#LiquorLeaks - Jay and the 8-Day Delay

On June 4, general manager Jay Chambers sent a memo to staff, assuring them he would guide them through the process that is the privatization of the Liquor Distribution Branch's non-retail functions.

He also invited staff to send him questions and even had a dedicated email address, askjay@ldb.com

LDB, through its parent, the Ministry of Energy and Mines (Rich Coleman, minister), shared modified versions of two of the emails with me via Freedom of Information, plus the prepared response. Were there more emails? Who sent them?

Ten days after Chambers invited questions from staff, he announced his resignation to join the Motor Vehicle Sales Authority of B.C. The sudden and inconvenient June 14 announcement had all the appearances of getting out of the kitchen while the privatization pot was burning. Predictably, both Coleman and Chambers claimed otherwise: Nothing to see here, move along. NDP critic Shane Simpson didn't buy it and unsuccessfully attempted to have the privatization's so-called fairness monitor, George Macauley, halt the tendering process. Macauley's power is extremely limited. He's a monitor, not a referee.

I don't buy it either. Chambers had a conference call on April 12 with the MVSA's hired headhunter George Madden, on LDB company time. It's in Chambers's daily LDB agenda!

Here's the kicker. Chambers told Coleman's deputy minister Lori Wanamaker on June 6 that he was resigning! That's eight days before the June 14 memo! Why the eight-day delay in telling staff?

"It is with very mixed emotions that I have made this decision," Chambers wrote to Wanamaker, giving her a month's notice. See the letter below.

Chambers's last day of work was July 4. He left two days early with an afternoon office party at the LDB headquarters. Roger Bissoondatt took over in the interim and is leading the committee vetting bids to take over LDB's warehousing and logistics.

Jay Chambers' resignation letter

Ask Jay FOI

Does fairness monitor equal fancy monicker?

As the old proverb goes, all is fair in love and war. But is it fair in British Columbia government privatization?

The last week of June began spectacularly with the shocking Alex Tsakumis revelation of a 2003 Dave Basi memo-to-file that alleged Christy Clark (then Deputy Premier, now Premier) breached her oath of confidentiality. Yet another reason why a public inquiry into the BC Rail privatization scandal is a must.

The week ended with the British Columbia Government and Service Employees' Union announcing a brief strike at three LDB sites, including headquarters in Vancouver. The BCGEU hit an impasse with the government on talks for a new government-wide contract and it says it is fighting back against LDB privatization. Meanwhile, there are serious questions about two ex-BCGEU executives who were lobbied by LDB privatization frontrunner Exel Logistics, but refused to do interviews.

The BCGEU strike notice was made June 29, the same day that bidding closed for the Distribution of Liquor Project. That's the fancy name given the controversial privatization of the LDB warehousing and distribution.

NDP critic Shane Simpson complained in a June 22 letter to George Macauley, the so-called fairness monitor who has a $74,900 contract to oversee the process. Simpson wanted Macauley to recommend the government postpone tendering until a business case is released, industry consulted and a replacement hired for LDB general manager Jay Chambers. Chambers drives away from his job as the head drink retailer in B.C. on July 6 to preside over the Motor Vehicle Sales Authority of B.C. Roger Bissoondatt will act as g.m. until a replacement is hired.

Simpson, who cited my May 8 story in Business in Vancouver during Question Period, already called the privatization "tainted" because of the cozy relationship between Exel Logistics, B.C. Liberal lobbyists Mark Jiles and Patrick Kinsella and the liquor minister, Rich Coleman.

Simpson got his answer from Macauley on June 25. In a nutshell: the Victoria lawyer and economist says he has no power to intervene, because of the terms of his contract that were set by the government. He is watching the process and making sure bidders follow the RFP requirements. He will submit a report next March, after the contract has been awarded. He can't do anything else.

