David Stonehouse
The Telegraph Journal
May 7, 1997

Institute says it’s sorry for critical report; utility to drop suit against it, directors today

FREDERICTON – INCENSED BY WHAT it saw as a threat to its own reputation and that of its president, NB Power filed a lawsuit late last month against a slate of high-powered Atlantic Canadians and one of its most vocal critics.

In documents filed in the Court of Queen’s Bench, NB Power and president James Hankinson alleged they were defamed by a critical report published earlier this year by the Atlantic Institute for Market Studies in Halifax.

The lawsuit sought unspecified damages from the entire board of the non-profit institute – a veritable Who’s Who of Atlantic business – and an Energy Probe official who wrote Energizing New Brunswick Power: A Brighter Future for Consumers and Taxpayers.

Among those the publicly-owned utility named in the suit were former Mulroney cabinet minister John Crosbie, one-time McKenna cabinet minister Denis Losier, NBTel president Gerry Pond and competing utility executives.

But after days of talks – and just as the lawsuit was about to become public – NB Power dropped the court challenge late yesterday after the institute agreed to say it was sorry.

“They’ve apologized and we have accepted that apology,” said David Hawkins, a public relations consultant hired by the utility, last night.

“They have got a very fine board of directors who are responsible people and I guess maybe they stepped over the line here a little. We brought it to their attention.”

The lawsuit claimed certain passages in the report issued last February suggested that NB Power lied to the public and that Mr. Hankinson is irresponsible, untrustworthy and unfit to run the utility.

A summary of the report was published in The Telegraph Journal after its release. It called on NB Power to be more accountable to the public and charged the utility was not being responsibly managed.

It criticized NB Power for being dismissive and defensive before a legislative committee last October in the wake of a scathing report by the Atlantic institute and Energy Probe.

Mr. Hankinson, a former president of Canadian Pacific Ltd. who took over NB Power last summer, could not be reached yesterday.

But before NB Power and the institute revealed that the lawsuit would be dropped, Mr. Crosbie said no one would be getting an apology from him.

Reached yesterday afternoon at his law office in Newfoundland, the former Tory minister called the lawsuit a waste of public money.

“I don’t think very much of it, frankly. They are certainly overreacting,” the Mr. Crosbie said. “We’re a non-profit organization devoted to discussing public issues, which is what we have done.

“They are a public agency. It seems to me they should be able to take criticism. And if they think it is wrong, reply to it and defend themselves – not fly off the handle and sue everybody in sight.”

In legal documents dated April 24, the utility charged that parts of the report and an accompanying news release were false and malicious. Specifically, it took issue with the following statements:

“The utility responded to many of the criticisms with incorrect assertions and incomplete information that may have created confusion among members of the legislature and the public. Future official inquiries into NB Power should require presenters to testify under oath …

“… NB Power’s management appears to be in denial, unwilling to acknowledge the grave problems the utility faces, instead offering false assurances to the legislature and the public. Taxpayers and ratepayers are both at risk, and the risks can only increase while management’s approach persists …

“… Mr. Hankinson offered assurances to the legislators and to the public about the condition of the Point Lepreau reactor without having made an appropriate effort to ensure that those assurances were warranted. Rather than responding to the issue by focusing on resolving technical uncertainties that can undermine safety, Mr. Hankinson instead focused on assuaging public concerns …

“By putting public relations assurances ahead of caution, he failed one of the most basic requirements of nuclear management – the requirement that safety comes first.”

NB Power said the report intended to suggest that Mr. Hankinson and utility management:

“Knew of existing problems at NB Power and intentionally and deliberately lied and withheld the information from the public and the Legislative Standing Committee on Crown Corporations;

“Are irresponsible and untrustworthy in the discharge of their obligation to inform the public and the Legislative Assembly Standing Committee on Crown Corporations and should be replaced.”

And the utility says:

The report suggested Mr. Hankinson “is irresponsible and unfit to be in charge of NB Power and cannot be trusted to tell the truth about a nuclear plant and is prepared to put public relations ahead of public safety;” and

The report’s “words and statements … were maliciously calculated to bring Mr. Hankinson’s character into contempt and lower the high estimation he holds in the business community and the community at large.”

NB Power sought damages and an injunction barring the institute from publishing the statements again.

Energy Probe’s Thomas Adams, an outspoken critic of NB Power affairs who wrote the report, said he was looking forward to the court fight. In an interview before the institute and NB Power reached the deal that will end the suit, he believed the legal challenge would open the utility to greater public scrutiny.

“We continue to hold the view that NB Power is in a serious financial and operational crisis and the court action will hopefully benefit all New Brunswickers by bringing the details of this very dire situation to light,” Mr. Adams said from his Toronto office yesterday afternoon.

“It is a great burden to our organization. But we say things that challenge the establishment and we have been called to account in the courts before and we will be back again.”

Other Atlantic Institute for Market Studies board members named in the suit included: Institute chairman Purdy Crawford and president Brian Lee Crowley; Mr. Losier, former New Brunswick Economic Development minister and now president of Assumption Mutual Life Insurance Co.; J.D. Irving Ltd. vice-president Larry Armstrong; Baxter Foods Ltd. president Malcolm Baxter; Halifax lawyer George Cooper, Maritime Telegraph and Telephone Co. chairman Ivan Duvar; Nova Scotia Power president David Mann; and Maritime Electric Co. chairman David A. Scales.