Saturday, April 13, 2013

Clark outruns conflict of interest train, but BC Rail still runs

Before I get into how Premier Christy Clark scored a rare victory in the final week before the official election campaign and how independent MLA John van Dongen has serious reservations about how the game was refereed, you must see this.

It is a letter to me from the private contractor who handles Freedom of Information requests for BC Rail. 

Yes, BC Rail still exists as a legal entity, even though CN took over the railway after the controversial 2003 privatization. (Read the A-to-Z primer on the BC Rail scandal from The Tyee here. Listen to The Investigators documentary from CKNW AM 980 here.)

BC Rail doesn't want you or me to know what happened at board meetings from 2003 and 2004, until sometime after the May 14 provincial election. It wants to consult with an unspecified public body before deciding what, if anything, it will release by May 29. Some of these records are now a decade-old. Why should they be kept secret? 

The reason was not given, but I am very curious. The BC Rail board of directors in 2003 included Jim Shepard, the former forestry, pharmaceuticals, military and construction equipment bigwig and Clark loyalist behind the Concerned Citizens For B.C. anti-Adrian Dix ad campaign. 

Don't forget how the BC Liberals fought tooth-and-nail to block Auditor-General John Doyle from seeing a copy of the $6 million indemnity agreement that forgave aides Dave Basi and Bob Virk of their legal bills after their surprise guilty plea in October 2010. That's the same John Doyle that a Liberal-dominated committee chose to replace as Auditor-General. Doyle has a habit of asking tough questions and offering critical opinions that don't correspond with the government's desired spin on topics ranging from BC Hydro's funny math to the folly of carbon offsets

Regina lawyer Gerald Gerrand submitted his opinion on April 9 to B.C. Conflict of Interest Commissioner Paul Fraser in van Dongen’s Sept. 21 complaint about whether Clark was in a conflict of interest during the 2003 privatization of BC Rail. 

Gerrand was put on the case after van Dongen discovered that Fraser was in conflict of interest because his son, John Paul Fraser, is an assistant deputy minister appointed by Clark. 

“It is a major thrust of the complainant’s written submissions that a reasonable interpretation of the available information in 2003 is that Ms. Clark knew she had a conflict or apparent conflict of interest in the BC Rail matter, that she should have recused herself form all aspects of the issue from start to finish, and that in failing to do so she failed to observe her statutory obligations under the Act."

“Ms. Clark was not in a position of conflict of interest or apparent conflict of interest in relation to the BC Rail matter as alleged by the complainant Mr. van Dongen," Gerrand concluded.

“I'm not satisfied we have facts,” van Dongen told me. “That was ultimately the mission I felt the public was entitled to a full accounting of the facts, what she did, why she did it. What was her involvement? There were serious inconsistencies. Some of the inconsistencies that gave rise to the complaint were not dealt with, they were deemed outside the scope of the Conflict of Interest Act.” 

“There is no appeal under the Act, this is an interesting area of law where we have a law on the books which normally should have similar status to any other law. But this one doesn't get tested in court where quite frankly it would be better if it was. Because everything would be out in the open and a wittiness would have to testify under oath out in the open and it would be subject to cross examination. The process we have here is entirely secret, while we have the benefit of what the commissioner chose to put in his report, we don't have the benefit of the complete interviews and transcripts and documents.”

Van Dongen had a bad gut feeling when he met Gerrand to give his testimony on Jan. 21

“From the line of questioning, which appeared to be from the point of view of defence lawyer questioning a plaintiff, which shouldn't be the context here under the law, I became more concerned about the process,” van Dongen said. “It seemed to be questions led by someone representing her, as opposed to a neutral fact-finder, which I believe the public is entitled to under this legislation.”

“There's a very consistent theme to condemn anyone or anything that is viewed as adverse to Christy Clark's view of the world and that applies to potential witnesses like Basi and Virk, and any testimony they would be checked and tested and viewed with sufficient caution, but it's still evidence. 

