Wolves in the Keep

Like two castles the federal Conservatives and the provincial PC's of Newfoundland and Labrador dominated their kingdoms. Their walls were impenetrable. Their moats were deep. From this place of strength they exercised their power at will, and avoided all the nattering of pesky peasants outside their high walls. Their word was law. That was then. This is now.

Like a Shakespearean tragedy the rot within has broken the massive stone walls, and the all too human truth of absolute power corrupting absolutely is open for all to see. Both governments have been guilty of abusing their power in a way not seen before. They have ignored or forgotten the rule that power is to be used, and "if you abuse it you lose it". It's an old saying. It's an old yardstick if you will to restrain the dark side of human nature and ensure an order of proper balance in the exercise of power. When that balance is lost the great unseen hand has a way of restoring it, and often it is not a pretty sight.

Both parties have lost sight of the nature of power. The ability to govern, the moral high ground if you will, is rooted in the ancient notion of the "social contract". The social contract being an informal agreement between the very earliest humans that they would agree to surrender some of their rights to the group in order that they might survive. So in the beginning one or more cavemen would agree to hunt together, to share, to follow a leader, and to protect each other. From there it grew to villages, cities, provinces, countries, ultra national organizations, and eventually some say world government. The contract itself was in the beginning, and has never changed, an agreement between man and the state on how he agrees to be governed. In modern times it has become a written contract commonly referred to as a Constitution.

Remember, the social contract was between a man and the group he agreed to submit certain rights to - his government in the modern context. Herein lies the poison in the wine if you will: corporations were never a part of the social contract. People never agreed to submit any rights to corporations. Corporations, therefore, never had any right to exercise power in the affairs and lives of people. However, and we have seen it all over the world, corporations have decided to take that power by controlling the process that establishes who shall govern. In a sense, they have added themselves to the social contract. This very simple concept has led to where the world is today, and locally to where our nation and province are today.

On the provincial level we have been subjected to such acts as Bill 29 which violate the ancient right of disclosure - the right to be informed. We have witnessed our government  lay off almost a thousand people to save $30 million while giving $90 million to Kruger - in the same budget no less. We have witnessed former premier Danny Williams negotiate offshore royalty deals with oil corporations that included impacts and benefits agreements that personally benefited his offshore companies. We have seen the same ex premier grant massive contracts to SNC Lavalin and then sell his offshore companies to them. Of course he wasn't the only one. Joey Smallwood took a $100,000 loan from the bank of Montreal to buy shares in Brinco which he had hoped would make him rich when the Upper Churchill deal went through. And on it goes. The rights enshrined in the social contract, to be protected and secure for the benefit of all, greedily thrown to the curb.

On the federal level things are no different. The Conservatives have thrown all responsibilities of governing out in the march for control. Rather than debate each bill in Parliament, and defend each bill, they have created omnibus bills which essentially lump many bills into one. There is no scrutiny by the people's representatives allowed. And what are those bills? Most are corporate in nature. The bill to remove federal protection of almost all Canada's water is a big one. Bills to streamline, read water down, environmental laws that restrain corporations from exercising unimpeded activity. Essentially laws that were put in place to protect the land for the benefit of the people. So corporately controlled has their agenda become, so far have they strayed from the social contract, that they have alienated themselves from the people.

This week we did not witness Senator Duffy fall from grace. Or Senator Wallin. Or Nigel Wright. Etc. What we really witnessed was the exposure of corporate power and all its ugliness. Senator Duffy, appointed by Harper, was not conducting himself any differently than any other Senator in the game. They are named to the Senate to be professional back room types if you will. When Duffy was warned by Senator Tkachuck that he was about to be exposed for using the people's funds for improperly subsidizing his way of life, a deal was reached with Harper's Chief of Staff Nigel Wright to pay off the $90,000 before the report was released. The plan was to nullify the issue before it was publicly exposed, and thereby protect Duffy from serious damage. Duffy after all was a chief fund raiser and promoter for the Conservatives. The plan failed when the "loan" was exposed and Wright became fully exposed. The dangerous part of this equation was Wright.

