Muskrat contractors fighting release of compensation information

·7 min read
Paul Harrington has been a leading figure with the Lower Churchill Project since he began working as an embedded contractor with Nalcor Energy in 2007. He is one of seven senior project managers fighting against the release of their pay information from 2019. (Terry Roberts/CBC - image credit)
Paul Harrington has been a leading figure with the Lower Churchill Project since he began working as an embedded contractor with Nalcor Energy in 2007. He is one of seven senior project managers fighting against the release of their pay information from 2019. (Terry Roberts/CBC - image credit)
Paul Harrington has been a leading figure with the Lower Churchill Project since he began working as an embedded contractor with Nalcor Energy in 2007. He is one of seven senior project managers fighting against the release of their pay information from 2019.
Paul Harrington has been a leading figure with the Lower Churchill Project since he began working as an embedded contractor with Nalcor Energy in 2007. He is one of seven senior project managers fighting against the release of their pay information from 2019.(Terry Roberts/CBC)

Seven senior contractors working on the Muskrat Falls hydro and transmission project — including longtime project leader Paul Harrington — are fighting a request to Nalcor Energy to have their 2019 compensation information made public.

That's despite the fact Nalcor believes the information should be released. As well, legislative changes made nearly three years ago lifted the veil of secrecy over compensation to embedded contractors, and previous court rulings have also come down on the side of full disclosure.

What's more, Nalcor released a comprehensive breakdown of Harrington's compensation in September 2019, in response to a CBC News access to information request. It revealed the project leader was billing up to $75,000 per month, including HST, for services performed a few years earlier.

As of March 31, 2017, Harrington's daily rate of compensation was almost $2,000.

CBC News filed a follow-up access to information request three months ago with the provincial energy corporation, seeking a list of the nearly two dozen most senior members of the Lower Churchill Project management team, and the amount of money the companies they represent were paid for their services in 2019.

With the exception of Gilbert Bennett, who is executive vice-president for power development and a top official at Nalcor Energy, the senior project team is comprised primarily of contractors, or consultants, many of whom incorporate their own companies and hire themselves out to Nalcor.

On Feb. 8, Nalcor released the names and pay of 13 members of the project team, with the annual fees for 2019 ranging from a low of just over $210,000, to a high of more than $395,000.

But Nalcor initially withheld the identity and compensation details for eight members of the management team.

That's because those eight members, including Harrington, filed a complaint with the Office of the Information and Privacy Commissioner, in a bid to have the information shielded from public release.

But one of those eight, Ray Butler, later withdrew his complaint to the privacy commissioner and Nalcor released his financial information on March 2.

Butler is the construction manager at the Soldiers Pond converter station, switchyard and synchronous condenser facility. Butler's company is called RB Consulting Services Inc., and was paid more than $406,000 by Nalcor in 2019.

This is a list of 14 senior contractors working on the Lower Churchill Project, and their compensation for 2019.
This is a list of 14 senior contractors working on the Lower Churchill Project, and their compensation for 2019.(Nalcor Energy)

A Nalcor official said the corporation is withholding information relating to the seven other senior contractors until it receives direction from the information and privacy commissioner, which is now reviewing the matter.

Information and privacy commissioner Michael Harvey confirmed in an email Tuesday that his office received "several" complaints after Nalcor issued notices to those involved that it would be disclosing the information to CBC News.

Harvey could not provide specifics of the complaints, but confirmed his office will investigate whether disclosure of the information should be withheld under sections 39 or 40 of the Access to Information and Protection of Privacy Act.

Michael Harvey was appointed Newfoundland and Labrador's information and privacy commissioner in July 2019.
Michael Harvey was appointed Newfoundland and Labrador's information and privacy commissioner in July 2019.(Office of the Information and Privacy Commissioner)

Those sections allow for the withholding of information if it would be harmful to the business interest of a third party, or if the disclosure would be harmful to personal privacy.

