#LiquorLeaks: Curious about George

During the Distribution of Liquor Project -- the fancy name given the process to privatize the warehousing and distribution of B.C.'s profitable Liquor Distribution Branch -- liquor minister Rich Coleman has defended the process by heralding the hiring of a "fairness monitor." Coleman has also called the job "fairness auditor" and "fairness commissioner." More fancy words from the cabinet minister who has bucked all of my requests for interviews since the privatization was announced in the Feb. 21 budget. If the privatization is such a good idea, why does Coleman refuse to sit down with me to answer my questions and defend it?

The fairness monitor is George Macauley, a Victoria lawyer and economist who has extensive experience working on contract with the provincial government. Macauley and Associates has been paid $1.3 million for contracts over the last decade. Macauley's resume indicates that his primary work and specialty is government contracts.

Records requested and obtained by me via Freedom of Information (below) indicate Macauley was among six people invited to bid on March 12 and he was awarded the contract on March 26. Doug Benson, Alistair Duncan, Owen Pawson, Jane Shackell and John Singleton were the unsuccessful bidders. The contract is worth $74,900, which is $100 shy of the $75,000 threshold that triggers a public advertisement, and runs March 27, 2012-March 31, 2013. The contract states Macauley must:

a) Review the procurement documentation so as to understand the negotiated request for proposal process that will be used on the distribution of liquor project;
b) Monitor the procurement process for adherence to the terms of the NRFP, including participating at the proponents meeting, site visits (if any), providing advice related to fairness in the NRFP, oversight during evaluation of submissions and subsequent proposal refinement process as well as final selection of the selected proponent; and
c) prepare a written fairness summary report based on observations made during delivery of the procurement process.
...provide a draft written fairness summary report to the Province on the NRFP process within two weeks of notification to proponents, by the Province, of the identification of the selected proponent. A final written fairness summary document will be provided to the Province at a date to be stipulated by the Province and to take place no later than two weeks prior to the end of the Term of this Agreement. This report will be made publicly available by the Province.
The contractor may be required to provide verbal reports as required by the Province to the executive procurement steering committee, vendors, cabinet, public or media. 

Macauley's bid to the government shows that he had a hand in the oversight of some of the biggest government contracts awarded to private companies during the post-2001 BC Liberal era, such as:

• $572 million, 10-year revenue management contract with EDS Advanced Solutions;
• $324 million, 10-year health benefits operations with Maximus BC;
• $300 million, 10-year workstation services and IT contract with IBM Canada, and 
• $1 billion, 10-year telecommunications services contract with Telus. 

That's almost $2.2 billion of taxpayer-funded contracts!

NDP liquor critic Shane Simpson wrote a complaint to Macauley on June 22, seeking him to intervene and recommend the government postpone the tendering while various issues of integrity are resolved. Here's my story on BIV.com. See Simpson's letter at the bottom of this post.

Macauley politely declined my request for an interview and would not comment on Simpson's letter or provide me his response.

"My previous engagements with the projects you identified were different from the current DLP engagement.  My role then was of an ongoing advisory nature to provide advice and course correction if I identified any fairness issues as the process proceeded. I was not asked to provide a written report or documentation, and such reports and documentation were accordingly not created. In the present project, as you know, I will be preparing and providing a written fairness summary report in addition to providing ongoing advice and course correction on fairness matters."

Macauley was one of many people involved in those processes listed above, which were ultimately decided by cabinet. But the contracts were targets of criticism. The B.C. Government and Service Employees' Union drew attention to how a company related to Maximus was accused of fraud in the United States. The government battled to keep the Maximus contract secret. The government spent more than $125,000 to keep the whole IBM contract secret since 2004, but a B.C. Supreme Court judge ruled in June 2012 that it should be published. The omnibus telecommunications contract for Telus raised the ire of competitors Rogers, Shaw and Bell, who accused the government of breaking interprovincial trade accords and running an unfair procurement process.

And now there is the Distribution of Liquor Project, which is happening without a business plan or formal industry consultation. Frontrunner Exel Logistics, I revealed, considered how it could use its BC Liberal-connected lobbyists and close relationship with Coleman to influence the writing of the RFP and get the 10-year contract -- which it estimated in October 2009 was worth at least $55 million a year.

All that and more in the #LiquorLeaks files.

More to come...

Macauley Fairnessmonitor Mackin

NDP critic complains about integrity of LDB privatization

Cue the circus music

The long, strange saga of the Telus Park naming rights deal for B.C. Place Stadium won’t end.

How did it start?

We know that the stadium wasn't finished in time for the Sept. 30, 2011 reopening, but the show went on anyway.

Telus crews, under the guise of the top secret "Project Frog," were in and out of the construction site throughout the summer to install the wi-fi and mobile phone antennas and video screens, but often had to hurry up and wait. B.C. Pavilion Corporation and PCL Constructors Westcoast had other priorities. The application of the fabric roof was way behind schedule, delayed from February to July because the Quebec steel contractor Canam and French cable installer Freyssinet couldn't get along and cables and machines were failing or breaking.



