Scathing Muskrat Falls inquiry report lays blame on executives - Action News
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Scathing Muskrat Falls inquiry report lays blame on executives

A scathing report from Commissioner Richard LeBlanc was released Tuesday, more than a year after the inquiry began.

Former Nalcor CEO Ed Martin and others took 'unprincipled steps' to secure project sanction, says report

Premier Dwight Ball and Natural Resources Minister Siobhan Coady released the Muskrat Falls Inquiry report Tuesday afternoon in St. John's. (Terry Roberts/CBC)

Former Nalcor CEO Ed Martin and his top deputy Gilbert Bennett"frequently took unprincipled steps" to secure approval of the Muskrat Falls project.

Former Progressive Conservative governments were "determined to proceed" with the development of the Lower Churchill through a lens of political bias and unrealistic optimism.

And top bureaucrats failed to provide proper oversight of Nalcor's activities as the government barrelled toward approval of a risky project in 2012that will saddle the province with billions in debt for generations to come.

Those were some of the jaw-dropping findings of the scathing Muskrat Falls report by Justice Richard LeBlanc, released Tuesday byPremier Dwight Ball and Natural Resources Minister Siobhan Coady,more than two years after Ball called the public inquiry in November 2017, and at a cost of more than $16 million to the provincial treasury.

Former Nalcor Energy CEO Ed Martin had several heated days of testimony and cross-examination at the Muskrat Falls inquiry in June. (Terry Roberts/CBC)

The six-volume, 1,000-plus page documentis called Muskrat Falls: A Misguided Project, and dissects a project that has soared in cost from $7.4 billion at sanction in late 2012, to the current price tag of $12.7 billionand has yet to produce a single kilowatt of energy.

Possible charges

Ball said the "significant concerns" highlighted in the report can't be ignored,and it will now be referred to the police for possible criminal charges, and to the provincial justice department for possible civil litigation.

"I am disappointed and saddened for what has been revealed," Ball told reporters.

When asked why it was decided to send the report to police, Ball said they "felt right now to leave no stone unturned."

The report is especially critical of Ed Martin, referred to during the inquiry as the "gatekeeper" of the project for the years prior to his ugly departure from Nalcor four years ago.

Martin's name is mentioned 46 times in the executive summary.

LeBlanc found that Martin and members of his team, including Bennett,"concealed information that wouldundermine thebusiness case reported to the public, to [the provincial government]and to Nalcor's board of directors."

And LeBlanc said the project team "did its best to narrow consultants' terms of reference to forestall independent review andit tried to influence the editing of reports to make conclusions appear more favourable tothe project."

Justice Richard LeBlanc was the commissioner of the Muskrat Falls inquiry. (Terry Roberts/CBC)

The commissioner said these decisions were most often made by senior team members like Paul Harrington and Jason Kean.

In an especially damning sentence, LeBlanc said Martin "failed tocommunicate the full cost of the project (including strategic risk exposure)" to the government and Nalcor's board.

Stan Marshall defends his deputies

Martin is long gone from Nalcor, but Bennett and Harrington continue to play seniorroles on the project.

But despite being singled out in the report, Martin's replacement is not planning any action against Bennett or Harrington, or anyone else still working at the Crown corporation.

Nalcor CEO Stan Marshall responded Tuesday afternoon to the release of the Muskrat Falls inquiry report. (Terry Roberts/CBC)

Stan Marshall took over as Nalcor CEO four years ago, and quickly labelled the project a "boondoggle."

But during a meeting with reporters Tuesday afternoon, Marshall said he's "not interested in the history," but in finishing the project in what best way possible.

Do I say, 'OK, you're gone,' to cut off our nose to spite our face? If I have to defend some of these people to [finish the project], that's what I'm going to do.- Stan Marshall

"Do I say,'OK, you're gone,' to cut off our nose to spite our face?" Marshall said Tuesday afternoon when asked by reporters whether he had lost confidence in some of his top deputies

"My duty is to get this thing finished in the best way possible for the people of this province. And that's exactly what I'm going to do. If I have to defend some of these people to do that, that's what I'm going to do."

Marshall said he has completeconfidence in Bennett.

"I trust him fully," he said.

As for Harrington, Marshall said, "I have seen no evidence of dishonesty from him, and if I had, he wouldn't be here."

Marshall said Ed Martin took responsibility for the lapse in communication between Nalcor and the government and "the CEO sets the tone from the top."

As forthe province's decision to refer the report to the police, Marshall said, "I didn't hear anything to suggest there's criminal behaviour."

Hesaid he's more worried he may lose some key peoplewho have become disillusionedby all the scrutiny and controversy associated with the project.

Meanwhile, LeBlanc also criticized Martin for "misleading" former premier Kathy Dunderdaleinto believing that sanctioning of the Maritime Link subsea power cable to Nova Scotia was a certainty "when it was actually contingent on future events in Nova Scotia, the outcome of which could not be pre-determined."

Nalcor operated with a culture of "we know best," said the report.

Ball was in Opposition at the time the project was sanctioned, and said it "became a runaway train that could not be stopped."

The premier said it's now clear that Nalcor"understated and withheld financial information" from the province, and Martin "took advantageof political bias and unrealistic optimism of the government of the day."

"We are saddled with the burden of Muskrat Falls, and will be for generations to come. But it didn't have to be this way," said Ball.

The report is highly critical of Nalcor, the public service, and the government. (Marie-Isabelle Rochon/CBC)

The report contains 76 findings and 17 recommendations and LeBlanc wants those recommendations put in place within the next six months.

One of those is that government not proceed with a project valued at more than $50 million without a comprehensive independent review.

'Unreasonable' removal of PUB

In the report, LeBlanc said it was "unjustified and unreasonable" that the Public Utilities Board was removed from providing oversight of the Muskrat Falls project.

If the province's utility regulator had been involved, there is a "good chance we wouldn't be here today," said Ball.

LeBlanc said the government was not fully informed of the risks by Nalcor, nor did the government provide proper oversight.

The commissioner was especially critical of Charles Bown, who was deputy minister in the Department of Natural Resources, and the "conduit" of information between government and Nalcor.

The project cost had grown by $300 million just prior to financial close in late 2013, and there's strong evidence this information was not relayed to government.

LeBlanc pinned this oversight on Bown, calling it"inexcusable."

Months of testimony

The inquirybegan Sept. 17, 2018, and heard from dozens of witnesses throughout three phases of testimony. The title of the report gives a taste of what Leblanc heard during the inquiry how the hydroelectric project ballooned in cost with unchecked oilmen at the helm.

The report was supposed to be released by Dec. 31, but LeBlanc asked for an additional three months to sift through thousands of exhibits and compile his findings.

LeBlanc and other members of the commission have not responded to interview requests.

Martin also declined, saying in a text message he has not yet read the report.

When asked about Martin's role in the project, the premier said members of the public can now read the report and draw their own conclusions.

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