“You saw they got Joey?” Pammy’s great2grandson Jon was calling from Toronto. A Royal Commission had nailed Canada’s only living Father of Confederation. It had made the Globe and both network newscasts.
In Quebec governments are always investigating their ousted opponents. There’s no reason it should be any different in Newfoundland and Labrador, where political nest building is equally a way of life. The ins put the boots to the outs. The only novelty in Newfoundland was that it was was the first time, for the very good reason that it was first change of government.
“Sure.” I had caught the item but I hadn’t been in Newfoundland for a while.
“How do you like what they did with your report?”
My report . . .???
The article July 6, 1972 in the Globe by John Zaritzky from St. John’s opened, “Joseph Smallwood and two associates bought $1.5 million worth of shares in Brinco Ltd., while Mr. Smallwood as Premier of Newfoundland was negotiating a $950 million deal with the firm on behalf of the province, a royal commission reported yesterday. The commission said that Mr. Smallwood and his associates borrowed money to buy the stock from the Bank of Montreal, which was and is the provincial government’s banker as well as Brinco’s.” There was some detail. Premier Frank Moores said his government would go after Smallwood in the courts. Finance Minister John Crosbie was flying to Toronto to confer with a top criminal lawyer. “The commission, headed by Fabian O’Dea, a former Lieutenant Governor of the province, was appointed by Mr. Moores on Feb. 29,” the Globe report concluded.
What had that to do with my report?
In May 1969 I was a resident of Barbados in the West Indies working on various economic development projects, including communications, hotel and restaurant management and an assignment with Gerry Bull’s controversial but highly innovative Space Research Corporation. I had departed Canada — mon pays c’est l’hiver — eight months before. There was still warmth in my heart for the old places, but I hadn’t been back. I had grown accustomed to the sun in my face.
Late on a Sunday afternoon, just home from a lazy day at Accra beach, Mary-Lea was laying the table for a supper of flying fish, christophine and breadfruit. Mary-Lea was cook and staff sergeant-major. But she couldn’t make a decent daiquiri so I was mixing the Mount Gay and lime when my daughter called from the den, “Daddy, it’s Canada.”
Jon asked, “Can you come to St. John’s?”
When in Canada, Jon (pictured right) was seldom away from where the money is, mostly Toronto. Since quitting school at fifteen shy a diploma and sticking out his thumb heading west, Jon had fashioned a sophisticated PR and lobbying consultancy. This belied his village origins. He had spent his infancy and pre-school years in the family hamlet on the Rideau Canal, Chaffey’s Lock with its population out of fishing season of a hundred and change. He bunked with his grandparents while his father was in prison on a DWI manslaughter conviction. He had vivid memories of his granddad Henry Fleming, who was Pammy’s eldest grandson and Kate’s big brother. Henry put in more than thirty years of service as lockmaster at the old stand, extending the family’s tenure at Chaffey’s to as near a full century as dammit (1832-1929).
“Why are you in Newfoundland?”
“Can’t explain on the phone. Can you come?”
“It’s not really a good time.”
“Would ten thousand dollars persuade you?”
“As soon as possible.”
I left the next day, figuring to stop a day or two in Montreal, which was home town. Forty eight hours later– I hadn’t even said hello to family and friends — he tracked me down at the Hotel Bonaventure.
“I need you right away,” he said.
“I’ll try to get out tomorrow.”
“My office has you booked on the midnight flight tonight. You can pick up your ticket at the airport. You have plenty of time.” It was 10 p.m.
The flight by DC8-F from Barbados had been five hours. From Montreal to St. John’s took twelve. A turbo-prop Viscount added undreamed-of dimension to the term “milk-run” as it chugged up from Dorval, down at Moncton, over to Halifax, to Sydney to Stephenville, to Gander where it sat motionless on the tarmac for two hours. Stops for weather. Passengers deplaning, emplaning, complaining. Stops for new crew. For refueling. From Gander the flight was wrapped in a fog soup. I first saw ground at St. John’s ten feet above it.
Jon was there. As we drove to the hotel he filled me in on what-was-really-happening in Newfoundland.
