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)

Sunday, March 30, 2014

The Fish Merchants Battle for the PC Leadership

I started my research on Frank Coleman, because he wants to be premier of this province. We haven't had a whole lot of success in that department, so a closer look is certainly warranted. In my previous post, Frank Coleman's potential conflicts of interest were outlined. They aren't his only areas of potential conflicts, and as you peel this onion a few more start to appear. I want to state from the start that this post is not about demonizing Frank Coleman. It is about shining a light on his past and current dealings for the dual purpose of informing the public, and changing our system of democracy for the better here.

Coleman has been passed off in the press as a successful grocery store business type. That's true on a very superficial level, but not nearly a complete assessment. As Coleman himself said on the CBC show "On Point", he is a long time friend of Danny Williams and Tom Marshall. That is a fact. His companies Coleman Management Services Ltd. and Humber Valley Paving gave Marshall almost $23,000 in election contributions in the last ten years, and even chipped in $2,500 for Williams. Of course that raises questions considering that Humber Valley Paving was awarded the Labrador highway project, valued over $60 million, while Marshall was finance minister. It also raises issues around Marshall resigning his seat and "encouraging" Coleman to seek it in a bye-election. However, this post deals with the history, and there is a history.

Coleman was educated as an economist. He was the senior economist for Newfoundland and Labrador Hydro (before there was a Nalcor), and had a private consulting business known as Atlantic Consulting Economists Ltd. Strangely, he wrote a study in 1993 on the economic feasibility of the Trans Labrador Highway - which his company is now paving. But there are many more twists along this road.

It goes back to the fishery, strangely enough. Back to the days of FPI. FPI was a company formed by the provincial government from the assets of a number of failed fishing companies in 1984. Then, in 1987 under Premier Peckford, FPI was privatized. Previous to the privatization, a number of fishing corporations that were competitors to FPI put forward proposals to take it over, but the government wouldn't relax the rule of a maximum 15% ownership per entity. The predecessor to Iceland Group PLC was one of them. The Risley Group (Clear Water) was another. The proposals were refused by the government, and John Risely blamed the Williams government for meddling in the deal, and killing it.

In any case, Bill Barry of the Barry Group (the other PC leadership candidate) thought he had secured a deal to buy FPI's Newfoundland assets - so much so that it was made public: 

But, the Williams' government didn't go with Mr. Barry. Instead, the assets were sold off to Ocean Choice International which was owned by Ches Penney of the Penney Group. National media were so perplexed by Penney's move that they speculated he could be the front man for an Icelandic company:
The other successful bidder was High Liner Foods Inc of Nova Scotia - which bought a plant and FPI's US marketing arm.

What was left of FPI became FP Resources Ltd. (FPR) FPR's membership is a who's who of the Newfoundland and Labrador business establishment : Peter Woodward (Woodward Group); Rex Anthony (Anthony Group); Frank Coleman (Coleman Group); and previous members John Crosby and George Furey. International players are: Iceland Group PLC; Glitner Banki hf (recently stripped of its bank status in Iceland and in the midst of serious issues); Eric Barratt (Sanford Limited New Zealand); and Randy Bishop (Whitecap International Seafood Exporters). John Risely and his Risely Group of Nova Scotia round out the list.

FP Resources took its cash from the fishery and began investing in the Caribbean. Specifically it began investing in a company called CFFI Venture (Barbados) Inc. (CFFI). CFFI in turn invested in Columbus Communications Ltd, a privately owned telecommunications company that provides retail, cable and internet services to Jamaica, the Bahamas, Trinidad and Grenada, and broadband connectivity to Caribbean countries.  Columbus is run by Newfoundlander Brendan Paddick. He was also the CEO of Persona Communications, which some of you may remember being at the centre of a $15 million contract controversy (Williams' government gave Persona an untendered  $15 million contract to deliver cable services to Labrador).

FP Resources also owned 19.24% of High Liner Foods, which received the FPI's old US marketing arm (many said this was the most valuable part of the company). It sold that interest in 2010 for $20.5 million.
Columbus Communications Ltd. is now worth about $1.6 billion US

I suppose you could say that Frank Coleman is wrapped up in some heavy duty business. The question is: does that mean he shouldn't run for the position of premier. He could hand that business off to a blind trust, but it can't be influenced in any way by family members - including sons - as that is not arms length as required by law. He would have to recuse himself from any decisions regarding awarding of contracts for Muskrat Falls, international cable, groceries, liquor and all the other enterprises he is involved in.

The same would be true for Bill Barry, and the fishery. Barry didn't get Williams' nod of approval for leader of the PC Party - Williams actually, and very publicly, campaigned against Barry. Of course, Barry didn't get Williams' nod to take over FPI assets either. Perhaps there is a history there, who knows.

The problem I have with Coleman is his bid for the camp services contract on Muskrat Falls. In my mind, you simply can't run for the head of government when you are bidding on government contracts, and in fact holding $60 million worth of business in paving contracts with that same government. Then there is the Emera NL directorship. Coleman says he resigned, and in an email exchange, an Emera official stated the same:

"Mr. Coleman formally resigned from ENL's board of directors on March 14, 2014. This was confirmed with the Telegram and NTV News that afternoon."

That's all fine and good I said, but why hasn't Emera, a publicly traded company, issued a press release to that effect. Also, who is Coleman's replacement on the Board? The Emera spokesman's response:

"Mr. Coleman was a member of the Emera Newfoundland & Labrador Board until March 14.  ENL is a subsidiary of Emera. Emera is the publicly traded company on the TSX. EMERA's policy is to issue announcement for board appointments and resignations to its board.  The TSX would not require such disclosure for a subsidiary board.
 A replacement for Mr. Coleman has not been determined."

So Emera's policy is to issue an announcement but they aren't in this case, and the TSX can't force them to, because Emera NL is a subsidiary. Of course that doesn't explain why the section listing Emera NL board members suddenly left its website. The question left begging is why won't Emera publicly issue a press release on Coleman's "resignation"? That's a fair question. At the same time all this went down, Coleman's company Happy Valley Paving's website went down for maintenance, and finally came back up on line on April 2nd .

In my opinion, Frank Coleman is not a good choice for premier of this province. He is more of the same old same old. He is a Merchant. For that matter, so is Bill Barry - although I'm not aware of any contracts Barry Group may have with the government. This PC leadership wouldn't matter if the winner wasn't automatically going to be premier. We've had enough Merchants. We don't need another battle between two Merchants with a history, with a third Merchant trying to get his way - as usual. It's time this province was governed by and for the people. Anything less is unacceptable.

1 comment:

  1. There you go Mr. Bennett...a resounding endorsement. Please reach out to Mr. Bennett...he needs your sage advice and insight into matters that that you have absolutely no idea about


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