Saturday, May 29, 2010

RailBiz Relativity...We Are Family.


In recent posts we have established that two of British Columbia's private Railway Tycoons, David McLean of CN Rail and Peter Armstrong of Rocky Mountaineer Railtours each gave, either personally, or through their companies, at least $250,000, each, to the BC Liberal Party of Mr. Gordon Campbell since the latter became leader way, way, way back in 1993.

And, on the flipside, both private Rail Tycoons have done very well, indeed, in the wake of Gordon Campbell promise-busting dismantling of a very public Railway soon after he became the Premier of British Columbia in 2001.

Specifically, with the destruction of a 90 year-old statute that required BC Rail to run a public passenger service, followed shortly thereafter by the tainted/not tainted/sale/not sale of BC Rail to CN Rail, Mess'rs McLean and Armstrong ultimately came up aces by any and all financial measures one could choose to use and/or trumpet.

But here is something that most folks, even those who have been paying attention (including, initially, myself) may have missed.

Which is the fact that when Mr. Armstrong's Rocky Mountaineer/Great Canadian Tours private passenger business started rolling down the formerly public BC Rail tracks it was NOT Gordon Campbell's hand-picked 'executives' of the doomed Crown Corporation that Mr. Armstrong ultimately had to negotiate with to get the deal done.

Instead, it was David McLean and CN Rail:*

....In September 2004, Canadian National Railway Co. announced (Peter Armstrong's) Great Canadian had been selected to operate tourist trains on its newly-acquired British Columbia Rail routes.....

Which is somewhat ironic, given Mess'rs McLean's and Armstrong's willingness to bankroll the efforts of Mr. Campbell from the very beginning, don't you think?


Perhaps, not.

Especially when you consider something else you might not have known....

Which is the fact that Mr. McLean's son Sacha, back in the days before he became a Helicopter Company tycoon, once worked for......

Mr. Peter Armstrong:

.....Sacha and his older brother were asked to get involved in the company after David McLean needed to temporarily reduce his workload following heart issues about 13 years ago. His brother was still in law school; Sacha was working with Rocky Mountaineer. Both joined the family firm in 1996.

“I figured if I didn’t like it, I could always go work for Peter Armstrong [Rocky Mountaineer’s executive chairman],” he said. “At the same time, I always kept saying to Dad I would rather somehow get involved in the family business because I would rather manage my own money than someone else’s.”.....

Oh, and one last thing before we go......

So, apparently, did Premier Gordon Campbell's son Nicholas, according to a piece written by Darryl Greer in the Tyee in May of 2005 (which was noted subsequently for posterity by one of our friend Mary's Anon-O-Mice in the spring of 2009):

..... (Peter) Armstrong’s former employees include the premier’s son, Nicholas Campbell, as well as CN chairman David McLean’s son, Sacha McLean, according to a recent book by Paul Grescoe, entitled, “Trip of a Lifetime: The Making of the Rocky Mountaineer. The book details Armstrong’s longstanding battle with VIA Rail....

Imagine that!

*And, in case you didn't know it, Sean Holman's archives at Public Eye Online are a treasure trove of now and forever publically available information of the utmost historical import (please note that the CN press release announcing the deal with Great Canadian [interesting non-Casino moniker that, eh?] that Sean originally linked to is, surprise!, no longer operative).....
Please note: As per usual, absolutely no RailGate pre-trial publication bans were harmed in the writing of this post.....



RossK said...


Say what?

They have septics on Savary?



Norm Farrell said...

From Business in Vancouver" Nov. 2009
"Using the company’s real estate assets, he [Sacha McLean] built Vancouver Film Studios. That led to the development of two film-production support companies, Pacific Backlot Services and Signal Systems. It also added aviation to the McLean Group portfolio when it started renting a helicopter camera platform to the film industry through Blackcomb Helicopters LP."

Have you wondered why the BC Liberal Government provided big tax credits to the movie production business? Maybe because the corporate welfare bums were good friends of the Premier and owed a favor or two, or millions.

North Van's Grumps said...

