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)

Wednesday, April 4, 2012

Dean MacDonald on a Go Backwards Basis

There has been much ado about Dean MacDonald now that his scheduled time to come has arrived. He has been rumoured to be circling the provincial Liberal Party like a vulture waiting for it to be dead enough to eat. He has been touted as "the great savior" of the Party, and the only saving grace for a force that would otherwise be dusted to the annals of history. The truth, however is alot more premeditated and ugly than the Messiah story so often floated to the public.

In truth Dean MacDonald is a product. A product created, funded, and promoted primarily by one man - with another man assisting from the inside. Dean MacDonald graduated from Memorial University in 1981 with a degree in Commerce. He held several junior positions typical of a freshly minted graduate until he was picked up and made President of Cable Atlantic in 1985. The same Cable Atlantic owned by one Danny Williams. Although most might balk at placing an undergraduate under the age of 30 in charge of a corporation, Williams did not. Williams not only placed him as President of Cable Atlantic, he agreed to make him a very junior partner with a 4.9% stake. On the face of it, and apparently despite MacDonald's Liberal association, Williams decided to take it upon himself to mentor and establish Dean MacDonald in the corporate world.

MacDonald made no secret of his Liberal connections. He was known as an organizer, and in later years as a bag man for another close friend of Danny Williams - one Brian Tobin. MacDonald dutifully carried out his obligations to Cable Atlantic and Williams until 2001. While still President of Cable Atlantic, and still Williams minor business partner, then Premier Tobin appointed MacDonald as Chair of Newfoundland and Labrador Hydro and Chair of Churchill Falls Corporation on January 13, 1999. Macdonald was by then an established figure in the Liberal Party and a protegee of a prominent Progressive Conservative who was himself angling toward the provincial PC leadership.

On December 17, 1999 Brian Tobin's Liberal government announced Cable Atlantic was granted a five-year, $12.5 million contract with Cable Atlantic that started May 1, 2000, and included the provision of local centrex phone services.  

Then, in November of 2000, Danny Williams sold Cable Atlantic to Rogers Cable. The deal made Williams over $200 million, and gave MacDonald his seed millions as well. Part of that agreement appeared to be moving MacDonald into the next step of corporate mentorship in Rogers, which named him Senior Vice President of Government Relations of Roger's cable subsidiary. In other words, it gave MacDonald the opportunity to add a high profile position to his CV, and be further groomed in corporate/government relations. It also, no doubt, satisfied his mentor that his protegee was taken care of. When John Tory left Rogers, to pursue the leadership of the Ontario PC Party, Dean MacDonald was slotted into his position as the corporation's new Chief Operating Officer.
However, and in a sign of things to come involving Danny Williams, Rogers took Williams and MacDonald to court over disagreements on issues stemming from the Cable Atlantic buyout. The matter was settled just before Christmas 2003. Three months later MacDonald resigned all duties from Rogers. As he put it:
The resignation is "as planned," MacDonald told www.cablecastermagazine.com this morning. "Edward and I have been talking about this for a little while. We knew I was leaving at the end of March."

MacDonald also resigned from his positions at Newfoundland Hydro and CFLCO in 2002. He stated publicly that he could not in good conscience stay on after then Liberal Premier Grimes arranged a deal to develop the Lower Churchill with Quebec. Despite his Liberal allegiance, despite the majority of the Board members agreeing with Grimes, despite the fact that the opposition to the deal came mostly from the new PC leader Danny Williams, Liberal Dean MacDonald left. Williams rewarded his protegee for his loyalty by naming him to again head Newfoundland and Labrador Hydro in September, 2004.

It didn't take long for MacDonald to change gears when he, and  Dallas-based Hicks Muse Tate & Furst Inc. (now HM Capital), TD Capital Canadian Private Equity Partners (now Birch Hill Equity Partners) and CIBC World Markets Inc. formed a consortium to purchase Persona Communications for $406 million. Persona, which was a publicly traded company, was then taken private. Obviously, MacDonald was the front man with a minor stake in this deal. Although he made good money on the sale of Cable Atlantic, he could not possibly do this deal on his own. In an interesting aside, Birch Hill Capital Partners, the same partners involved with MacDonald in the Persona takeover, named him CEO of the year in 2007 - which he often cites in his many biographies.

