Wednesday, July 23, 2008


Tiny BC Rail offers big bucks to bosses (Part 1, Part 2)

Les Leyne
Times Colonist - July 23, 2008 -- and July 24, 2008

Kevin Mahoney and his lieutenants must be the highest-paid railroad barons in the history of transportation, if you measure salaries in relation to kilometres of track.

{Snip ... }

In a passage straight out of the Dilbert cartoons, the board said it canceled the incentive payments for everyone at B.C. Rail except executives and senior management. "The primary reason for this decision was that with the evolving mandate, it had become increasingly difficult to establish meaningful and measurable performance targets upon which bonus eligibility could be determined."

That sounds to me like nobody's quite clear what they're doing.

So only the people at the top who are supposed to make it clear will continue to get lavish bonuses.

Just So You Know: The mandate is likely muddled because the operation's future is unclear pending the outcome of the corruption trial. So they're paying the boss $570,000 a year to provide strategic real estate advice and run a 39-kilometre railway that they can't do much with until the never-ending Basi-Virk case is wrapped up in some fashion.

In recognition of these difficult times, the board voted last spring to trim the executives' bonuses by five to 15 per cent and cut discretionary allowances, lunch club memberships and their golf memberships.


Les Leyne barrels right along with:


Les Leyne
Times Colonist - July 24, 2008

The salaries that B.C. Rail pays its senior bosses continue to astound ... Of course the Crown corporation has other interests. It's a real estate holding company and provides strategic consulting advice on industrial real estate matters.

Overseeing those interests is considered so important that the president was paid $275,000 in salary, a bonus of $137,500, an RRSP contribution of $123,505, plus $33,970 in other benefits, for a total of $569,975.

The bonus is particularly striking, given the compensation disclosure statement released last week. The B.C. Rail board voted last spring to cancel incentive payments for everyone at B.C. Rail except executives and senior management. "The primary reason for this decision was that with the evolving mandate, it had become increasingly difficult to establish meaningful and measurable performance targets upon which bonus eligibility could be determined," the statement said.

That prompted a check of B.C. Rail's annual report to see how many people actually work there.

The answer is astounding -- there are just 30 full-time equivalents, the measure used, on the payroll.

The ratio of the president's salary to the number of employees is as wildly out of line as the ratio of pay to kilometres of track. There isn't another public-sector boss in B.C. making more money for managing fewer staff, although Partnerships B.C. boss Larry Blain comes close with compensation of $548,000 and 41 FTEs.

The annual report also shed some light on how B.C. Rail is doing in the real estate business. It appears to be one of the few entities in the province having trouble capitalizing on the real estate boom. Its net income was less than one-third of the previous year's and about one-quarter of the budgeted amount.

Why are they doing so poorly?

The problems are "substantially attributable to a delay in the sale of real estate due to the significant boom in economic activity throughout the province," the annual report proposes.

Has an explanation of failure to meet goals ever been couched in terms more pleasant to the ears of the powers that be? It has to be one of the more paradoxical reasons ever given for failure.

The claim is that the boom has resulted in limited access to professionals like consultants, land surveyors and real estate appraisers. It has also delayed decisions from government departments and municipalities.

So the corporation, which was supposed to complete 95 individual property transfers last year, managed only 20.

The report's financial statement also has a fascinating line called "Operating Losses." People who might be surprised that B.C. Rail is still around will recall the Liberals' explanation for the sale-lease of the freight line to CN was that B.C. Rail was a terminal money-loser that had built up enormous debt.

The government pitched the deal as a good way to make $1 billion up front and wipe out a lot of debt.

But three years after getting out of most of the railway business, it's still posting operating losses -- $17 million last year, up from $10 million two years ago. (That's more than offset by interest income and gains from disposal of assets.)

So the orphaned government-owned railway handed over most of its operations to CN four years ago, morphed into the real estate business, which is struggling to close deals, is still posting growing operating deficits (offset by other income) and posted net income that was one-quarter of what was expected.

But the corporation still managed to pay a six-figure bonus to the boss.

There's a strong clue as to how this is all explained.

It's in the grandiose, overblown description of the "benefits to the public."

B.C. Rail said the main benefit to the public "comes from its role in helping to implement the shareholder's B.C. Ports Strategy and Pacific Gateway Strategy."

"These strategies will add billions of dollars of economic output and more than 30,000 jobs in B.C. by 2020 by expanding and increasing the efficiency of the province's transportation infrastructure," the report says.

The Pacific Gateway is one of Gordon Campbell's pet projects. If you are anywhere in the public sector -- and working anywhere near the Gateway Strategy -- you're apparently as good as gold.

Think of ICBC, then BCRail ... what they once were, vs what they are now. Tip o'the tuque and sincere thanks to Les Leyne. - BC Mary.


Not such a big mystery ... pay the boys well - especially the boys who know the sums and signed off on all the deals - and they'll keep their mouths shut.

All the BS about taking the crowns away from government oversight and putting them under the direction of a private board being good for the taxpayer and the citizen was just that - bs.

