Questions on Nalcor CEO Employment

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Thursday, February 16, 2017

February 16, 2017


For Immediate Release




Questions on Nalcor CEO Employment Contract: Questions Continue




Keith Hutchings, Natural Resources Critic for the Official Opposition advises, "The Auditor General advised in a letter dated January 23, 2017 – in response to my December 19 request for a review of the employment contract of the Nalcor CEO – that: ‘The Office of the Auditor General has currently set its work plan for the period to September 30, 2017. In the summer of 2017, we will commence planning for our fall/winter schedule. We will give careful consideration to the information contained in your letter as we develop our work plan.’




On August 23, Hutchings initially wrote the Auditor General to request a review. On August 31, the Auditor General responded: “The Conflict of Interest Act, 1995 provides guidance around issues of conflict of interest and sets out processes for determining and reporting on potential conflicts and administrative processes. Section 14 of the Act requires that the Lieutenant-Governor in Council appoint a Conflict of Interest Advisory Committee. Among other duties, the Committee shall ‘advise a head of an agency or deputy minister as to whether a public office holder is in a conflict of interest’. In my view, seeking the views of this Committee would be the most appropriate first course of action to take to determine if there has been a contravention of the Act or if the appropriate processes around potential conflict of interest have been followed."




In September, Hutchings wrote the Premier, asking that the Committee be appointed to review the new CEO’s contract in relation to the former CEO’s contract to see if the new contract is appropriate. The Premier ignored the request as per direction from the Auditor General for 3 months. “The Natural Resources Minister replied on behalf of the Premier the day after the House closed on December 14, but again clarity and why shares held in various corporations that interact with Nalcor could not represent a possible conflict for current Nalco CEO remain unanswered,” said Hutchings.




Hutchings said “In the fall sitting of the House of Assembly, the Official Opposition asked for clarity and justification on changes made to the contract of the current Nalcor CEO from the Premier, the Minister of Finance, and the Minister of Natural Resources. We raised numerous questions which remain unanswered on how the Conflict of Interests Act was being met and adhered to as is required. Quite simple; the Premier has a responsibility to tell the people why the Liberal Government believes there is no conflict of interest, actual or perceived.”




On December 7, Hutchings brought a private member’s resolution to the House asking for an open and transparent review. The resolution stated: “BE IT RESOLVED that the House of Assembly urges government to request the Conflict of Interest Advisory Committee pursuant to section 14 of the Conflict of Interest Act, 1995 to review the terms of employment contract of the Chief Executive Officer of Nalcor Energy and Newfoundland and Labrador Hydro and determine the appropriateness of the employment contract; and BE IT FURTHER RESOLVED that this House urges the Lieutenant Governor in Council to ensure the Conflict of Interest Advisory Committee's report on this review be made public.”




The sitting Liberal Government, cabinet and caucus voted against this motion. They blocked the review and voted not to release any information that could justify the acceptance of their decision. The members of the NDP and the Independent Member voted with the Official Opposition for the Motion and that a review occur and the review be made public.




Hutchings said, “I reached out to the Rogers School of Management at Ryerson University, which is well recognized in the fields of ethics and assessing conflict of interest, and was advised that the circumstances described do cause concern, do have the possible appearance of conflict of interest, and should be independently reviewed.”




"Unlike the previous CEO of Nalcor, whose contract expressly forbid him from having interests in a company or his immediate family such as Fortis, the new CEO's contract – which apparently was revised months after he was hired – permits him to have substantial financial interests in Fortis and possible other corporate entities that may have business interactions with Nalcor, even though those interests may conflict with obligations as Nalcor's CEO and decision making processes.”




"The optics are absolutely terrible. Nalcor is responsible for overseeing and negotiating electricity agreements, not just throughout the province, but across eastern North America, in the very areas served by Fortis and its subsidiaries, such as Newfoundland Power, Maritime Electric, FortisOntario and utilities in the United States. The general principal of Conflict of Interest guidelines is that no one is put in a position of authority or decision making that can result in any material financial benefit or materially suffer from the decisions of the Crown corporation he/ she now runs because of substantial continuing interests in Fortis, or other corporate entities where shares are held. The ability to make decisions cannot and should not result in the ability to impact value of shares in another corporate entity."




Hutchings asked, "When and how and on whose direction was the contract for the Nalcor CEO altered to create a possible conflict of interest? How can we be assured that the best interests of Newfoundlanders and Labradorians are protected?




"I wrote to the Auditor General requesting a thorough, independent‎, impartial investigation of this matter. However, the Auditor General has responded by saying that the earliest his office can even consider whether to conduct such an investigation is the summer of 2017, and even if he were to agree to proceed, an investigation would have to start even later than that. The Ball's Government ignoring of a means to address this through the Conflict of Interest Act and an advisory council is even more disturbing. The question is why?"




"Who is looking out for the best interests of Newfoundlanders and Labradorians in the meantime? Every month that passes is a month when Nalcor is making decisions that significantly affect Newfoundlanders and Labradorians. Are there discussions with Hydro-Quebec? With Fortis? With Fortis entities such as Maritime Electric? With others? We need to know that the people's best interests are paramount in all of those decisions and not compromised in any way,” said Hutchings.




"We need an independent, impartial body to look into this matter, to see what happened and whether it was appropriate, and to tell us if and how we may be vulnerable. The Ball government has repeatedly refused to commission such an investigation. Indeed, there are unanswered questions about the involvement of the Premier, the Minister and others in the transition at the helm of Nalcor. People still do not know what transpired,” added Hutchings.








Media Contact: Heather MacLean, Director of Operations and Communications, Office of the Official Opposition (709) 729 6105,


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