Premier Danny Williams said a deal to build a competing fibre optic network that involves former business associates is "as clean as a whistle" and will pass independent inspection.

Opposition politicians have accused the Newfoundland and Labrador government of cronyism by putting $15 million into a $52-million fibre optic network that will compete with an existing Bell Aliant system.

Danny Williams said there is nothing untoward in his government's backing in a fibre optic deal that involves former associates.
(CBC)

Williams, who has been on vacation for much of the period since the deal was announced, said Tuesday he will not oppose the Liberals' call for a review by Auditor General John Noseworthy.

"If the auditor general wants to look at this, or needs to look at this, he will have the full support of the government. This transaction is as clean as a whistle and it's good for the people of Newfoundland and Labrador," Williams told CBC News.

The provincial government has partnered with a consortium that includes Rogers Communications, Persona Communications and MTS Allstream to build two fibre optic lines that will connect the island with mainland Canada.

Dean MacDonald and Ken Marshall, former executives who worked for Williams before he sold Cable Atlantic to Rogers, are involved in the deal. MacDonald is the president and chief executive officer of Persona, while Marshall is a Rogers vice-president.

Data from Newfoundland and Labrador's electoral office also show that Persona and Rogers have donated generously — and exclusively — to the Progressive Conservative party in the last couple of years.

Williams insists the decision to back the fibre optic network was made on a business case alone.

The decision came shortly after a fire at a Bell Aliant switching station in St. John's knocked out telecommunications — including phones, internet and bank machines — in the region for about four hours.

The government has said the outage showed that the proposal, which had been in the works long before the fire, had considerable merits for improving public service, as well as for spurring innovation.

Williams said the proposal should not be overshadowed by the fact that former associates are involved.

"These people contributed to my success, [and] we built very successful businesses. They've gone on with their lives and they're still in business," Williams said in an interview.

"Does that mean that government can't continue to have any business dealings with people I know or friends of mine? If that's the case, that can eliminate a big sector of the business community," said Williams, who — apart from being a high-profile lawyer — has owned or had stakes in a number of businesses.

Williams, meanwhile, said the new fibre optic network was almost not approved at all. Cabinet, he said, rejected the proposal twice because the premier believes it was, at the time, not solid enough.

Williams said, though, he is prepared to defend the approved deal against its critics.