FRED and the NALCOR Curse
Furey Liberals switch from knob polishing to turd buffing
Things are not looking good in NeverLand.
Andrew Furey’s new ‘69 with Francois Legault is not going over well with voters. Excessive hype made people suspicious right off the bat and lots of credible people hauling the guts out of it over fatal flaws that are easy to see did their own damage to Furey’s Dream Date with Destiny Legault. What’s worse, all the king’s negotiators and all the government’s spin machine cannot explain the glories of this version of the ‘69 deal as simply or as convincingly as the critics can point to the giant holes in it.
Not surprising really since Legault played Furey for a fool and Furey willingly obliged. To help seal the Legault steal, Furey got lots of bad advice all the way along from his friends and didn’t go looking for good advice from the people who aren’t going to enable him. That’s just a flaw he’s had since Day One and it just won’t go away.
Ultimately, Furey got trapped letting the two partners in the project - NALCOR and Hydro-Quebec - negotiate how they were going to split the electricity between them as cheaply as possible. The result is that Furey got the nightmare political scenario: he’s selling the deal so heavily as a defeat for Quebec in nationalist eyes that the Parti Quebecois is tearing strips off the beleaguered Quebec Premier who also has to go to the polls soon. Meanwhile, the real deal is so favourable to Quebec - essentially exactly like 1969 but way worse - that it makes Newfoundlanders and Labradorians suspicious at the least. Furey’s only bright moment on the home front is an opposition so bland, even Dwight Ball would find it weak tea. A political opposition with some guts would already be hanging Furey’s from a pole.
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The real giveaway that Furey’s deal is in trouble this week was the passage of yet another Wednesday without the election rumoured to be called every Wednesday since the first of the year. Instead, Furey’s crowd made the announcement they were supposed to make two years who negotiations with Quebec started, namely of a negotiating team. Thing is, the negotiations are now over, as head negotiator Karl Smith told NTV. All Karl, NALCOR boss Jennifer Williams, and justice deputy minister Dennis Mahoney are doing is overseeing the lawyers as they draft the final agreements based on the memorandum of understanding.
For inadvertent extra giggles, the guv’mint crowd also announced the three people on an oversight committee from the House dog and pony show. Their job is to watch the team of Smith, Williams, and Mahoney as they oversee the lawyers doing the real work. What Dennis Browne and his two buddies on the oversight of the oversight will do if they find an oversight in the overseeing remains to be seen since they have no right to tell anyone but the guv’mint if they see an oversight by the oversight committee.
Don’t forget that when he should have announced a negotiating team existed, that is two years ago, Andrew Furey told us only that he’d asked three people to see if there was a basis for negotiations. Turned out they actually were the negotiating team and they started the day before Furey’s announcement to the public of the Not-Negotiating team that was actually the Negotiating Team. And the deal they delivered is the one Furey and the team now cannot sell to the people stuck with paying for it. Sound familiar?
Karl Smith’s media appearance was another clue that the deal is in political trouble. Smith, an ex-boss at Newfoundland Power had all along refused to speak publicly about the deal and was nowhere to be seen in early January during the stage-managed dog and pony show in the House of Assembly to sell the deal. Yet there was Smith now talking up the deal, which Smith knows is already done.
To go with the giggles of the oversight oversight committee, Smith accurately described the original 1969 deal: a long-term deal that cannot be changed for a lot of electricity, dirt-cheap. All fine as far as that goes but the problem for his team came when Smith couldn’t explain how his deal was not a long-term deal that cannot be changed for a metric shit-tonne of electricity for a dirt-cheap price. The only thing the crowd behind this fiasco point to, Smith included, is that the new superlow price is higher than the old superlow price. But that original price was so low, getting more was easy to do just as much as it is also a dodge, a line, a fib, a nose-puller as Smith well knows. The complaint about the original deal was that the fixed price did not reflect the market price, which isxway higher, something that Smith’s deal repeats exactly. For good measure, Smith also repeated the enormously obvious falsehood that there’s a billion dollars coming to the provincial treasury from the deal this year. Just. Not. True.
So yeah. Not helpful to Andrew Furey at all.
You cannot buff a turd, as the old saying goes.