This seems to contravene Coleman's answer to Simpson during the May 29 budget estimates committee hearing:

Simpson: (Does the fairness monitor) have any other authority to be able to direct the RFP process in any way if they have a concern during the process that they think…? You know, maybe it isn't anything major, but they have a concern, and they want to recommend or direct an adjustment in the process to keep it more balanced based on their view. Do they have authority or an ability to do that, and if so, how?
Coleman: Through the process, he has the ability to raise concerns, keep the balance, make recommendations — all of those things as the fairness monitor with regards to the process, if he has concerns.
Simpson: Who would he make those recommendations to? Would he make them to Mr. Chambers? Would he make them to the minister? Where would those recommendations go? Would they be expected to be of a private nature, or would it be of a more public nature?
Coleman: It's probably the project team or the two deputies that are responsible, which is probably the same thing.

A fairness monitor not empowered to ensure fairness is like a referee not allowed to blow a whistle or a linesman prohibited from raising a flag. Yet another reason to question the integrity of an already controversial process.

Coleman, the minister responsible, has not responded to any of my interview requests.

Read my story here in BIV and see Simpson's letter and Macauley's reply below.

NDP critic complains about integrity of LDB privatization

Response to Shane Simpson 2012-JUN-25

#LiquorLeaks reveals LDB wingding for Jay-C

Could there be whisky?
Mighty they have gin?
Could there be three or four six-packs?
I don't know...
Will there be a party?

With apologies to the Irish Rovers, there's a staff-only get-together at the Liquor Distribution Branch's Vancouver headquarters on June 27 in honour of departing general manager Jay Chambers. (Coffee and cake are advertised, but, ahem, the LDB has more than a few wobbly pops and bottles of hooch in storage.)

Remember him? Ten days before the resignation became public on June 14, Chambers sent staff this memo that implied he would be around for months to guide the taxpayer-owned company through the privatization. But he's driving away July 6 for a new job as president of the Motor Vehicle Sales Authority of B.C., and he still hasn't responded to my numerous interview requests. 


Here's the invitation for the June 27 event:

Jay Chambers is leaving the Liquor Distribution Branch (LDB) after more than 18 years. Jay has been the General Manager of the LDB since January 1997. He joined the LDB in January 1994 as the Director of Store Operations, and in March 1994 he became the Executive Director of Retail Services.  He will be missed!  

Come celebrate Jay’s many dedicated years of service at the LDB!! Wednesday, June 27, 2012 Coffee and cake will be served at 2:00 p.m. in the Atrium at 2625 Rupert 

To sign the card & donate towards a departure gift for Jay please come by the Communications area (on Peter Martin’s desk).

Almost a month earlier, on May 30, it was Chambers treating staff for lunch. He dropped $443.93 at Joey Burnaby for eight workers. For the record, no alcoholic beverages appear on the bill, which was obtained via Freedom of Information.

Jay Chambers and the Joey Lunch

#LiquorLeaks reveals the "Ask Jay" memo

Ten days before he announced his resignation, British Columbia Liquor Distribution Branch general manager Jay Chambers told employees in a memo that he would guide them through the coming months of uncertainty while private companies jockey to take over the taxpayer-owned company's warehousing and distribution.

Chambers even launched an email address to which curious employees could send him questions about the privatization.

Sources have told me post-privatization retirement was on Chambers's mind. (Chambers has not responded to several of my interview requests.) Now he is instead counting the days until his July 6 departure from LDB to start a new job as president of the Motor Vehicle Sales Authority of B.C., a B.C. Liberal-friendly, industry self-regulator.

The full memo is below. (The italicized emphasis is mine.)

Two items of note:

• The list of key dates at the end of the memo shows the negotiated request for proposals' release date as March 30. It was actually published April 30. 
• The body of Chambers's memo says that three companies would be shortlisted by July 20. In the timeline, it says "up to three." The NRFP documents says "up to the top three." On April 30, liquor minister Rich Coleman told reporters at the Legislature that the shortlist could be as short as one company. On May 8, I revealed in Business in Vancouver that one company, Exel Logistics, may have an advantage over the rest because of its intriguing connections to Coleman and the ruling B.C. Liberals.

