The Department of Innovation, Trade, and Innovation is essentially a department set up to dole out tax dollars to companies looking to expand or develop their businesses here in the province. Within the department is a program called the "Commercialization Program". The role of the program is:
The Commercialization Program bridges an identified funding and
investment gap between product research and product marketing. It
provides financial assistance to private sector enterprises for activities
leading to the development of innovative, market-ready products and
services, including support for technology transfer activities. The
program will assist companies in Newfoundland and Labrador that have
difficulty securing investment or loans to develop innovative products
or services.
In other words, it doles out taxpayers money to companies that can't get bank loans. It gives "qualified" companies up to 75% of the cost of developing their product to a maximum of $500,000.00.
In late December, 2007, Minister responsible Trevor Taylor approved a $500,000.00 loan for NewLab Clinical Research - the maximum amount allowed. The Minister allowed the funds released to the company using future profit projections as the equity investment required by the company under the program. In other words, the company didn't have to put a cent upfront for the loan. Then, in late 2008, new Minister Shawn Skinner approved another loan. This time to Newfound Genomics for $500,000.00. Instead of using possible future profits as it's down payment (equity) investment, the company transferred $200,000.00 of government money already lent to NewLab Clinical Reaearch into the account of Newfound Genomics. The result? Dr. Wayne Gulliver, the owner of both companies, received $1 million from the taxpayers without putting up a cent.
During this time, Mr. Gulliver and his company NewLab Clinical Research were donating to the PC Party. Their donations were as follows:
2007 - NewLab Clinical Research $1,450.00
2008 - Wayne Gulliver $2,000.00
NewLab Clinical Research $ 900.00
2009 - NewLab Clinical Research $4,500.00
2010 - NewLab Clinical Research $5,000.00
2011 - NewLab Clinical Research $4,500.00
2011 was the last year that Gulliver or his companies made political donations according to the records. Also happening in 2011 was an investigation by the Auditor General into the awarding of the $1 million worth of loans to these two companies. The Auditor General found a number of problems, including: No equity investment made by the companies as was required by the loan agreement; taking on additional debt in contravention of the loan agreement ( $460,000.00 bank mortgage - a total of $961,763.00); $33,200.00 paid out to a director of the companies, which contravened the loan agreement; and no remedies included in the loan contract if the company broke the terms of it. The Auditor General also found that additional monies were paid out to the two companies by the government: $21,000.00 in wage subsidies; and $5,000.00 in trade mission subsidies.
In fact, the Auditor General stated:
" The terms and conditions of funding indicated the applicant must use the funds for the items outlined in the Commercialization Program."
That essentially refers to wages, equipment, etc. So the question that comes to mind is how do political donations fit into that description? Almost $16,500.00 was paid out by the company to the PC Party during the period in political donations.Another, far more troubling question is how can the PC Party accept money from a company it is negotiating development loans with? As part of that loan agreement the Government of Newfoundland and Labrador also became a shareholder. That is a question for Taylor, Skinner and the PC Party to answer.
In April, 2011, Newfound Genomics sold its equipment an closed shop. Finance reports from the province indicate the full $500,000.00 from Newfound Genomics was still outstanding, and that money is still being recorded as a viable investment on the books. The same financial reports indicate that NewLab Clinical Research has paid back a gran total of $16,000.00 of its $500,000.00 loan since 2007 - that's slightly less than it contributed to the PC Party during the same time.
Meanwhile, then President and CEO of Newfound Genomics, Siobhan Coady, seems to have said little on the issue. Coady is currently listed as President of Bonaventure Capital (which doesn't exist according to provincial and federal corporate registries), and seeking the provincial Liberal nomination in St. John's West. Coady was also involved with Gulliver in The Clinical Trials Centre, which was involuntarily dissolved in 2013.
Just another incidence of the PC Party profiting off government business. In this case a company partly owned by the government paid off the PC Party rather than the taxpayer. It's also another case of the King's men taking care of business.
Related links to this story:
Telegram story 2011:
file:///C:/Users/Cabana/Desktop/NL%20%20AG%20investigating%20Newfound%20Genomics%20loan%20-%20Provincial%20News%20-%20Daily%20Business%20Buzz%20-%20Newfoundland%20&%20Labrador.htm
Ministry of Finance, Public Accounts, Volume 1, (page 63)
http://www.fin.gov.nl.ca/fin/publications/volumeI_2012-13.pdf
Report of Auditor General 2011 (Page 417)
http://www.ag.gov.nl.ca/ag/annualReports/2010AnnualReport/AR2010.pdf
Siobhan Coady makes play for provincial seat (CBC)
http://www.cbc.ca/news/canada/newfoundland-labrador/siobhan-coady-makes-play-for-provincial-seat-1.2512216
Genomics lab quality questioned (CBC)
http://www.cbc.ca/news/canada/newfoundland-labrador/genomics-lab-quality-questioned-1.1027319
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