Controversy grows around hefty severance payment to former head of Muskrat Falls project
Former Nalcor head Ed Martin has contradicted Premier Dwight Ball's explanation of $1.4 million severance payment
ST. JOHN’S, N.L.—Growing controversy around severance for the ex-CEO of Newfoundland and Labrador’s Crown energy corporation erupted May 30 as he flatly denied Premier Dwight Ball’s explanation of the $1.4-million payment.
In a statement to media, Ed Martin contradicted what Ball has repeatedly said about Martin’s abrupt departure as president and CEO of Nalcor Energy on April 20.
He said the government had requested and received a copy of his employment contract several weeks prior to a meeting on April 17.
Martin said during that meeting with Ball, the premier’s chief of staff Kelvin Parsons, and Natural Resources Minister Siobhan Coady, he offered to either stay on and finish Nalcor’s Muskrat Falls hydroelectric project or leave the company with his contractual severance paid out.
“In a professional effort to address the expressed lack of confidence in Nalcor management I suggested these two options,” Martin wrote. He said criticism of Nalcor’s performance by Finance Minister Cathy Bennett in her budget speech earlier that month had undermined his ability to do his job.
Martin said he met again with Ball on April 19 and was told the government felt the best option was his immediate departure with severance.
The former CEO said he agreed to step down but was informed Nalcor’s board of directors had invoked one of the termination provisions in his employment contract to “give effect to the government’s decision.”
“And that (the board) had accepted the fact that my ability to effectively fulfill my mandate had been seriously undermined by the actions of the only shareholder of Nalcor Energy.”
Martin said he spoke out because of a lack of clarity that has had an impact on the integrity of board members.
“This is a bigger issue as it touches right and wrong,” Martin said. “This I cannot abide.”
Ball has said the former Nalcor board fired Martin without cause the same day he stepped down, triggering a severance payment amounting to more than twice the former CEO’s salary.
The premier has also said he didn’t learn details about the severance package until May 5.
On Monday Ball issued a statement saying he would leave the matter to the auditor general and, like Martin, pledged to hand over all relevant information.
“I trust that the auditor general’s review will be comprehensive and that he will consider all the information available in the course of arriving at a determination as to the appropriateness of the severance provided to Mr. Martin by Nalcor’s past board of directors,” said Ball.
Opposition Progressive Conservative Leader Paul Davis said Martin’s statement “called into question” the honesty of both Ball and Coady over the severance issue.
“Based on the information to date, Premier Ball has deliberately misled the people of our province,” said Davis. “He has been asked numerous times to provide the truth on the resignation of Mr. Martin and has changed his position daily.”
Davis also said the auditor general’s review was too narrow to get at “the most grievous issue,” which is whether Ball and Coady were truthful about what they did and what they knew.
The province has spent almost $4.8 billion building the Muskrat Falls dam and power house on the lower Churchill River, the largest publicly funded project in its history. Construction costs have soared over budget and first power that was expected in 2017 has been delayed several months.
Still, Martin indicated the departure was his decision and said he had no regrets about how the project was managed.