BC Rail: who knew what, when?

The Deputy Minister to the Premier knew

In November 2002, the members of the BC Rail Evaluation committee were working on convening the second of a number of meetings with key industry stakeholders in preparation for the release of the official Request For Proposals in the sale of BC Rail.

The meeting was important.  These were the people who paid the bills at BC Rail and generally earned it a profit.

Prior to the meeting, BC Rail VP Kevin Mahoney wrote Brenda Eaton, the Deputy Minister to the Premier with a special request.

It seems that BC Rail contractor Patrick Kinsella wanted to attend the meeting as an observer.

Mr. Kinsella has claimed in the past that his involvement in BC Rail was limited to advising BC Rail on the implications of the government’s Core Review.

Here’s how his lawyers put it in 2009, when Mr. Kinsella came under intense fire in the Legislature:  “Mr. Kinsella was engaged by BC Rail to assist in understanding and interpreting the Core Review Process as to its potential impact on the Corporation.  BC Rail sought counsel on what implications, if any, might affect the Crown Corporation’s operations and their strategic plan going forward.

Translation:  Mr. Kinsella wanted to go to an invite only meeting with BC Rail shippers to find out what shippers thought about privatization and its impact on their business, information that would be very valuable to say…  a potential buyer as well as the Evaluation Team preparing the bid papers.

BC Rail VP Kevin Mahoney knew

According to an email trail released to me through an information request, Mahoney wrote to Eaton late in the day on November 1st, “I have had a request from Patrick Kinsella to attend as an observer.  We have no problem with it however, I would like to run it by you before I get back to him.  Any concerns with adding him to the list?”

Eaton responded an hour later, “On the Patrick Kinsella front, he doesn’t fit any of our categories of invitees does he?”

It is interesting that Eaton – the deputy minister responsible for the entire public service – didn’t ask questions about this request, given the security surrounding the process, security that was necessary to protect the bid process.  Most likely Eaton and Mahoney both knew Kinsella was in some fashion involved in the file.

What follows is more than interesting.

Mahoney provides Gordon Campbell’s deputy minister with an overview of Kinsella’s role.

“Patrick doesn’t fit in any of the categories,” writes Mahoney to Eaton about 90 minutes later.  “However, I believe he has been advising some of the railways (CN/BNSF) on how to approach the issue of the potential sale of BC Rail.  Patrick has also provided us a bit of guidance from time to time however, we understand if he is not on the list as it may create a more obvious political link than you might want.”

There you have it.  The Vice President of BC Rail tells the Deputy Minister to the Premier a few months before the Request for Proposal is tendered that BC Rail’s $300,000 advisor is working, he believes, for both BC Rail and CN, which at the time was already seen as most likely the winning bidder.

How wrong is that?  Let’s let Gordon Campbell’s chief of staff Martyn Brown begin to answer.

In 2010, towards the end of the Basi Virk trial, Defense Attorney Michael Bolton asked Brown about such a situation.  ”I talked about the problematic issue of Mr. Kinsella working for BC Rail,” Bolton led off.  “I suggest to you that there’s an obvious optics problem working with BC Rail and CN Rail at the same time.”

Brown replied straight away, “I believe that’s true.”

An optics problem.  That’s just the start of the problem, which we’ll explore tomorrow.