McLeod and Paddon - Spin on the Spin

James McLeod presented a news story on October 7th in the Telegram.

It was headlined "Nalcor audit won’t be done before retirement: AG"

As usual - pose a question - get an answer - print answer. No follow-up, no definitions of terms used, and no independent thought respecting the answer.

I'll get into Auditor General in another post - but for now - let's watch this "journalistic" masterpiece unfold.

The conversation between the two must have wandered into the need for a forensic audit. McLeod reports as follows on that question:

Paddon was cautious when talking about a potential forensic audit for Muskrat Falls. He said he knows it wouldn’t be cheap though.

“I’m not quite sure that the word ‘forensic audit’ is appropriate. I mean, I think really what people are looking for is for somebody to go in and look at, perhaps, the decision-making process and the execution process, and those sorts of things,” he said.

“It would take a lot of time and a lot of resources. The outcome? I have no idea what the outcome would be.”

IN MY OPINION HERE IS WHAT SHOULD HAVE BEEN ASKED AND ANSWERED:

1. Paddon was cautious but did say it wouldn't be cheap though.

Question: what's cheap? why are you cautious? 

2. Paddon was not quite sure that the word 'forensic audit' is appropriate.

Question: why is it not appropriate? what part of a forensic audit would be inappropriate? 

3. Paddon believes he knows what critics are calling for - decision making and execution process


Question: how does that fall out of the purview of a forensic audit? Why do you believe "people" are only looking at those components? 

4. Paddon believes it would take a lot of time and a lot of resources.


Questions: How much time would this forensic audit need? How much would it cost. Cost relative to what? What might be the cost of NOT doing it? 

5. Paddon has no idea what the outcome would be.


Question: is that perhaps why people want one done? Is the reason you can't speculate on the outcome because you do not know what perimeters would be set? 

and of course: Based on the doubling of the costs, hidden documents, continued extension on time-table for completion, independent contractors information hidden from shareholder. Don't these things present a red-flag to an accountant? 

AFTER THIS MCLEOD SHOULD HAVE SOUGHT ANOTHER ACCOUNTING SOURCE AND ASKED THE SAME QUESTIONS.

Now let's do a bit of research ourselves and see if a forensic audit is exactly what we are asking for and know that we need.

Forensic auditing is a specialization within the field of accounting, and forensic auditors often provide expert testimony during trial proceedings. Most large accounting firms have a forensic auditing department.

The audit covers a wide range of investigative activities performed by accountants. The process may also include serving as an expert witness in a fraud trial.

The investigation process follows a similar path as a regular audit of financial statements. The steps can include planning, review and a report. If the investigation was undertaken to discover the presence of fraud, evidence is presented to uncover or disprove the fraud and determine the amount of the damages suffered. The findings are presented to the client — and possibly the court should the case go that far.

During the planning stage, the forensic auditing team establishes objectives, such as identifying if fraud has been committed, how long it has been going on, the parties involved, quantifying the financial loss and providing fraud prevention measures. While gathering evidence, the team collects evidence in the proper manner in order for it to be used in a court case. There are various techniques used to gather evidence. A report is produced for the client with the findings. Lastly, those involved in the forensic audit may be asked to present their findings to the court.

Forensic audits uncover several types of fraud. The most common involves theft, including cash, inventory and fraudulent payments. Another type of fraud is corruption, such as a conflict of interest, bribery and extortion. The last major category is financial statement fraud. This relates to misstatements of the financials of a company.

Above information can be found HERE

There are many other sites - but this should suffice to ensure that what we are asking for is exactly what we want and need. 

This blog has already posted the RED FLAGS post on the need for a forensic audit. 

McLeod should have put to a few known critics - the responses of the Auditor General and get another take on it. 

This - let me find a source who has a title and a designation - and I can write a news piece is flawed and can lead to the readership relying too much value on the information presented. 

This is the spin of spin and is yet another artificial deterrent to completing a forensic audit and attempting to curtail increased calls for a forensic audit. 

It seems to me there are many people who just want this whole sordid mess to disappear. Unfortunately for them - social media is alive and growing. 

 

Pam Frampton provides déjà vu

Pam Frampton's latest attempt to thwart Muskrat Falls critics who are demanding that the project be shut down while a forensic audit is completed - fails.

If you are feeling a déjà vu - you're not alone.

The majority of media took exactly the same approach when Muskrat Falls was initially talked about and during sanctioning.

From the outset - I can tell you we most certainly won't learn from this "mistake" if we allow this one to be completed. In fact - the more we let this "boondoggle" continue - without a forensic audit being completed - we are watching ourselves - knowingly - make a "mistake".

