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Severance paid Ed Martin warranted, AG says

['James McLeod/The Telegram<br />Nalcor CEO\u2008Ed Martin speaks to reporters atop the Muskrat Falls construction site, to announce that the project is now $1.4 billion over budget, and will be delayed from the expected first power in 2017 until some time in 2018.']
['James McLeod/The Telegram<br />Nalcor CEO\u2008Ed Martin speaks to reporters atop the Muskrat Falls construction site, to announce that the project is now $1.4 billion over budget, and will be delayed from the expected first power in 2017 until some time in 2018.']

Auditor General Terry Paddon concluded the departure of CEO Ed Martin from Nalcor Energy was “tantamount to constructive dismissal” because Premier Dwight Ball wouldn’t publicly express confidence in him.

Paddon’s report into the Ed Martin severance affair landed out of the blue Monday afternoon, and its main conclusion was that Martin was entitled to roughly $6.2 million in severance when he left Nalcor last year.

This is despite the fact that both Martin and Premier Dwight Ball claimed publicly at the time that Martin was voluntarily resigning.

Behind the scenes, there were two meetings between Ball and Martin, with Natural Resources Minister Siobhan Coady and then-chief of staff Kelvin Parsons sitting in.

Martin said that either he needed public support from Ball, or else his employment situation was untenable.

“Meeting notes indicate the premier thought the options provided by Mr. Martin put him in an awkward spot and that the point had been reached of not having Ed Martin stay around,” Paddon wrote in his report.

“By the end of the (second) meeting, both the premier and Mr. Martin understood that Mr. Martin’s employment had come to an end.”

But the two men had different understandings of what that meant.

“Mr. Martin considered that the decision for him to leave his employment was made by the premier and the premier considered that the decision for Mr. Martin to leave his employment was made by Mr. Martin,” Paddon wrote.

This is critical, because the circumstances of Martin’s departure dictated whether Martin would get severance.

Paddon’s judgement was that, ultimately, the government undermining Martin as CEO of Nalcor, critical language directed at Martin in the 2016 budget speech, and a refusal by Ball to publicly support Martin all added up to constructive dismissal.

In a formal statement responding to the report, Ball thanked Paddon for his work, and noted that the decision to award severance ultimately rested with the Nalcor board.

“The Auditor General has determined that government did not direct Nalcor’s Board of Directors regarding the contract of Ed Martin. The contractual obligations owed to the former CEO were negotiated and signed under the former administration,” Ball said “The Auditor General has now concluded that the severance payments provided by Nalcor Energy were appropriate under that contract.”

jmcleod@thetelegram.com

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