Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.
Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Saturday, July 19, 2014

All the King's Men - Part 6 - Paul Davis and the RNCA

Paul Davis is running for the PC leadership race - the new one. The last one went off the rails like a train derailing at high speed. It was ugly, messy and well ... that about covers it. Davis was elected in the district of Topsail as a result of a by-election in 2010. A dashing, and well-spoken MHA (as opposed to any of the rest of the PC MHAs), Davis quickly made it through the ranks to the Cabinet table. He has held a number of cabinet positions in a very short period of time, mostly as a result of the political carnage at the top of the PCs over the last four years: Minster of  Transportation; Minister of Service NL; Minister of Child and Youth Services; and Minister of Health and Community Services. However, this post deals with the time just before Davis entered the provincial scene as an MHA.

Davis became best known in the province as the public voice for the Royal Newfoundland Constabulary (RNC). He joined the force in 1985 and retired in 2010 - just as he entered elected political life at the provincial level. As part of his service i the RNC, Davis served on the Executive of the Royal Newfoundland Constabulary Association (RNCA) - from 2005-2010. It is this period that casts a shadow over Davis's judgement and leadership qualities.

The RNCA is essentially the "union" for officers of the RNC. The RNCA lists, as its first objective as: "The goals and objectives of the RNCA are to improve benefits and working conditions for police officers." Nothing inherently wrong with that. Every union, or in this case "professional association" does the same thing. However, unlike other trades, or professions, the RNCA are restricted in how they can "improve benefits and working conditions." The primary restriction on that practice is a ban on political activity by RNC officers - ie: those that make up the RNCA:

From the Royal Newfoundland Constabulary Regulations:

"Officer's Conduct:
       7. (1) (A) A police officer shall not:

           (d) wear the emblem, mark or insignia of a political party or in another way manifest political                               partisanship.
Seems straight forward enough. While officers have the right to advance their positions through the RNCA, the law of the Province requires they do so without "manifesting political partisanship". However, that is not what's been happening - and Davis had a hand in that.

The RNCA's entry into official political partisan activities first appears in 1999 with a $200.00 election contribution to PC candidate John Ottenheimer - yes the same John Ottenheimer that is now also running for the PC leadership (much more on him in another post). It made no other donations to any political party. In that same year, "Coppers" (the RNCA Mess) donated $200.00 to the PC Party. That's where the long relationship between the RNCA and the PC Party started. Also, in that same year, RNC officers were banned from staging protests by the provincial Liberal government - which caused fury in the ranks of the RNC. Whether or not the entry into political donations is tied to the dissatisfaction of a ruling against them is uncertain - although it pops up again in 2007.

In 2007, while Davis was an RNC officer, and a member of the Executive of the RNCA, the force became entangled with the then PC government in contract issues. Specifically, the PC government refused to grant the RNC the wage increases they were demanding, and the matter had to be settled by arbitration 

It was the only year the RNCA refused to contribute to the PC Party, and instead made a donation of $500.00 to the opposition Liberals:

1999 - John Ottenheimer    - $  200.00 (election)
1999 - PC Party                - $  200.00
2001 - PC Party                 -$ 1250.00
2002 - PC Party                 -$ 1250.00
2003 - PC Party                 -$ 1000.00 (election)
2003 - PC Party                 -$ 1750.00
2004 - PC Party                 -$ 3000.00
2005 - PC Party                 -$ 1800.00
2007 - Liberal Party            -$  500.00
2008 - PC Party                 -$ 2000.00
2009 - PC Party                 -$ 2000.00
2010 - PC Party                 -$ 2000.00
2010 - Paul Davis               -$ 1000.00 (by-election)
2011 - PC Party                 -$ 2000.00
           Liberal Party            -$ 1200.00
2011 - Paul Davis               -$ 1000.00 (election)
2012 - PC Party                 -$ 2000.00
           Liberal Party            -$ 1650.00 

When the story was cast under light by the Telegram in Dec, 2011, they received this response from Tim Buckle - RNCA President:

"The RNC Association supports the political process... Fundraising by political parties is an aspect of politics, and we have supported both (the Tories and Liberals)"

Buckle admits that "fundraising" is "an aspect of politics". In other words, Buckle admits that the Association has broken the law by violating the prohibition on partisan politics incorporated in the "Regulations". 