Frampton titles her government/corporate puff piece, "Inquiring minds want to know" a phrase that is familiar to most people as being used by the gossip rag The National Enquirer (with the exception of I instead of E). The writer - with her first scribbles - attempts to diminish, downplay, and question the Muskrat critics who want the project to stop and a forensic audit commissioned. déjà vu

The first paragraph of her article reads: "While it should never have been started, the hydroelectric project is way beyond the point of no return. With more than 80 per cent of the work finished, the province can’t afford — financially, legally or practically — to stop now."

The serious critics of the project wrote, made public comment, and drew attention in whatever way possible to argue that the project should not start. We didn't wait until it was 50%, 60%, 70% and "80" % completed to pull the fire alarm.

The serious critics of this project know that Frampton's claim "With more than 80 per cent of the work finished, the province can’t afford — financially, legally or practically — to stop now." is not based on fact - but based on politically and corporately produced spin. The spin cannot possibly be backed up unless a forensic audit and financial investigation were completed.

The serious critics of this project know that there are dozens of red flags waving prominently over this damn dam and would lead any knowledgeable person to demand a forensic audit. These red flags could be indicators of fraud, gross negligence, bribery, and other corrupt potentials.

If any of these serious and illegal activities were found - contracts entered into would have to be re-assessed, renegotiated or dismissed - yes people could go to jail - and yes the project could have to be stopped.

It's like saying Enron would have to be continued - resurrected - or reworked because it's too big to fail.

If we are actually in a position where this project is too big to fail - then I expect the Government of Canada to come in pay off the debt on the project and re-work something with Nalcor that leaves the people of Newfoundland and Labrador whole - (as they were before the boondoggle started).

Doing nothing is paramount to knowingly bankrupting the future of our province.

Let me add this for Ms. Frampton - if an engineering investigation found that the North Spur would probably fail at some time in the future - would it be too expensive to stop, not practical to stop, not legally wise to stop?

This continued writing on Muskrat Falls without truly fully understanding what the options are regarding the project - is nothing short of irresponsible at best or a deliberate re-spin at worst. The Tobinesque speech by Ball and dutiful and predictable media fawning over it - is the same old same old technique used to get the project sanctioned.

Spinster used to have a different meaning in Newfoundland and Labrador in days of old. The meaning today is less innocuous.

Then Frampton - inexplicably - goes on to suggest what the Public Inquiry (not yet established) should examine. Ms. Frampton - respectfully but barely - I suggest that you don't possess enough knowledge on the subject to reasonably put perimeters on it.

The "eight main thrusts" that Ms. Frampton articulates can be answered before an inquiry begins. That's the problem.

Value for money? Really? the answer is no!

Good decision making? Really clearly not!

Lessons learned? Come on now. Naive (please read the Economist article again) or if you have the time our history on the development of natural resources)

Financial consequences? Oh my~ They are obvious!

Commercial sensitivity? What where the owner of a company cannot know or see the content of financial remuneration contracts? Surely you jest.

The key motivations? Okay that's just silliness. It's called corporate welfare. It's called idiotic legacies. It's called political pandering.

You see Ms. Frampton - you and many other journalists, columnists, and/or announcers are a very real part of our ongoing and historical record of failure.

One must be knowledgeable enough on a subject to ask the pertinent questions and follow-up. One must be willing to ask critics - why they really hold opinions, express concerns, or continue to put out "warning trouble ahead" information. Particularly when these people have nothing to gain directly. When you base all you opinion on those who have something to gain - then you are likely putting out spin.

This inundation by some media - of late - is EXACTLY the same type of nonsensical rhetoric that got us here to begin with.

Then - finally- indulge me as I review this paragraph of fiction:

"Let’s be clear: no inquiry into Muskrat Falls is going to result in a parade of former politicians being hauled away in shackles, satisfying as that might be. None of the money squandered will be paid back. If we accept those basic facts, then what is it we want an inquiry to accomplish?"

You have no idea what a yet to be established inquiry may or may not result in. Therefore the fact that politicians will not be hauled away on shackles - is not a fact. An inquiry could in fact lead to information that could be used to investigate potentially illegal activity. Remember those trinkets in the House of Assembly. People went to jail there - right? And how much money was that over? I am going to suggest that IF illegal activity were going on - those involved on any level would try to prevent it being discovered.

None of the money squandered will be paid back. Not a fact. First you do not know if the money was "squandered" or if it disappeared (illegally) - you don't know if somebody doesn't have a million in their back-pocket from a wink and a nod - you don't know if significant amounts of equipment was stolen or cannot be found - you don't know if somebody has taken a kickback. You do know that the projected cost has doubled.

