The Coronation of Andrew Furey - Part 2, Brendan Paddick

1986 was a defining year in the province's cable history. Prior to 1986 there were a number of scattered cable companies all over the island of Newfoundland. Everyone is familiar with former Premier Danny Williams involvement in those early days, but there were others. On May 13, 1986 the CTRC brought down its decision on which one of four cable companies would control cable vision in rural Newfoundland. Danny Williams' company Eastern Cable was in the bidding. So were Shellbird Cable (formerly Western Cablevision of Corner Brook), Central Cable and N1 Cable. HPhil Keeping, N1's founder, and personal mentor to twenty something Paddick, succeeded in convincing the CRTC to grant his company the coveted licence.

Shortly after that fateful decision, Williams' Atlantic Cable bought all the losing companies except N1. A young Brendan Paddick, fresh  from MUN's commerce program, was hired by Keeping to sell N1 to the collection of towns and villages granted to him by the CTRC. During an interview with Atlantic Magazine, Paddick opined on the old days, but his tale also tells us something about him:

"As a salesman for N1, whose business model was to build a rural cable TV network where there wasn't one, I knocked on the doors of literally every home in 151 towns. That was thousands of doors. I knowm people used to look at me and say, 'Well, now, look there's Paddick with a business degree no less, going door-to-door, couldn't find a real job.' But, you know what? In my first year oof doing that, I made about $150,000. Of course, I kept it very quiet..."

The camera pans back to the young door-knocker and his homemaker customer. Remember, he tells her, to stick her yellow copy of the cable work order in the window facing the road. That way, when the technician rolls by later, he'll know which house he's supposed to service. After all, he laughs, street numbers in these rural towns can be hard to find.
'The next thing I knew,' he says, 'is I'd have kids stopping me in the street saying, Mom wants one of those yellow things for her window. It had nothing to do with cable. It was pure peer pressure. Before I knew it, there was this groundswell. They all wanted yellow slips for their windows."

What these statements say, at least to this author, is that Paddick is an aggressive, motivated, manipulative, and ruthlessly determined individual whose primary focus is making money and using the basest means to do it. As he says:"It had nothing to do with cable. It was pure peer pressure," and "Of course, I kept it very quiet". Remember those comments for later.

Despite the aggressive expansion of its business, and re-branding to Regional Communications, the company was having great difficulty in remaining in business. It was not meeting all its debt obligations, and Paddick managed to talk the Board into allowing him to become the company's new president when the original gave his notice.

Then, in 1991, a truly fortuitous moment happened in Paddick's life - he met Wayne Myles. At the time Paddick was running his own company named Research Associates, a market research company. Myles approached Paddick to join the Board of the Victorian Order of Nurses (Myles Chaired the Board - More on Myles the Rotarian in the next part of this series). Once Paddick agreed. Myles became involved in his life helping him to negotiate a concession package, and restructure of the debt of Regional Communications. This allowed for the rebranding of Regional Communications to Persona Communications - as most people are familiar with it. Persona continued on with varying degrees of success until it went public in 1998. After the IPO Paddick became President of Persona.

Myles describes it:
"When he became CEO, we did a number of complex deals for them...in my firm which was then known as Benson Myles. So we did work for Persona across Canada and established a fairly deep relationship with him and his team."

In 2001, Myles hooked up with John Risley (much more on him in next parts), owner of ClearWater Seafoods. At the time, Risley was attempting to take control of FPI, but the Newfoundland government (Brian Tobin) would not give control of more than 15% of the company to any non-Newfoundland entity. The solution was to place Paddick as a Board member. Risley was then successful, on his second attempt, to take over FPI. After that time Myles, Risley and Paddick collaborated in each others' business:" Risley as an investor in Persona; Paddick as a board member of the Risley-founded Clearwater Seafoods public company; and Myles as legal strategist for both."

In 2002, as President of Persona, Paddick purchased a 25% share in Cable Bahamas from his old mentor Phil Keeping. As the Globe and mail noted, in 2002, Paddick did quite well by his new acquisition:
"A walking tour through Persona's management proxy circular and assorted financial statements presents a few curious tourist attractions. Here's one: Brendan Paddick, Persona president, is the happy recipient of a $1.1 million (US), interest free loan. The money, according to the proxy, was used "to finance the purchase of his new personal residence. And where is the new residence? In the Bahamas, lucky him."

By 2003 Paddick faced  a shareholders revolt over his Caribbean wanderings - they accused him of not being focused on Persona's core operations. So, in 2004, Paddick agreed to sell Persona to a group of wealth funds fronted by Dean MacDonald. The wealth fund that purchased Persona could not, however, own holdings outside of North America, so Persona's interest in Cable Bahama became immediately available. Paddick scrambled to buy it before anyone else moved in. He personally did not have the money to purchase it, but his friend John Risley did. As Risley put it:
"We had decided what our launch had to be. We originally thought it (Cable Bahamas) carried a price tag of US $35 million. At a dinner in Toronto, it became apparent that it was going to be US $50 million, and I went home angry and disappointed. Brendan told it was 50 or we weren't going to get going, so I agreed."