Without further ado...

June 4, 2012  

Good afternoon,

As you know, the Provincial Government announced in its Budget speech that it would privatize the warehousing and distribution of beverage alcohol in British Columbia.  

Since this announcement, there has been extensive and ongoing media coverage about the government’s privatization plans. I appreciate that you will have many questions about how this decision may impact you and your colleagues.

We have a proud history of serving British Columbians for over 90 years and I often have opportunities to share stories about the long term dedication and commitment of LDB employees.  I am aware that uncertainty is stressful, so in the coming months, I will provide you with regular information updates about these privatization plans. 

Below you will find the timeline of the Request for Proposal (RFP) process. Some of these milestones have already passed. The next significant date is June 29 which is the RFP submission deadline. 

Currently, there are eight parties that have expressed an interest in submitting proposals for this  RFP — Centric Retail Logistics Inc., ContainerWorld Forwarding Services Inc., Dimex Distribution Corp., Exel Canada Ltd., GL Distribution, Green Light Distribution Services Inc., Kuehne + Nagel Ltd. and Schenker of Canada. The three shortlisted parties will be announced on or about July 20. 

It is not known how many of these interested parties will submit a formal proposal by the deadline. Once the RFP submissions are received, they will be reviewed by the RFP team and narrowed to a list of up to three qualified proponents by late July.  

I am sure you will have many questions as we move through this process. During this challenging time, I would like to invite you to send your questions to me at askjay@bcldb.com. These questions and their answers will be shared with all LDB employees on a regular basis.

Jay  

Key Dates  Request for Proposal (RFP) Process

February 21   Provincial government announces distribution privatization plans

February 27   First meeting of RFP team

March 21        BCGEU signs Memorandum of Agreement with the government for post-privatization job security 

March 27        Victoria lawyer, economist and consultant George Macauley is appointed "Fairness Monitor" to oversee the procurement and evaluation process  

March 30        RFP is issued and posted on BC Bid website (http://www.bcbid.gov.bc.ca/open.dll/showDisplayDocument?sessionID=27492391&disID=22111058&docType=Tender&dis_version_nos=3&doc_search_by=Tend&docTypeQual=TN) 

May 9               Industry information session 

May 10             LDB’s RFP information session and warehouse tour of Vancouver Distribution Centre

June 29           Deadline for RFP submissions 

July 20            The provincial government announces RFP shortlist (up to three potential candidates) 

October 16     Announcement of successful proponent 

March 1/13     Agreement negotiated and signed with successful Proponent by March 1, 2013.

P.S.: As usual, I remind kind and loyal readers that I gladly accept envelopes containing credible documents addressed to me at the following addresses:

Business in Vancouver

102 4th Ave. E., Vancouver, B.C. V5T 1G2 

The Tyee
PO Box 88484, Vancouver, B.C. V6A 4A7

Booze Barn Boss Bolts!

Amid the most controversial privatization in British Columbia since BC Rail was sold to CN Rail in 2003, Jay Chambers, the $200,000-a-year general manager of the Liquor Distribution Branch, dropped a bombshell on June 14 by announcing his resignation.

Here is the memo to staff, obtained by #LiquorLeaks:

"I am writing to advise you of my decision to resign from the Liquor Distribution Branch effective July 6, 2012.

"It is with very mixed emotions that I have made this decision. Words cannot properly describe just how much I have enjoyed being the General Manager of the LDB. However, I have been in this job for over 15 years and I feel that it is time for a change, both for me and the LDB.

"I have accepted an offer to be the President of the Motor Vehicle Sales Authority of BC. In this role I will continue to have the opportunity to work with government, stakeholder associations and consumers. These are the areas I have learned so much about during my time at the LDB and I look forward to being involved in them at the VSA.

"Upon my departure, Roger Bissoondatt, our Chief Financial Officer, will be acting as the General Manager of the LDB until the process of finding a permanent replacement has been completed.