“And similarly the comments (in Gerrand's opinion) about Alex Tsakumis or any other blogger. The suggestion that absolutely everything that's posted on a blog has no credibility, it wears a little thin and it's disappointing to see Gerald Gerrand pick up that theme.”

(Tsakumis, who revealed new, untested evidence of the BC Rail scandal on his blog, was neither contacted nor named by Gerrand. Gerrand only identified Tsakumis as a "political blogger." Was that because Tsakumis revealed how Gerrand financially supports the Liberal Party of Canada, the same federal political party as Clark?)

“The bias of the commissioner shows, he's not a neutral fact finder. Admittedly some of it's subtle, but some of it's not so subtle,” van Dongen said.

Van Dongen had much to say to me about three specific points in Gerrand's report. 
GERRAND: “Ms. Clark confirms that she attended cabinet meetings on the following days when matters related to the sale and/or lease of assets of BC Rail were a subject of some discussion: March 27, 2002, Dec. 4, 2002, June 18, 2003, Oct. 29, 2003, Nov. 19, 2003 (recusal on the BC Rail issue).”
Van Dongen: “He confirms the meetings she was in and the relevant ones for my submission... The meeting of July 23, I find it very hard to believe she wasn't in that meeting, but I would like to see more detail. 

“The emails of July 27, 2003 between Kieran to Bornmann and Bornmann back to Kieran give very detailed information that come out of cabinet that I don't believe were fabricated, there was no basis for someone fabricating that. 

“When the email is as explicit as Kieran saying to Bornmann, talk to Christy find out what's happening, words to that effect, there needs to be serious cross-examination of that, the issues around that memo, the issues around the July 23 meeting. We don't have anything conclusive around that.” 

(Read more about Bornmann in Canadian Lawyer Magazine's story "Admitted briber gets green light to practise law in Ontario.")
GERRAND: “Ms. Clark was present at the Oct. 29, 2003 meeting at which BC Rail was discussed. Following that cabinet meeting, Ms. Clark met with Commissioner Oliver in the afternoon at his office for approximately 90 minutes.... Ms. Clark has testified that she does not recall whether it was she or Commissioner Oliver who made the connection between (then-husband Mark Marissen’s Burrard Communications) contract with CIBC WM (the company handling the sale) and the BC Rail file, but she states it was discussed. While she did not consider there was a conflict of interest. Commissioner Oliver indicated that he would consider the question further and in the interim, she should be cautious.“It is Ms. Clark’s recollection that following her meeting with Commissioner Oliver on Oct. 29, 2003 she had no further involvement respecting the BC Rail issue.”
Van Dongen: “She goes to a cabinet meeting and after that on the same day has a meeting for 90 minutes, was the meeting set up ahead of time or did she ask for it on the spur of the moment after the cabinet meeting? We don't know that. 

“A one and a half hour meeting is a very long meeting on a so called conflict that they both claim now was not a conflict at all. She doesn't recall who raised, who made the connection. You mean it came up by accident? There's a huge unanswered question here about why she went to the meeting.

“It is relevant to ask why would she do these disclosures on a very superficial basis, leave the impression with everyone she was declaring a conflict of interest, we find out now there was absolutely no conflict, it was black and white. It's relevant to ask: why'd you go through all that drama?”
GERRAND: “While Mr. Bornmann was unable to confirm the authenticity of that specific document ( Pilothouse June 24, 2003 briefing note about the June 18, 2003 cabinet meeting attended by Clark)... I will assume for purposes of this discussion that  it is authentic...”
Van Dongen: “A fascinating statement. Unable or unwilling? He remembers enough detail to say it was different than the one the RCMP showed him. It's interesting when you read the transcript of Bornmann's interview with the RCMP, the detail that he claims he can remember and then everything that he doesn't recall. Some of what he doesn't recall and some of what he does remember is pretty self-serving in terms of the narrative that ultimately unfolded here. This guy has no credibility, he wasn't put under oath, he responded to written questions. But he goes out of his way to claim that she was not a source for anything. How does he explain the July 27 memo, that wasn't put to him?”

