Sunday, July 05, 2009

 

Public taken for a 40 km, $1.2million gravy train ride

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Executives on huge pay running tiny Crown corporation

By Michael Smyth
The Province - July 5, 2009

I thought the only way to get rich running a make-believe railroad was to play Monopoly -- and even then all your loot would consist of play money.

But Kevin Mahoney is playing this game in real life and for real cash: Last year he bagged nearly half a million dollars running B.C. Rail.

What's that, you say? You thought Premier Gordon Campbell sold B.C. Rail to private-sector rival CN Rail six years ago? Not all of it. There's a little spur line that runs out to Roberts Bank near Tsawwassen that's still technically controlled by the government. (Campbell tried to sell that, too, but the deal became tainted by the ongoing B.C. Rail corruption scandal and fell through.) So, incredibly, B.C. Rail still exists as a provincial Crown corporation, responsible for managing a measly 40-kilometre spur line, as well as doing some real-estate deals and providing "consulting advice" on the government's ports and Pacific Gateway strategy.

And Mahoney is the president and CEO riding the gravy train -- which is the only kind left at B.C. Rail, since all the rolling stock was sold to CN. Last year, Mahoney was paid $275,000 in salary, $64,167 in bonuses, $123,505 in RRSP and pension allowances and $31,511 in "other compensation." Total haul: $494,182. Not bad for running a railroad that doesn't have any trains.

According to B.C. Rail's 2007 annual report -- the most recent one on their website -- the corporation suffered an "operating loss" of $17 million. Those losses were offset by interest income and sale of assets such as real estate.

In fact, B.C. Rail has a second president in charge of its real-estate division. John Lusney was paid $268,574 last year. And there are two other executives at B.C. Rail also pulling down more than $200,000 a year.

How can the government justify these type of executive salaries at a Crown corporation that's a shell of its former self? Amazingly, the government has argued Mahoney's salary is far less than the $2.9 million collected by Fred Green, the CEO of private-sector CP Rail.

Just a few small differences there. CP Rail had $4.7 billion in revenue in 2007, compared to $18 million at B.C. Rail. And CP Rail has 16,000 employees, while B.C. Rail is expected to trim its workforce this year to just 24 people, down from a robust 30 in 2008.

That's right, folks: You're paying a quartet of executives $1.2 million a year to run a money-losing 40-kilometre railroad with no trains and 24 employees. It doesn't get much loopier than that.

{Snip} ...

But that would be a little awkward for Campbell, who still insists he never "sold" B.C. Rail, but simply leased the tracks to CN for 990 years -- ensuring the B.C. Rail executive gravy train keeps rolling far into the future.

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Maybe it's not so difficult to understand John Lusney's fat salary after looking at the list of BCRail lands (scroll down: list of BC Rail Lands posted below on June 28, 2009). Many valuable properties are vulnerable to certain miraculous $1. real estate deals on the 5th anniversary of the BCRail main giveaway (July 14, 2009). John Lusney's fat salary may simply be the cost of doing business the Campbell way.

The archives of this web-site has this story, posted December 10, 2006, headed BCRail port lands, most cruel hoax; and further developments 18 Jan. 2007 (and the comments are outstanding).


See also this item on executive compensation, government explanation. Note also (for those still debating the actual date of the secret BCR-CN deal) that they refer to July 14, 2004.
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Salt Spring News, one of the best world news digests, is thinking of the same things. Go HERE [http://www.saltspringnews.com/index.php?name=News&file=article&sid=19418] for the complete edition ... but href="http://newswithviews.com/Levant/nancy134.htm" this remark strikes a nerve in British Columbia these days ...



AND the very same infrastructures listed in [U.S.] Executive Order 12803 are also listed in all Martial Law Executive Orders, and all these infrastructures having been for sale, lease-able, or having been sold during the last 17 years- including our children’s schools, our hospitals, and our homes - I suggest to you that you are witnessing Central Banking Debt Magic at its finest moment. Wouldn’t you love to know how much money has been made by selling our nation to the highest bidders?