From your link to what Sacha was doing "The McLean Group then bought two helicopters in 2001 and 2003."

And then there is the uncorroborative report of helicopter landings on Savary Island with the bigwigs of BC Rail .... is there a connection here

North Van's Grumps said...

From BC Mary's blog:

"What a twist, so much so that I had to go back and read all this twice...

So, this meeting (allegedly)took place at John O'Neills( of Westin Whistler)vacation home on Savary, and was facilitated by Peter Armstrong... How convenient.

After the fact,A competitor in that Whistler line bid later complains that they were told THEY had the best bid,yet it goes to Armstrong.

Seems this ( alleged) meeting could play into the whole BC Rail corruption deal in a rather important way... Armstrong and O'Neill obviously both stood to make some big bucks from this contract, Peters trains bringing customers to John's hotel. The connections between all of them on Savary is just too handy, or am I the only one who thinks that?

Can anyone tell me if there is any reference to all of this in the pages released to the NDP? Has anyone looked?

That previous comment left by the Savary resident states that the chef stayed at a local B&B and that people were helicoptered in.

Shouldn't be too hard to trace that on a small island.
# posted by Anonymous Anonymous : April 17, 2009 7:30 AM"


Anonymous said...

That report can be corroborated North Van Grumps, and no there is no reference to anything Savary related in those documents released by the NDP, unless I have missed something. It was the first place I looked.

There were two people, working on the island
for one of the major players in this meeting at the time, who told another islander who asked what and who the big deal was coming via helicopter, that the men in the helicopters were " BC Rail executives."

The staff that were brought in were not allowed to talk about anything to do with the meeting, but the chef, a woman, stayed at the Savary Lodge because there was no room elsewhere, and nothing else really existed on the island for accomodations at the time.

If once could locate any one of those three people... I'm told the two people who were working for one the front row people are still living in Powell River.

Anonymous said...

Both Armstrongs and O'Neills homes are located on the front row, beachfront known as Malaspina Promenade, opposite ends of the road.

kootcoot said...

"And then there is the uncorroborative report of helicopter landings on Savary Island with the bigwigs of BC Rail .... is there a connection here "

Yes there is, and if a fly that was on the wall at that Infamous BC Rail Exec/BC Cabinet Retreat on Savary Island could be subpoenaed, and was allowed to testify by (in)Justice MacKenzie, the Secret BC Rail Scam would be secret no more!

Anonymous said...

I suspect there is much more business that goes on whilst on Savary than one thinks. The average person really can't afford to buy a place there, often homes are passed down generations and there is a strong, STRONG liberal contingent all over the island. Take for example, Kip Woodward,the newly appointed chair of Vancouver Coastal Health. He's a frequenter of the island as well.

Only problem is that the island is pretty tight lipped. One tends not to want to piss off those with a lot of money and power,if one wants to vacation in peace, no?

Anonymous said...

John ONeill's bio states:
"John is also an active member of the Young Presidents Organization and serves on the B.C. Chapter’s Executive Committee."

Confirms that such a meeting of the Young Presidents would be held at his house.

Anonymous said...

John ONeill's bio states:
"John is also an active member of the Young Presidents Organization and serves on the B.C. Chapter’s Executive Committee."

Confirms that such a meeting of the Young Presidents would be held at his house.

Anonymous said...

Young Presidents' Organization:

"Our Core Values
A great deal has changed since YPO’s founding 60 years ago, but certain things have remained the same: the value of a peer network and trusted mentors, the importance of ongoing education, and the need for a “safe haven” where issues can be aired in an environment of confidentiality. Over the past six decades, YPO has maintained its core commitment to these ideals while embracing change with each successive generation of young business leaders."

"Safe Haven", Savary Island would fit that bill nicely.

Oh, and here's one member who has flying (helicopter) company experience/connections to Whistler/needs for a railway line

David Barry Alpine Helicopters/Canadian Mountain Holidays/Intrawest

Anonymous said...

This is starting to sound like a witch hunt.

Anonymous said...

Hmm! It is definitely a hunt - but for corporate warlocks, not witches...