So to accept those "basic facts" as you call them - is to continue to be fooled. It is a continuation of spoon-feeding the public - information being spoon-fed to you.

I do not have a desire to shut you up as James McLeod might say - but I do have a desire for you to to be really cognizant of the potential damage you may cause by writing facts that are not facts.

My previous blog posts from 6/7 years ago talk about not needing the power, Emera owning the transmission line to the Island, the concern about budget projections and so on - demonstrate that there were a number of us people - who seen through the last round of spin. I for one am seeing through this current onslaught of it.

Maybe we should do an inquiry on how the media plays a role in advancing the "boondoggles" of governments. Perhaps they should be tested on their knowledge of subjects they confidently write about. Perhaps somebody should look at that record. The Johnny Come Lately media questions about the Muskrat fiasco - should probably continue and not get swept under another carpet for historical review.

Next up - James Mcleod and his story on our retiring Auditor General.... does it ever end...

Dear Premier - do you see the red flags? Forensic Audit

A forensic audit is the process of reviewing a person's or company's financial statements to determine if they are accurate and lawful.

 

Forensic audits are used wherever an entity's finances or operations present a legal concern.

Forensic audits are performed by a class of professionals with skill-sets in both criminology and accounting who specialize in following a money trail, keeping track of fraudulent and actual balance sheets and checking for inaccuracies in overall and detailed reports of income or expenditures. If they find discrepancies, it may be the auditor's job to investigate and determine the reason for it, or it may be the job of a separate financial investigator.


Red Flags for fraudulent or questionable activity. 

 

Unexplained variances between budgets and actual balances.

 

 

Significant internal control issues.

 

 

 

 

 

Unusual write-offs or unordinary transactions.

 

 

 

Infrequent or late financial reports and reviews.

 

 

 

(Scapegoating) Where people are given a title but without actual responsibility, it can effectively cover up what is going on with those who do have responsibility or power in a situation.

 

The weakening or elimination of a watchdog (such as PUB) for the Corporation.

 

 

 

Staff whispers and rumors “that all is not right".

Budget for a project escalates on a recurring basis.

 

 

 

Contracting an outside accounting firm to validate specific things but not all things. 

 A major indicator can be the act of deletion or pressure on staff to delete, remove or otherwise dump past records or conceal past reports following a senior management change. 

 

 

Falsified estimates, reports, or projections. 

 

 

 

There are any significant conflicts of interest present with senior executive and/or outside contracts/tors. In the case of a Crown Corporation - if any potential conflict of interest is or may be present with an elected official in Government. 

Employing any external consultants or contracting firms who have been found guilty of fraud, bribery, or embezzlement in the past.  

 

 

 

Any corporation that deliberately withholds information from its shareholders.

 

 

 

Questionable payouts or bonuses to Senior Executive where performance does not match results. (happened with Enron)

 

 

Be particularly concerned by any corporation that refuses to do an immediate forensic audit - when several warning signs are present. 

 

In conclusion - I add to all MHA's - ignorance is no excuse when it comes to the law. 

 

Whistle-blowers needed for Muskrat Falls. Send me a message. 

 

 

 

 

 

 

 

 

 

 

Ask yourself - Why?

Politicians are elected by us to represent us.

No doubt for some of us - from the inception of the Muskrat fiasco deal - politicians have not been doing that.

Now the majority of us do not want Muskrat Falls.
The majority of us want a forensic audit now.
The majority of us want a public inquiry now.
The majority of us want Muskrat stopped until we can examine all of our options.

So why are politicians - most of whom want to be re-elected - continuing to ignore the wishes of the majority of people - without any substantiated reasoning?

The majority of politicians who want to be re-elected are wannabe career politicians. It's the best gig they can get. They are gutless and either deliberately ignorant or unable or unwilling to learn.

Some politicians do not want or expect to be elected again and their masters for whatever reason are not the people of the province.

Some politicians make decisions in their own best interests and that many times conflicts with what's in the best interests of the people.

The vast majority of politicians are me first, party second, and people third.

Now we need to figure out what classification each of our politicians fall into.

Let's start with the Muskrat leaders: Dwight Ball, Paul Davis, Tom Marshall, Kathy Dunderdale, and  Danny Williams. 

Nalcor bonuses - reflective of arrogance

The latest round of Nalcor executive bonuses is reflective of the arrogance of our elected officials.

The province can stop these bonuses from occurring but have not.

This province is virtually bankrupt from the Muskrat Falls fiasco - and we the ratepayers, shareholders and taxpayers cannot afford these ludicrous insulting bonuses.

