Spring Investigation Brings Fall Resignation: Minister of Transportation and Works Resigns in Light of Auditor General Report

Minister of Transportation and Works resigns in light of Auditor General report

 

 

You could call it a stink.

The public outcry and scathing comments made back in the spring about a certain situation between a company connected to the next premier (of that moment), and a minister in a government he was set to lead.

The company in question is Humber Valley Paving (HVP); the former premier-designate one Corner Brook businessman Frank Coleman, tangled up with the department of Transportation and Works and Minister Nick McGrath.

Former minister, as of September 29th.

That’s when Newfoundland and Labrador’s Auditor-General, Terry Paddon, released his report on the cancellation of HVP’s contract with the government to pave roughly 80 km of the Trans-Labrador Highway. And the A-G’s findings – of an unusually fast and inappropriately documented cancellation – prompted McGrath to resign from his post. Premier Paul Davis said he would have asked McGrath to resign anyway, given the contents of the report.

So what was all the fuss about?

HVP asked to be released from the contract without completing the work, citing unforeseen expenses and delays. The request was made the day before nominations closed for leadership of the PCs. And the Department of Transportation and Works, under Nick McGrath, quickly granted that request without penalty.

That is, HVP was not asked – or required – to pay the government a dime, up to the $20 million in bonds put on the contract. Bonds are perhaps best understood as a form of insurance to protect the government (read taxpayers) against the extra costs of getting the work completed.

Frank Coleman – who, when this was all coming out back in April, was sole contender for leadership of the PC party and therefore the next premier – was personally liable on a portion of those bonds. Coleman’s son Gene took over from him as head of HVP just days before the company asked the government to cancel the contract in March. Apparently the company was sold shortly thereafter.

Coleman ended up stepping down as premier-designate just before the scheduled convention in July, when he was to be officially made premier.

Tom Marshall was premier at the time (yeah, our government has been in a state of flux lately) so in May he called for an Auditor-General investigation into the whole shebang – to determine what exactly happened and whether or not it was as untoward as the opposition and some members of the public seemed to think.

Auditor-General Paddon’s report states five objectives for the review, including finding out “if there was any evidence of undue influence in the evaluation or timing of the decision to cancel the contract.”

The A-G’s office found some aspects of the contract perfectly above board. And some less so, including a lack of “consistency and transparency” in bi-weekly progress payments to HVP,  “which could have provided an unfair advantage to HVP bidding on contracts.”

Of course that could have nothing to do with Nick McGrath, only as head of the department he is held responsible for its actions. The report clearly states “there is no documentary evidence of undue influence in the decision to mutually terminate the contract.”

But what there is evidence of, according to the A-G, is a question of curious timing.

Paddon’s report says their office questions why two cabinet ministers (McGrath and Kevin O’Brien) asked the Deputy Minister of Transportation and Works about the status of HVP within half an hour of each other on the morning of March 13, 2014.

It also says the A-G couldn’t satisfy themselves as to why the process to terminate the contract with HVP “had to be concluded the day before nominations closed for the leadership of the Progressive Conservative Party of Newfoundland and Labrador.”

It’s not clear if there will be any recourse for the government to recoup the costs of retendering the contract for paving that section of highway in Labrador.

Nick McGrath says he will continue to serve as MHA for Labrador West.

Written By
More from Meghan McCabe

Premier’s Court-related Announcement Not What Many Expected

Many people are surprised the big announcement was not to reinstate the...
Read More

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.