To understand who Wright is you can check out this Globe and Mail story soa.li/8IFfm0Y   Essentially, Wright is a corporate guy, loaned from Onex corporation for two years (which were up six months ago) to run the Prime Minister's Office - in reality the Government of Canada. He is responsible for many of the actions of this government and it's decidedly corporate flavour. He is not a man of the people. He does not embody any of the principles and rights of the social contract. He is a man of the order, the corporate order that is. Like so many things, and like so many countries, he is there to establish their interests - whether they are those of the people or not. Since Wright became exposed, and the pressure from the people mounted, Senator Duffy was quickly thrown from the party. Then Senator Wallin quickly followed. Naked power, corporate power that is, was exposed. The ability to, in a premeditated stroke, cover up the transgressions of the privileged. The ones we agreed to give up certain rights to for their promise to look after and protect the rest of us. In one brief moment we saw it all. Now Harper is trying to save Wright. Just like he tried to save Penashue in the other recent, premeditated attempt to cover up corporate donations.

It is an ugly truth in all. The order of civilization is broken - terminally broken. Those with the great trust have failed their great responsibilities. It is evident throughout the world we live in today. From civil wars, to oil wars we see it everywhere around us. And while those wars were benefiting us we chose to go along with those social contract rights being violated. Now, with our world monetary system in near failure, with our personal and governmental debts reaching the maximum sustainable, we gaze into an uncertain future. We look toward the corporations for accountability. We look to the governments for solutions. In reality, they have become one and the same. Our earliest ancestors gathered together for protection from the wolves. Now the wolves are the ones we turn to for protection. Therein lies the not so good news.

Dedicated to my friend Jason.

Tipping Point - the End Game

It's been just over two years since Williams left office and Dunderdale was sworn in. It was the culmination of many political deals to pave the way for the Lower Churchill project. There was the deal with the Innu of Labrador. There was the deal with Harper. There was the deal with Nova Scotia Premier Dexter. There was the deal with Emera. There was the deal within the PC Party caucus. There was the deal with the corporate community of the province (less than ten families). There was even a deal with the Liberals. So many political and business deals were made over one project that one truly must tip the hat to the old chess master Williams - in that regard.

However, as the saying goes: "The plan doesn't survive first contact with the enemy". It's an old military saying, but it works. Like a well rehearsed play the show unfolded. Williams crafted the necessary legislation to force Hydro Quebec to share the Upper Churchill. He created Nalcor as the vehicle to achieve the project. The one thing he could not do was finance it alone. Since 2006 he pleaded with Harper for a loan guarantee. Harper put him off. Harper is aligned with Enbridge which has a strategic alliance with Hydro Quebec. Why would Harper help Williams and thereby Nalcor? Williams carried on. He eventually reached a deal with the Innu - the New Dawn Agreement. Peter Penashue, then at the Innu Nation, represented the Innu. Still, it took almost three years to take New Dawn from the drawing board to the place where it could be executed, and free the government to proceed with the Lower Churchill.

In those three years Williams set the stage by amending the Electrical Power Control Act, which would force Hydro Quebec to submit to the province on the operations and sales of the Upper Churchill. He also became increasingly desperate for a loan guarantee - culminating in the "ABC Campaign". In the interim he also sold his two offshore companies to SNC Lavalin for an undisclosed sum. SNC Lavalin was then given the Lower Churchill contract. By late 2010 Williams had all his ducks in a row. The agreement with Harper that in exchange for the loan guarantee he would leave politics. And so he did after carefully orchestrating a backroom deal with his cabinet to put Dunderdale in charge. She became the Premier run and controlled by her own Cabinet - rather than the other way around. He even contrived a falling out with Dunderdale, to reinforce his deal, claiming to be deprived of cell numbers for cabinet ministers that had not changed since he was premier. All very contrived, and all pulling on the ores in the same direction.

Then something happened. Actually several things happened. Firstly, and perhaps most importantly, the United States created a natural gas revolution. They built gas fired electrical plants in places like New York where Williams and company had dreamed of selling power. Hydro power was suddenly becoming obsolete. Also, the resistance started. In Newfoundland and Labrador the resistance was started by a handfull of political bloggers. They were/are Peter Whittle, Ed Hollet, Wally Maclean and myself. Dunderdale became so frustrated with the bloggers that she singled them out in her year end interview as "nay-sayers". The war within went viral. The bloggers were determined. They drove the discussion, the opposition, and some would say a political revolution resulted. Citizens, and bloggers, began consistently calling the daily radio shows with concerns about Muskrat Falls. Williams went public denouncing them and all who attacked his project for "no good reason". Dunderdale followed. So did the cabinet. It was a war of hearts and minds.

