14 March 2009
Campbell's BC Rail Deal Just Can't Shake Whiff of Scandal
Victoria Vancouver Island British Columbia -
Premier Gordon Campbell's determination to sell the assets of BC Rail to Canadian National was under a cloud even before the
$1-billion deal was made public.
Canadian Pacific pulled out of the bidding one week before the announcement, and blasted the B.C. Liberals for giving rival CN the
inside track.
The corporate vice-president for legal affairs, Marcella Szel, levelled the accusation in a letter sent to Campbell's
deputy minister, Ken Dobell, on 17 Nov 2003.
CN was given preferred access to BCR customers while CP and the other bidders were bound by a confidentiality agreement preventing
them from making the same sort of approaches, she wrote.
"This is a clear breach of general process fairness and a violation of the intent of the specific process established and
communicated [to us]. This lack of fairness put CPR at a disadvantage as another competitor in the bid process had the ability to
discuss, contracts, rates, and services with key shippers on the route."
The railroad was embarrassed in its relations with existing customers, disadvantaged in attracting new ones.
"These consequences are unacceptable to CPR."
The sharply worded missive put on the record what observers had long suspected, that the outcome of the bidding process was a foregone
conclusion because the Campbell government had a marked preference for CN from the outset.
But the Szel-to-Dobell letter also illustrates the challenges in tracking the fallout from the BC Rail deal and the
myriad complications arising out the subsequent raid on the provincial legislature.
The letter recently resurfaced among 8,000 pages of documents obtained by the New Democratic Party after an enterprising application
for access to the mountain of evidence assembled in the interminable court case.
After CP's accusation was reported elsewhere, I heard from readers wondering why this "bombshell" hadn't been noted in this
space in the paper. I gently informed them that I had written about the Szel letter two days after it was stamped "received"
in the premier's office.
"CP pulls out of BC Rail bid in a huff." Vancouver Sun, 19 Nov 2003. Later, I quoted the concerns at some
length: "Liberals wonder whether CPR letter will haunt them."
It haunts them still, though to what degree is a matter of debate. Keeping track of this case and its impact on the public is a
challenge, even for those of us who try follow all of its twists and turns.
A colleague says he tries to read stories on the case, but bogs down in the ubiquitous disclaimers. So and so isn't accused of any
wrongdoing. It is alleged. No evidence has yet been tested in court. It may mean this, then again, maybe not.
His point was that, if all this is so vague, unproven, and murky, why are we writing about it at all?
The New Democrats have managed to keep alive the political controversy over the Campbell government's promise-breaking
sale of the assets of the government-owned railway. It was likely a factor in their comeback showing in 2005, when they
wrested 30 seats away from the governing party, including three along the former BCR mainline.
But they've also bogged down in a story that, in many respects, resists simplification. As an old Socred once said about
scandal-mongering, if you can't boil it down to a single sentence, it probably isn't a scandal.
This week however the Opposition got a break. NDP researchers, thumbing through reports in the legislature library, turned up $300,000
in payments from BC Rail to companies owned by Patrick Kinsella.
The same veteran political insider who co-chaired the B.C. Liberal election campaigns in 2001 and 2005.
Shortly after the first of those victories, Kinsella was hired by the government-owned railway to provide advice on the
incoming administration's plans and policies.
Prime focus on a so-called "core" review that was deciding what parts of the enterprise should be kept in the
public sector, what could be safely downsized or privatized altogether.
The BCR brass must have liked what they heard, because they kept him on retainer for just short of 50 months, long after the core
review was completed and most of the railway's operations had been sold off. The contract didn't run out until September 2005, four
months after the second of those two Kinsella-chaired election wins.
Cosy. The premier has been ducking all questions about this relationship since the details came to light. Kinsella has apparently been
asked to clam up. The Liberals hope that if they stonewall long enough, it will just go away.
But the cone of silence frees the New Democrats to speculate.
Liberal insider gets $300,000 contract. $6,000 a month for the premier's pal. Government railway hires government insider to explain
government policy. Campbell, Kinsella, in BC Rail tryst.
In the absence of a plausible justification from the Liberals, the one-sentence summary speaks for
itself.
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