The reopening came and went. So did the marquee event, the 99th Grey Cup. The name remained B.C. Place Stadium. Telus had incurred extra costs and the value of the naming rights had diminished. It reasonably wanted a better deal than the one originally agreed.

Meanwhile, the B.C. Liberal Party ended 2011 with its "Risky Dix" attack ad campaign and began 2012 by soliciting various frequent donors to build a war chest for the Port Moody and Chilliwack by-elections. Telus, which gave $352,407.35 since 2005, declined.

The Liberals were miffed after awarding Telus the $1 billion, 10-year omnibus telecommunications contract in summer 2011 in controversial fashion.

The Liberals were hammered by Telus competitors, chiefly Bell, Rogers and Shaw, who accused the government of violating trade agreements and government procurement rules. The tendering process for nine different contracts lasted more than two years before the government's sudden, surprise bundling of the entire business into one deal, for one company.

Despite the party's ties to Telus, Premier Christy Clark has telecommunications connections of her own.

Not only is Clark a good friend of Bell-sponsored, Vancouver Whitecaps' owner Greg Kerfoot, but she was formerly employed as a CKNW radio talkshow host by Corus Entertainment, a company controlled by Shaw Communications.

In fact, Clark met on Jan. 30 in the Premier's Vancouver Office at the World Trade Centre in Canada Place with Shaw CEO Brad Shaw.

Shaw Communications is contesting Telus’s application to trademark Optik TV. Shaw also owns Global TV, which boasts the best-rated local TV newscast in Canada on Global BC.

As if to make matters worse, Telus is suing the B.C. government. Deputy Minister of Finance Peter Milburn denied Telus's appeal for a Social Service Tax refund on Feb. 7, according to the March 9-filed B.C. Supreme Court documents below. Telus claimed it errantly paid or self-assessed $306,311.61 in taxes after the 2004 purchase of servers, operating software and maintenance from IBM, Lucent and Sun Microsystems. At least $96,580.40 was not refunded and remains in dispute.

Telus sues B.C. government for a tax refund

While Clark has been noticeably quiet during a week-long break from the Legislature (after mis-handling the mess and message the previous week), some Liberal MLAs have used their time off to arrange photo opportunities with community newspapers to dole funds from a $30 million pot Clark announced at the Union of B.C. Municipalities convention on Sept. 30, 2011 in Vancouver.

MLAs Randy Hawes and Marc Dalton went to Mission to announce $185,000 for dehumidifiers at the Mission Leisure Centre’s three rinks. Hawes and Dalton told Abbotsford Times reporter Christina Toth that the money was left over from the stadium’s renovation!

MLAs Randy Hawes (Abbotsford Mission) and Marc Dalton (Maple Ridge Mission) met with the district's mayor Ted Adlem and Coun. Nelson Tilbury at the leisure centre to hand over the cheque.

The largesse comes from monies left over from the $563-million renovation of the B.C. Place roof. When the project came in $30 million below the last estimated cost, Victoria decided to disperse those dollars to recreation projects around B.C., explained Hawes.

"We just got the information on the weekend," he said.

Preposterous! Minister responsible for B.C. Place Pat Bell told me in a Jan. 30 interview: “We’re probably three or four months away from being able to roll out the final numbers.”

"For them to claim this is surplus money from a project millions of dollars over budget is a real stretch," NDP critic Spencer Chandra Herbert told me. "There is no surplus because they have no financing plan to pay for the project."

UPDATE, 5 p.m., March 22: Hawes claims "we are under the final budget for the stadium refit" (though he didn't mention any numbers). But he goes on to say:

"I either misspoke or was misunderstood. The recreation funding of $30 million for more rural communities is not from the under budget amount from BC Place. That was capital funding and from an accounting perspective, this funding must be from operating funds. I have looked at this funding as a way to allow some communities that might not benefit from the stadium remake to feel they have some benefit. I do feel a bit foolish having tied the funding directly to the under budget amount on the stadium. Incidentally, while the total recreation grant funding is $30 million, that does not mean the stadium savings was $30 million. Mea culpa."

UPDATE, 7 p.m., March 22: I asked Hawes for proof that the B.C. Place project was under budget. Not surprisingly, he has none.

"I don't know what the numbers are but Pat Bell has said numerous times that we are under budget. I believe the final numbers are still to come in."

Work continues at the stadium. A new fence is being erected outside the west side service entrance. The level 1 media entry is under renovation (and wasn’t complete for the Whitecaps’ home opener).

This is the same stadium that is now faced with a $35 million to $40 million shortfall because of the nixed Telus naming rights deal. The same stadium where an operating deficit of $49 million has been forecast for 2012-13 to 2014-15, according to the latest Service Plan.

The same stadium where grease leaks from the support cables have damaged the roof and could cost $10 million to repair.

The same stadium that will be the subject of an 85-day B.C. Supreme Court trial expected to begin in October 2013 between Canam and Freyssinet. Canam is suing for $26.15 million, Freyssinet wants $6.5 million. B.C. Pavilion Corporation is a defendant in the Freyssinet lawsuit.

Here's my modest proposal: move the B.C. Liberal caucus and its staff under the expensive big top at B.C. Place. They are clowns, who are running this province like it’s a circus.

Cue the circus music.