If these turkeys didn't have something to hide they wouldn't be hiding it so carefully.

Honest men don't need confidentiality - especially where 'public assets' and their disposition are concerned.

Bring on the searchlights!

Skookum1 said...

Have you wondered why the BC Liberal Government provided big tax credits to the movie production business? Maybe because the corporate welfare bums were good friends of the Premier and owed a favor or two, or millions.

Well, actually, it was a mystery to me when I heard that Vancouver Film Studios was a McLean holding, as they were just as much on the outs with the rest of the film industry when the NeoGrits wanted to toss out the film tax credits entirely. The plan was only dropped when not just Vancouver Film Studios but also the Bridge Studios, plus the formidable film unions (which includes the Teamsters) formed a unified front.

Those tax credits were brought in by the Socreds, and expanded under the NDP. Some ideologue within the NeoLibs had this idea that the film credits somehow benefited leftist elements and "things that should have to earn their own money", and by a politician (Falcon?) who clearly had not clear idea of the fierce competition for film productions by different North American jurisdictions, about which BC was already struggling.

Film tax credits, like operating debt on railways, make it possible to film, and/or to encourage films to come to BC. And the spin-off as with the other culture-industries is a high job-creation-per-dollar invested/ might notice that there's not many Liberals in the creative end of the film industry (direction/production, writing, actors etc)....but there are many prominent NDPers (including Joy McPhail) and the leftist bent of actors, writers, directors and others with something other than MBA/B.Econ educations is legendary.

But they also have powerful unions, and the studios will always line up to protect the industry as a this ties into the little fandango that Campbell has been dancing with the Governator I also still haven't figured out....because the Governator wanted to shut down the BC film industry to help keep California's one going. Now apparently everbody's kissy-kissy-happy-happy but, other than trying to please California, it's a complete mystery to me why the Liberals would attack a tax credit that "went after" one of the main insider's family companies.....I think it was just bumbling and antipathy towards "the arts" (as if X-Men 2 were "art"), but maybe there's more to it. But to me, as someone in the film industry (if only marginally) and who follows this stuff, it was a really curious thing.....

Maybe it was as simple for the tax credit to be restored as David McLean calling Campbell and saying "Gord, you realize my son Sacha runs the biggest film studio in the province, right?"

Ian said...

My old boss, who would know, used to tell me "never forget BC is run by the village elders from the village of Kerrisdale. It's a couple of hundred people at most, they invite a few more in, but they all know each other, they do favours for each other, and they run the province for each other."

She's still right. Kerrisdale in this instance may be a bit of a mental construct but it's a more realistic way of saying 'cabal' that actually accounts for the kind of relations that lie behind these deeds.

RossK said...

The real question, which I believe the Basi/Virk/Basi defense is getting set to ask, is the following....

Was there a prior agreement, made by various parties, to award the sale/not sale of BC Rail to CN Rail?

And that, no matter how you slice or dice it (or try to wave it away with a magic wand), has nothing whatsoever to do with witches.

Ian - I'm pretty sure Ms. M. would know.....Thanks for that.

And thanks to everyone, Anon-O-Mice included, for chiming in.

Off to look into the various suggestions voiced in this thread....


Norm Farrell said...

One more comment on film industry tax credits. This has become similar to the professional sports business. One says, give us bigger grants (tax credits) or we'll go play elsewhere. The other says, take a billion or so tax dollars and build us a new playground or we'll go elsewhere to play.

It is a game of continuous leapfrog where the public always loses. In both cases, taxpayers subsidize the wealthy.

How far can we go in paying production companies for filming here? And why them, but not, say, pharmaceutical research companies or widget manufacturers?

Remember too that when they give us the value of the film industry, the numbers are largely unverified and usually contain every cost, including those that are paid elsewhere. If Tom Cruise shoots in Vancouver, they'll count his $20 million share of the budget but none of it will be spent in Vancouver. The so called financial benefits of Hollywood North are far less than claimed. I know because I use to help write the fiction.

RossK said...



You helped write the fiction...

Other examples, perchance?

