Thursday, March 01, 2007

The COD Con

cod - to fool

When the news first broke that Ed Byrne had been asked to step down by Premier Danny Williams, it was came as quite the bombshell. He had the political image of being hard working, trustworthy and dedicated, where upon hearing the news, one might say, "Say it ain't so Ed!" If anyone were going to be honest in government it just might be Ed Byrne. But it appears that the former Minister of Natural Resources was one of 46 current MHA's who at some point unquestionably took money from the public purse. He was one of 5 current and former MHAs to overspend their constituency allowences. The others include Wally Anderson, Randy Collins, Jim Walsh and Percy Barrett. There are over 140 MHAs who may have been involved from the mid 1990's to 2004.

The public always seem to be suspicious of politicians in general because of other scandals nationally, provincially and historically since Canada became a nation. Newfoundland & Labrador is not the first or only province or political body to have political scandals. But now respect for elected officials is likely at an all time low, and only a couple of key figures come out untainted, Premier Williams, and particularly former Auditor General Elizabeth Marshall. It wouldn't be expected for multi-millionaire Premier Williams to accept the kinds of monies concerned with in this scandal, or any amount. But to me Beth Marshall seems to really have kept her hands on the moralistic tiller, and out of the till.

Since the 1990s the Internal Economy Commission acted like civil servers, dishing out cash nuggets in increasingly larger chunks for the next 15 years (see summary below). Sometimes it was even rationalized, for example, Bill 19 was tabled and passed. Bill 19 was significant in that it would give the IEC unregulated capacity to deliver the cash to MHAs. After Clyde Wells' time as Premier was done, the rules of the IEC began changing. It was easier to increase constituency allowance amounts, there was less transparency, less permission to increase various financial forms of income or support for MHAs, and tighter control over who could see the transactions that took place.

Whatever way you look at this scandal it is sad on a number of levels. First of all, the stress of the families of those MHAs must be very difficult. The job comes with pressures but also an image of prestige because of being a peoples' representative, a civil servant. But the image now is more inverted than ever, and families can suffer unenviable embassassment. It is also sad in that when you are connected to dishonesty it paints a new image for the public, something about the person that may not otherwise have been perceived. It can be interpreted to make the person seem morally or personally weak, and all too human. We have seen that picture many times before in our national and provincial histories, e.g., Sponsorship scandal, Hydro One, Mike Harris 1999 election.

Each new election carries the hope that people will have learned from the mistakes of others before them, and to not give in to the till temptation. The satisfaction of doing your best for the province's benefit with an already respectable pay should be enough. With the fall election, there may be plenty of new faces this time, who want to prove that. The extent of shady dealings within the House of Assembly would be enough, one would think, to make new candidates think twice about accepting cash bump ups. If this broad sweeping scandal will not teach people lessons, I'm not sure what it would take. Then again, year after year, we see that people have short memories.

Why weren't more questions asked by MHAs from the 1990s to 2004 about all these constituency allowance raises, discretionary spending amount increases, and lax rules which allowed them to be more unaccountable? It's apparant that an environment of acquiecense, and stealthy approval of the direction of where the IEC was going after the Clyde Wells era, saturated the mindset of MHAs. The whole affair leaves questions still unanswered, such as, "How much of say, constituency allowance increases, would be considered normal, given inflation, the passage of time, and demands on MHAs?"; "Why was there approval of $2850 in 2004 after the IEC began reversing previous benefit changes?"; "How much did Premiers Tobin and Grimes know about the IEC's actions, and what moral interventions should they have exercised to halt the abuse of public funds?"

It would be very interesting to hear some explanations from MHAs of their perceptions of the many increases, raises, benefits and rule changes that took place while they were in office. Did they not sense its secrecy was wrong? Again, it's sad when many MHAs do have many good qualities, are hard working, and appear to have sincere intentions for the people they represent.

It will also be very interesting to see how the fall election unfolds. Will many more MHAs throw in the towel? I'm thinking yes and we will see many new faces seeking party nominations. Let's hope that future potential representatives will learn valuable lessons from all of this and from now on, set a better example of honesty in government.

'Life is for one generation; a good name is forever'
~~ Japanese Proverb


Below are excerpts from Rob Antle's very detailed research.