Now, the stated goal of the Association is to "improve benefits and working conditions for police officers". In other words, get better pay, benefits, etc for its members - who are all RNC police officers. That is its primary role. Therefore, it can be easily argued the RNCA is making financial contributions to the governing party to influence its ability to get those increases and benefits. The problem with that is it violates the Criminal Code of Canada:

"(2) Every one commits an offence who, in order to obtain or retain a contract with the government, or as a term of any such contract, whether express or implied, directly or indirectly subscribes or gives, or agrees to subscribe or give, to any person any valuable consideration

         (a) for the purpose of promoting the election of a candidate or a class of party of candidates to                          Parliament or the legislature of a province; or

         (b) with intent to influence or affect in any way the result of an election conducted for the purpose of                  electing persons to serve in Parliament or the legislature of a province."

It seems clear that the RNCA, including by his participation Davis, withdrew financial support of the PC Party when contract negotiations were forced to arbitration in 2007. It also seems clear that the RNCA started contributing to the PC Party (and parties in general) after a conflict with the then Liberal government in 1999. The "implied" message being quite obviously that political donations will be held back if contracts are not negotiated to the RNCA's satisfaction. That would violate the Criminal Code, and its corruption provisions. It is also quite obvious that the RNCA intended to influence the result of an election, because it donated to Davis and the PC Party directly in election and by-election contributions. 

I personally had a similar type situation indirectly with Davis in 2010. He, along with Terry French, were presenting on election readiness to the PC Party convention. While sharing the stage with Davis, French advocated that delegates should approach paving contractors for donations - reminding them where their contracts came from. When that issue hit the press French did not deny he had said it. More importantly, for the purposes of his leadership integrity, Davis did not come forward and admit the comments were made. Coincidentally, French is now Davis's co-campaign manager for the leadership. 

The bottom line is that Davis was involved with making political donations from the RNCA to the PC Party from at least 2005-2010. He accepted personal political donations from the RNCA for his election to office. All of which appear to violate a number of laws. That raises the question in my mind: Is Paul Davis fit to be premier of this Province? The answer: He looks the part, but his actions say different.

Sunday, June 22, 2014

The Great Uncoupling

The war in Ukraine is about a number of things: language and culture; nationalism; buffer zones; resources; and even bees. It has become the playground for a hybrid proxy war between the "East" and the "West". Like the Lend Lease program of World War II between the US and Britain, Russia now appears to be supplying arms to rebels in East Ukraine while trying to remain officially neutral. On the flip side of the coin, the US and allies have openly supplied the Ukraine government with money, arms, and reportedly soldiers - or private military  contractors. To be clear, there are no innocent parties here. There is also no right or wrong side. This is about one thing - interests.

It is also extremely naive to look at the Ukrainian civil war as a one-off. An isolated conflict on the bridge between Europe and Asia. It is far more than that. In fact, the Ukraine conflict is the final tremor in the "Great Uncoupling". To understand what's happening to the world one needs to go back to the early 1990's and the "fall" of the Soviet Union. The question is: Did the Soviet Union lose the Cold War, or did it simply change tactics and create the "Gold War". In other words, did the Soviets, and as importantly the Chinese, decide a military standoff was a flawed strategy, and the better strategy was to beat the West at its own game - namely financially.

When the Berlin wall fell, Russia and China became "quasi-capitalist" societies. By which I mean, fundamental governing structures remained in place, but production of goods and services changed somewhat. Western countries, and particularly Western corporations, began to rely on cheap Chinese goods to drive their economies, and endless supplies of Russian natural resources to feed their production. Over time, the West accumulated huge trade deficits with the East, and more importantly huge debts to cover it. The debts were financed by the East. Now China is on the verge of becoming the largest economy in the world. Similarly, Russia is the great energy warehouse for Europe. Both have highly developed space programs, defence programs, and technology in general.

Fast forward to 2010, and the World Economic Conference in Davos, Switzerland. At the conference both Russia and China insisted on a new "world reserve currency". They argued that, especially after the collapse of the US economy in 2008, that the US currency was no longer strong enough to fit that roll. They were turned away. However, it didn't end there. Now enter the Ukraine crisis.

The United States reaction to the Ukraine crisis has been to financially act against Russia. However, that has suited Russia's purpose. It's given Russia the reason it needed to secure itself from financial instability. It also gave Russia the excuse it needed to take the next major step in the "Gold War" - namely, isolate the indebted countries of the West from the demographic market places of the East. Russia and China immediately started this process by creating, in a sense, a sheltered monetary union between themselves. Firstly, the massive gas deal between them was to be paid in their national currencies - not US dollars. That is the blue print that each country wants, not just for each other, but also the non-aligned BRIC countries like India, Iran, Brazil and the like. By way of example, India's most recent purchase of a Russian aircraft carrier. Another important development was Russia's moves on "card transactions". Russia took steps for credit card companies that essentially make Western cards useless in that market, and even created its own chip technology for cards.

