AG finds no wrong­do­ing in Martin sev­er­ance

The Aurora (Labrador City) - - FRONT PAGE - BY JAMES MCLEOD

Au­di­tor Gen­eral Terry Pad­don seemed guarded, an­swer­ing ques­tions about his long-awaited re­port into the Ed Martin sev­er­ance af­fair.

Did any­body do any­thing wrong in the award­ing of a $6.2-mil­lion sev­er­ance pack­age to the de­part­ing CEO of Nal­cor En­ergy last spring? “Nope,” Pad­don said.

But Pad­don was care­ful to make it clear he was tasked only with an­swer­ing a fairly nar­row ques­tion. “My man­date was to de­ter­mine whether the sev­er­ance was ap­pro­pri­ate,” Pad­don said. “I mean, Mr. Martin had a con­tract. The con­tract pro­vided for a num­ber of things, in­clud­ing pay­ment in lieu of no­tice.”

The 34-page re­port pub­lished last Mon­day didn’t get into the thorny po­lit­i­cal ques­tions sur­round­ing the Martin sev­er­ance sit­u­a­tion, and whether Premier Dwight Ball lied to the pub­lic.

The clos­est Pad­don came to any ob­ser­va­tion on that front was stat­ing that Ball’s of­fice ap­pears to have not looked into what the im­pli­ca­tions of dis­miss­ing Martin would be. Pad­don said it “prob­a­bly would have made sense” to do some of that back­ground re­search.

“When you think about the fact that Mr. Martin was prob­a­bly one of the most high­pro­file pub­lic ser­vants in the prov­ince, it’s fair to say that his departure was likely go­ing to cause some pub­lic no­tice,” Pad­don said. “It might have been a worth­while process to have some as­sess­ment done on what the im­pli­ca­tions of him leav­ing would be.”

Ball was not avail­able for an in­ter­view last Mon­day, but is­sued a state­ment to the me­dia thank­ing Pad­don for his work.

“The au­di­tor gen­eral has de­ter­mined that gov­ern­ment did not di­rect Nal­cor’s board of di­rec­tors re­gard­ing the con­tract of Ed Martin,” Ball stated.

“The con­trac­tual obli­ga­tions owed to the for­mer CEO were ne­go­ti­ated and signed un­der the for­mer ad­min­is­tra­tion. The au­di­tor gen­eral has now con­cluded that the sev­er­ance pay­ments pro­vided by Nal­cor En­ergy were ap­pro­pri­ate un­der that con­tract.”

The core of the au­di­tor gen­eral’s re­port was that Martin’s departure from Nal­cor En­ergy was “tan­ta­mount to con­struc­tive dis­missal.”

In the early part of 2016, the new Lib­eral gov­ern­ment had hired an in­de­pen­dent con­sul­tant, and then in the April bud­get speech, the man­age­ment team of Nal­cor was the sub­ject of some crit­i­cal words from Fi­nance Min­is­ter Cathy Ben­nett.

More­over, Ball and Ben­nett both de­clined to pub­licly voice their con­fi­dence in Martin.

On Wed­nes­day, April 20, Ball an­nounced Martin was re­sign­ing, and Martin said he was leav­ing vol­un­tar­ily to spend more time with his grand­chil­dren. That turned out to be un­true.

On the same day, the Nal­cor board of di­rec­tors re­signed en masse, say­ing they no longer felt they had the con­fi­dence of the gov­ern­ment.

It came out later, by way of sev­eral ac­cess to in­for­ma­tion re­quests, that Martin re­ceived sev­er­ance to­talling close to $6.3 mil­lion — and he wouldn’t have been en­ti­tled to al­most all of that if he re­signed vol­un­tar­ily.

Pad­don came to the con­clu­sion that Martin’s departure was a con­struc­tive dis­missal.

“The in­abil­ity of the premier and the min­is­ter of Fi­nance to pub­licly sup­port Mr. Martin cre­ated a sit­u­a­tion which com­pro­mised Mr. Martin in his role as CEO of Nal­cor. This was in­com­pat­i­ble with the con­tin­ued em­ploy­ment of Mr. Martin,” Pad­don wrote.

But in the key meet­ing be­tween Martin and Ball where the de­ci­sion was made, Pad­don con­cluded that the two men had dif­fer­ent takes on what ac­tu­ally hap­pened.

“Mr. Martin con­sid­ered that the de­ci­sion for him to leave his em­ploy­ment was made by the premier, and the Premier con­sid­ered that the de­ci­sion for Mr. Martin to leave his em­ploy­ment was made by Mr. Martin,” Pad­don wrote.

The sev­er­ance scan­dal dom­i­nated the po­lit­i­cal con­ver­sa­tion last spring, with ques­tions about how in­volved Ball was, and whether he per­son­ally ap­proved Martin’s sev­er­ance.

Last week Pad­don said there’s no ev­i­dence the premier knew at the time the mag­ni­tude of Martin’s sev­er­ance pack­age, even though his chief of staff and his nat­u­ral re­sources min­is­ter had seen copies of Martin’s con­tract.

The clos­est thing to con­fir­ma­tion that Ball knew Martin re­ceived sev­er­ance came from Martin’s in­ter­view with Pad­don.

“In his in­ter­view, Mr. Martin stated that he asked whether the premier was say­ing he wanted him to leave now and that he would be paid out, to which, Mr. Martin in­di­cated, the premier an­swered ‘yes,’” Pad­don wrote in his re­port.

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