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.