War of words heats up between Pallister and former Hydro chair

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This article was published 22/03/2018 (2775 days ago), so information in it may no longer be current.

A day after the stunning mass resignation of the Manitoba Hydro board, the war of words between the premier and the former board chairman ratcheted up Thursday.

Premier Brian Pallister accused the former board of offering the Manitoba Metis Federation “hush money.”

Sandy Riley, who quit as Hydro’s chairman, said he found the characterization to be “offensive” and driven by the government’s “desperation” over the resignations.

“I am just so disappointed in the way this government has decided to play this,” Riley said. “Although I guess I should not be surprised… I’m just so disappointed that we’ve come to this stage.”

Riley said Pallister has spun “untruths” about the events that led up to the board’s resignation Wednesday, in a blatant attempt to cover up his own mismanagement of pressing issues facing the province’s electrical utility.

The dispute between the Tory-appointed board and the premier has not only rocked Manitoba’s largest Crown corporation, but it threatens to divide the Progressive Conservative party, just two years after it steamrolled into office with a massive majority.

Riley, a strong PC supporter and generous party donor, and several of his former Hydro board colleagues have strong Tory ties. Pallister had appointed the nine directors who left their posts Wednesday, shortly after his party took power in May 2016.

Reached Thursday in California, where he is vacationing with his family, Riley said he and fellow ex-board members had no choice to resign en masse after the premier repeatedly refused to meet with them on a variety of issues, and Riley had been informed he and others were about to be shuffled out the door.

He said the board had been frustrated by the premier’s stance that he couldn’t meet with the board while Hydro’s request for a 7.9 per cent rate increase was being deliberated by the Public Utilities Board.

Riley, who is president and chief executive officer of Richardson Financial Group Ltd., called the explanation “nonsense.”

“Basically, he’s used that as an excuse not to talk to us about anything,” said Riley, adding he has been unable to meet face-to-face with Pallister since October 2016.

Riley confirmed Crown Services Minister Cliff Cullen wrote a letter to the Hydro board last Friday, saying the premier would meet with the chairman immediately following the release of the PUB decision, expected in April. Riley said the board, which had already discussed a plan to resign, agreed to hold off until that time.

Then Monday, Riley said a government official called, acting on behalf of the premier — and offered him an opportunity to chair the board of a different Crown corporation. Riley refused.

“I told them, no, that was not what I signed on for,” he said. “I was stunned… It was obvious that they were trying to move me out of Hydro. I didn’t take this job on because I wanted to head a Crown corporation. I took it on because I felt I could help with the Hydro file.

“If I have one major complaint about the nature of the relationship I have with the premier right now is that he’s unwilling to take responsibility for what he knows or should know is a significant problem,” Riley said. “There was a complete lack of communication and a lack of leadership by the government.

“There was no good faith.”

Following that call Monday, Riley talked with other members of the board, and the decision was made to resign.

On Thursday, for the first time, the outgoing board’s resignation letter was released to media outlets. Signed by all nine departing members, it details repeated attempts to meet with Pallister and his cabinet to discuss the corporation’s financial problems and the government’s refusal to authorize it to enter into any agreements with Indigenous communities.

“We believe this is irresponsible,” the board members said of the lack of access to cabinet.

Riley said the last thing he and his former board colleagues wanted to do was to interfere in the PUB’s independent rate-setting process. However, they did want to discuss how Hydro would proceed, depending on whether the corporation received all or some of the rate increase it was seeking.

“We respect the PUB rate-setting process. The suggestion that we would somehow want to lobby him (Pallister) to get him to try and lobby the Public Utilities Board (on Hydro’s behalf) is just absolute nonsense.”

Riley said the $67.5-million tentative agreement Hydro had reached with the Manitoba Metis Federation — pending government approval, which was refused by cabinet Wednesday — was a “good deal for Manitoba.”

“It covered all current discussions (on Hydro projects) we have with Manitoba Métis, but also future discussions we would have with the Métis,” he said.

The agreement didn’t just cover one project — the proposed Manitoba-Minnesota transmission line, as the premier suggested Wednesday — but multiple developments, Riley said.

For Pallister to call the payments to Métis ‘hush money’ suggests the board members the government spoke so highly of two years ago, when they were appointed, would stoop to such a dubious arrangement, he said.

“It shows you the level of desperation that this government seems to be descending to in response to our resignations,” the prominent Winnipeg businessman said. “It’s wrong and it’s cynical.”

Speaking with reporters Thursday, Pallister said his officials have been in continuous communication with Manitoba Hydro. He also played down the importance of the premier or cabinet members meeting with the corporation’s board.

Pallister said he got a call Thursday morning from a former Hydro chairman, who said he only had three meetings with the premier while serving in the role for more than a decade.

“It’s not impossible that we can communicate without having physical face-to-face meetings. And we have been,” Pallister said.

“I’m sorry that Mr. Riley feels that way. I’m sorry that he has chosen to do what he’s chosen to do, but that being said, we’ll have a new board by (Friday) at noon,” the premier added. “And we will move forward and Manitoba Hydro will be stronger in the future than it has in a long, long time.”

The Hydro board resignations dominated question period for a second consecutive day Thursday.

NDP Leader Wab Kinew called Hydro the province’s crown jewel.

“It is without a board, as we speak, because of the premier’s inability to meet with his hand-picked appointees for the past year. I don’t always agree with the ideology of this hand-picked board, but I would say they represent the brain trust of the business community here in Manitoba.”

– with files from Dan Lett

larry.kusch@freepress.mb.ca

nick.martin@freepress.mb.ca

Manitoba Hydro Electric Board Resignation Letter