In his autobiographical Recollections of a Streetfighter, which was privately printed but deserves study by anyone in the rough and tumble of winning business and influencing governments, Jon writes of “the Smallwood Project” he took on after “two very high profile recently appointed provincial cabinet ministers resigned to protest the abuses of privilege, the patronage, and the anti-democratic dominance of Joey Smallwood.” The two who resigned were John Crosbie and Clyde Wells.
Now Boss Smallwood, it appeared, was going to retire, although nobody knew for sure. He said he would, probably. He had called a Liberal leadership convention for the fall. He had loosed his grip on the provincial Liberal party, which he had founded and always controlled. Some constituency organizations had exercised their newfound freedom to choose delegates to this convention who would not simply rubber-stamp Joey’s decisions.
As I arrived John Crosbie was the only declared candidate for the leadership. He had once appeared to be the heir apparent. Born to the St. John’s merchant clique that Joey baited with such devastating effect on the outport hustings, Crosbie had won a seat for the Liberals — no difficult task for they had dominated political life ever since the province had opted for Canada. After Joey took a liking to him he was named to the cabinet where as Health Minister he began to look like the anointed one. But he ran afoul of one of Joey’s pet industrial giveaways, a passel of government goodies for New York financier John Shaheen, who was promoting an oil refinery at Come-By-Chance, a hamlet with a deepwater port. Crosbie resigned from cabinet rather than endorse a deal that gave Shaheen a $15 million unsecured loan.
By the standards of the day in the province this arrangement was not extraordinary. It hardly compared in generosity, for instance, with the mineral rights and loans provided for John Doyle’s Javelin empire. Or the local pork-barreling that had turned the Lundrigan family from impecunious owners of a small sawmill into multi-millionaire construction czars. Or the benefits over a quarter-century that had siphoned millions of Canada’s transfer payments into the pockets of the established merchants — not excluding the Crosbie clan, which controlled construction and building materials companies, the regional airline, insurance and shipping companies, and a St. John’s daily newspaper. (This empire, run by Andrew Crosbie, John’s brother, was destined to collapse of mismanagement some years later.)
But Shaheen and the deal stuck in Crosbie’s craw and he withdrew to the backbenches. When Smallwood announced in early 1969 that he would retire it was widely understood that he would promote his own successor. Joey didn’t like it at all when Crosbie decided to make a contest of it and announced he would be a candidate for the Liberal leadership.
Joey Smallwood was the first and, until then, only Premier of Newfoundland. Almost singlehandedly against the opposition of the colonial-minded administration and the merchants of St. John’s he had persuaded the Islanders to opt for union with Canada in 1949. This coup had brought hundreds of millions of dollars into the new province, money which Joey had shrewdly distributed in ways to ensure the loyalty of the electorate. He was Premier-For-Life, or as long as he wanted to be.
However John Crosbie had got religion. He believed the time had come to call a halt to Joey and bring Newfoundland into respectable alignment with fiscal probity, at least to the extent it existed in other provinces. An autocracy was no longer tolerable, and Joey himself had dangled the possibility of change by calling for the leadership convention. The opening was slight and diminishing every day as Joey reconsidered, but Crosbie finally decided to run against Joey’s man, or against Joey himself if that became necessary, as indeed it would.
Jon was Crosbie’s campaign manager.
I wasn’t surprised; Jon is a great believer in improbable causes. He had put his talents at the disposal of Eric Kierans’ bid for the federal Liberal leadership (against Trudeau at his most charismatic), Bob Nixon’s hope to become Premier of Ontario (against unbeatable Bill Davis), and the First Nations’ fight for a fair future (against the weight of centuries). Managing opposition to Smallwood in Newfoundland seemed right in character.
”We don’t expect to beat him if he runs,” said Jon. “But we think we can create enough of a stink — or threaten to — that he’ll have to make a deal to leave soon. The first priority is to get Joey out. Getting Crosbie in is secondary.” It would be an expensive sacrifice.
What he wanted of me, I should have known, was “to provide the stink.”
In Streetfighter, written some forty years later, Jon describes how he “had taken a lot of heat from Andrew Crosbie” over a contract he had put out “to a financial journalist who had a unique forensic ability. The deal was $10,000 plus expenses for a publishable article that, if ever printed, would result in the biggest public scandal since the financing of the Canadian Pacific Railway. Its key value was that if the Smallwood campaign got unduly dirty, we had the capability to offer a scorched earth response.”