------- For a Complete Reference see Rob Antle's article or the Feb. 23 issue of The Telegram -------

A Timeline of Key Developments in the MHA spending scandal
Taken from Rob Antles article "Behind Closed Doors" from the Feb. 23 issue of The Telegram

  • In 1989, new speaker of the House Tom Lush announced the creation of a commission to examine MHA salaries and benefits - initiative that dated back to the previous government. Lush noted that Newfoundland politicians were underpaid compared to their peers elsewhere in Canada in virtually every area - salary, indemnity and allowances.
  • Former MUN president M.O. Morgan was selected to head the panel.
  • MHAs at the time received a sessional indemnity of $28,811, plus a tax-free allowance of $14,405. They were entitled to a district allowance of between $1200 and $6000, depending on the geographical makeup of the area they represented.
  • The Morgan report raised MHA salaries to $35,000, and the tax-free allowance to $17,000 - an increase of more than 20 per cent.
  • The Morgan report wiped out the district allowance, and replaced it with a new constituency allowance system.
  • It set down the rules for members' travel - both to and from their districts, and within them.
  • Importantly, it advised the creation of an "accountable constituency allowance," with the IEC determining the amount.
  • The report's authors said that "Receipts should be required, and if no receipts are submitted for certain types of expenditure, some form of verification should be provided.
  • In 1990, the IEC - which is comprised of Tory and Liberal MHAs set the maximum amount for constituency claims at $7500. The committee also imposed rules on how that $7500 could be spent. ... Receipts were required.
  • The bulk could be used for things like office rentals, furniture, office supplies and secretarial assistance ($5000), and receipts were required.
  • A maximum of $1000 could be spent on non-partisan newspaper and radio advertising flags, pins and Christmas cards. Again, receipts were required.
  • The remaining $1500 was discretionary, but required receipts.
  • The $7500 limit on constituency spending remained in place throughout Clyde Wells era.
  • Over the next number of years some changes were made but for the most part, there appeared to be few changes that significantly bumped benefits during the Wells era.
  • MHAs even took pay cuts in the early 1990s, for example, when the Wells government brought in a severe austerity program.

    First Media Inquiry, 1991

    On July 14, 1991, the Sunday Express first raised questions about how MHAs were spending the constituency cash. Then-Speaker Tom Lush rejected the newpaper's request for detailed receipts.

  • Days later, then -NDP leader Jack Harris made public details of his own constituency spending. Said Harris, "I think the answer to it all is to encourage everybody to disclose (their receipts)."
  • Little public attention was paid to the constituency claims system until 1994, when CBC reporter Russell Wangersky reported on a controversy involving Liberal cabinet minister Tom Murphy.

    April 12, 1995 - another IEC review of the various Morgan commission report with a view to rationalizing the system.

    Clyde Wells era was concluding in 1996 and Brian Tobin's was about to begin and with that many more changes to the constituency claims process.


    The IEC said it would reduce travel and constituency allowances for members.

  • Pre-1996, there were capped limits on claims in certain categories.
  • Post-1996, those category caps weer removed.
  • Before, MHAs could spend a maximum of $7500 on things like newspapers, advertising, etc.
  • After 1996, that cap no longer existed.

  • The new rules also clarified that was ok for MHAs with a second home to claim accommodation expenses if that home was "within reasonable proximity of his or her district."
  • The IEC also permitted MHAs to claim $2000 per year from their constituency allowance without receipts, for "miscellaneous expenses."

  • In June 1996, the Tobin government passed an amendment to provincial law allowing the IEC to vary travel and constituency allowances "in accordance with rules made by the commission." In other words, the IEC could make the rules, and change the rules, as it saw fit.


    The IEC created a sub-committee to review constituency allowances for "members who appear to be having difficulties with their allotments." Its three members were Tory MHA Loyola Sullivan, Speaker Lloyd Snow and Liberal MHA Melvin Penney.

    On Dec. 1, 1998, immediately after question period - with the press gallery empty ... Government House Leader Beaton Tulk introduced amendments to the Internal Economy Commission Act. There was no debate. MHAs voted themselves a pay raise in 41 seconds, retroactive to the beginning of the fiscal year eight months earlier.

    Soon after Tobin was re-elected in 1999, the IEC again re-examined constituency benefits. Transparency and accountability of constituency spending faded.

  • There were new positions for MHAs with generous new salaries.
  • more hefty bumps in allowable spending
  • A sub-committee of the IEC recommended another increase of the "discretionary" portion of constituency allowances.
  • The IEC also axed the monthly limit on "discretionary" funding.
  • Furniture owned by the public, more easily became property of MHAs - Anything under $1000 would now be the property of the politician and not the public.

    After 2000

  • Bill 25 was passed which was significant in that is further blocked accountability and the auditor general from reviewing the House books.
  • In December 2000, constituency allowance amounts were raised yet again
  • The IEC even threatened Elizabeth Marshall salary and office operating allowance.

    In 2002 AG Elizabeth Marshall said that her office was blocked from carrying out an audit of the constituency allowances.
  • All this was done behind closed doors, with public disclosure delayed months or years from the dates those decisions were made.

    After Danny Willams was elected Premier in 2003, he "directed" the majority Tory members of the IEC to allow the AG back in to review the books. There seemed to be a sense of contrition as there were some reversals of allowance and benefits raises, that is, until 2004, when the now infamous $2850 constituency bonus was accepted by 46 out of 48 MHAs.

  • The overspending of constituency allowances by five current or former MHAs amounted to $1.6 million.
  • The House also made questionable payments of an additional $2.8 million to a number of companies for trinkets and baubles like keychains and fridge magnets. A key House employee was tied to one of the firms.
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