The BC Rail conflict cont.

In the Spring of 2003, Joy MacPhail asked a question during Premier’s office estimates about potential conflicts related to Patrick Kinsella’s role with CN.  RossK over at the Pacific Gazetteer has a link to the Hansard excerpt.

The Premier sloughed off the question.  ‘Use FOI’ he told MacPhail.  Sitting next to the Premier in the Legislature, advising him on his answers was his Deputy Minister Brenda Eaton.  Just a few months earlier BC Rail VP Kevin Mahoney told Eaton that he believed Kinsella was working for CN at the same time he was working for BC Rail on the privatization deal.

But Eaton wasn’t about to disclose that information and nothing came of MacPhail’s line of questioning.

Imagine if it had been disclosed.

BC Rail hires the most politically connected operator in the province, the chair of Gordon Campbell’s campaigns, to advise them on the billion dollar privatization of BC’s railway, knowing that he is also advising at least one of the main bidders.  That bidder is chaired by one of Gordon Campbell’s most significant financial backers.

That is an optics problem as the Premier’s Chief of Staff admitted in court.  But it’s not just an optics problem.  It’s against government procurement policy and arguably raises criminal code issues.

Government procurement policy specifically demands disclosure from any employee aware of a conflict:

“An employee who is exposed to an actual, perceived or potential conflict of interest in relation to an actual or proposed solicitation must disclose the matter to his or her supervisor and/or the contract manager. If, after review, it is determined that there is a conflict, the supervisor or contract manager must remove the employee from this particular contract situation. An employee who fails to disclose a conflict of interest can be subject to disciplinary action up to and including dismissal. Any suspected conflicts of interest must be investigated and resolved.”

Clearly Eaton, Mahoney and Kinsella were all “exposed to an actual, perceived or potential conflict of interest” the moment Mahoney pressed “send” on that final email.

Canada’s Criminal Code also speaks to these kinds of conflicts.  Under the Code a person or a company – for example a company bidding on a public railway – cannot have dealings with a government and pay an employee or official of the government with which the dealings take place unless the government consents in writing.

Similarly, an official or employee of the government cannot accept a payment from a company or person who has dealings with the government without consent in writing from the government.

The reasons are obvious:  the person taking the payments is serving two masters with conflicting interests, one public, the other corporate.

The questions raised by Mahoney’s disclosure to Eaton of Kinsella’s possible dual role are significant:

  • Did Eaton investigate Kinsella’s apparent conflict as required by policy?  If not, why not?
  • Did Eaton and Mahoney and Kinsella violate government’s procurement rules by not disclosing the apparent conflict?  If so what were the consequences?
  • Did Kinsella’s knowledge of the process obtained through his years of work for BC Rail provide CN with an advantage, objectively corrupting the process.
  • Kinsella advised BC Rail for at least a year past the date the RFP was issued, including a period when CN was negotiating key parts of the final deal.  Was he working for CN during that time?
  • According to documents released by the NDP, in the spring of 2004, Kinsella was involved in negotiations with the government regarding the taxation treatment involved in CN’s deal.  Those tax losses were worth up to half a billion dollars.   Kinsella was paid by BC Rail at the time.  Was he still being paid by CN?
  • Why was Kinsella’s role not disclosed to fairness consultants Charles Rivers by either Mahoney or Eaton?
  • These documents were in the hands of the Special Prosecutor and the RCMP.  Did they inform the government or take any investigative action regarding the conflict and the legal issues it may raise?  If not, why not?

And of course, there is MacPhail’s question.  Did Kinsella use a dual role to arrange access for CN to the Premier or the government?

The conflict Mahoney discloses is not just any conflict.  Mahoney communicated to the Deputy Minister to the Premier that his contract employee was to the best of his knowledge strategizing for the company considered by many to be the likely winner of a government process to sell a public asset worth at least a billion dollars.

And Eaton, Campbell’s highest appointed official, apparently did nothing.  In fact she is currently the well-paid Chair of BC Housing.  Mahoney is the board chair at BC Transit.

And what of Patrick Kinsella?

Premier Clark is wrong when she says all the questions about the sale of BC Rail have been answered.  The questions surrounding her advisor continue to grow.

Still, Kinsella continues his backroom role with the current Premier.  He is a key part of Christy Clark’s political team and his access to government is as great as ever.

Given Kinsella’s complicated role in the sale of BC Rail and the government’s awareness of that role, there is every reason for this Premier to do as her predecessor did and protect Kinsella and a corrupted deal from public scrutiny.

 

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9 Responses to The BC Rail conflict cont.

  1. cfvua says:

    In light of comments made Mr. Mahoney or was it Mr. Mckernon (?) I believe, what Kinsella was doing for BC Rail was a large question all by itself. It doesn’t appear that although he was being paid, that it would be called work, as in working for, or in favour of BC Rail or its owners. So, who was he working for, or in favour of?? The deal achieved certainly was not worth what he was paid, to the province, so who was it good for? Obviously, he isn’t that good at what he does, whatever that is. Couldn’t have been lobbying, as he wasn’t registered. Progressively, strategically speaking of course.
    And in regard to the others, silence is indeed golden.
    Splendid analysis MR. Reid.

  2. RossK says:

    So.

    Given this new, and very important information, the following question must be asked…

    Did either the sender or the receiver of the Email in question speak to the consultants that were hired write the ‘fairness advisor’s report’ after one of the bidders, CP Rail, later pulled out of the bidding at the last minute screaming that the fix was in for CN Rail?

    Why do I ask this?

    Because the writers of that report, Charles River Associates, concluded that the bidding was ‘fair and impartial’. They also stated that they came to this conclusion without talking directly to the principles involved in the bidding.

    Now, I don’t know about you, but I find it inconceivable that a consultant would not have spoken to at least one of the principles (ie. CN Rail) if they had been told by either a high ranking government bureaucrat or a BC Rail executive that they had reason to believe that a consultant working for BC Rail may have also been working for CN Rail in the run-up to the bidding.

    Now….

    Having said all that, it is important to point out that at least one person did directly ask CN Rail if Mr. Kinsella was in their employ during this period of the bidding for BC Rail which they, CN Rail, ultimately one.

    And that person was not a consultant, a deputy minister or a high ranking official for BC Rail.

    Instead, it was a member of the press, Mr. Gary Mason.

    And the answer he received?

    It was the following non-denial denial from a CN spokesperson:

    .

  3. RossK says:

    Sorry, disappeared….

    The answer Mr. Mason received from CN Rail was:

    “We have nothing to say.”

    .

  4. John's Aghast says:

    Your tenacity is much appreciated. I only wish that this issue had half the attention demanded by the HST. I believe it is much more significant!!

  5. Stuart says:

    Having just returned from a month away, I am delighted to see that you are pursuing this issue with vigour.

  6. Liam says:

    Keep it up please – still listening and spreading the info

  7. “…….one government consultant who is responsible for managing FOI requests for one provincial agency once told me, in a moment of surprising candour, that her job was to provide strategic advice on the operations of the act; not, as section 6 of the act says, “to make every reasonable effort to assist applicants and to respond openly, accurately, completely and without delay” ……. K. Corrigan

    http://www.leg.bc.ca/hansard/39th4th/H11019y.htm

    Be kind of interesting to find just how many “government consultants” there are who are responsible to slowing down the FOI process

  8. Dreamer says:

    All this is long overdue to come out so thank you for your persistence, and as I mentioned in a reply to an earlier version it is only the tip of an iceberg because PK was involved in lots of other theatres too, possibly in selling sponsorships for Vanoc for which he could have received substantial commissions.

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