Bricks and Mortars

OPINION: The Deloitte report

By Lawrence Reichard | Aug 16, 2018

On June 26 I made a Maine Freedom of Access Act request for all emails between the City of Belfast and Nordic Aquafarms CEO Erik Heim for Jan. 1, 2017, through June 25, 2018, and on July 31, I requested all emails between the city and Deloitte, a global consulting company hired by the city to report on the financial viability and environmental sustainability of Nordic's plans to build one of the world's biggest salmon farms in Belfast.

The emails are mostly between Heim, City Manager Joseph Slocum and Economic Development Director Thomas Kittredge. Some of the emails discuss Belfast opposition to Nordic, but initially Heim and Slocum agree that opposition is minimal, and everything seems fine until March 26, 2018.

Then things start to heat up. In a March 26 email to Heim, Slocum, who seems to be feeling pressure from Nordic opponents, writes: “Perhaps it would be a good idea for the city to hire an independent consultant in Norway to attest to financial issues.” Then there's nothing for four days.

Then on March 30 at 1:18 a.m. Norway time (7:18 p.m. March 29 in Belfast), Heim received an email from Kittredge requesting Nordic financial records and links to news articles on Nordic's “capital raises.”

Fourteen hours later, March 30 at 9:21 a.m. Belfast time, Heim sends a long email with 15 bullet points to Slocum and Kittredge. The email expresses concern over requests for more financial information. “We are somewhat surprised by the fact that the city is asking for financial records and documentation of investment activity at this late stage, particularly with no good explanation of what is behind this. We have been told that resistance is limited to a few people, so why this move now?”

Bullet #1: “Why is this issue coming up now after signing of the land property agreements and our investment of several hundred thousand dollars so far?”

Bullet #14: “...we need to consider if proceeding in Belfast involves us being dragged into a public financial due diligence process.... If local resistance is being turned against us as a company, then we are forced to do a new assessment of the Belfast track.”

Bullet #15: “It is important to clarify expectations now, before we proceed with further investments in Belfast.”

Nordic's suspicions were well-founded. Opposition in Belfast was mounting. A budding opposition was raising the prospect of Nordic building the fish farm and then selling it. And in the face of requests for more financial information, Nordic was threatening to pull out of a possible $500 million investment — a project the size of Bath Iron Works that was likely to yield millions of dollars a year in tax revenue and perhaps relieve pressure from Belfast homeowners who have faced steady property tax increases.

At 12:16 p.m. Slocum replies. “I just got in the office, as I had to be elsewhere this morning. We would like to talk with you today if possible. Can you call us sometime after 1:30 p.m. our time today?”

At 12:33 Heim replies, “I can call you at 1:30. Let me know if this is OK.” At 12:40 Slocum replies: “Yes 1:30 p.m. our time will be perfect.” End of email thread.

At 2:14 p.m., 44 minutes after the agreed-upon time for the phone call, Heim sent Slocum and Kittredge contact information for Anders Gjendemsjø, whom Heim describes as “practice leader for Deloitte Seafood in Norway.” Heim assures Slocum and Kittredge that “Deloitte is highly professional and will give an objective assessment of our company.”

But there are problems.

On July 30, Slocum told me Nordic played no role in the hiring of Deloitte, which had previously done auditing work for Nordic's Denmark operations and had written positively about Nordic in at least two prior reports.

Then Slocum called me back hours later and said that Nordic CEO Erik Heim had in fact suggested Deloitte, and a particular person at Deloitte, but that was after he, Slocum, had already decided on Deloitte.

So, on March 26 Slocum raises with Heim the idea of hiring a consultant, and on March 30, Heim suggests Deloitte — after Slocum had, according to Slocum, already chosen Deloitte.

On July 30 and Aug. 13, Slocum told me he looked around for a consulting company and found Deloitte. “And so I did ask Erik, because I saw him,” Slocum told me Aug. 13. “I said, 'Do you know anybody over there?' And he sent me the contact information. I called him, I saw him and said, 'I'm looking at these people; they look pretty good to me; do you have a contact there?'”

Well, we know Slocum didn't call Heim, because Slocum told me Aug. 13 he couldn’t make international calls, and the emails support that. And on Aug. 13, Slocum twice said he saw Heim and asked him about Deloitte.

But the scores of emails have many references to various Heim visits to Maine — there are many exchanges about schedules, weather, delays and other travel-related issues. There are references to Heim visits to Maine in January and February. And there is an email exchange March 22, but there is no mention in any email of any visit between March 26 and March 30. So how did Slocum see Heim between March 26 and March 30? Was Heim in Maine between March 26 and March 30? There is no indication in the emails that he was. Phone calls placed to Slocum and Heim on the afternoon of Aug. 13 were not returned by press time Aug. 14.

But there are various emails, cited above, that refer to a phone call to be placed by Heim to Slocum at 1:30 p.m. on March 30, at a time when Nordic was essentially threatening to pull out of Belfast. And 44 minutes later Heim sent Slocum a Deloitte contact.

On May 4, Slocum sent Heim a copy of his April 11 introductory email to Deloitte, which outlined what Belfast wanted in the report it was seeking. Slocum sent this to the subject of the report Belfast was seeking.

In the email to Heim, Slocum writes: “I am confident we will get positive feedback from them.” Heim suggested Deloitte. Deloitte had done work for Nordic. Deloitte had on at least two occasions written positively about Nordic. And Slocum gave Heim information on what Deloitte would be looking for.

Yes, I, too, would be confident of getting positive feedback. Who wouldn't?

Lawrence Reichard is a first-place Maine Press Association winner, freelance writer and activist who lives in Belfast.


Comments (1)
Posted by: Kenneth W Hall | Aug 16, 2018 15:15

Mr Reichard, are there emails of the City's $240,000 investment status?  Village Soup's article written by Ethan Andrews on Feb 2 2018 has the City "to cover some costs of salmon farm development" like paying half of the structural study of the dam.  Was the Deloitte study of $14,000 part of the $240,000?  I asked a few weeks or so ago if the study went out to bid, as I never saw any advertisement for spending $14,000 for an aqua farm study.  The City Council denied the mayor $900 for travel to a Bill Clinton and Chelsea Clinton at the Global Initiative, yet spent $14,000 without any sort of bidding process!

I hope the farm is built, but in a safe and complete manor.  It will be interesting to see how the fish fillets are packed and shipped after processing with the status of banned plastics and styrofoam in Belfast.  The ban certainly controls any sort of sale to a bottling water facility such a Nestle.  Does extracting water from the ground and trucking the water to a bottling facility in Northport or Searsport be a loop hole of the plastic ban?  I want to clarify there is NO water bottling facility that I know of, but curious, as Nestle could be a suitor for this project should the aqua fish farm fail.  Heim stated the wells can produce 1200 gallons per minute in an article Ethan Andrews wrote on Apr 30 2018.



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