Coleman can be Frank about personal benefit

The word of the week is "bonds" performance bonds and labour and material payment bonds.

If however we really want to know if Frank Coleman benefited directly from the government's cancelling of the contract we need to see the indemnification agreements.

Here's as simple as I can put it: In order to bid on contracts the company/contractor needs to supply a performance bond. This bond simply is to protect - in this case government - from default of or problems with completing the agreed to work under contract. In order for the company Humber Valley Paving to get a bond they must go to a surety company. The surety company then requires that indemnification agreements are signed by the principal (bidder) and possibly others - typically majority owners, their spouses, and in some cases assets of other companies owned by a majority owner.

We have not talked much about the indemnity agreement - rather we have focused on the bond. This is exactly what government and Minister McGrath would prefer and here's why. Just because Frank Coleman sold or transferred for a nominal fee his majority shares to other shareholders does not necessarily relinquish his obligations under an indemnification agreement. So in other words - Coleman may claim he can no longer speak for the company as he no longer holds shares but what Coleman is not saying is that he still may have been on the hook for losses should the bond have been called.

Now let's look at how Coleman may have directly benefited. The government says that the contract was not cancelled until after Frank Coleman relinquished his shares. While that part may be true - if the bond was called after Coleman divested of his interest in HVP - Frank Coleman still may have been an indemnifier for any losses resulting from the bond being called. This could be millions of dollars.

This is why this whole thing smells rotten - because ALL information is not forthcoming and they hide behind things like "I am no longer a shareholder" therefore cannot speak for the company. Okay then here are the questions for Frank Coleman.

1. Did you personally or any of your holdings other than HVP indemnify the surety for the performance bond?

2. Have you sold or divested of your other interests such as Coleman Foods - if not why not?

3. When an extension was sought by HVP - did you provide a letter from the surety regarding that extension. Were the appropriate emails, faxes, documents, provided to the surety?

Bottom line is this - unless we see the indemnification agreement for the bond - we cannot ascertain if Frank Coleman benefited from the government's decision to cancel the contract and not call the bond.

Further any indemnity agreements signed by Frank Coleman personally or by other entities where Frank Coleman has interests are really personal documents not documents of HVP. Our future Premier should have no problem releasing these. 

None of this of course negates the fact that relatives of Frank Coleman benefitted.

Tories avoid paper trail on Coleman/Humber Valley Paving affair?

The House of Assembly revealed something very scary today.

As we all might have anticipated the HOA question period was filled with inquiry over the Coleman affair.

I await the Hansard - in order to demonstrate how many times Minister McGrath used the word verbal when explaining the process of determining the release from Contract of Humber Valley Paving.

There was apparently verbal communication between the Minister and Premier on this subject. There were all kinds of verbal communications between the Minister and representatives of the company. The only thing I heard that might have been in writing is the document that released Humber Valley Paving from the contract and any consequence of bond.

This was a multi-million dollar contract between government and Humber Valley Paving and it was with a company where Frank Coleman (the incoming Premier) was CEO and majority shareholder. The discussions - as they were mostly verbal - will not give us real time frames and will not confirm or deny that these discussions were being held at a time Frank Coleman may have been looking at a run for the leadership of the Tories.

These very important details seem to have no written back-up. I remember a time not so long ago - where Ministers were not taking briefing notes - they were being briefed verbally. Here we go again.

Of course this stinks - because the company was apparently sold and could have been in a real unsaleable state had the bond been tested. This going on at a time just prior to Frank Coleman announcing his candidacy for the Tories and via our system the keys to the Premier's Office.

Oh yes this needs to be investigated. The sooner the better. What options do we have now to prevent such negotiations going on verbally - leaving us - the people, the taxpayer, their boss - without any paper trail?