Yet, the project plodded along. Even before Muskrat falls was officially sanctioned in the House of Assembly, Nalcor was busy excavating the site - once the Innu had signed the three New Dawn Agreements. Harper came fourth with the promised loan guarantee, although it was in the form of a memorandum of understanding and had many stipulations. Williams promoted mining in Labrador, and his own little city on the Island - all of which would need the new power.  Even giants of industry like Brian Mulroney appeared on the scene. He publicly espoused the need for "environmentally friendly policies". He also joined the board of directors of Dean MacDonald's company - a close ally of Williams.

Then things started to go bad. The backroom deal to have Dean MacDonald take over the provincial Liberal Party, and then replace the battered Dunderdale in power, collapsed and he pulled out. The deal to include Penashue in the federal Cabinet fell apart as he was exposed, and forced to resign. Meanwhile Yvonne Jones kept to her deal and immediately pounced on the federal Liberal nomination to replace Penashue, leaving previous Nunatukavut MP Todd Russell justifiably furious.
Things started getting very interesting though when an email was sent to Hydro Quebec.

As you may or may not know, I have filed a lawsuit against the Government of Newfoundland and Labrador, Innu Nation, and Nalcor over the constitutionality of the New Dawn vote and the water management agreement/power control act amendments. On January 18, 2013 I sent an email to Hydro Quebec informing them of the nature of my lawsuit, and requesting they advise if they wish to intervene. Coincidentally, two hours later, the same person I was speaking with held a press conference. The story went essentially like this:

 "Quebec’s Crown-owned utility, which declined comment Thursday on the consultant’s report, changed its tune the following day.
'Normally we don’t comment on such third-party reports,' Ariane Connor, a Hydro-Quebec spokeswoman, said in an interview.
“But having had a chance to look it over quickly over the last 24 hours, we’re very surprised by the analysis and the conclusions of the report.'
Connor said the utility may want to be part of the regulatory hearing to “present our view” because it wasn’t consulted about the study."

What does that mean? It means Hydro Quebec's ambush was tripped. Hydro Quebec has always known that Williams' Electrical Power Control Act amendments forcing Hydro Quebec to share the Upper Churchill were unconstitutional. The law regarding this issue was decided in the 1984 Reversion Act review by the Supreme Court of Canada. However, like any good soldier, they were lying there waiting for Williams and company to deliver us to them. After all, without a valid water management agreement both of the Lower Churchill dams would only produce 20% firm power - as per Nalcor's evidence given at the Public Utility Board hearing. With Muskrat Falls built, and unable to operate, Newfoundland and Labrador would be at the mercy of Quebec. We would be unable to defend ourselves having completely maxed our borrowing on the construction of the dam, and the terms of the loan guarantee would require the surrender of these assets if the province were to default. All nice and cozy for Harper, Hydro Quebec and company. What they needed for this plan to succeed was silence.

That was the tipping point. After years of saying almost nothing, Hydro Quebec suddenly had a big interest in dumping their glut of power in Nova Scotia. They are scheduled to speak at the hearings in Nova Scotia now. Brian Mulroney's good friend Pierre Karl Péladeau just stepped down as President and CEO of Quebecor to become non-executive chairman of Hydro Quebec - not pulling a salary if that rings any bells. Jim Prentice, former Conservative cabinet minister, and vocal proponent of the Muskrat Falls deal, had this to say just days ago:

“It essentially means Canadian hydroelectricity, although we see it as renewable — the ultimate renewable energy — it doesn’t qualify as renewable energy in those states, because the renewable portfolio standard doesn’t recognize it. So basically you have a state-level interference with the market, and my point is if the North American market is going to work efficiently, we need the same standards on both sides of the Canada-U.S. border, and these renewable portfolio standards get in the way of our ability to sell Canadian hydro.”
This comes as the United States moves closer towards energy independence, he said.
“If you look at the numbers in terms of energy production in the United States and imports and exports (between) Canada and the U.S., it’s increasingly clear that the U.S. is moving towards energy independence.”
Combining the resources of Mexico, Canada and the U.S., Prentice predicts those nations will be energy independent by 2020. He said it becomes all the more important to keep the marketplace open and free from what he labels “sub-national impediments,” such as those state laws.

Asked about the implications for such standards with respect to Muskrat Falls, Prentice said they do not help.
“Well, it’s not helpful, and we need to make sure that across the United States, Canadian hydroelectricity is recognized as a renewable energy that is good for consumers.”