Furey’s ‘69 with Legault is such insubstantial crap, you could not even get a decent coat of shellac on it that might hold a bit of a shine of its own.
They’ve already taken their best shot at selling it with the opening announcement packed with every Liberal that anyone could find. Brian Tobin gave it a thumbs up. Roger Grimes was at the launch newser and gave it a thumbs up. Gil Bennett was sitting next to him. Wait. He’s not a Liberal. But big thumbs up from the Muskrat Daddy. Clyde Wells was there, too, apparently. Even Yvonne Jones was ready to tell anyone who asked how great this all was but no one asked her. Sending out Karl Smith now and anyone else who might pop up in the future only affirms the shakiness of Furey’s best hope for a mention in the history books in a good way.
Another clue the deal is not going over well is the fact we don’t have an election call yet. That’s the simplest one. Furey and the Liberals have been gearing for an election since the last one and this has been the centrepiece of their plan for a long while. They’ve been running campaign ads for a while and were ready to go to the polls a year ago, likely in anticipation of having this deal finished by then. The longer Furey goes without dropping the writ now that he has a deal, the shakier the Liberal backroom thinks the deal is.
This is not news to regular readers. They’ll remember the observation that there have been those inside the provincial Liberal party who think the time to go is after the next federal election. These folks are buoyed by any sign the Liberal fortunes are on the rise now that Trudeau is gone but they are also folks who figured Trudeau could have pulled off a miracle. Their approach to politics is less numbers and analysis and more chicken gizzards and incantations. But hey. They think it works.
There are others who want to go to the polls before the next election in hopes of avoiding the huge tide of the federal Cons swamping the provincial Liberal dory as the Con supertanker steams past them at high speed. Theirs is not much better than the turning around three times naked at night and sacrificing a squid to the election gods but it makes a bit more sense than blind hope. Even this debate is a sign of the fundamental weakness of the provincial Liberals since they do not have their own identity in the public mind that is strong enough to carry them through an election without some sort of outside help and a lot desperate praying to non-existant gods.
In a larger sense, the Furey bunch are also shagged by the political problem of reworking the ‘69 poorly especially once public support for Legault’s Coalition Avenir Quebec tanked right after his trip to Sin Jawns in 2023. Then there’s the bit we mentioned at the beginning. A good deal for Quebec at Newfoundland and Labrador’s expense - which this one is, in spades - would sit with the Newfies Furey needs to vote for him like a cow-pat centrepiece at the family Christmas dinner. A good deal for Newfoundland and Labrador - which is the way Furey is selling this - would ignite Legault’s opposition in Quebec, which it has.
The political way to succeed in presenting a genuinely good deal that benefits both sides was to prepare the ground ahead of time. Way before now. Way before Legault put his knees under a dinner table at The Rooms. This is something Furey’s Liberals not merely failed to do in any way but their choice of secrecy and lies in place of even rudimentary political communications actually guaranteed they’d be in the political jam they are in. It’s almost like they wanted to shag themselves up.
Anyone paying attention over the past 20 years will recognize that secrecy and lies are the NALCOR/Hydro culture, especially obvious in the original FRED called Muskrat Falls. They will also recognise the recurrence of the pride theme with *this* deal, again something that has seeped across from NALCOR to infect any politicians touched by it.
“Pride is a big factor” a manager at Muskrat Falls told the Telegram’s James McLeod in 2015, even as the scale of the disaster became more apparent to people who paid little attention to the project. The business crowd who organized a front group to sell the project in 2012 never talked about the business case for Muskrat Falls. They talked instead of pride. At the Muskrat Falls inquiry, then NALCOR board chair Brendan Paddick - Andrew Furey’s best friend and the source of some of Furey’s most amazingly bad advice - told us all that the time was here to “put on the NALCOR jersey” and get behind the project, like we hadn’t backed it before. And just a few weeks ago, NALCOR chief executive Jennifer Williams told us all repeatedly during the dog-and-pony-show that Muskrat Falls was great. Be proud. Just forget the money bit.
Well, in a sense, that way of thinking is the same as Jennifer’s and by extension the guv’mint crowd’s thinking about *this* deal. It’s not the 1969 deal because it was signed in 2024. So obviously, it’s not the same deal. The logic and anything else in the official argument are really not much more sophisticated or even factual than that bit of nonsense.
