TENSE TIMES FOR HERITAGE FUND.

Albertans will soon learn how far the provincial NDP’s neo-progressive politics will reshape the Heritage Fund — and other multi- billion- dollar public savings, scholarship, pension and emergency accounts — that until recently had been vigilantly kept at arm’s length from interference.

The Alberta Investment Management Corp. ( AIMCo), which manages $ 90 billion in provincial funds, including the $19-billion Heritage Savings Trust Fund, is about to get a bunch of new directors under a new process rejigged by the NDP government. Four board seats are now occupied by directors whose terms have expired; three of them have term extensions that end next month, the fourth ends in October.

The NDP recently stripped out of the act regulating AIMCo any requirement that the agency’s directors have relevant financial, legal or board experience to qualify for overseeing the management of Albertans’ savings funds. It also granted Premier Rachel Notley’s cabinet the power to install its own hand-picked people. By the end of June, Albertans will find out how this new influence will be used. New documents show that AIMCo’s top brass is watching with as much unease as the rest of us.

The first signs of NDP meddling began last fall, with Notley ordering AIMCo to sell off non- Alberta assets and redirect the money back home on the pretence that this would somehow look like she was helping create jobs in the struggling province. In a rush to show its pointless plan was working, the NDP followed with a ham- handed hijacking of the messaging around AIMCo’s investment in an Alberta oil company. The farce was exposed after FP Comment obtained documents revealing how much havoc the government had unleashed in dressing up AIMCo’s investment decisions in the clothes of a shabby political subsidy.

The documents showed AIMCo and the company, Calfrac, stunned and aggravated when the economic development minister, Deron Bilous, publicly declared that the province had handed Calfrac money to promote green energy and job creation. That announcement made both AIMCo and Calfrac look bad. It was also entirely untrue.

Then, in March, FP Comment revealed how that fiasco’s fallout pushed the NDP further into AIMCo’s affairs. Although AIMCo had specifically warned Bilious’s staff that he was misrepresenting the deal, AIMCo was made to accept blame for the minister’s misrepresentations, issuing a press release that misrepresented it as a mixup caused by AIMCo’s fault “guidance.” AIMCo was also dragged along to help the premier’s office do damage control after the debacle, to help craft talking points and media scripts. By that point, the Alberta PC party was calling for an investigation into all this interference. The auditor general is considering the request.

It can’t be helping morale at AIMCo these days that highly skilled managers hired to maximize returns on Alberta’s public investments are preoccupied with concocting government spin and uttering false confessions to help the NDP hide the smudgy fingerprints it’s been leaving all over the agency’s independence. So when the government in February decided, without notice, to revamp the qualifications for directors at AIMCo while giving cabinet control over the appointments, it was bound to make AIMCo’s people positively jumpy.

New documents obtained by FP Comment show just how nervous and politically sensitive things are lately in a Crown corporation that’s supposed to be far removed from political sensitivities. Stuck in the middle is Kevin Uebelein, AIMCo’s CEO. Publicly, he’s said there probably isn’t anything to worry about in the NDP’s changes to board appointments. “I don’t believe there was any intent to put at risk the cornerstone attributes of AIMCo, of our independence of decisionmaking and our best-in-class governance structure,” he told the Calgary Herald when news of the changes broke. Privately, however, documents show that AIMCo executives the day before had been preparing talking points for Uebelein’s response that used much more grave language.

Memos and emails from AIMCo written in the wake of the NDP’s changes to the director- appointment process show executives caught completely by surprise by the changes. In one draft of proposed talking points, Uebelein was even about to say he had “been called personally with an apology” about that. But his team apparently decided the government wouldn’t like him pointing that out, and quickly struck it out.

Early talking- point drafts also proposed that Uebelein soberly highlight how the sudden change showed “how easily and unilaterally AIMCo’s terms of engagement… can be modified.” And that while AIMCo had traditionally operated with autonomy, “we must accept the fact that — in the end — we exist and are granted these beneficial advantages entirely at the Government’s pleasure, and they always have the ability to change them.” But then executives decided it best not to point to these blunt realities, without knowing where else the NDP government “might unnecessarily go with this” intrusion.

Taken together, the exchanges paint a picture of Alberta’s vital fund manager beset yet again by confusion and anxiety after an NDP ambush. One executive talks of needing “room to catch our breath and figure out exactly what the GOA ( Government of Alberta) has in mind” for AIMCo. Memos also note nervous calls coming in from leaders of pension funds managed by AIMCo, expressing “significant concern” about what the government is up to and the widespread feeling on “The Street” that AIMCo’s independence is under “attack.”

Weeks later, Uebelein would testify about it all before the standing committee on the Alberta Heritage Savings Trust Fund. With no choice but to be frank, he returned to the grim tone that had earlier been excised from public communications: “These recent changes to the AIMCo regulation actually did come as a surprise to us and, frankly, not a welcome surprise,” the CEO said. And “we respectfully disagree that this (the NDP’s new process) is an improvement in our governance… This is something we don’t take lightly.” In just a few weeks, with new directors coming in under the Notley government’s new process, Albertans will find out just how serious this is getting.