Complaint about unethical hiring practices at Muskrat Falls had merit, Nalcor found

A Nalcor Energy internal investigation concluded that a complaint of unethical hiring practices within the Lower Churchill Project had "some merit."

The investigation was conducted after Nalcor received an anonymous letter questioning hiring practices at the Muskrat Falls hydroelectric project.

There may be unethical and/or fraudulent hiring practices.- Anonymous 2014 letter

"It has been reported to me that there may be unethical and/or fraudulent hiring practices taking place within the Lower Churchill Project," said the February 2014 letter said.

The letter was released by Nalcor as part of a response to an access to information request in 2016.

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The letter outlines the alleged problem.

"It has been reported that some project leaders/managers, who have been hired as contractors, have companies formed and it is through these companies that employees are hired under their direct supervision," the letter said.

"The potential conflict of interest is that these persons directly receive financial gain through the hiring of their own employees, for which the company receives a 'head hunting or administrative' fee for the hire."

After receiving this letter, the vice-president of the Lower Churchill project conducted an internal investigation.

"It was subsequently determined that there was some merit to the complaint and steps were immediately taken to rectify the situation," said a Nalcor summary of facts.

Team member had ties to recruiting company

The identity of the person investigated for a potential conflict of interest was blacked out in Nalcor's 2016 response. For the purpose of this article CBC is referring to them as XXX.

The investigation found that XXX worked in "the Marine Crossing Team of the Lower Churchill Project" and are "involved" in Newfound NL Inc. which partnered with another company Newfoundland Recruiting Corporation.

Newfound Recruiting Corporation supplied four workers for the Muskrat Falls project. 

Received no benefit

The summary said XXX did not play a role in the recruitment of those four workers.  It also said that all parties involved stated in writing that XXX did not receive any benefit from Newfound Recruiting's involvement with Nalcor.

Documents released by Nalcor say XXX terminated Newfound NL Inc. and advised they would set up another business with a different name. 

Newfound Recruiting agreed to release four of its employees with the project to other recruitment agencies. It also agreed not to supply people to the project's Marine Crossings Team.

CBC News asked Nalcor for more information to clarify details of the story, but the company had not responded as of Monday afternoon.