Sunday, December 16, 2007
Update 9:00am, Monday, December 17, 2007
(posted by kootcoot)
Here in clickable form is a link to the "wayback" cached copy of the publicly paid for Fairness_Report done by Charles Rivers and Associates of that esteemed Commonwealth of Massachusetts. Apparently the Government of British Columbia doesn't think it is in the interests of the citizens of BC to have access to information they paid to have collected and published.
This requires a "Portable Document Format" reader such as Adobe Acrobat, as does most of the information published online by the Government of British Columbia.
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He found it! Thanks to our "G West" we have seen the FINAL REPORT prepared by Charles Rivers Associates who were retained by the Campbell government to act as Fairness adviser in "matters of BC Rail Freight Division re-structuring and BCRail Port Subdivision restructuring".
This report -- Fairness Evaluation of the Restructuring of the BC Rail Freight Division -- appeared to have been scrubbed from every source we consulted. But G found it and here's the link he used:
Update: G West says Fortunately an 'internet archive' is available and a cached copy has been filed which is accessible using the wayback machine.
Here's the website:
Last evening, all we had to do was just click on the lengthier link, and we saw all 139 pages for which BC taxpayers paid $300,000.00.
BUT ... when I started off, this morning, to study the Fairness Report, it was gone! "Not in the Archive" I was told. "Try again." I was told. So I did try ... again and again. Nothing. A mere co-incidence, of course.
[Anon 9:10 says: The report is still there. Type the original url in the "Wayback" function. http://www.archive.org/index.php -- and confirmed by G West. ]
Then I realized that pdf always provides that icon thingy which it leaves on the desk-top. That was working this a.m., but I wouldn't be too surprised if it vanishes too. And it did. Or at least, it vanished en route to this web-site. I can't get the pdf icon to transfer here.
Here's a bit that I wrote down:
Charles Rivers Associates' (CRA) contract began in October of 2003, by which time round two proposals were submitted. The CRA contract called for an Interim Report by mid-November (it was delivered on Nov 14), and Final Report in mid-December 2003 (delivered 11 Dec).
"Specifically, CRA provides detailed review of the transfer of a publicly owned Crown Corporation to a private operator.
"It is important to note" says the CRA final report, "that the Province retained CRA after the transaction process had begun so that CRA could review and provide analysis only in retrospect."
And, if you ask me, in an extremely short time, too, if the BCRail Case is as complex as the trial lawyers keep saying it is. CRA apparently boned up on all the issues within 6 weeks. How come it's taking 4 years to get the issues straightened out for presentation in court?
If British Columbia taxpayers paid $300,000. to CRA for these matters, why couldn't CRA's holdings be called in to assist the Defence in Case $23299 and get it into Trial mode.
Good luck with individual searches for this Final Report. There's a lot to think about, in each of its 139 pages.
Thanks also to the Anon-Y-mouse who advises the "save as" function for the pdf file. Good advice. - BC Mary.
Hey, thanks a million to His Geekiness, Kootcoot, for posting the button which we only need to click on, to get the whole 139 pages of the final report prepared by Charles Rivers Associates -- the Fairness Evaluation of the Restructuring of the BC Rail Freight Division. - BC Mary.
Any province that re-elected a Premier who laughed during mugshots of himself, taken in a foreign country, deserves corrupt government. If that drunk driving swine had swerved into an incoming lane, he could have killed people. And Dirtbag#1 laughed about it.
Canadian cops butcher EVERY major crime investigation. Yet this website is pro-cop. Get with the programme.
Thanks for the tip, 9:10. I'd like to move the pdf icon over here so that others can click onto that ... any clues there?
Tiny correction. This web-site isn't pro-this or anti-that. Why? Because block-headed stereotypes stall the conversation. Turns things adversarial. Fightin' words that get us nowhere.
This web-site is about something we all share: BC Rail, and how BC is governed.
This web-site is a discussion place where we can share facts and opinions, and someday come to an understanding why the police raided the BC Legislature.
Technical glitch, inadvertent mistake, purposfull deletion --- Who knows?
Fortunately an 'internet archive' is available and a cached copy has been filed which is accessible using the wayback machine.
Here's the website:
Unfortunately, not every single thing that goes missing IS archived but it's still a valuable resource in a pinch.
My comments on something interesting, and revealing, from the 'interim' report now up at my place for those interested.
...and continuing your line of investigation about "ostriches and "fairness and such", gazetteer and BC Mary, I want to include a link here to a stunning piece written by Kevin Potvin in January, 2004. In it Potvin theorizes that "BC Rail's $2 billion worth of tax shelter instruments may have been the real prize CN was after."