Before decamping for the West Indies I was associate editor of Financial Times of Canada. Anything remotely comparable to the CPR scandal had my attention, especially if it had scorched earth potential. After checking in to the Hotel Newfoundland, which would be home for two weeks, I walked to Jon’s headquarters, a two-storey frame house on a pleasant, tree lined, middle-class street not far from the hotel. It was leased for the summer from a family vacationing in Europe. What a treat it would have been to hear the neighbours describe that summer scene to the homeowners on their return. The place was erupting.
Jon had three of his seven children visiting from the mainland. There was a red-haired girl friend in residence (Jon was in the midst of what he himself referred to as a “somewhat messy divorce action”), a brunette secretary and blonde transient. A young law student, who ran the campaign office, was encamped. And his girl friend. A private detective dropped in frequently to check for bugs. One was discovered and cleverly turned to deliver misinformation to the enemy camp. Public relations counselors were draped over the couches at all hours of the day and well into the nights. The freezer was stocked exclusively with steaks, the refrigerator partitioned between white wine and tomato juice. Much of the shelf space was occupied by cartons of Islay Mist scotch whiskey.
The strategists were from Toronto and the runners from Memorial. But the local strength was impressive. Brian Peckford, a political activist, was among the first to join the team. Clyde Wells, a Cornerbrook lawyer and Crosbie’s fellow defector from the Smallwood cabinet, organized volunteers. They would each become Liberal premier of Newfoundland in their day. Though his assistance had to be kept “in deepest confidence,” as Jon put it, Frank Moores “happily helped with the fund raising.” Moores belonged in the enemy camp. He was MP for Bonavista-Trinity-Conception and president of the Progressive Conservative Party of Canada. He too would become premier, finally ousting Smallwood and the Liberals and bringing the first Conservative government to the province since joining Canada. All this was to come but known to none of the Crosbie cabal at that time.
“You’re not to tell anybody what you’re really doing here,” said Jon. “As a cover, you can say you’re researching a story on economic conditions in the province.”
“What will I really be doing?”
“You’ll be digging up all you can find on Smallwood.” After I had dug out whatever there was to be found, Jon wanted a report. He wanted it in publishable form, though there was no plan to publish it. “We want it as a lever,” he said. “This campaign is going to be bitter. If we have this in reserve it might keep Joey’s camp from going overboard.”
Crosbie had already paid for a wide-ranging survey of public attitudes done by one of the top American pollsters. He discovered that Newfoundlanders believed that their government was corrupt but didn’t much care. Joey was a folk-hero. Whatever he took for himself was alright with them.
At the time Joey talked the island into confederation just after the end of World War II, he had been a failure at almost every business he had tried. Before becoming premier he had run a pig-farming operation into the dirt. His salary for the top political job in the province had been $6,000 a year. Yet he lived in a lavish home that he had built privately and then, in an imperial gesture, willed to the people of the province.
But the Crosbie camp was convinced that the people had no idea of the extent of the rip-off. Particularly, they weren’t aware that, while Joey was well off, some of his friends and associates were wealthy beyond avarice. A complete accounting might be able to topple the tyrant. But perhaps just the threat of it could induce him to retire gracefully.
“We really want to avoid an all-out battle between Joey and Crosbie,” Jon said. “That can only undermine the party, and might mean a Conservative win at the next provincial election.”
Obviously, if I was going to be nosing about on this tight island, no cover story we could concoct would fool anyone for very long. This was alright, Jon said. It didn’t matter if Joey’s gang found out. In fact they were supposed to; it might throw the proper scare into them. But it would be more useful if they thought they were being clever while discovering me.
In fact I’d already been discovered. As Geoffrey Stevens reports in The Player: The Life and Times of Dalton Camp, “Smallwood was known to have informants at the airport who kept him personally posted on the arrival of suspicious strangers from the mainland.” By my May tan alone I was suspicious.
Jon suggested I get a copy of Richard Gwyn’s biography of Smallwood. He made an appointment for me with Baron Macdonald, an executive with the Crosbie companies, for the next day. I had a number to call in case I needed anything. I saw him only twice again in the next two weeks — once by chance at the Candlelight and once when I delivered my report.
