$5M flood-fight plan helped spark NDP uprising: source

Hey there, time traveller!
This article was published 16/06/2015 (3793 days ago), so information in it may no longer be current.

An untendered deal for $5 million worth of flood-fighting equipment for several First Nations helped provoke the cabinet rebellion in Premier Greg Selinger’s government last fall, the Free Press has learned

Details of the deal were revealed in a government whistleblower’s complaint filed to the ombudsman’s office shortly after five cabinet ministers resigned last fall in protest over Selinger’s leadership.

The whistleblower alleged that Infrastructure and Transportation Minister Steve Ashton made the spending commitment without government approval, and may have placed himself in a conflict of interest because of his connections to the suppliers of the specialized flood-fighting equipment.

In an interview, Ashton said he did nothing wrong and the equipment deal was part of a government plan after the 2011 flood to equip a new First Nations emergency command centre with water-filled dams it could deploy to communities needing immediate protection from flooding.

“We made the commitment for the $5 million and absolutely it was our intention to live up to it,” Ashton said. “The key issue for the First Nations was that there were certain needs that they should have.

“That was the intent — to be part of the solution for them. It’s unfortunate it’s been interpreted in another way.”

Ottawa eventually picked up the entire $5-million tab for the flood-fighting equipment.

The allegations made against Ashton are contained in a Nov. 17, 2014, letter, obtained by the Free Press, written by then acting ombudsman Mel Holley to clerk of the executive council Milton Sussman, the province’s top bureaucrat.

In the letter, Holley said the whistleblower’s allegations were serious enough to warrant an investigation under the Public Interest Disclosure (Whistleblower Protection) Act regarding the untendered purchase of $5 million work of flood-fighting equipment for the Interlake Reserves Tribal Council Inc.

The PIDA was made law in 2007 to give government employees a process to disclose significant and serious wrongdoing in the Manitoba public service, and to provide protection from reprisal.

Holley’s letter to Sussman said the whistleblower was concerned two of the three suppliers of the flood-fighting equipment were campaign contributors to Ashton. A review by the Free Press of donor lists and amounts filed with Elections Manitoba indicates the two have been longtime donors to the NDP and the minister.

One of the donors was out of the country and unavailable for comment and the second donor said at that time his company was not manufacturing flood-fighting equipment for the main supplier, and had no involvement in the IRTC deal.

Ashton said the province buys flood-fighting equipment from a number of sources and purchases go through a vetting process.

“It has to go through the financial processes,” he said. “Does that take time? Yes. Are there often detail discussions? Absolutely. That’s what we did.”

The whistleblower’s main complaint was that the $5-million purchase was publicly announced in a July 25, 2014, news release without prior government approval or the purchase going to tender to solicit bids. The whistleblower has not been identified.

The whistleblower also claimed efforts were made to circumvent the normal Treasury Board approval process by trying to get funding approval from another cabinet committee, the aboriginal issue committee.

Treasury Board is a sub-committee of cabinet responsible for overall government spending and chaired by the finance minister, who at the time was Jennifer Howard, one of five ministers who later resigned over Selinger leadership. Also on Treasury Board at the time were then jobs and economy minister Theresa Oswald and then municipal government minister Stan Struthers, who also resigned their posts.

Ministers Kerri Irvin-Ross, Gord Mackintosh, Kevin Chief and Greg Dewar were also on Treasury Board at the time.

Sources said Treasury Board refused to approve the funding request despite pressure from Ashton and the premier’s office.

“It was a very aggressive attempt to circumvent the process,” a source said.

The same source provided the Free Press with Holley’s letter and other documentation on the condition of anonymity.

The source said there was a push by Ashton to use the Building Manitoba Fund to cover the cost of the flood-fighting equipment. The fund is used to provide municipal infrastructure assistance.

The whistleblower’s complaint also alleged the planned purchase of the flood-fighting equipment was questionable in that the amount of equipment would exceed the province’s own stockpile, and was coming at a time when there was no immediate flood threat as summer flood waters on the Assiniboine River had receded.

Ashton disputed the claims, saying the IRTC believed it was urgent the equipment be purchased quickly to protect the 31 First Nation communities at risk of flooding.

He also said the whistleblower’s allegations are “clearly coming from a perspective of not knowing all the facts.”

Sources say soon after Holley’s letter landed on Sussman’s desk, efforts were made by Sussman to deal with the situation by putting it to tender, despite it languishing at Treasury Board for about four months.

“This was happening in parallel with all the political crap,” the source said, referring to the closed-door discussions between the premier and his MLAs and senior staff about whether he should resign to heal the party, damaged in part because of the 2013 increase to the retail sales tax. The tax was raised one point to eight per cent despite a promise by the premier in the 2011 election campaign he would not raise it.

One month after Holley’s letter to Sussman, the government issued a request for proposal Dec. 19, 2014, for “Water Filled Barrier Rapid Deployment Flood Systems” for flood response on First Nations. No tender was awarded.

On March 23 of this year, the IRTC issued a news release it had purchased 20 emergency flood-tube response units to distribute to three First Nations. The release said Aboriginal Affairs and Northern Development Canada and Public Safety Canada covered the $5-million cost of the equipment.

“The province just kind of disengaged from it,” said a second source with intimate knowledge of the whistleblower’s complaint. “The feds picked up the tab for the full amount.”

The provincial government’s issuance of an RFP also ended the ombudsman’s investigation of the whistleblower’s complaint almost before it began. Under the PIDA, the ombudsman has the authority to refer a complaint to resolve informally.

However, sources said the premier’s office only took action after the whistleblower’s complaint came to Sussman.

They claim the premier’s office was aware of the situation since at least August and had lobbied Treasury Board to approve the $5 million.

The Free Press has also obtained a copy of an itemized Aug. 5, 2014, invoice from International Flood Control Corp. to the IRTC for payment of $5 million for 33 customized flood-fighting units.

“I am sending this invoice to you as follow up to the commitment your department has made to Manitoba Flood (sic) affected First Nations,” IRTC chairman and Peguis First Nation Chief Glenn Hudson said in the invoice’s cover letter to Ashton.

Ashton said Hudson submitted the invoice to the government in error. Hudson was unavailable for comment.

“It was not what was discussed,” Ashton said. “It was going to be provincial equipment. “Certainly, they would have preferred it to be owned by the IRTC. That was clear on the initial invoice that they sent, but we made it clear that was not the commitment. It was $5 million of equipment, but if it was going to be provincially owned and it would have to go through our own internal processes.”

Sources also say the matter had been discussed around the cabinet table prior to the weeks leading up to the whistleblower’s complaint in November, coinciding almost to the day when Howard, Struthers, Oswald and two other ministers, Andrew Swan (Justice) and Erin Selby (Health), resigned Nov. 3, saying they could no longer work with Selinger.

Ashton said he would not comment on the timing of the whistleblower’s complaint and the resignations.

The resignations subsequently touched off a three-way leadership race. Selinger retained his leadership of the party at a March 8 vote by NDP delegates, beating Oswald by 33 votes. Ashton fell off the first ballot.

Sources say a number of NDP MLAs were also concerned at the time that the planned purchase was not tendered — a process condemned months earlier by then-auditor general Carol Bellringer in her scathing report on the government’s untendered, 10-year contract with the Shock Trauma Air Rescue Society (STARS) helicopter air ambulance.

“To try to pursue this so soon after the auditor general’s report was especially concerning,” the first source said. “It did not seem to be in the public interest.”

bruce.owen@freepress.mb.ca