The lesson to learn from these actions is quite simple: Now that Russia and China have the West in an indebted position they aim to starve Western production of markets. For example, Russia and China are creating their own "IMF". They will lend, etc to the developing world in competition with the already existing IMF (which they see as Western dominated). The currency involved with their IMF will be the Chinese Yuan - not the US dollar. Their primary market will be the BRIC countries - which also have the largest demographic markets for consumption of goods. The West will be faced with a limited market for its goods - a market dominated by heavily indebted countries, whose debt is primarily owed to the East, and whose populations are the fastest aging in the world.

In other words, the "Great Uncoupling". The splitting of the world into two camps: North America and Europe vs the rest of the World. The old Soviet Bloc, China, and BRIC versus the rest. The end of the "New" World Order, and the beginning of another. It's a financial war that the West cannot win. On every level, strategically or tactically, the West can not win in a financial war. Largely, a position it placed itself in by losing the discipline that gave it rise in the first place, and the inability to recognize the nature of the financial war since the 1990's. Living far beyond its means, and being helped along the way by those that were only too happy to help it along the way.

So, in many ways Ukraine will be the litmus test of each sides power. Will the West challenge Russia's counter moves in Ukraine with military force? It's abundantly clear that Russia is prepared to do so. It's far less clear that the West has the appetite, or even the means, financially or otherwise, to do so. Will the West simply recognize the apparent inevitability of its financial outflanking, or will it fight til the last man? In a world of mutually assured destruction a nuclear war seems out of the question. Will the West see a large scale conventional war as their one and only last hope? Not likely. The Russians and Chinese, not to mention countries like India or Iran, would be at least their equals. The great irony is that, frankly, the West is no longer in a financial position to fight a large scale war, while the East's debt is minuscule in comparison. yes, we live in a world of ironies at the moment. We also live in a world on the edge - on the edge of divide. At the end of a pseudo World Order, and on the verge of a quite different World Order. But for now, we are on the cusp of the "Great Uncoupling".


Saturday, June 21, 2014

The Decline of Danny Williams

There was a time when Danny Williams' controlled the collective mind of Newfoundland and Labrador - those days are over. While premier he wrapped himself tightly in the provincial flag, while disgracing the Canadian flag. He put gas on the fire of Newfoundland nationalism. I say Newfoundland nationalism, because Labrador nationalism is a kettle of fish he doesn't see as fitting into the picture. For those that don't know, Labrador nationalism is to get the hell out of the province of "Newfoundland and Labrador".

He fanned the flames of already well entrenched anti-Quebec feelings in the province. Blaming Quebec for holding the province down - everything from the Upper Churchill to the Labrador border to transmission rights. Yes the province got screwed on the Upper Churchill, but was it Hydro-Quebec that did it, or a collection of European business men (Brinco) and a then premier who bought 100,000 shares in Brinco hoping to become rich (Smallwood)? Perhaps it was all the above, but Quebec saw his vitriol. Transmission rights were treated in a similar vein. Quebec approved transmission rights for the province, but insisted Newfoundland and Labrador pay for the cost to increase the lines capacities,etc. Williams wanted it for free. He turned them into the bogyman, while in reality it was simply him being too cheap to pay the additional costs. And on it goes. He was the fan of hate. The provocateur. The identifier and the answer all in one.

People generally, and widely bought into that vision. Fueled by sudden oil wealth, britches were extra large. No one ever stopped to tell the people that, despite the oil wealth, the province still only made up 1.5% of Canada's GDP. No, according to Williams and company this was Canada's newest and coolest province that was at the top of the country. In truth, Newfoundland is the oldest settlement in North America (500 years old), and despite joining Canada only 65 years ago, many of its ways follow those time lines. Sure it is cool and has a grove, but so do other places in the country as well. Simply put, Williams exaggerated to the maximum the province's good things, and trivialized the negatives. It created a false impression, and people bought into it.

Things have changed now. 11 years since the start of Williams' reign as premier, and about the same for the oil boom, people are becoming jaded - not without reason. $18 billion dollars in oil income has essentially evaporated. The civil service was increased by 25% (locally known as the "buddy boom") while the gross provincial debt actually grew a billion or so from where it was in 2003. Now the province sees massive cuts in that same civil service. Programs are being trimmed or cut everywhere. There still remains about 300 water boil alerts in rural municipalities across the province. The public roads are literally worse than most third world countries that have pavement. Taxes and prices have skyrocketed as local inflationary pressures from spending like a drunken sailor smashed against the economy. In other words, many people have felt the costs of the "oil boom", but not the benefits.