But there’s more to the problems in this deal and the political tumbling of it than that. One of the problems that emerged in the late 1990s was the close personal relationship between NALCOR - then genuinely called Newfoundland and Labrador Hydro - and the Premier’s Office. By the time Roger Grimes left office, he and his officials actually controlled the Lower Churchill Project Office, paid for by NL Hydro, but not accountable to its board of directors. Huge governance problem.
Danny Williams carried on this approach, gave the newly named NACLOR responsibility for energy policy that had been done by government, gave the NALCOR team responsibility for negotiating contracts on behalf of government for the offshore and Labrador Hydro, and strengthened the *personal* relationship between himself as Premier and the NALCOR CEO. On top of that the Premier, who is solely responsible for making senior appointments to boards, agencies, and Crown corporations, stacked the Board with personal and political friends and family members. That same pattern carried on once Kathy Dunderdale - Williams’ chosen successor - took office and Dwight Ball kept all of the old Williams/Dunderdale appointees in place including Martin and board chair “Kenny” Marshall. Andrew Furey continued the pattern, typified in his appointment of his best friend Paddick as board chair.
This gave NALCOR/Hydro and extraordinary and highly unusual political power. It altered fundamentally the normal accountability relationships and the policy responsibilities within a healthy cabinet government. Just as we now have with the health authority, NALCOR had a direct pipeline to the Premier instead of reporting to the appropriate minister. That means that any policy or project decision takes place, in effect, outside the proper channels of authority and accountability and maximizes the chances for groupthink.
It’s really important to notice that the personal relationship between Premier and NALCOR/Hydro is what one would find in an autocracy anywhere in the developing world, based as it is on personal ties to the Premier rather than demonstrated knowledge, competence, or a lack of any serious conflicts of interest. It is very old-fashioned and fundamentally anti-democratic as much as it is just a recipe for endless mismanagement. And under Andrew Furey all of that has continued unchanged at best or intensified at worst. When you put that together with the other political changes like the neutering of the legislature - the real independent oversight group - you can see why we have had a string of this disastrous projects since 2003.
Conflict of Interest - individually or organizationally - is at the heart of the way the Government of Newfoundland and Labrador and local politics has operated after 2003. Conflicts of Interest that are bad things in any properly-run organization are considered normal in any autocratic, anti-democratic culture, which what we now have in Newfoundland and Labrador. Just look at how many of Andrew Furey’s political and personal controversies are rooted in conflicts of interest, which he dismissed as normal and irrelevant. But notice that for Danny Williams, Andrew Furey or any other premier since 2003, the only important qualification for any key appointment was *personal* loyalty to the premier of the moment. Loyalty is defined as doing whatever the boss wants. Literally everything else is irrelevant.
Conflicts of interest abound in this ‘69 deal, not the least of which is letting the two partners in the Churchill Falls project sort out between themselves how much electricity each would take for the project and deciding - again as I warned about two years ago - how little to pay for it. The people Andrew Furey appointed to “advise” him on the various committees all came *after* he’d bought Legault’s line and so there was never a chance to explore genuine alternatives or find strategic options.
What’s worse, Furey appointed people who would support his own views or people who had nothing important to offer. His “advisory” teams intentionally neutralized some potential critics with the flattery of an appointment or gave a seat to others whose presence served as mere tokens. All of that goes with the well-established pattern for post-2003 Premiers and of Furey personally of not heeding any advice that does not fit their own pre-determined decisions. The result is exactly the groupthink that Richard LeBlanc warned against. There is no evidence that any of the corruption of sound decision-making that bloomed under Danny Williams and is now baked into the architecture of government has been altered. If anything, Andrew Furey and the 1969 deal is the result of taking all the very worst trends and developing them to even greater degrees.
This is the NALCOR Curse, long-ago spread to the university but without the personal affections of the Premier involved. The NALCOR Curse is also now spread to health care with the appointment of Pat Parfrey as chief executive. It is no surprise that this continues. What is amazing, though, is how quickly Newfoundland and Labrador went from financial health and an imperfect but fundamentally well-managed government to something that would rival the worst autocracies of the world.