The deal is coming apart, and Williams and company are watching as the ground shifts beneath their feet. Hydro Quebec's massive debt grew $10 billion from just 5 years ago to a whopping $ 43.5 billion. That's over three times the gross debt of this province. It has mass surpluses of power it can not sell - - last I heard it was 5000 MW, almost the entire production of the Upper Churchill. Hydro Quebec now realizes it must abandon the idea of laying the trap for Williams and company, and instead move to secure the Nova Scotia market directly for it's own survival. This is what it is in the process of doing. The only remaining question is: At what point does the Newfoundland and Labrador government realize and accept the tipping point has been reached and the jig is up? Here is my suggestion: Be prepared to write off the money already spent and stop the bleeding here; send the Electrical Power Control Act amendments and the water management agreement to the Supreme Court of Canada for review to determine it's constitutionality; accept the political consequences; reimburse expenses. This is the end game. We are in it now.

Were the Innu bribed for the Muskrat Falls Vote?

The Innu communities of Labrador, Sheshatsui and Natuashish, are tight communities. Understanding what is taking place, or has taken place there is difficult at best. With a total population of 2245 people according to the 2011 census, everybody knows everybody and large families dominate the political and economic life in the communities. Therefore, getting accurate information of what is happening there is almost impossible for outsiders. This article is made possible by a number of Innu who have broken that code of silence and taken me into their confidence - for that I'm thankful to them as we should all be.

In the early 1980's Peter Penashue and two other people Incorporated a body politic now called the "Innu Nation". Essentially, the Innu Nation's purpose was to act as a quasi-government for the Innu people, because without a finalized land claim the two communities could only represent themselves and not the overall interests of the Innu in Labrador. The first real major financial victory for the Innu Nation came with the Voisey's Bay Agreement.

The Innu had tried to stop it until they had a land claim in place, but the courts ruled it could proceed and an impacts and benefits agreement was put in place. As part of that agreement the Innu would receive quarterly royalty payments from the provincial government of 5% of Vale's Voisey Bay sales and $59 million for the Teshipitakan Fund (T-Fund). The T-Fund was created soley as a fund for future generations (ie: the Innu children). As of February 4, 2011 the fund had grown to $66 million. Revenues from Voisey's Bay are split 3 ways: 50% to the T Fund (Innu Nation); 25% to the Sheshatsui Community Fund; and 25% to the Natuashish Community Fund.

The trustees of the fund, members from each Innu community and the Innu Nation, have been trying to gain access to the children's trust for some time. Minutes of their meetings show a determined effort by Paul Rich, brother-in-law of Peter Penashue, to take $25 million from the fund to build houses. The money was to be split evenly between the communities. He had no support but managed to have the trustees lawyers give an opinion. The only way to pull money from the trust was to prove a "man-made disaster" had occurred. He tried to have the housing issue put in that context. The issue was so divisive the trustees were read the Trust's mission statement, and they reviewed their trustee's Oath of Office. The trustees were cautioned by the manager to remove their "biases (personal and political)". They were reminded that the principal of the Trust could not be touched in any case.

On February 7, 2011, Paul Rich motioned the idea of getting a loan for the money and using the Trust as collateral. It was agreed that this course would be explored. It was also agreed the Bank of Montreal, the representative of the Trust, would look into the matter. On February 14, 2011 Paul Rich put forward a motion to lend the $25 million from the Trust. During discussions the concern of money being used for payouts to community members rather than housing was brought up. The motion was defeated 4-2 in a recorded vote.

During the May 10, 2011 meeting it was discussed and agreed to that public meetings would be held in each community in the middle of June - just weeks before the referendum on the New Dawn Agreement. On May 26, 2011 it was agreed the meetings would be held in the first week of June with expenses for planes, halls, and lunches to be funded. Then, during a Trust meeting on June 3, 2011, just days before the meeting were to take place, they were cancelled.

This is were it gets very interesting. On July 6, 2011, less than a week after the New Dawn vote, the trustees held a teleconference. The issue again was money, but this time it was different. The following motion, the only apparent topic on the agenda, was made:

" Paul Rich made the following motion: The Trust hereby agrees to apply for a loan for approximately $12,500,000 from the Bank of Montreal to provide a per capita payout of $5,000 to each member of the Innu Nation. It was seconded by Mary Jane Edmonds. BMO Trust Company, the corporate trustee, abstained from voting because of the conflict of interest with the application for a loan from the Bank of Montreal.  All other trustees voted in favour and the motion was carried."