In my opinion - the Premier and the CEO of Nalcor are testing our resolve. They are testing the waters for what we will stand for and if we are willing to pull the plug on their stupidity and arrogance.

If we accept these bonuses - will we also sit like little lambs as the power bills soar?

Will we continue to demand a forensic audit?

There is not a truly reasonable consideration that would allow Gil Bennett and other executives to receive a reward for "performance".

Speak up now and be heard. What are you waiting for? The doubling of your power bill? The loss of another 40,000 people? The loss of your job?

If we were to implement the real costs of Muskrat on our bill now - would that make you stand up? I think Con O'Brien might be on to something when he says - put it on our bill now. In that way the following generations (if there are any left here) would not be paying for our mess. Perhaps if it was on our power bill now - you and everybody else would hit the streets in protest.

Right now - we should be demanding the retraction of these absurd bonuses - and force the government to take some action.

Call your MHA and say - no bonuses for Nalcor and demand a forensic audit immediately. Tell them your vote depends on what they do right now - today.

TO CONTACT YOUR MHA CLICK HERE

If we wait for Muskrat to be history - we won't be studying it in Newfoundland and Labrador - we won't exist. 

Marshall fired and Ball on Notice?

Muskrat Falls is a boondoggle.

This is not from Captain Obvious Marshall - this is from those who predicted the problems with the contemplation of the deal and development going back to 2006.

Stan Marshall was hired to act as a CEO - his shareholders are the people. While Stan is used to dealing with very wealthy shareholders - right now he's been charged to deal with all of us as shareholders. As such we should be treated like shareholders of a publicly traded company and he should be seeking to maximize our investments and stop boondoggles with our money.

As we learn from Uncle Gnarley's post this morning - the latest executive choice to gamble or hedge $1.82 billion of public (us being the shareholders) money - did not fare well. 

I wonder if we spent let's say 65 million (equivalent to what we lost) on the USA Powerball, currently standing at 650 million, would we fare much better. 

We are losing our province and our youth to this mess and yet we carry on. We hope sometime in the future to have a public inquiry of the failure? Really? Are we completely mad? 

We have not been privy to much truth on Muskrat Falls and Nalcor/Government continues to keep us in the dark on this complete and total failure of a "project".

We have transmission towers here there and everywhere - little signs on the highway sprinkled like salt in our wounds - telling workers where to turn off on the Muskrat Highway for the latest erection of metal. 

A forensic audit needs to happen today, not tomorrow, not next week but today. 

The findings of that audit need to be publicly reviewed. 

Then we need to look at all our economic and legal options as it relates to this province.

These options must be vetted in full - transparently to shareholders. 

Then we need a referendum. 

Will we stop and use the asset another way? 
Will we stop completely?
Will we proceed with re-opening contracts and renegotiating our position?
What are the potential legal obligations of any of these actions?
What are the potential legal obligations if a forensic audit finds corruption, malfeasance, lies, deceptions, and or fancy accounting? 

Now that we've started to play lotto 649 with our money on hedge-bets - why not take a chance on gambling to find the truth?

Sitting here and saying let's have a public inquiry when this mess is completed is insanity. Let's foreshadow this choice.

100,000 seniors sitting in the dark - if they want to eat that is - trying to follow an Inquiry via snail mail? Seniors and low income families unable to afford the internet, power, telephone, or television - will be shouting out to their neighbours to see if they heard from one of their kids or grand-kids on the mainland watching our public inquiry? 

Wake up and shake yourself off. 

We cannot now or ever afford this project and that's notwithstanding the real possibility that the structure may fail. 

If the dam does not fail - will the transmission system?

Who are we finishing the project for?

1. Not for the ratepayers of Newfoundland
2. Not for the people of Newfoundland and Labrador
3. Not for required power
4. Not to eliminate Holyrood
5. Not for industry in Labrador

Then who?

1. Galway?
2. Nova Scotians?
3. The corporate elite making billions?
4. Emera?
5. Hydro-Quebec?

So Dwight Ball and Stan Marshall - do your job for the people and the shareholders respectively. Stop this project until it is thoroughly reviewed by a forensic audit and a public inquiry - NOW. 

As for this latest finance disaster on the hedge bet - we don't need a forensic audit or inquiry. Fire the executive of Nalcor and put Ball on notice. 

Our only choice may be greater than Liberal PC or NDP in 2019. 

As for Nalcor gambling in the "futures" market. That is what they have failed at consistently since 2006. Our future.   

Meanwhile we are charging grandmothers and journalists for trying to have a peek?