Harvey said the investigations commenced in early February, and the legislation requires the investigations to be concluded within 65 business days.

However, Harvey said his office is working with Nalcor and the complainants to reach an informal resolution. Otherwise, Harvey noted that it's possible the issue may not be resolved until mid-May.

The senior managers are also entitled to appeal any recommendations from Harvey's office to the Supreme Court of Newfoundland and Labrador.

Paul Harrington among the holdouts

Meanwhile, CBC News was unable to confirm the identities of all seven, but has confirmed through sources that Harrington, who joined the project team in 2007, five years before the troubled project was sanctioned, and Ron Power, who is deputy project manager responsible for Muskrat Falls power generation, are among the holdouts.

Harrington is a key architect on a project that is billions over budget and years behind schedule, and is not expected to achieve full commercial power until the end of 2021, at a final forecast cost of more than $13 billion.

The project was sanctioned in late 2012 with a projected in-service cost of $7.4 billion, with first power scheduled for July 2017.

For nearly a decade, Harrington was the overall project director for the Lower Churchill Project, but is currently project director for electricity generation at Muskrat Falls.

Harrington vigorously — though unsuccessfully — fought a similar battle to shield his compensation in 2017 and 2018, and launched a court challenge against a CBC request for his pay information.

He also applied to the Supreme Court of Newfoundland and Labrador for an order prohibiting questions about his compensation when he appeared before Justice Richard LeBlanc at the Muskrat Falls commission of inquiry in late 2018.

Harrington's lawyers said in court documents that releasing these details "would not serve the public interest, but would cause undue financial harm to him and his consulting company."

But those legal challenges lost steam after LeBlanc ruled "there will be no restrictions," and it was revealed at the inquiry that Harrington was being paid a day rate of nearly $1,700 up to March 31, 2011.

A subsequent access request two years ago revealed Harrington's day rate had increased to $1,945 as of March 30, 2017.

The documents also revealed that Harrington billed Nalcor $74,800 including HST for his services in November 2016, though at least one month that year was below $40,000.

Lifting the veil of secrecy

Five years ago, the provincial government passed legislation requiring an annual listing of all public employees who receive a total compensation of more than $100,000 in a calendar year.

Nalcor employees are included, and the list for 2019 revealed that CEO Stan Marshall received a $315,000 bonus on top of an almost $460,000 salary, while executive vice-president for power development Gilbert Bennett received an almost $70,000 bonus along with a $334,000 salary.

Temporary workers on the Muskrat Falls project are not included on the so-called "Sunshine List," even though the project is publicly funded.

So nearly three years ago, following months of intense media scrutiny of the issue, the provincial government made changes to the Energy Corporation Act, allowing for the identities and amount of money paid to contractors hired directly by Nalcor to work on Muskrat to be subject to disclosure under the province's access to information laws.

At the time, then-Natural Resources Minister Sioban Coady said such secrecy was "not reasonable or necessary."

In 2017, prior to a change in the legislation, Marshall said that "If it was up to me, I'd release it."

The Muskrat Falls hydro and transmission project is scheduled to achieve full commercial power later this year, four years later than originally planned when the project was sanctioned in late 2012.
The Muskrat Falls hydro and transmission project is scheduled to achieve full commercial power later this year, four years later than originally planned when the project was sanctioned in late 2012.(Nalcor Energy)

Insiders say secrecy is preferred by the contractors because they compete with each other for work.

But the Office of the Information and Privacy Commissioner ruled in 2017 there was "no evidence" that releasing the information would unfairly expose contractors to "risk of financial or other harm."

In a similar case, the province's teachers' association launched a legal challenge against the Sunshine List, calling it an unnecessary invasion of privacy. The Supreme Court of Newfoundland and Labrador agreed. But that ruling was overturned in 2018 by the Court of Appeal, which rejected privacy arguments like those made by the Nalcor contractors, and concluded that pay details for people on the public payroll is public information.

The NLTA unsuccessfully took its case to the Supreme Court of Canada.

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