So, less than a week after the Innu voted 88% in favour of the New Dawn Agreement, a $5,000 payment was authorized to every man, woman, and child - motioned by non other than Peter Penashue's brother-in-law. There are a few points to digest on this. Firstly, there was discussion during the meeting to have $5,000 payments for children placed in trust - that was summarily ignored in the motion. Secondly, and quite shockingly so, no reason was given for the payout in the minutes anywhere. Thirdly, the average annual income of the Innu people, according to last available census data, is approximately $12,000. Now consider the following facts:

Sheshatsui

population 1,314
ages:
0-4      200
5-9      130
10-14  150
15-19  115

total children 695 or 53% of the population

Natuashish

population 931
ages:
0-4      145
5-9      125
10-14  90
15-19  100

total children 460 or 49% of the population

Based on this census data, $6,775,000 of the $15,000,000 would go to children - or their parents on their behalf. To put that in perspective for some, the following are family sizes in:

Sheshatsui

2 people  100
3 people  95
4 people  60
5 people  80

Natuashish

2 people  65
3 people  60
4 people  50
5 people  55

Keeping in mind the average ANNUAL income in both communities is less than $12,000 per year, many families and individuals were about to hit the jackpot. For example, families with 5 people living in a household looked to receive $25,000.

On July 8, 2011, a formal meeting of the trustees was held. It was announced at that meeting that the Bank of Montreal had approved the loan for $12,500,000 for the $5,000 payout to each Innu. The bank, however, said it would take some time to process the loan. Paul Rich then motioned:

"Paul Rich made the following motion: To advance money from the Teshipitakan Fund to provide money for the per capita payout, and the money advanced from the Fund will be replaced once the loan money is available. The motion was seconded by Gregory Rich. BMO Trust Company, the corporate trustee, abstained from voting because of the conflict of interest with the application for a loan from the Bank of Montreal.  All other trustees present voted in favour and the motion was carried. The trustees were advised that tomorrow is the earliest the funds could be advanced. Janet will discuss with Lorraine Rich and Karen Penunsi about how much money to hold back. Only the amount that we are paying out will be sent to the band office."

In a somewhat incredible twist of events, a sum of $25,000,000 for housing was changed to a sum of $12,500,000 for individual $5,000 payments, days after the New Dawn was successfully approved by referendum, and motioned by Paul Rich - Peter Penashue's brother-in-law. The Peter behind the Muskrat Falls dam as it were. Interestingly, if you do the math, $5000 multiplied by 2245 people comes out to $11,225,000 leaving $775,000 left over. It appears that the early concerns of some trustees that this housing money would be used for personal payouts was warranted after all. It was noted in the minutes that once a major loan was drawn using the children's trust as collateral no other loan could be made in a similar fashion. So, after the New Dawn payout was made the housing crisis was to remain a housing crisis. The sudden reward for voting in favour of the New Dawn, or so it would appear, and the sudden rush to get the money into the hands of the Innu, robbed the future trustees of any ability to leverage that fund for any other purpose. As an aside, the trustees are currently trying to amend the terms of the trust so they can gain access directly to its funds.

The questions that now surround the New Dawn Agreement, which was necessary for the Muskrat Falls project to proceed, are many. Most seem to centre on what happened during the referendum to approve the New Dawn Agreement. It is illegal to offer a reward or bribe to people for voting in favour of a particular thing. It appears quite obvious this $5,000 per person payment was a big reward for some of the poorest people in Canada. There has been many stories of voting money and alcohol bribes to get the Innu to vote in favour of the New Dawn Agreement. In the end though, without sworn affidavits from the Innu themselves, these remain just stories. However, the $5000 per person payments just days after the vote, and sudden in its conception, leads to the inevitable conclusion that these funds were either a reward or a promise of reward fulfilled. That is my take on it. I have also been advised the RCMP were provided with all the documentation surrounding this issue a year ago, but have done nothing in the way of an investigation or forensic audit. If bribery or reward was used on some of the poorest people in the country to push forward the Muskrat Falls dam project, well, that is just unjustifiable in a country that we think we understand. Surely our provincial government knew these payments had taken place. It goes against our laws, our core beliefs, and everything we believe in as a people.