In fifteen years of reporting there were a few luxuries I had missed. One was a research assistant. No employer had ever seen fit to provide one. Now that I was being paid so munificently, I thought to fill the gap myself. It seemed likely to be useful to have someone around who knew something about Newfoundland and its politics ¾ not to mention somebody to escort me about St. John’s. It didn’t take long to find Helen, a young widow who was under-appreciated by the daily paper where she worked and willing to moonlight.
She had the important qualification of family links to one of St. John’s old families. She knew a lot of skeletons, some still clicking.
Gwyn’s biography of Smallwood is excellent, very chatty, full of detail, some of it even critical. It was only after I had been in the province a few days that a strange omission struck me. All kinds of people were in the book, friends and enemies, rich and influential, politicos, merchants and fishermen. But there were no Lundrigans. This was very curious indeed because the more I tried to find out about Smallwood’s business affairs and the economic policies of his government, the larger Lundrigan loomed.
A courtly and charming clerk informed me with regret that there, were no open records of debates in the Newfoundland legislature. He had them of course, and they were scrupulously kept. But they weren’t to be made public. The reports of the provincial auditor-general were stored in the basement of the Confederation Building. When I asked for all the reports over the past 15 years, the guardian of the stores looked at me with quizzical condescension.
“You’d better come back tomorrow,” he said.
I called the number Jon had given me and told the young law student that I could use some expense money. Thirty minutes later there was a knock at the hotel room door. The girl standing there was very pretty, very young and very serious. She would have made a popular beauty queen at Memorial University but her manner said she would rather be student president.
She reached into a shoulder bag and pulled out a thick, white, unaddressed envelope, handed it to me and left without another word. The envelope was stuffed with $20, $50 and $100 bills. There was no note.
The next day the guardian of the stores had the A-G reports ready, except for two that were “out of print.” For several days I pored over these records, particularly the sections dealing with grants to private companies. There were dozens of these, for everything from fish packing to motel building. A number of companies, after taking the government’s money, had been somewhat improvident with it and come to the edge of bankruptcy. The practice then was for the government’s industrial development agency to take control of the company, and frequently hand over management to another business group. One of the most prominent of these business-fixers was Lundrigan’s Ltd.
Armed with the names of the companies I visited the provincial corporate records department to find out who was behind them. I was surrounded by law clerks in the dimly lit, meshed-in storeroom. We all suffered from eyestrain and the mugginess of an early summer heat wave.
It became clear that millions of dollars of government money had been pumped into ventures that had little or no chance of commercial success but had been sponsored by close friends of the Liberal party. Of the government-supported companies that survived, many had a remarkable congruence of directors.
The name that appeared most frequently was D.W.K. Dawe, a St. John’s lawyer whose clients included Lundrigan’s Ltd. and Joey Smallwood. Oliver Vardy, a senior public servant and Smallwood’s closest friend, and Arthur Lundrigan, who never met a benefactor he didn’t like, also sat on many recipient boards.
Arthur Lundrigan was a director of the Bank of Montreal, which was the province’s official banker. One of the first things I’d learned about Joey’s financial affairs was that he had a loan from the BofM that he used to buy stock in Brinco, the company that was building a gigantic power complex at Labrador’s Churchill Falls. Jon had known about it and so had Baron Macdonald, the Crosbie lieutenant. In fact it was almost a matter of common gossip.
One afternoon drinking screech in the hotel bar with one of the best freelance journalists in town, I told him of a complicated maneuver involving the provincial agricultural marketing board and a large chicken farm that Joey owned and his family ran. “Hell,” he came back, “I had that months ago. Sent a query but nobody bit.”
It was interesting and frustrating. Each time I discovered a particularly unorthodox situation involving Smallwood and company, I found the essentials of the deal were fairly well known in the corridors of St. John’s. My research was just confirming rumours that everyone believed anyway.
That night I saw Jon at the Candlelight and mentioned this problem. He didn’t seem concerned about the cost. “Put it all together with some documentation,” he said. “Nobody’s done that before. It should be enough to scare Joey. That’s all we want to do.”
I had several meals at the Candlelight during my time on the job. At first glance it appeared the typical eastern short-order lunch counter. But the Wyatts orchestrated a kitchen and a homey warmth into a rare experience. The place was a jewel.
