Nfld. & Labrador·CBC Investigates

Nalcor says it hired $350K consultant after meeting with premier's chief of staff

Nalcor Energy says the Newfoundland and Labrador government directed its oil and gas spinoff to foot the six-figure bill for a newly hired consultant.

Premier's office says Nalcor VP 'mutually agreed' on 'ideal person' to help new oil and gas company

Gordon McIntosh was appointed Newfoundland and Labrador's deputy minister of natural resources in 2016, and served in that job for two years. His company was then contracted to work as a consultant on oil and gas issues. (Facebook)

Nalcor Energy says the Newfoundland and Labrador government directed its oil and gas spinoff to foot the six-figure bill for a newly hired consultant.

That contract was signed after a November 2018 meeting between a top Nalcor executive, the consultant and the premier's chief of staff.

In a series of emails responding to questions from CBC News, Nalcor provided those details of how the arrangement with Aberdeen International Associates came about, but wouldn't say who exactly gave any direction.

Meanwhile, the premier's office said a Nalcor vice-president and the chief of staff "mutually agreed" at the meeting that the consultant was the ideal choice to help transition the new stand-alone oil and gas corporation. Nalcor then took over negotiations, finalized the contract, and submitted the $350,000 budget request.

While the contract sparked debate in the House of Assembly last year, the involvement of the premier's office has not been publicly revealed before now.

The natural resources minister recently told CBC News she was unaware of any direction from the government related to the hiring.

One of the directors of Aberdeen International Associates is Gordon McIntosh, who served as the deputy minister of natural resources until he left that position and was awarded the sole-source consulting gig.

'Incorporates government's direction to OilCo management'

With an access-to-information request, CBC News obtained Nalcor correspondence revealing the government's role in the decision.

Brendan Paddick, the chair of Nalcor Energy's board of directors, wrote Natural Resources Minister Siobhan Coady a two-page letter about the new oil and gas spinoff's 2019 budget.

"The budget incorporates government's direction to OilCo management to include $350,000 to cover the costs of the Advance 2030 policy advisor that government has retained," Paddick wrote on Jan. 31, 2019.

That's nearly double what McIntosh was making as deputy minister.

Brendan Paddick is chair of the Nalcor Energy board of directors. (Terry Roberts/CBC)

According to emailed statements from Nalcor, the stand-alone oil and gas company entered into a contract with Aberdeen International Associates after a November 2018 meeting between three people — Greg Mercer, the premier's chief of staff; Jim Keating, Nalcor's vice-president of oil and gas; and McIntosh.

"It was decided to expand the mandate of the new oil and gas corporation to include supplier development and promotion initiatives and with this expanded mandate Mr. McIntosh was ideally suited for this position," a Nalcor spokesperson wrote in an email to CBC News.

That's because McIntosh played a "key role" in the development of Advance 2030 — the Ball administration's plan for the oil and gas sector — as well as his local and international industry expertise.

Nalcor didn't make anyone available for an interview. 

But Nalcor's board issued a short statement saying the government provided budget direction in a number of areas, including that contract, as the oil and gas division transitioned to become a separate Crown corporation.

'Mutually agreed' on 'ideal person'

The premier's office also did not make anyone available for an interview.

But in an email to CBC News, the premier's office confirmed that 2018 meeting took place.

However, there is no reference to any direction being given.

"In the fall of 2018, a meeting took place with Greg Mercer, Jim Keating, and Gordon McIntosh to discuss the future of the new oil and gas corporation and how its mandate aligns with the objectives of Advance 2030," the premier's office wrote.

"With Mr. McIntosh's vast experience and expertise on both a provincial and international level, Mr. Keating and Mr. Mercer mutually agreed that Mr. McIntosh would be the ideal person to help transition the new stand-alone oil and gas corporation."

Greg Mercer, left, is Premier Dwight Ball's chief of staff. According to Nalcor Energy, Mercer was involved in a November 2018 meeting about expanding the mandate of the province's fledgling oil and gas corporation. (Twitter)

According to the premier's office, McIntosh and Keating then entered into contract discussions that were finalized with Keating and the Nalcor legal team.

"As standard with Nalcor consulting contracts, the government did not have input in those discussions," the premier's office said.

Appointment sparked questions in legislature

The contract sparked debate in the House of Assembly last March, with the Opposition Tories asking why it wasn't opened up to a public competition that included industry players in Newfoundland and Labrador. 

Aberdeen International Associates is based in Scotland, and McIntosh is working from there.

"Nalcor budgets for its own consulting services and this is within their consulting budget," Natural Resources Minister Coady replied in the legislature.

"They make those decisions around the consultants they require and around the payment that they are going to make."

Natural Resources Minister Siobhan Coady answers questions from reporters at the House of Assembly on March 19, 2019. (CBC)

In a scrum with reporters after question period, Coady again stressed Nalcor's role.

"Nalcor Oil and Gas Co. has its own separate budget for consultancies and for consultant work, and this is within their budget parameters and they made a contract with Mr. Macintosh to do some extra work," Coady said.

"We are trying to grow our oil and gas industry. His expertise is wanted by Nalcor, Nalcor Oil and Gas … for that very reason."

Minister defends comments 

In a recent interview with CBC News, Coady defended those comments, saying the contract was part of a larger budget submission she received from Nalcor in early 2019.

Coady said she interpreted that part of the budget submission in the broader sense of putting a focus on supply and service delivery, as part of the overall oil and gas plan, and not about a particular contract.

"I don't on a regular basis, and I don't at all know the inner workings of OilCo's how they use and manage contracts with regard to professional services. That's not my role," Coady said.

"My role is, overall, the direction of the corporation."

Nalcor Energy is a Newfoundland and Labrador Crown-owned corporation. (CBC)

Coady stressed she played no part in the specific decision to retain the consultant.

"Let me be crystal clear: at no point did I have any involvement in Aberdeen International's contract, or in any discussions around the contract."

The premier's office told CBC News that Mercer asked Coady during a brief conversation if McIntosh would be a good fit for the oil and gas corporation, and she said yes. But there was no discussion on a specific position or contract.

Coady added that having someone of McIntosh's calibre helping out in the supply and services area with the oil and gas corporation is a good thing, given his decades of experience and international reputation.

"It's a positive thing, not a negative thing," she said.

Current contract for 2 years

According to Nalcor, the current consulting contract has a two-year maximum, with a 30-day notice period after year one. 

The contract with Aberdeen International Associates is now in its second year.

McIntosh was appointed provincial deputy minister of natural resources in late 2016, and served in that role for two years.

The provincial cabinet granted him a conflict-of-interest waiver to take on the consulting role — one of four such waivers granted to departing civil servants over the past two years.

According to a biography attached to that announcement, McIntosh's past career spanned more than 30 years in the international oil and gas industry in Scotland, Southeast Asia, East Africa and South America.

For over two decades, he was director of economic development with Aberdeen city council with responsibility for the energy industry, before retiring from that post earlier in 2016.

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About the Author

Rob Antle

CBC News

Rob Antle is producer for CBC's investigative unit in Newfoundland and Labrador.

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