And as for movies v. pharma v. widgets.....Again, I think it comes down to who has the juice....And for pharma - when the going was good and the VC Angels were perched on every streetlamp, they tried throwing down the tax reversal squeeze-outs like rain in an attempt to hit jackpot on the boutique biotech bandwagon.....Unfortunately, that really only generated a couple of big hits before the money dried-up, and one of those hits has since collapsed....So... Now they seem bent on giving away the (p)f(h)arm to the sure(r?) thing MultiNats (eg. see: the systematic, 'blue' ribbon panel-assisted, discrediting of the
'Therapeutics Initiative')....


North Van's Grumps said...

Day for Court and here I was thinking about "BC Rail" and how Patrick Kinsella may have played a role in it being sold. Then I said to myself, what about the man still on the stand: Martyn Brown..... and BC Rail

And I got about 27 results (0.12 seconds). The really nice thing is the TIMELINE feature. Reading the page before me brought back oh so many memories of the past six years. No Trials and Tribulations, just PRE Trials and Pre Tribulations.

North Van's Grumps said...

Day before Court and........

North Van's Grumps said...

Oh what the heck, this is what I was reading of Our Man on the Stand:


L. Krog: For years we've known the B.C. Rail deal was about selling off a public asset to benefit Liberal friends and insiders. Now the tracks of this corruption scandal lead right into the Premier's office.

[1420]Jump to this time in the webcast

In May 2004 the deal to privatize B.C. Rail was falling apart, so Patrick Kinsella said he would work with the Premier's chief of staff, Martyn Brown, to salvage the deal.

Tell us today: what exactly did the Premier's office do to save this tainted deal?

Hon. W. Oppal: The sub judice rule is there for a very good purpose. It is there to protect the independence and the integrity of our courts. It is improper — it would be wrong — for anyone in this chamber to comment on whatever is taking place in the Supreme Court of British Columbia."

Source: Hansard :

Okay Wally, you're gone as AG, the Courts are in session, will the Defense team ask Martyn Brown "what exactly did the Premier's office do to save this tainted deal?"

Norm Farrell said...

Someone mentioned the high quality jobs created by the film industry. It is true, when the big shoots happen, incomes are great for the crew people involved. But, after a production wraps, the jobs are gone. There is zero inertia. The workers wait for the next subsidy seeking producer to hit town but those guys also shop in New York, Toronto, Louisiana, Latvia and everywhere else that will compete to offer the best deal.

Government money is better applied to encourage start-ups that will carry on independently, after the subsidy has been provided, one time. The film industry wants continuous subsidy for every production that hits town. But, the leapfrog game is always going. Give them 20 cents back for ever dollar spent and another place gives them 22 cents. So, increase the rebate to 25% and somebody else will make it 30%. You keep going up or lose the game and fall to nothing.

In the long run, it is bad use of public funds to subsidize portable productions with no loyalty to the local scene.

The film production industry always has had good support of the media. They were always ready to publish a puff piece about somebody's "world-class" efforts to earn superlatives about the work they do better than anyone else anywhere. Politicians were always on side if they got invited to black-tie parties and met authentic celebrities.

That made it an easy job to oversell the value of the business. Think about it. Collecting sewage and distributing clean water is really important to our society but who cares? Give me a chance to meet Paris Hilton and I'll go ga-ga. Well, maybe not me.

But, yeah, those thats got the juice, get the attention. Just like the land developers and railway operators that wanted what BCR had.

Anonymous said...

What a coincidence . . . Kinsella was also hired by Lions Gate (Bosa et al) as a 'consultant I believe . . . . let's keep it all in the family.

kootcoot said...

Am I the only one who wonders if Kinsella and Dobell go in together and lease a warehouse to store all their hats?

RossK said...

Not sure 'bout that koot.


If there was a 'Hat Warehouse' operating in Lotusland you can make book on the fact that the Glimmer Twins would be figuring out a way to lobby for a requirement that all kids in schoolyards must wear a chapeau at all times for individual districts to retain their funding.

(b/w data provided by the Fraser Institute arguing that a warm head increases test score performance, of course).