Monday, November 06, 2006

What If There Was A Quid Pro Quo?


After some extremely opaque suggest-o-grams, Vaughn Palmer finally came right out and wondered out loud if there just might have been some sort of 'You say tomato, I say tomaaaaahto' kind of a thing going in the run-up to the BC Rail sale.

Palmer's velvetized hammerhead screed in last Fridays's (Nov. 4th) Vancouver Sun is hidden behind that gosh-darned Canned-West subscription wailing wall, but BC Mary has it well excerpted here. The following passage gets to the crux of the matter at hand:

"The aides (ie. Basi and Virk) are accused of being involved in the exchange of confidential information regarding the sale [of BC Rail] and of gaining benefits and/or other considerations in return.

But one possible defence would be that they were authorized to pass along information to keep the bidding process alive.

That was a critical consideration for the B.C. Liberals as they moved to privatize BC Rail in the second half of 2003.

The preferred bidder was CN Rail. It had a continent-wide rail network and it was offering the highest price -- $1 billion.

But to preserve the competitive aspect of the process and to keep pressure on CN, the government needed other bidders.

Initially there were three. But one dropped out in the early going and a second exited in the final month, complaining that the process was tainted.

With only one other bidder left, the competitive aspect was hanging by a threat. Not surprisingly, the Liberals wanted to keep that alternative player in the game.

The rival bidder was OmniTRAX, a Colorado-based operator. It did stay in until the announcement Nov. 25, 2003, that CN Rail would takeover BC Rail.

OmniTRAX subsequently got involved in bidding for another BC Rail asset, the spur line serving the Roberts Bank superport.

There was talk that it might prevail in the bidding process as a sort of consolation prize.

But the Roberts Bank sale was cancelled in early 2004. Police had advised the government that confidential information regarding the spur line had ended up in the wrong hands, possibly compromising the bidding process.

The charges in the case imply a tit-for-tat. The aides were allegedly passing confidential information to gain something for themselves.

But what if any passing was inspired by their bosses, the politicians? What if the objective was to keep OmniTrax in the loop and thereby preserve the credibility of the BC Rail sale?"

So, given that last paragraph, wouldn't it be interesting to know if the leaders of the BC Liberal government at the time were meeting privately with the leaders of CN and Omnitrax in 2003 before the deal went down?

Well, one of the great things about the discussion over at BC Mary's place is that it spurs folks to consider such possibilities and go looking for any evidence to either support or refute them. As such, I went a searching and found that this issue had been raised in the Legislature way back in 2004:

First, there's this, originally posted for posterity by Mary herself, from Hansard of Apr 26, 2004

Joy MacPhail (to Minister of Transportation Kevin Falcon): When did the minister become aware that the Minister of Finance (Gary Collins) was meeting with Pat Broe, the head of Omnitrax, while the bidding process for the Roberts Bank spur line was going on? When did he become aware of that?

Hon. K. Falcon: The fact is, I'm not even sure when I became aware. I think I recall reading something in the media about the member's questioning of the Minister of Finance in estimates or something. I have some brief recollection that I read something in the media, but that would be it.

J. MacPhail: I just want to clarify. It is this Minister of Transportation who is responsible for the sale of B.C. Rail — am I correct? — including the spur line to Roberts Bank.

Hon. K. Falcon: The member knows very well that that's correct.

J. MacPhail: Okay, and he was the minister on March 3. When the Minister of Finance was asked questions about these private meetings with Pat Broe by a Vancouver Sun reporter, the Minister of Finance admitted that he discussed the Roberts Bank spur line sale with Pat Broe. He said, "Oh, it was inconsequential," but he did admit to discussing it. That's his interpretation. It was inconsequential — a private dinner between the Minister of Finance and one of the bidders on the Roberts Bank spur line sale while the bidding process was going on. The Minister of Finance admits that it was discussed at their private dinner.

Did the Minister of Finance ever tell this Minister of Transportation about the nature of those discussions? Did he ever declare that discussion in what's supposed to be an open and transparent bidding process, of which Omnitrax was one of the bidders?

Hon. K. Falcon: No.

And the following anexchange between former MLA Elayne Brenzinger questioning Mr. Falcon, also from Hansard, on Oct 6th, 2004* .

E. Brenzinger: My question is directly to the Premier and not to the Minister of Transportation, as this clearly is not a transportation question. As early as June 2002, then-CEO of CN Rail, Paul Tellier, discussed with the Vancouver Sun editorial board CN acquiring B.C. Rail, despite the fact that only a year earlier the Premier had promised not to sell B.C. Rail.

On November 21, 2003, CP Rail wrote a letter to the Premier stating that the government's handling of the B.C. Rail sale was extremely prejudiced. My question, directly to the Premier, is: will he confirm that he did in fact meet with then-CEO Paul Tellier in Kamloops prior to an RFP being issued regarding the sale of B.C. Rail, and that amongst the matters discussed was the purchase price of CN?

Hon. K. Falcon: Clearly, this is an issue that the member continues to raise, so I might direct the member to Charles River Associates Inc., the independent report that was done on the B.C. Rail–CN investment partnership. He actually goes into some detail over that CP letter. You will find that it was canvassed very, very thoroughly, and there was no fault found whatsoever.


I would encourage the member to actually take the time to read the report, and when the member reads that report, she will have all the answers there for herself.

Now, in addition to all the ramifications that this would have regarding how our assets were sold down the Corporate River on a flood tide by the gang that couldn't PPP straight, just consider the following for a moment.......

Doesn't this cast those apparently 'innocent' conversations between Messr's Campbell and Collins on David Basi's cellphone that Liberal Attorney General Wally Oppal made such a fuss about last week in an entirely different light, or dark, as the case may be?

*Actually went searching for the Brenzinger passage after prodding from 'Deep' Anonymous on Mary's comment threads.


1 comment:

istvan said...

Right on Ross,thanks for doing the work, adding the links etc.This issue is just not going away.There is a big problem with the MSM in canada. What happend to the"reporters" in the press? What they print is spin spin spin of gov propaganda,no real digging.The lazy fools or 'stooges'as some call them are on thier way out. Shame on the MSM!