Humber Valley Paving contract: Nick McGrath says 'nothing untoward' about cancellation

The man whose political career suffered a tremendous setback over the controversial cancellation of a major paving contract in 2014 sayshe did "nothing untoward," despite repeated assertions from opposition politicians to the contrary.

• Nick McGrath quits cabinet over paving fiasco
• Humber Valley Paving should've paid penalty, Lisa Dempster says

NickMcGrath's actions also came under fire from the province's top civil servant during proceedings Thursday before theHouse of Assembly's public accounts committee.

The committeeis reviewing thedecision by McGrath toterminate the $19-million contract withHumberValley Paving for roadwork in Labrador, and not to call in a $9.5-million bond against the company.

McGrath, who was transportation and works minister at the time, vehemently defended his actions while speaking byteleconference with the committee.

"I was trying to protect the taxpayer,"McGrathsaid by teleconference,when asked to explain why it tookjust for hours for him to cancel the contract on March 13, 2014 after learning thatHumberValley Paving would not be completing the work.

Close links to the Coleman family

The decision sparked controversy because of its political overtones, with Corner Brook businessman Frank Coleman at the time poised to become leader of the Progressive Conservative Party, and thuspremier of Newfoundland and Labrador.

Coleman was the formerpresident and CEO ofHumberValley Paving, and his son, Gene, was still a company executive at the time.

Coleman later withdrew has candidacy at the11thhour, however, citing personal reasons.

The contract cancellationeventually resulted ina stinging auditor-general's report, andMcGrath'sresignation from cabinet a little over a year ago.

HumberValley Paving received 'leniency,' saysOsborne

McGrath, who is now actively campaigning for re-election in Labrador West,was repeatedly questioned Thursday about the speed at which the decision was made to cancel the contract, the decision not to challenge the company for defaulting on its obligations, and the political jockeying that was underway at the time.

He was also challenged for keeping his cabinet colleagues, including then-premier Tom Marshall, in the dark on the decision, which didn't become public until CBC News began asking questions nearly six weeks later.

One committee member,Liberal MHA TomOsborne, suggested "normal protocol" was not followed andHumberValley Paving received "a great deal of leniency."

McGrathdenied there was any favouritism or politics involved, and kept stressing that his actions were designed to avoid pushing the company into bankruptcy, and protecting the interests of taxpayers.

"I wasn't seeingit as having politicalimplications. I was seeing it as getting a jobdone and gettingit done in thebest form possible,"McGrathsaid.

Leadership issue 'purely coincidental'

Eyebrows have been raised about the fact that the deadline for nominations for the PC Party leadership was March 14, 2014, the day afterMcGrathmade the decision to cancel the contract.

McGrathcalled that "purely coincidental."

McGrathwould not confirm Thursday whether he was supporting Frank Coleman's candidacy, saying, "I don't think that's relevant."

But he denied ever meeting or speaking with Coleman before the termination of the contract.

"The two had nothing to do with one another," he said.

As for his decision not to share the information with cabinet, McGrath said, "I just didn't do it.I had accepted the responsibilityas a minister and I felt I was within the realm of my responsibilities and duties as a minister. It didn'tseem important to me at the time."

Former premier 'was quite upset'

That's nothow the former premier viewed it, according to Julia Mullaley, clerk of the executive council and secretary to cabinet, who also appeared before the committee Thursday.

"From my perspectivehe was quite upset," saidMullaley,describing how Tom Marshall reacted inlate April 2014, when he learned that the contract had been cancelledafter talking with a contractor at an airport.

She said there's a "requirement" for such a "significant issue" to go before cabinet.

"This decisionby the minister and I think it's recognizedby everyone here that there was no issue in the legal authority of the decision itwas around the sensitivityof the decision," she said.

Rumblings being heard

HumberValley Pavinghad been awarded a contract to pave 80 kilometres of the Trans-Labrador Highway, but that work was hampered by forest fires during the summer of 2013.

The company completed about 60 per cent of the work, and was paid accordingly, or just under $12 million.

McGrathsaid he felt an urgency to cancel the contract because he wanted to get the paving done on schedule.

He said a decision was made to recall two other tenders that were about to be called for roadwork in Labrador, and bundle all three into one contract.

He said that decision saved the province nearly $2 million.

As for the decision not to call in the $9.5-million bond against the company, McGrath said "we didn't feel that was the best route to go" because of the potential for a drawn-out court battle.

'I would have done things differently'

Meanwhile, the formertransportation departmentdeputy minister admitted Thursday that he would have done things differently if he knew that the premierwas not aware of the decision to cancel the contract.

BrentMeadesaid he assumed that the former premier and cabinet were in the loop, or were about to be, when he was directed by McGrathto cancel the contract.

During a conversation with McGrath on March 13, Meadesaid he asked whether the matter should be "moved up the line" and remindedMcGrathof the "political sensitivity" because of Coleman's involvement.

On the question ofcancellingthe contract,MeadesaidMcGrathtold him to "move on it today,"while he was told "not to worry" about any political fallout.

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"Based on the information, the way I drew it out, thequestionsI asked, I felt I made a judgment call that was the best I could make in that sort of situation," saidMeade.

"If I had any inkling the premier didn't know, clearlyIwouldhave pursued other things, includingcontacting the clerk."