“You had a person two-and-a-half years ago presenting herself as candidate for leader of the party and, in turn, the position of premier, which is the most powerful and responsible position in B.C. It behooves us to know everything we can about the candidate, it certainly behooves us to look at past performance, and where there are gaps of information, it behooves us to ask the questions. I’m simply motivated by getting the facts. 

"To suggest I'm an accuser, is not legitimate. To suggest I don't like Christy Clark is irrelevant."

Friday, April 12, 2013

B.C. horse racing future remains muddy

An April 12-published report says the uncertain future of aging Hastings Racecourse and the public’s perception of the potential danger to racehorses are among the biggest risks to the sport of kings in British Columbia.
Hastings Racecourse in Vancouver: "a stunning physical setting"

Published on the eve of Hastings’ 69-day, 2013 live season, the Horse Racing Industry Management Committee’s draft report was originally expected last summer. A final report will be released at an unspecified date after more consultation by the committee, which was struck in November 2009. 

The report expects the two-year Great Canadian Gaming Corporation lease extension at civic-owned Hastings to be followed by a long-term pact after 2014, but “the Hastings facility in particular is in need of upgrading, requiring significant capital expenditures. The business plan must reflect this need.”
Great Canadian promised upgrades when it was granted a casino licence in 2004, but balked at renovating the barns or building a parkade. 

Safety of the sport is also a concern. 

“A number of media outlets across North America have reported about thoroughbred horse injuries, deaths and drugging,” the report said. “The public perception regarding horse health has the potential to have a serious impact on any industry rejuvenation. The B.C. industry must continue to do all it can to make B.C. tracks as safe as possible and communicate effectively on this issue.”

Twenty horses died at Hastings from January 2010 to September 2011, according to figures released in December 2011. 

The report recommended thoroughbred and standardbred racing be decoupled and the breed associations and track operators form corresponding management groups. 

“The funding model should reflect this decoupling so that benefits derived from the execution of independent strategies flow to reward the breeds’ actions,” the report said. “A financial transparency program should be put in place to promote trust and understanding between industry partners.”

The report recommended a so-called “governance triangle,” whereby the thoroughbred and standardbred management groups report to the industry management committee and the financial working group. It also said B.C. Lottery Corporation should have a bigger hand in marketing the Teletheatre B.C. off-track betting parlors.

The report said the province’s 2004 support for slot machine installation at Hastings Racecourse and Fraser Downs flopped. A percentage of royalties was earmarked for the sport, including purses. 

“Unfortunately, revenues from the racetrack slot machines were, and continue to be, lower than anticipated.”

Live racing wagering was up 7.6% in 2012 at the tracks, but the amount wagered on simulcast at the tracks and via teletheatres continued to fall. Fraser Downs’ handle fell 9.8% and Hastings fell 7.9%. Teletheatre BC fell 1.9%. Overall, a 4.4% drop.  

"In the past 15 years consumer preferences have changed. Horse racing is no longer the only legal form of gambling in the province, and it is far from the only option British Columbians have for a fun afternoon or evening out. Horse racing is now in a much tougher entertainment environment.”

The province topped-up the combined $6 million slot machine revenues with $4 million extra in 2011 and 2012. Last December, the provincial government replaced the top-up grants by increasing the industry’s share of net slot machine revenue to 25% from 15.5%. The net effect is funding will remain at $10 million a year.  

The report said the industry has to become less reliant on government. It also noted Hastings’ competitive advantages, such as a hyper-social sporting event with free-flowing movement of people; a stunning physical setting with the view of the North Shore mountains; and “celebrity ambassador” 
Mario Gutierrez, the 2012 Kentucky Derby and Preakness Stakes winning jockey aboard I’ll Have 
Another. Mexican import Gutierrez honed his skills at Hastings and returned to race on several occasions after his Cinderella springtime. 

The 23-page draft report was released at 5 p.m. on April 12, the last Friday before the provincial election’s formal April 16 start. Industry stakeholders were given a preview earlier in the day. The government did not respond to a request for media access. 

Click here to listen to a 2012 documentary on the past, present and uncertain future of horse racing in British Columbia, from The Investigators on CKNW AM 980

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