According to Paddick:
"Risley actually wired US $50 million to my personal chequing account in the Bahamas without a piece of paper, a demand note or a lawyer involved. We closed the deal after regulatory approvals in February 2005 and the rest is history."

By that same year, despite a seven year rule for citizenship in Barbados, Paddick was a Barbados citizen. Also in that year, Paddick and Risley had run out of their own money after buying the Cable Company of Trinidad and Tobago. Hankering back to his early door-to-door, dogged, pavement-walking days, Paddick and Risley tried to raise funds in New York, but failed. As providence would have it, or just good intelligence, billionaire Michael Lee-Chin and Michael Dell (Dell Computer) came to their rescue. They paid $130 million for a sub sea cable network called New World Networks, which became Columbus Networks. Over the years of purchasing, amalgamating, and selling cable companies in the Caribbean, Paddick established 30 corporations through a law firm owned by one Andrew V Thornhill in Barbados. The disclosure  of these tax haven accounts was made as part of the giant leak of tax haven accounts collectively known as the "Paradise Papers" to the International Consortium of Investigative Journalists. For your information, the 30 accounts and their details can be read here:

https://offshoreleaks.icij.org/search?utf8=%E2%9C%93&q=paddick&e=&commit=Search

It is unclear whether or not any of Paddick's businesses or income have paid any taxes in Canada, and specifically Newfoundland and Labrador, in ages. He remains a citizen of Barbados, and his income fund remains there too.

In November, 2016, Brendan Paddick was named Chair of Nalcor Energy, despite having no background in utilities or mega projects, other than being the "cable guy".

Exactly six months later, Wayne Myles, lawyer, chief connector with a large empire of his own, was named as Chair of the Newfoundland and Labrador Liquor Corporation.

The next part in this series will focus on John Risley, Wayne Myles, Mark Dobbin with a few others, and their ties to Doctor Andrew Furey. The alarming agenda behind the coronation of Andrew Furey.

The Newfoundland Nightmare

Newfoundland's economic problems are all structural, and now those problems are all coming home to roost. The structural part is not new. In fact, they trace back to the "merchant" days here - which in many ways have not changed. A small group of select families have controlled everything from insurance to resources, and everything in between for centuries here. Looking through that prism it is easy to see "modern" Newfoundland and Labrador's key structural problems.

Everything that is worth anything is controlled privately. Now, pure economists or extreme capitalists will argue that isn't a structural problem, but rather the way it ought to be. However, a province with such a small population must have a revenue stream greater than more populated provinces in order to adequately support its operations. In Newfoundland's case, successive governments have sold that revenue generating capacity away. The province is at the point where its major streams of Crown corporation revenue, other than oil royalties, rests really in liquor and gaming, and to some extent Nalcor Energy/NL Hydro.

It is quite easy to see why NL Hydro and Nalcor are still in government hands. Firstly, NL Hydro is not a money maker. Its primary function is to generate power - not retail it (where the money is). In other words, taxpayers pay for the generation of power, and NL Power (Fortis Corp) sell the power at retail prices while avoiding the costly problem of infrastructure to produce it. It's a win-win for NL Power, and a lose-lose for the average citizen.

Another industry which should be nationalized, or never privatized as it was, includes the insurance industry. The provincial government sees almost nothing of the car insurance, house insurance industry revenues that regenerate annually.

Telecommunications is another example. There is no provincial phone/cable company that could generate annualized revenue for provincial coffers.

Now all this may sound a little socialist in its undertones, but the bottom line is all the worth while wealth of the province has been transferred from the public's hands. That means there is not sufficient cash flow returning to the provincial coffers to adequately fund a modern quality of life. This becomes glaringly obvious when the one gravy train,oil, falls on its face. That is exactly where we are at today, and where we keep finding ourselves in the future. Structurally there can be no other result.

However, it isn't just the "little" people that get hurt in this cannibalistic economy. Small and medium sized businesses, municipal governments, non-governmental actors, and even the provincial government suffer as well. Eventually the loss of revenue from the local economy results in: less consumption of goods and services; higher government taxes; and uneven business cycles. That makes economic activity and necessary governmental wealth unstable and inadequate. And all that combined puts Newfoundland and Labrador's economic and social existence on thin ice - which in turn results in out migration, which in turn makes the core problems even worse.

Eventually all this must come to a head and fail. I believe we are almost at this point now. With an accumulated deficit now reaching almost 9 billion dollars, and structural budget deficits of at least a billion dollars a year for the foreseeable future, there is no answer for this province's nightmare. Raising taxes further will kill whatever consumption economy is left here, while failing to do so will kill governmental activity. Cutting civil service jobs may make governmental activity somewhat more efficient, but it will also severely damage the one "stable" economic driver for consumption. In short, the economic elites in the province have managed to paint all of us into the proverbial corner. There are no immediate solutions left. Nationalization of key industries like power, cable and insurance would provide some long term stability, but would require putting out money now that the province doesn't have. All in all it's a nightmare - a Newfoundland nightmare to be sure.