Buses, Middlemen, and Politicians

This post is the first in a series of posts on corruption in the government of Newfoundland and Labrador.

In 2003 the Newfoundland and Labrador School Bus Operators Association (the Association) was formed as a professional association. It never achieved full membership, and today it actively represents about 15-20 of more than 85 private school bus companies in the province. Last week, in an act of bravery in this province, Dave Callahan (a school bus operator) openly exposed this story on province wide radio. The story goes like this:

The Association submitted a brief to the provincial government on issues relating to regulations and standards applied to school buses. The condensed version of the brief is that provincial regulations would force school bus operators to buy new school buses, at a price of about $120,000, rather than purchase well maintained used buses for half the price. For example, if an operator were to buy a bus without a stop arm on it, he could not have one installed. Instead, he would have to buy a new bus with one installed at construction of the bus. Other examples include decals and the like.

The bus operators explained to the government that they could not possibly stay in business if they had to buy new buses, because rates paid to them would not reflect that cost. For example, in the 1980's bus operators were paid $30,000 per run for busing children to school. Thirty-four years later, in 2014, that rate was $50,000. However, the cost of a new bus in the 1980's was about $50,000. Today it is $120,000. The bottom line is the government is imposing requirements on the bus operators, but not offering the rates so they can meet those new requirements - hence driving them out of the business.

It's against this backdrop that in 2012 the Association decided to get more politically involved in resolving their problem. Here is a quick history of the two Association members involved:

Clarence Gosse: Owns CB Bus Lines. Sat on town council in Spaniard's Bay in the 1990's. Ran as a provincial PC candidate under Danny Williams in the 2003 election. Known locally as a Tory "bagman" (fundraiser). Frequent financial contributor to the PC Party, including a $1000.00 donation to Jerome Kennedy's election campaign in 2011. Paid for two tickets to a PC Party fundraiser in 2012 for himself and Kerry Noel.

Kerry Noel: Owns Noel Motors and Transport. First cousin of Peter Noel. Peter Noel was: Chief of Staff of the Official Opposition (PC 2000-2003); Principal Assistant to Premier Danny Williams 2003-2007; Senior Advisor - Tourism,Culture and Recreation; and one of Dunderdale's last appointments - Private Secretary, Office of the Lieutenant Governor.

With the failure of their proposal to the government, Gosse and Noel were told by Jerome Kennedy to attend a $100 per plate PC Party fundraiser, at which they would be afforded time to meet with Ministers Jackman (Education) and Davis (Transport and Works).


After the fundraiser, Gosse approached Noel with a list of three names as possible "lobbyists". The person chosen was Robert W. Lundrigan. Here is Lundrigan's history:

Robert Lundrigan: Retired school principal; Resident of Spaniard's Bay; Past PC Party President (2003); past PC association President Port de Grave; and appointed by Danny Williams as Chief Review Commissioner Workplace and Health (2007). Most recently involved with the failed election campaign of Jack Harrington (who was the Executive Assistant for Jerome Kennedy).

Robert Lundrigan was also (until very recently) spokesperson for the private development known as Veterans Development Park - Phase I Inc. - a 210 acre business park development at Spaniard's Bay by Brad Roberts Developments (recently taken over by another entity). Lundrigan and Brad Roberts Developments were also contributors to Jerome Kennedy's re-election bid in 2011 ( Brad Roberts Developments to the tune of $2500.00).

After the fundraiser,  $10,000.00 was offered to Gosse and Noel to help hire a "spokesperson-lobbyist" by Minister Kennedy. The Association was expected to come up with its own money to top that off. When Lundrigan quit he claimed to be still owed $34,000.00.

So, to sum up the transaction part of this affair, two men with some political connections to the PC Party were told to attend a fundraiser for the governing party, to get a resolution for their contract dispute. Three Ministers of the governing party then met the two men, and spoke about resolving their contractual issue at the party fundraiser. The one man, who donated $1000 to Jerome Kennedy's campaign, came back with a list of three names. The name chosen was a man who assisted in the campaign of Jerome Kennedy's former EA, and was spokesman for a company that had donated $2500.00 to Jerome Kennedy's campaign. Minister Kennedy volunteered $10,000.00 of taxpayers money to pay this man to lobby himself ("himself" in the context of his government). I think I have that straight now..

Going through this affair, step by step, it appears to be a  case of influence peddling. There is no reasonable purpose for a Minister of the Crown to request a "lobbyist-spokesman" be appointed by an Association that has already submitted a detailed report on its position. Its position was well known and well explained. There is no reasonable excuse for using taxpayers money to fund such a person - in effect the government is funding someone to lobby itself. Then there is the clear, unmistakable political flavour. It quite clearly appears as a scam by the government to reward a political friend with a plum job, with the premise that his hiring might actually achieve something. Then, of course, there is the requirement that that two men buy tickets to a governing party's fundraiser to get an audience with three ministers.

Is all of this legal? The Criminal Code of Canada states:

 Contractor subscribing to election fund

(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 or 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.

Here are Minister Jackman's words from an interview with the Telegram on April 2, 2014:

Education Minister Clyde Jackman brushed aside allegations Tuesday that a private lobby group was pressured to buy tickets to a PC Party fundraiser in order to get a meeting with him.
He said that interest groups come to party functions all the time, and it often leads to meetings with him, but that doesn’t mean he’s pushing people to do it.
“It’s up to individuals what tickets they buy and what events they go to,” Jackman said. “I’ve been to numerous events where people 
have approached and discussed certain issues, 
and we’ve set up meetings afterwards, Mr. Speaker, 
and I will do this with this group as 
I’ve done with many other groups.”

“All this seems very suspicious: a former PC party president hired on the advice of a senior PC cabinet minister to lobby his own government all through the use of public funds provided by the minister of education,” Liberal MHA Dale Kirby said. “So I ask the minister: how do you justify using your department’s funds to pay a high-level PC Party member to lobby you about school transportation?”

Jackman countered that the government only gave a $10,000 grant, but the Newfoundland and Labrador School Bus Operators racked up $36,000 in lobbying fees, so the taxpayers didn’t cover all of it.

What Jackman doesn't understand, somehow, is that it is illegal to do so when it comes to a government contract or the "transaction of business relating to the government".

Then there is this:

Frauds on the government

121. (ii) being an official, demands, accepts or offers or agrees to accept
from any person for himself or another person,
a loan, reward, advantage or benefit of any kind as consideration for
cooperation, assistance, exercise of influence or an act or omission in
connection with
(iii) the transaction of business with or any matter of business relating
to the government, or

Requiring (and actually partially funding) a middleman to represent an association, that already is the elected representative for its membership, in order to "influence" or "assist" in the details of a government contract is illegal.

Then there are the multiple political layers on top of all this. In my opinion, and I believe the law is very clear on this, and in taking the evidence provided by the association members and others that aren't members, this government has broken the corruption laws of Canada. The RCMP need to investigate this matter. This is one, very public example of corruption within our government. In the coming weeks, there will be many outlined here on this blog.