Natural Resources Minister Responds Day

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Friday, December 16, 2016

December 16, 2016


For Immediate Release


Natural Resources Minister Responds Day After House Closes about Conflict of Interest Review of Nalcor CEO Contract; Questions Not Answered


Keith Hutchings, Natural Resources Critic for the Official Opposition, is bewildered that Natural Resources Minister Siobhan Coady waited until December 14, the day after the House adjourned to send a letter on behalf of the Premier, responding to a September 20 request to have a Conflict of Interest Advisory Committee review the Nalcor CEO's contract.


"Unfortunately, Minister Coady's letter leaves important questions unanswered. However, because she waited until the House closed to send her response, I won't have the opportunity to question her in the legislature about what's missing," said Hutchings.


"The letter is unclear as to whether the Conflict of Interest Advisory Committee actually reviewed the CEO's shares in Fortis, or why the contract was changed so dramatically compared to the prior CEO's contract.


"What the Minister's letter does not answer is whether the Conflict of Interest Advisory Committee investigated whether the CEO's shares in Fortis place him in a conflict of interest, or why the CEO's contract changed between June and August to add an unprecedented provision to allow him to hold shares in a company such as Fortis," said Hutchings.


"The letter suggests that the Minister spoke with the committee chair about the shares; the chair did express concerns; and the matter was even referred to the Justice Department for legal advice. There is no indication that the entire committee reviewed the contract. We do not know the extent of the committee chair's review, the concerns about the shares or the recommendations, nor do we know what Justice advised after their own analysis," he said.


"It does appear that others shared our concerns that there is a potential conflict of interest as of today - not even considering future operations.


"The current CEO was appointed on April 21, and signed a contract on August 9, but received a letter from the Minister on November 10 advising that he, in the opinion of Minister, was not in conflict. Should this assessment not have been completed prior to starting the position and prior to signing a contract? Why would a candidate have to ask if he is in conflict? Would not the due diligence, full disclosure, and other requirements under the Conflict of Interest Act require any assessment to be completed for a contractual arrangement to be sanctioned? In this case, almost six months elapsed before there was a commentary from the Minister on conflict of interest.


"The Minister has a responsibility to release the documentation - including producing a report of the Conflict of Interest Advisory Committee's review, a process cited by the Auditor General, that had to be completed, and the Justice Department's legal analysis - so people can see for themselves whether there is a problem,” said Hutchings.


"It is not a small condition when the CEO of Nalcor will be required to remove himself from any meeting or dealings that have anything to do with Fortis, a major North American electricity distributor and the parent of Newfoundland Power, a key business partner of Newfoundland and Labrador Hydro. ‎Is it even reasonable to think that the CEO could be left out of the loop on any Nalcor dealings with Fortis? And if not, then what are the implications in terms of conflict of interest? All of his subordinates will certainly know of his interests in Fortis, so it is difficult to imagine they could make decisions without that knowledge weighing on their minds. What future business dealings might Nalcor consider having with Fortis entities across North America, in addition to the ones they already have?


"People need answers. The Minister's and Premier's reluctance to provide them in question period, in a private member's resolution debate and in written response, raises concerns that something is being hidden. It's time to bring everything out into the open. If there truly is no issue of conflict, as the Minister claims, then surely there is nothing for her to hide. Once the people see the documents, they can be the judges of that," added Hutchings.


Attachments: [broken links]


Minister's letter to Nalcor CEO November 10, 2016:


Minister's letter to Hutchings dated December 12, emailed December 14, 2016:




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