MacDonald, Williams and Persona came into controversy in that same year when the provincial PC government awarded Persona a cable contract. In 2005 Persona made a powerpoint presentation to promote a redundant cable line between Newfoundland and Nova Scotia. The government chose to award the contract without public tender. The Liberal Opposition campaigned against the deal. In September, 2007 Persona was sold to Bragg Communications for an undisclosed amount. The Liberal Opposition again attacked the deal, and even suggested that Williams granted the untendered $15 million contract to Persona to assist in its sale. http://tinyurl.com/82ny6pp   Certainly it almost echoes the circumstances and timing of the earlier Cable Atlantic deal.

In any case, MacDonald padded his personal fortune quite handily, and moved on as is the trend. Since 2004 he, and his partners founded a private company which would go public as Newport Inc. in April, 2011. Three months later the shareholders approved a name change to Tuckamore Capital Management Inc. In November of that same year, former PC Prime Minister Brian Mulroney was named to its Board of Directors. At the same time MacDonald has kept his own privately held company Deacon Investments Ltd.

In 2004 Deacon Investments purchased the Paramount Building in St. John's for $3.23 million. Today that building houses, among other tenants, the law offices of former premier Danny Williams. In 2008 MacDonald's Deacon Investments purchased the former head office of FPI for $3.35 million - despite the fact it was assessed at a value of only $2.2 million by the City of St. John's. MacDonald was left with an empty building (other than old, used office furniture - more on that coming) and no tenants. That problem was solved by the provincial PC government when it took a multi-year lease on the building in April, 2009 for the Centre of Health Information. The result was an increase of rent overhead for this public agency from $291,904 per year to $911,744 in MacDonald's new building  http://tinyurl.com/6qaptag . The kind of return an investor can only dream of with total cost of your investment returned in essentially 3 years at the taxpayers expense. By the way, both these buildings are up for sale now. The irony does not stop there though. In an apparent case of selling ice to an Eskimo, Dean MacDonald sold all that old, used furniture FPI had left behind when they exited the building to his new clients. In fact, he sold that used furniture to the provincial government for $87,450. The sale was untendered, and explained like this:

Used Office Furniture, 70 O'Leary Avenue.

3(2)(e) only available source

FPI Limited, previous tenants, left much of its

furniture when it vacated the building. Deacon

Investments Ltd., offered the Centre this

furniture at industry standard costs.

http://tinyurl.com/7wh7pum  For a man who says he is all about new leadership for Newfoundland and Labrador, Dean MacDonald seems to be building his fortune the same way many have before in this province.

The bottom line of the Dean MacDonald story is this: He was groomed, established, set up, and looked after by Danny Williams. His political map has been chartered by Danny Williams. His current attempt to take over the Liberal Party is being, and was always meant to be, orchestrated with Danny Williams systematic destruction of the provincial PC Party. Hand in hand as it were. When Dean MacDonald speaks you can hear Danny Williams. Whether it be their near identical condemnation of the recent PUB decision on Muskrat Falls, or MacDonald's use of the term "on a go forward basis". Its not that they are great leaders simply imitating each other by their greatness. Its a case of the puppeteer pulling strings on the puppet. Mr Williams is, and always has been, obsessed with control. Mr MacDonald is only too keen to reward his mentor with obedience. Their journey together has been a classic example of "adding value for the share holders." Mr. MacDonald does not represent new leadership for Newfoundland and Labrador, nor for the Liberal Party for that matter. What Mr. MacDonald represents is a continuation of the insular, corporate boy's club in St. John's. It's an old story that has always ended in heartache for the common people of Newfoundland and Labrador. However, as the most attentive followers of this province's politics will have noted recently, there are always bigger clubs.







 

1 comment:

  1. this is a very interesting post,curious as to its informant

    ReplyDelete

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