There are zero degrees of separation between the board of Manitoba Hydro and the allegedly independent office of the Manitoba Auditor General.
Auditor General Carol Bellringer sends a representative to each and every Hydro board meeting to take notes and report back to her what is said.
Hydro chairman Vic Schroeder dropped this bombshell at last week's legislative committee meeting discussing, among other things, the refusal by Hydro Minister Rosann Wowchuk to acknowledge Bellringer is in a conflict of interest if she conducts an audit into a whistleblower complaint of mismanagement by Hydro.
Bellringer sat on the board of Hydro immediately prior to being appointed Auditor General---and during the time the whistleblower was working for Hydro--- and she admits herself there is at least the perception of a conflict of interest. But Schroeder's revelation undercuts Bellringer's claim that she can use safeguards to overcome any perceived bias in her work.
The previously unreported unbroken connection between Bellringer and Hydro means that she has been getting one-sided reports into the whistleblower's complaint of mismanagement (at the time Bellringer was one of the managers) for months, if not years, before the whistleblower complaint wound up on her desk.
And it goes a long way towards explaining why Bellringer has sat on the complaint for nine months, doing exactly nothing about it even though she's legally bound by the NDP's vaunted Whistleblower Act to investigate such complaints.
Even prior to Schroeder's explosive admission, Opposition leader Hugh McFadyen served notice that "the credibility of the audit is now damaged beyond repair as a result of the lack of independence of the Auditor..."
McFadyen presented a letter Bellringer "wrote to somebody who had asked for an audit into Hydro, and in her reply dated August 14th, 2008 ... said, and I quote: Prior to my appointment as Auditor General in July 2006, I was a member of the Manitoba Hydro board of directors and thus, neither I, nor my staff, are in a position to follow up on your request as independent auditors."
"So I wonder," McFadyen asked," how, in August of 2008, that Auditor General is not independent, but now, in the highly politicized environment we're in today, suddenly that same Auditor General and her staff are suddenly, magically, independent?"
Ms. Wowchuk: Mr. Chairman, we had the Auditor General at Public Accounts here when the members opposite had the opportunity to ask the Auditor General about this very situation and she indicated that she had sought out advice and been given advice based on the time that she was on the Hydro board and at the time these allegations are made, that she was not in a conflict.
But Wowchuk acknowledged she has no communication with Bellringer, which means that any "advice" the auditor general allegedly received is secret and known only to the Auditor General.
She told the Public Accounts committee she "had discussions" with the Institute of Chartered Accountants of Manitoba. The Institute of Chartered Accounts hasn't released to the public any letters providing Bellringer with loopholes to their conflict of interest regulations. So by what authority does Bellringer now claim to be cleansed of the perception of bias?
Wowchuk, the alleged watchdog of the watchdog, doesn't care.
The Opposition wasn't buying it. Having grown some backbone, they refused to pass acceptance of Manitoba Hydro's annual reports for the past 3 years, serving notice to unelected Premier Greg Selinger there's big trouble brewing just ahead of the coming mini-session of the Legislature.
* The revelation of a previously unknown communications channel from Manitoba Hydro to their former board member who is conducting an investigation of a whistleblower's complaint about Manitoba Hydro.
* A declaration by the Opposition that they reject the special audit in advance because of conflict of interest by the person doing the audit, the provincial Auditor General.
* A vote to reject Hydro's annual reports.
And not a word of this reported in the mainstream media.
Winnipeg Free Press reporter Mary Agnes Welch, who refuses to report details of the former consultant's complaint provided in an unpublished letter to the newspaper, did give Hydro another opportunity to slander the whistleblower.
Hydro boss attacks whistleblower's credibility
By: Mary Agnes Welch
18/11/2009 1:00 AM
The whistleblower who raised red flags about blackouts and bankruptcy was a "disgruntled consultant" who refused to take direction and whose allegations could never be substantiated, Manitoba Hydro boss Bob Brennan said Tuesday night.
Welch concluded with her personal shot at the consultant whose identify is protected by the Whistleblower's Act.
"The whistleblower, who has so far refused to allow her name to be published, has said she repeatedly offered to detail her findings and was rebuffed."
We wait for the Winnipeg Free Press reports on "The rape victim, who has so far refused to allow her name to be published, has said..."