"On a personal note, what I will miss most about working at the LDB is you, the great employees. It has been a pleasure and privilege to work with you. The LDB was a very well-run business when I joined the company and I am very proud to say that, because of your efforts, it continues to be a very well-run business. This is a reflection of the quality of staff that work at the LDB – no individual or single department has been responsible for your success – it is a team effort."

Jay

A source told me there was an employee breakfast at the LDB headquarters in Vancouver where Chambers was serving flapjacks with a smile to workers on the morning of June 14. Workers were flabbergasted when, about an hour later, they received the resignation memo from Chambers.

There you have it. The general manager of the province's liquor retail authority isn't sticking around to complete the taxpayer-owned company's biggest strategic move in its history. He is instead going to oversee the retail of automobiles and trucks. From the drinking industry to the driving industry, in a legal fashion.

Driving away

The Motor Vehicle Sales Authority was established in 2004 as a non-profit, industry self-regulator during Premier Gordon Campbell's first term. MVSA regulates and licences 1,600 dealers and 7,000 salespeople and now reports to Justice Minister Shirley Bond. Former Nanaimo mayor Graeme Roberts is the chairman of an 11-member board. Directors include Langley lawyer and onetime Liberal nominee Rebecca Darnell and Richmond chiropractor Dr. Don Nixdorf, also a Liberal donor. Darnell, according to the Elections B.C. database, donated $14,475 to the BC Liberals since 2005. Nixdorf donated $1,170 since 2006. The most-prominent director is the province's biggest car dealer, Moray Keith of Dueck GM.

Keith is also chairman of the new B.C. Sport Agency, director of B.C. Lottery Corporation, co-founder of the B.C. Lions Waterboys and chairman the 2011 Grey Cup Festival. His Chiefs Development Corporation built the Langley Events Centre. One of the tenants is liquor minister Rich Coleman's constituency office.

Keith donated $95,000 to the BC Liberals via Dueck, $3,825 through the B.C. Automobile Dealers Association and New Car Dealers Association of B.C. The latter entity is a client of lobbyist Mark Jiles, who is also a lobbyist for Exel Logistics, the German-owned, leading bidder for the LDB logistics contract. Exel boasted in an internal memo that it had a close relationship with Coleman and pondered influencing the writing of the request for proposals.

It's a small province, after all.

Doug Longhurst, MVSA's Director of Finance and Operations and Director of Learning and Communications, told me previous president Ken Smith announced his retirement last fall “as his contract required six months notice” after serving eight-plus years.

“The recruiting and advertising was handled by (corporate headhunter) Pinton Forrest Madden," Longhurst said. "The process was directed by a three-member committee of the board beginning in the fall. The process included the normal process of development of the position description for the posting, a long list, a short list and final selection. The position was on the PFM site for two months (plus or minus).”



Coleman did not respond to yet another one of my interview requests. (Yes, "Mr. Coleman Country," I'm like a broken record.) Neither did Chambers reply to repeated requests.

In a statement provided by Coleman's office, the liquor minister claimed the Chambers shuffle is unrelated to the LDB privatization and his departure won't affect the process. NDP critic Shane Simpson is, understandably, in disbelief. Chambers is the key bureaucrat on the file, heading a committee of LDB executives charged with sifting through the bids and picking the best one.

Bids are due June 29 and the shortlist of one to three companies is expected July 20. The winner is expected by October and the contract to be executed by March 2013 -- right before the May 2013 provincial election.

In the summer of 2006, then-liquor minister John Les was pondering a corporate shakeup, including hiring a new GM, at LDB. That never came to fruition. My sources tell me Chambers was planning on retiring from LDB after the logistics privatization was complete.

You can hear his voice in the audio below recorded May 9, 2012 at an industry information session at the LDB Vancouver headquarters about the privatization.

Boost your volume. It's especially entertaining at the 3:30 mark after the first of several pointed questions by Spirits Canada executive vice-president C.J. Helie, who opposes the set-up of an Alberta-style, private monopoly to store and move booze in B.C.