It was also a traffic centre. My first evening there I met enough people to keep successive conversations going well past midnight.
Newfoundlanders are great storytellers and Joey was one of their favourite topics. It was something of a temptation to include in my narrative for Jon some of the more delicious scandals told me with serious conviction by more than one respected citizen. But most of the worst tales of venality were simply impossible to document. In the end I stuck very close to what was in the public records. On the tenth day I rented an IBM Selectric and started to write. After work Helen would drop over and we’d discuss my notes. She was a fount of knowledge on relationships ¾ where the family ties were, or the long-standing friendship, or the submerged but powerful business links ¾ the kind of things you learn by osmosis when you’re born into a community.
Two nights later the final version was ready. It fell short of proving malfeasance but showed a pattern that explained how a political cadre had been able to manipulate public funds in order to raise themselves from impoverishment to opulence and develop the clout to borrow millions of dollars from one of the nation’s Big Five banks. One original, no copies, per instruction. I delivered it to Jon the next morning and that afternoon the young woman arrived again with another unmarked envelope stuffed with bills. I left on a Wednesday.
The report that was supposed to increase pressure on Joey to see the light didn’t work at all the way it was intended. Events moved faster than anyone anticipated. Less than a week after I arrived Smallwood announced he would indeed be a candidate to succeed himself as Liberal leader. Crosbie’s campaign would feature an attack on “Newfoundland’s LSD — Lundrigan, Shaheen and Doyle,” but it fell well short. Joey was a shoo-in at the convention. Crosbie’s team secretly subsidized Alex Hickman, the justice minister, to join the race. The subsidy, Jon writes in Streetfighter, was delivered “in a shopping bag containing $25,000 in $100 bills.” Hickman’s entry split the vote three ways and spared Crosbie the ignominy of a head-to-head trouncing by the wily old veteran.
The report never surfaced during the campaign. A top libel lawyer provided an opinion that any action arising from its publication could be “successfully defended,” but it represented too much escalation for the Crosbie family, which still had to do business in the province after the votes were counted.
Only one person outside the Crosbie entourage ever saw the complete document. Jon told me a year or so later (he didn’t repeat it in Streetfighter – perhaps memory had faded after forty years) that he brought it himself to Frank Moores as soon as the Crosbie’s loss was certain. After all, the two men shared the same basic objective. Moores was a boyhood friend of Crosbie’s; they had been schoolmates together at St. Andrew’s College in Ontario. Both millionaires, from old island families. Both politicians. They shared many objectives, including the basic conviction that Joey had to be gone if Newfoundland was to have any chance to prosper.
As it happened, they soon accomplished this goal in a classic one-two combination. Crosbie weakened Joey’s credibility in the no-holds-barred fight for the Liberal leadership in 1969. Moores took over the PC Party in Newfoundland the next year. In the 1971 provincial election Moores’ Progressive Conservatives beat Smallwood’s Liberals to form a minority government, which became a knockout majority in early 1972.
Once Frank Moores became Premier, John Crosbie crossed the floor to become his finance minister. His political career took a federal turn that would include senior cabinet posts in both the Clark and Mulroney governments. In 2008 Harper appointed him Lieutenant Governor of the province, a gig that lasted until March 2013 when he was eighty-two. Joey left for London to write his version of the province’s history. Though he would live another two decades and die a nonagenarian, he was a spent force politically. It had all come about much as Jon had predicted.
Among the items flagged in my report, now in the hands of Joey’s opponents in power, were the unusual leasing practices of the Newfoundland Liquor Commission. Moores picked this peccadillo to invoke the Public Enquiries Act and establish a Royal Commission to investigate breaches of trust, conflicts of interest and other ways and means that public funds had been misused by his predecessor.
Fabian O’Dea found much the same pattern of private gain at public expense for a small group of Smallwood intimates that I had. He had access to private documents and could call witnesses to testify under oath, so his findings were more detailed. Even so there was not enough evidence to sustain criminal action. All the government could do was try to recover some excess payments through the civil courts. This would prove no more successful than recovering any of the billions from Churchill Falls that were recklessly ceded to Quebec by Smallwood, with a hydro obsession but blind to fiscal reality while he was in power.