Let us review:

1. The country’s infrastructure has been for sale for 17 years. Roads, tunnels, bridges, electricity supply facilities, mass transit, rail transportation, airports, ports, waterways, water supply facilities, recycling/wastewater facilities, solid waste facilities, prisons, hospitals, schools, and housing -- this being of “examples” of saleable infrastructure and not the entire list of saleable items according to E.O. 12803--so the question begs: What exactly has been sold to “private parties in our nation? We would like to see the complete list. We know that many highway systems have been sold to foreign countries, but what of the other listed items? Have they been sold as well?

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Still having blogger problems. Even CanWest problems!! - BC Mary

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Comments:
From the "Executive compensation":

Internally Equitable

Positions are evaluated based on market (pay) data from salary surveys. The basis for selecting
market data is position comparison, determined by comparing the duties and responsibilities of
the BCRC position with the best match of the survey positions. They are matched on content,
not necessarily title. Several factors are considered to establish and maintain internal pay equity
among employees. These factors include applicable work experience, education, appropriate
certifications, performance, and consistent application of pay policies and practices.


Hmmmmmm Funny how the Campbell government prefers to compare the Executive salaries worth with another railway company (CPR and NOT CNR) that has a bottom line profit far in excess of the BCRC.
 
No wonder they call it the best place on earth, land on BC Rail collect half a mil.
 
Everywhere one looks, one finds that the Campbell government has proven to be extremely poor managers of the public purse, yet there is a continuing myth that is perpetuated by mainstream media personalities like Bill Good that say the opposite. This over-the-top pay for a railroad executive with no rolling stock and very few employees to manage (for the last five years) is yet another example. From an outsider's perspective, it all sounds slimey - like the CEO pay could be hush money to me.

When one looks at the facts, one finds that the median citizen in BC is worse off than he or she was a decade ago. The poor are much worse off; and, we have continually fewer public assets.
 
Hush money actually occurred to me as a reason why the NDP have not released what they know of the deal; other than maybe a non-disclosure agreement and/or threats....I suppose the threat might very well be that if they break the non-disclosure, the Libs can make fools of them politically like they did with the Ledge pay raises and other matters where the NDP caught the heat for something naughty the Libs did....clearly that's the gist of the PAB trolls in trying to rejigger the emails thing into some kind of fault of the NDP.....

So the NDP have known what's in the deal along, it seems; which makes them politically complicit for whatever damaging information is in it. And surely there must be something, and no little thing - or else why would the goevernment, the railway(s) and the opposition party all keep it secret?

Time to come clean...maybe the real problem with this whole mess is that everyone's hands are dirty.

So is that the deal, NDP insiders reading this? Are you caught in the privatization hog wallow's muck too? Unable to speak because of the damage it would do you? If not, then to prove you're not as morally bankrupt as the Liberals, it's time to 'fess up.

Maybe it's just timidity, or fear of whatever terms the non-disclosure lays out; Lord knows you've already backed down about Patrick Kinsella because of his libel threats....are you so easily cowed?

If the NDP don't show leadership about this, there's little room to think that they will do so by 2013....
 
How can the managers of BC be so stupid with our money? This province is beginning to seem like it is an episode of the twilight zone.
 
I recently began looking at some of the financial aspects of the BCR side issues.

The Northern Development Initiative Trust is the Liberal creation that manages part of the sale proceeds. They withheld financial statements for 2008 because they did not want to embarrass the BC Liberal Party before the election.

Deloitte & Touche LLP had signed off on the financial statements on February 20, 2009. Directors were required by law to release financials by April 30 but failed to do so.

When finally released, the 2008 financials showed that NDID made net grants during 2008 of only $5.3 million but suffered total fund losses of $33.3 million.

So, for every $1 grant provided, it cost over $6 in fund assets. Great business managers, eh?

BTW, my blog today features a discussion of Canwest Global's reporting on BC Rail. The article is called "That job belongs to the fringe media."

http://northerninsights.blogspot.com/
 
Skookum1 said July 5, 2009 4:59 PM,....maybe the real problem with this whole mess is that everyone's hands are dirty.


Yes, maybe their all joined at the hip. I wonder, will they soon go under the banner of, The New liberal Democratic Party
 
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