And BS that allows all the nonsense, whether it's at Hydro, the Ferries, Translink, BCRail - to be undertaken in the quiet secrecy of a 'corporate' boardroom.

There's going to be a long article about Russian corruption in the New York Times tomorrow. If only we had some enterpising reporters with the resources to do a similar job on BC under the Campbell regime.
g west,
There are enterprising reporters in BC, who can do the job we need to be done here. The difference is in BC, reporters are paid NOT TO report the news! People, feel free to prove other wise.
Dunno anon 9:19, in some very real ways Mary and her blog - with the help of her many readers and contributors - have managed to shine more light on the activities of the Campbell government to hide, misinform and mislead the public about the state, the profitability and the accountability of the PUBLIC agencies of this province than anything I've seen from a paid reporter.

Bill Tieleman (who I'd say is a self-employed professional) is an exception I suppose.

Given some of the kinds of things we read and see in the media these days it may well be that you're correct.

Please don't miss the latest contribution of NV Grumps above here – that exposition of what’s happened with accountability and responsibility relative to BC’s Crowns since 2001 should be printed in every daily in the province. Surely the people are finally waking up to the kind of “management” people like Kevin Falcon and Gordon Campbell are actually engaged in?

I can only hope that some of those reporters (who've said before they read Mary's blog religiously) are beginning to feel the tickle of a burr beneath their saddles.

It's time they stepped up too.
"The difference is in BC, reporters are paid NOT TO report the news!"

Yes, sadly that is so.... but what would we all think of teachers who continued, for example, "not to teach reading", year after year after year, if they, too, were paid "not" to do so?

I understand the editorial control and corporate constraints reporting is under these days, but historically investigative reporting has never been easy and like G West, I think personal and professional integrity and the reporter's obligation to the public's right- to-know upon the acceptance of that job must at some point be weighed against becoming merely a propaganda agent for government and special interests.
A few minutes ago, I was copying a 2007 article written by Neal Hall (Vancouver Sun). It's a well-written, informative article decribing the 8 persons arrested after the raids on the B.C. Legislature on charges of drug trafficking for organized crime: cocaine and such, from B.C. to Ontario.

We all remember that, don't we? The raid on the B.C. Legislature actually started as a raid on drug trafficking ... leaving some big-time journalists to go pooh pooh, pshaw! etc., at the very idea. That line was generally accepted. Neal Hall quietly said otherwise. But ...

Neal Hall is one of the best. He worked with Julian Sher and William Marsden on their book about organized crime in Canada. Neal is thorough, steady, logical, and always looks unhappy. To me, that's the image of a journalist today.

And Neal Hall has disappeared.

Could be holidays, I suppose. But then newspapers would say "Neal Hall returns next month", wouldn't they? Or maybe he's on some kind of Leave of Absence for professional development. Or something. Eh?

Or maybe he was too good, too logical, too thorough, because I mean, somebody in the background has their finger on that giant DELETE button at all times. No journalist gets to control that, no matter how much they'd like to.

For a treat, for those who really believe in a free press, there's Harvey Oberfeld's blog. The things he says ... now that he's a retired TV journalist (NewsHour) and free of that giant DELETE button downtown.

Harvey wonders, for example, why CanWest newspapers made no mention whatever of CanWest shares plunging from $15. to less than $3. in the past 2 years, or CanWest's debt load of $3.6 Billion.

No reporter could've got that past the big CanWest newsroom DELETE machine and into print.

Only after Harvey talked it up on his own blog, did CanWest come up with this fascinating headline (I paraphrase: "CanWest shares soar to $3.", but nothing about CanWest shares dropping like rocks before that.

I was thinking, Lynx, of your analogy of journalists not reporting the whole truth as being like teachers not teaching reading.

The thing is: the journalist (unlike a teacher) is separated from his readers. Never sees us. Rarely hears what we think. But hears the News Editor laying down the law on a daily basis.

The journalist is isolated from his "students" (us, in a sense), and is working more like via video -- and what's worse: with somebody else controlling the on/off switch. Write what the newsroom wants, or the screen goes black.

The missing link, in my view, is where readers (all of us) could help. When a journalist does manage to get things right (like Vaughn Palmer did this week, on ICBC), we could drop an e.mail saying we noticed, and felt better. When they get stupid, we could say that, too, the way a teacher would say it -- helpfully.

We could cc the newsroom. I hope that brings a smile ... because I bet those bozos don't very often get told that we're mad as hell at being lied to, manipulated, insulted, and that we aren't going to take it much longer.

But hey, we could e.mail the Newsroom and cc. the journalists!

We could tell the Newsroom Gang to start encouraging more truth-telling, better journalism. Yeah. Imagine.

I'm pretty sure that young people go into Journalism School because of their strong feeling about the place of the media in a democratic society.

I sure hope so.

Meantime: Neal Hall, where are you? Next Basi-Virk pre-trial hearing is September 19. Come home! We need you.

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