I remember reading it a long time ago but it is highly relevant to the discussion of the fairness report and what Charles River itself says in this regard - that in the end they were not privy to the detailed data on BC Rail tax shelters - and just had "to trust the government".
This is an excerpt. It is long but it highlights what could be the greatest of losses to the people of BC in order for CN to gain the greatest of tax shelter prizes.
"Combined with the $1.2 billion in un-depreciated capital purchases, CN acquired in total $2 billion worth of tax shelter instruments for the princely sum of $250 million. Tax shelter instruments are extremely important to profitable companies because provincial and national corporate income taxes in British Columbia grab 38% of a company's reported profits in its tax returns. Reducing the profits a company must report reduces the taxes it must pay to governments. Companies with large carried-forward losses and large un-depreciated purchases have become increasingly attractive targets for take-over by larger, profit-making companies. It is often the case that the interest one company has in taking over another company is almost solely in the hidden value contained in its tax books, and can have little or nothing to do with its real assets or operations. BC Rail's $2 billion worth of tax shelter instruments may have been the real prize CN was after, while the actual assets and operations of BC Rail, worth just a potential $111 million annually, was simply a throw-in to legitimate the deal.
The firm hired to assess whether the Province received fair value in its sale of BC Rail explicitly disavowed any capacity to assess the value of the tax shelter instruments comprising the second half of the deal. The report generated by Charles River Associates states that, "historically, BC Rail has paid no income tax because of its relatively large backlog of" of tax shelter instruments. "We did not attempt to model the prospective tax strategies of an acquiring company," the report states.
The report further states that "We cannot offer much insight on the sale price" of the tax shelters "because we are not privy to the detailed data that would be required to assess a particular company's situation." The firm hired to assess the government's handling of the sale of BC Rail ended up simply trusting what the government said about its own transaction: "It is our understanding," Charles River Associates concluded, "the Province did compare the sale price of the [tax shelter instruments] to the potential future tax revenue that would be generated for the Province if the acquiring company did not have access to BC Rail's" tax shelter instruments. There is no documentation offered in the report to justify the authors' "understanding."
The report goes on to conclude, "It is safe to assume that there is sufficient inventory of [tax shelter instruments] to offset CN's income tax obligations to the Province of British Columbia for at least 25 years," and further, that "any future income tax revenue after 25 years is negligible."
This is an astonishing statement. If it's true that CN can expect to earn $6.7 billion in the next 60 years with BC Rail, and if the tax shelter instruments allow CN to avoid federal taxes as well, the $250 million portion of the sale is potentially worth more than $2.5 billion to CN, just on its operations of BC Rail alone. As the report explicitly states, "We can assume that in the future, CN will use the [tax shelter instruments] acquired as part of the BC Rail transaction to avert paying taxes." But the report further states that CN's entire operations in British Columbia, after acquiring BC Rail, will not be liable for any taxes because of its acquisition of BC Rail's tax books.
We don't know the size of CN's prior operations in British Columbia, but it is a substantial operator in this province. If its operations were roughly equal to BC Rail's operations prior to the purchase, then the benefits to CN in its purchase of BC Rail's tax books would exceed $5 billion. Had Charles River Associates evaluated the total value of the sale of BC Rail to CN, they would have concluded the package was worth close to $12 billion in anticipated profits to CN. If it's true that $750 million was a fair price to pay for the $6.7 billion in anticipated income from BC Rail operations, then it stands to reason that $12 billion in effective income should have been sold for no less than $1.75 billion. CN paid in total only $1 billion.
That $750 million gain is no chump change. The firm hired to assess the fairness of the deal admitted in its own report that it was not privy to the information necessary to do its job. It states that it relied on a vague understanding that someone in the finance or transportation ministries assessed the value of the hidden tax shelter assets on BC Rail's books at $250 million, instead of the $1 billion they may be worth.
Whoever within these ministries provided this understanding to the government and to the firm that assessed the fairness of the deal would have been in a key position to personally profit by arranging a $750 million gift to the executives of the private company, CN."
Who were the co-chairs of the Syeering Committee?
What two Cabinet Ministers "chose" not to run in the next election?
And you are most correct in pointing out that the "Fairness report" was based on info supplied by the Government. In fact that point is made throughout the report. Given what is going on in court these days in the Leg Raid Case does it surprise anyone that the spin doctors are in charge?
Great points and food for thought - thanks
Something else that I found interesting in the interim 'Fairness' report is the comment by the 'Advisor' that confidentiality was only necessary DURING the bidding process.
Which, of course, was 2003.
Thus, unless the government plans to rip up the agreement and start the bidding all over again, it is not clear why anyone would need the cover of confidentialty in 2007.