November 30, 2005

Fentie chooses the ‘or else,’ but can’t launder the loan issue

(from November 30 issue of the Yukon News)

Three years after convincing Premier Dennis Fentie to cross the floor to the Yukon Party, Peter Jenkins abandoned the majority government they built together.

Now he’ll sit as an independent.

“We have accepted Mr. Jenkins’ resignation,” a pokerfaced Fentie told reporters at a news conference just minutes before Monday’s Question Period.

Jenkins new seat in the house comes with a $21,147 pay cut.

It is nothing short of a revolution.

But why?

Recently Jenkins received a letter demanding he pay off his more than $300,000 in overdue government loans or face legal action, explained Fentie.

True to his street-fighter reputation, Jenkins presented counter demands to cabinet.

“Mr. Jenkins informed his colleagues that the government accept an offer from himself, or else,” said Fentie.

“The government has chosen the ‘or else.’”

It may now seem that a political liability is off of Fentie’s back.

But many cite Jenkins’s departure as evidence of a coming Yukon Party implosion.

“What we’re really witnessing now is a desperate government hanging on, similar to the Liberals (under Pat Duncan),” said Opposition leader Todd Hardy on Monday.

What’s worse, Fentie is trying to paint himself as the ethical one — despite the fact he still has a debtor minister in cabinet (Archie Lang) and that he has done little about Jenkins for three years, said Hardy and other critics.

Jenkins version of events is different than Fentie’s.

Loans had “nothing” to do with the departure, he said Monday.

“The whole issue as to why I’m leaving the government is predicated on what has happened, or not happened in my community,” an emotional Jenkins told the house.

“The heart and soul of my community has been ripped out by the inefficiencies of government at the municipal level, the territorial level.”

Dawson City’s problems span several territorial governments, he said.

“The issue is certainly surrounding my riding and what’s going on there. I can’t seem to get anywhere and bring it to a head,” Jenkins told reporters after leaving the legislature floor.

Surrounded by MLAs and politicos from the NDP and Liberals, reporters challenged Jenkins about his ability to affect more change from the opposition bench than he could from within government.

“I guess I failed (in government),” he said. “I didn’t get what I was looking for, for my riding, so you can draw your own conclusions there.

“They’ll probably stand up and take more notice of it now, won’t they,” he said of the Yukon Party.

Jenkins’s company, Dawson City Hotels, owes the Yukon government more than $300,000.

Most of that amount is interest accumulated from two loans awarded to his Dawson business, the Eldorado Hotel, in 1988 and 1990.

Last year, under pressure from the opposition on the loans issue, the government handed its delinquent loans file — including Jenkins’s debt — to Whitehorse’s Dana Naye Ventures.

His loans coupled with his cabinet post have reflected badly on the Yukon Party.

And Jenkins knows it.

“Everybody brings their past to the table; everybody has issues,” he said candidly, adding that his departure could help his former party, which he largely still supports.

“It takes another series of areas out of the equation. It will allow them to concentrate on moving forward.”

Wayne McLennan, manager of Dana Naye’s loans file, verified Fentie’s version of the story on Tuesday.

Has Jenkins received a letter demanding full payment of his loan?

“You betcha,” said McLennan.

Jenkins has 10 days to pay up, he added.

“The debtor can either pay in full, he can tell you to whistle in the wind, or he can try to come to some meeting in between.”

Has Jenkins responded to the demand letter?

“Not that I’m aware of,” said McLennan.

“We’re getting pretty close to the deadline.”

Jenkins denied any knowledge of McLennan’s letter or possible court action.

“That would be handled by our corporate solicitors,” he said.

If Dana Naye’s lawyers do not receive a response, the normal course of action is to file a statement of claim in the Yukon courts, said McLennan.

Court action against Jenkins could happen this week, added McLennan.

Fentie was in full-spin mode after Jenkins tendered his resignation Monday morning.

“The likelihood of us being in court with Mr. Jenkins in the very near future would dictate that I would have removed him from cabinet regardless,” said Fentie.

“I want to stress that we would never allow a cabinet minister to be in legal proceedings with the government.”

It was the first time Fentie had laid out what he does and does not accept regarding loans and his cabinet ministers.

Jenkins’s reasons for leaving do not make sense to NDP house leader Gary McRobb.

“He said it was all about Dawson City and family values, and he was criticizing the two previous governments, yet he wasn’t criticizing the Yukon Party government,” said McRobb on Tuesday.

“It was the Yukon Party government that he quit to sit as an independent, so it didn’t add up.”

Fentie is the one with egg on his face now, agreed Hardy and Liberal leader Arthur Mitchell.

Last week’s Copperbelt byelection forced Fentie to fire Jenkins, they said.

The Yukon Party came a distant third in the riding, and candidate Cynthia Kearns pinned the loss on Jenkins’s loans.

“Oh, absolutely,” said Hardy on Monday.

“Mr. Fentie has never done the right thing in this matter. We called for it from day one for him not to put Mr. Jenkins in cabinet.”

“He could have taken action long ago,” said Mitchell. “He refused to. And I think that, if it wasn’t for the results in Copperbelt and the distant finish of the Yukon Party, he probably wouldn’t be taking that action.”

Hardy expressed grudging respect for Jenkins.

“Mr. Jenkins, is the hardest working guy over there,” said Hardy.

“For all his faults, he is one of the strongest people on that side.”

Jenkins often micromanaged projects because “others over there aren’t capable,” Hardy added.

“There’s probably going to be more” that cross the floor now, he said.

Fentie must now shuffle his cabinet.

“We’re certainly not in a big rush,” he said Monday.

Jim Kenyon has been named acting minister of Health and Social Services. Brad Cathers has been named acting government house leader.