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)

Tuesday, January 15, 2013

Danny Williams, and the sale of... Atlantic XL - Part 2

When I started this look into the former Premier's business dealings and possible conflict of interest, with the sale of Spectrol Energy Services to SNC Lavalin, coming across a company named Atlantic XL was not in the plans. However, it soon came to light that this company was a matter of interest like Spectrol. In fact, Atlantic XL was made a subsidiary of Spectrol Energy Services. In other words, Danny Williams controlled it. Williams, SNC Lavalin, and a fellow named Collin Laird were contacted for comment, but after two weeks, nothing. Just wanted to get that bit of legalize out of the way.

To start the story you need to go to Scotland, Aberdeen to be exact, the corporate home of XL Group Ltd. XL Group was incorporated on April 14, 2000, and was previously known as Mountwest 288 Limited. XL Group has a number of subsidiaries: ORYX XL (joined XL Group in 2000); Aquidata XL (inc 1997); Excel Industrial Systems (inc 1992); Bennett Engineering Services (inc 2003); and until 2008 Atlantic XL. The sole shareholder of XL Group is one Collin Laird of Aberdeen, Scotland.

Scotland seems to, for some reason, hit near and dear to Williams, Brian Tobin, and even Dean MacDonald. Starting with Brian Tobin and Dean MacDonald back in 1998, MacDonald had this to say about a Scottish business trip:

"We identified the Information Technology Association of Canada's annual international deal-making conference, Softworld, as the perfect opportunity to have our coming out party (so to speak). After pitching to host the conference, the ITAC brass finally and reluctantly agreed to let us host Softworld in September of 1998.

I was the chair of the conference and to ensure a healthy dose of European delegates, we convinced Scotland to co-host the event with us. After months of negotiations it looked like we had our deal. I led a trade delegation to Aberdeen to sign the agreement -- everything was falling into place. At least I thought so.

A day and a half before the closing banquet at which the M.O.U. was to be signed, word was relayed to me that the Scots were upset because our Premier was not attending the signing. It was their understanding he would be there as they had confirmed the attendance of their government officials. Uh-oh...the wheels were coming off.

I tracked Brian down in Vancouver and explained the diplomatic slight. He was eight hours behind my time zone and just finishing up meetings. To make the next evening's event he would have to grab a plane in the next few hours, lose a nights sleep and basically travel non-stop for 24 hours.

To make a long story short, he made it. And as I greeted him at his hotel in Aberdeen he looked completely bagged. He looked at me and said "Deano, what are you doing wearing a kilt?" I said, "I'll explain later... here, quick, put this one on I've got for you!". "You don't think I'm going to put that on do you?" he exclaimed. I told him that I had chosen the tartan myself, it was the same one as Braveheart.

That evening, in his kilt, he delivered a vintage Tobin speech to the delight of all in attendance. The deal was done and the rest as they say is history."

What is interesting about that story is Softworld 98 was incorporated in this province in 2006, barely after the last one finished, and its chairman was Dean MacDonald. Williams' companies, like OIS Fisher and Atlantic XL, would have benefited from the international exposure. In 1999, Scottish Abbott Group sold out its interest in OIS Fisher to Williams. Shortly after that, 2001, Williams took a majority position in Atlantic XL. The company had 20 employees and earnings of $1 - 1.5 million.

Williams' two companies did very well in the offshore. Very well indeed. By 2007, Atlantic XL held lucrative contracts on the White Rose, Hibernia, Sea Rose FPSO, and Terra Nova projects. His other company, OIS Fisher/Spectrol, did just fine as well: White Rose; Terra Nova, Deep Panuke; and even a Mobile project in Nigeria. Newfoundland and Labrador Export Directory 2008 lists export markets as NS, AB, United States (TX), Brazil, China, and West Africa. It conveniently shared the same office as Spectrol Energy - 1 Duffy Place, St. John's.

The President of Spectrol, and director of Atlantic XL, was Bill Fanning. Fanning had a history in oil and gas, including his stint with the Hibernia Management and Development Company Ltd, before joining Williams' company. Fanning was also a director, as was Edward Williams, of Spectrol's US subsidiary Spectrol Group GP, LLC, and Spectrol Group Limited of Houston, TX. During Fanning’s time as President of Spectrol he was appointed to the Bull Arm Site Corp Board of Directors (Oct 2006); appointed as Chair of the Board of Management of Newfoundland and Labrador Centre for Health Information (2007); and appointed as a director to Nalcor's Board of Directors (2009). These appointments were made by the Williams' administration to key positions regarding the offshore development of the province's oil industry. Fanning now runs Kvaerner Newfoundland Ltd, an SNC Lavalin subsidiary. Today, Atlantic XL remains an SNC Lavalin subsidiary. Its two directors are Marc T. Cullen representing SNC and Colin Laird representing his XL Group of Scotland.

The problem for Williams, as will be discussed more in depth in the last part of this series, is he was in an obvious conflict of interest. While his companies may have been in a blind trust, although this author was unable to find a public filing of such a trust, his connections to his offshore companies were anything but arms length. In fact, he had family sitting on the Board of Directors of each company. Those Boards were small. Small enough that a family member could carry 50% of the Board's voting rights. Williams, as Premier, made decisions on offshore activity. His companies captured lucrative contracts on every offshore development in Newfoundland. His family members sat on those companies Boards. Williams, appointed his own President of Spectrol to government positions that could place him in a conflict of interest regarding Spectrol's, and Atlantic XL's operations. It would seem that Williams prepared his companies well for his time in government, and that arms length was not a primary concern of his.

Part3 will look at the actual sale of Spectrol, Atlantic XL, and Spectrol Group LLC to SNC Lavalin.

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