms of its contract with Astaldi, but was in a difficult spot as the company had a lot of work left to do, but limited cash and a troubled parent company.
The view around May and June of 2015 was the growing problem of the commercial dispute with Astaldi could cost the province into the hundreds of millions of dollars, Martin acknowledged, although there were no firm numbers.
Martin said he told the Progressive Conservative government of the concern and advised they not include any amount in a September update to the public related to the Astaldi problem, so as not to show the province’s cards and thinking on a settlement one way or the other.
That’s how they proceeded.
Over the next couple of months, Martin said, the numbers were firming up into ranges, in the hundreds of millions.
The government changed hands in November 2015.
In the inquiry hearing room, O’Flaherty challenged Martin on details of what happened next.
He asked Martin if he provided numbers on paper for the premier on the Astaldi costs, before a meeting on Dec. 20, 2015.
Martin said he hadn’t.
O’Flaherty read Martin back some of his earlier testimony, saying Martin left that meeting believing he had a mandate to negotiate with Astaldi and settlement authority of $500 million.
Martin told O’Flaherty he had nothing in writing, but it was discussed, and any agreement would be brought back to the board and province for approval.
“I put it to you that that’s not what happened at the meeting, Mr. Martin. You had no settlement authority whatsoever,” O’Flaherty said.
“I disagree with that,” Martin replied, not hesitating.
In January 2016, he was told to cease and desist, and not to undertake any further negotiations with Astaldi. The CEO said he took it as a signal the new government had lost confidence in him.
O’Flaherty said Ball wanted an EY representative in the room for anything in future. Martin said he recalled discussion on that, and disagreed with the idea.
“(The premier) specifically told you that he was not comfortable having you and your team alone in the room with Astaldi to fix this contract, correct?” O’Flaherty asked.
“I can’t remember that,” Martin said.
“Well, that’s what he’ll say,” O’Flaherty said. “And he’ll say, Mr. Martin, that that was because he felt to do so, and to proceed in that manner, was not in the best interests of the Government of Newfoundland and Labrador, as you and your team were the ones who had negotiated the same contract that had now failed. Do you remember him telling you that?”
“No,” Martin said.
Martin explained he didn’t want EY at the negotiating table or in the room, in order to maintain a single point of contact and single focus for Astaldi, as they tried to settle the matter.
Martin left Nalcor in April 2016. The “bridge,” “settlement,” and “re-advance” commercial agreements with Astaldi all followed his constructive dismissal and departure.
He continues on the stand Friday.
Twitter: @TeleFitz
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