Essentially, Williams set the economy on fire by dumping billions of taxpayers dollars on building-type infrastructure. The biggest and most gruesome being Muskrat Falls. The PCs had to rein in all that "good times" spending on schools and the like to save up for the 35% down payment the feds required to grant a loan guarantee to build the dam. Now, suddenly, there were layoffs, cancelled programs, healthcare problems, education problems, road problems...the list goes on. Next will be the billion needed for the Hebron partnership that Williams insisted on. But, before that, will come the public pensions.

Williams, during the great spending spree, never took care of the non-sexy stuff like funding the pensions. The only real money he put into the pensions was the $2 billion Paul Martin advanced on the Atlantic Accord, and that was only because it was written into the deal that the money had to be used to reduce the province's debt. Now, as is the case in all our lives, the ignored bill has become the pressing bill. This year Standard and Poors threatened the province with a down grading of its credit rating, because the pension debt had grown into a monster. In fact, since Williams came into office, it has tripled. That $18 billion is all but gone, and the pension bill now approaches half that figure. The cold reality, or the "party is over" hangover, has gripped the province. People are looking around themselves at their grossly over valued housing that is not selling quite like it used to; at that property tax bill that has tripled for that over valued house; at the programs they once took for granted being scaled back; and at that pension they always knew they would need being threatened. Now they are mad. Betrayed. Disillusioned.

That is where the fall of Danny Williams comes in. Like many before him, the grand savior is now being seen in a different light. No longer is his word gospel. No longer is his position without reproach. Many still fondly remember him with the good old days, but a growing number are also associating him with the province's "missed opportunity". Why? Because he didn't do the non-sexy things. He didn't bother with the fundamental responsibility of government, to look after the welfare of its people, but rather he took care of business's business. The cloak of secrecy that he brought in to shield Nalcor, and other government operations is now under intense scrutiny. The bond of trust he had with the people is shattered.

Williams' once untouchable reputation as premier is now only too human. Two very clear examples should make this crystal clear to any casual observer. The recent by-election in which he campaigned for a week straight for his friend Danny Breen in Virginia Waters was one. This district fell to the Liberals despite being former premier Dunderdale's seat, and despite Williams' own personal week long crusade. In the recent past, Williams would only have to show up for a quickie hand shake photo op, and the candidate was guaranteed to win - sprinkled as he or she was with Danny dust. Didn't work for Breen. He lost. Williams claimed he was called in because Breen was sitting at twenty something percent, and that his involvement brought the race to within 40 votes of winning. The truth, as just stated, is Williams mere presence was not enough to save the PC seat or his friend.

Then there was Frank Coleman. The first premier-elect in Canada to be investigated by an Auditor General and resign before he was even officially sworn in. Another friend of Williams. Another friend down. Many believe, as do I, that Williams orchestrated Coleman's run for the leadership. Yet, it failed spectacularly. The entire spectacle played out on provincial and national TV. The embarrassment for the province unprecedented. Williams claimed he had nothing to do with Coleman's "coronation" as leader and "was-to-be-premiership", but almost nobody believes it anymore. The golden touch has turned into the poisoned chalice.

Then, just yesterday, Williams and Brian Tobin presented together at the NOIA conference in St. John's. Afterwards, the media interviewed them both together. The questions were put to Williams. The general theme of the questions: "Are you still going to be involved in politics and the new leadership race for the PCs?" He was quite firm in his reply: "No". He was going to just be quiet now and stay out of politics, much to the apparent relief of Tobin beside him. However, that was short lived. During the same interview he publicly attacked anyone who "publicly shit on Nalcor" - the most political of all bodies in the province.  

"There is a group out there that every day just keeps pounding away...they've all got the same background, they all come from the same origination, for want of a better term, even though it's 30 or 40 years ago. And they're out there just pounding away at us just for the sake of pounding..."

Now, apart from sounding a wee bit paranoid and disturbed, the quote illustrates a few things. It shows that Williams still would rather attack the messengers than contemplate the message. It shows that Williams is still unable to understand the basic tenants of democracy - like the freedom of speech. It shows that Williams is all about getting his own way. In other words, he hasn't learned a thing. Maybe it's hard to teach an old dog new tricks? Either way, the mesmerized audience that once followed closely and unquestioningly at his feet has woken to the reality of the betrayed.