If MSM reporters had bothered to listen to the answers provided at the Nov. 17 meeting of the Standing Committee on Crown Corporations
( http://www.gov.mb.ca/legislature/hansard/3rd-39th/cc_06/cc_06.html )
they would have learned how much Manitoba Hydro CEO confirmed specifics of the formal complaint filed by the ex-consultant we've named Miss Whistle.
"The multi-year drought analysis on this “future generation” build, including in-service dates, and contract dates, showed exposure to the Province of $7BN. Obviously, this is more than the retained earnings, and under any definition, would wipe out the entire “solvency” of the Utility."
Bob Brennan, Manitoba Hydro
"I think in the current IFF we're looking at, I think the amount of a drought that was the same as a period of '89, '90, '91-in that period, five year-period, if the drought was the same amount as that, I think it would cost us 2.4 billion or something. So that'd wipe out our equity. "
"...what was uncovered was there were “systemic and massive” computer system flaws - with obsolete computers maintaining the calculations. Massive system errors and inadequate mathematics were found in the power calculation of “blackouts” or reliability conditions - which could lead to faulty results in keeping the lights on.
Bob Brennan (ducking the question)
Mr. Brennan: First of all, I think the report said that we have old computers. Well, I don't think that's the problem. We're talking about software systems that are continually under review.
If it was learned, that the safety methods for keeping the lights on were programmed only by 1 or 2 persons (with source code and changes known only to them), on an outdated computer which hasn’t been changed since the 80’s, I think you too would be worried.
Bob Brennan (feigning ignorance to Manitoba Liberal Party leader Jon Gerrard)
Mr. Gerrard: Now, is it true that there are only one or two of your employees who know the programming or the source code for the software which controls the power grid?
Mr. Brennan: Not to my knowledge.
Mr. Gerrard: Approximately, how many people would-in the Manitoba Hydro - would know the source code?
Mr. Brennan: Oh, I really don't know the answer to that at all, but we have a lot of people working on computer operations; they'd be in the hundreds. But, you know, as a relation to that one specific system and there's knowledgeable-but, we could-I'm sure we could always have more people with knowledge in all kinds of areas. Like, we have some jobs at Manitoba Hydro where the individuals are known internationally as being people with a real knowledge. Well, some of those people are really, really hard to replace. But we will get to find out about all that. But I don't know the answer to it.
"The ICF consultants were told not to look at the computers."
"...so we decided to hire ICF and we took the two major issues and said, these are the ones that are, you know, really, really serious; take a look at those and see whether, what your opinion is on those."
The transcript also proves how much Free Press Mary Agnes Welch interjected her personal opinion into her story.
Mary Agnes Welch
"She also recommended that Hydro buy millions of dollars of software from a company in which she had a stake."
"The contractor also recommended the purchase of some software and the contractor had some solution for us to consider."
- For 14 months and counting, Manitoba Hydro has managed to keep the Public Utilities Board, which allegedly has the power to oversee Hydro operations, at bay, deflecting all requests for Hydro's internal risk analysis into their $14 billion plans for new dams and power lines.
- They thought they had succeeded in stifling the risk consultant who raised big problems with their proposed plans, only to learn she had taken her concerns to the government under the Whistleblower Act.
- Their former colleague Carol Bellringer has managed to delay the required investigation of those concerns for 9 months while Hydro engages in a compaign of slander against the consultant and intimidation against anyone thinking of coming forward to support her.
But the transcript of the Crown Corporations Committee suggests that Hydro's well of goodwill has run dry.
Brennan tried to defend his colleague Carol Bellringer, a proud chartered accountant, and the new bunch of CA's Hydro has hired to churn out a report they can use to deflect criticism. He found out the usual razzle dazzle doesn't work anymore.
Excuse me. I think I have to defend chartered accountants. Chartered accountants are a credible organization, full of ethics, and I have every confidence in the world that KPMG is credible.
I have a lot of respect for KPMG as well. I know certainly Arthur Andersen was a great audit firm as well, and they were paid handsomely by Enron to produce the results that they were looking for.
Some Honourable Members:
Next: The easy-to-understand Risk Analysis that Manitoba Hydro doesn't want you to see---ours.