Tuesday, September 14, 2010
BC Rail: Sept. 14, 2010 in BCSC Courtroom 54. The BC Rail Scandal. Basi, Virk, and Basi.
By Robin Mathews
The day was long. Special Prosecutor, William Berardino, finished drawing from Brian Kenning, BC Rail director and member of the BC Rail Evaluation Commttee, the answers wanted - to the effect that everything presented to the witness was material established as confidential. Presumably, that will be used to attempt the incrimination of one or more of the accused as having breached trust in relation to it.
Neither yesterday nor today did anyone hint that the severity of confidentiality employed was unfitting in the alienation of an asset owned by the people of the province. None suggested that in such a case a great deal more transparency and public discussion are required than were permitted in the transfer of BC Rail from the ownership of the people of the province to private ownership by the CNR. Confidentiality as revealed in courtroom 54 would look to most British Columbians, I believe, as rigid secrecy to disguise dubious alienation of the railway, not wise guidance to assure the best deal for the real owners: British Columbians.
Mr. Kenning obviously believes "the business model" was all that was required to think about. He is wrong, was wrong, and his error signals one of the deepest wounds in the whole, ugly operation. We won't spend time on the meaning of "the business model". It is too patently a process undertaken by private corporations and their minions to enrich private corporations (and their minions).
Mr. Kevin Mccullough, for the Defence, began cross-examination and engaged in it for the rest of the day. The same general aura of "the business model" pervaded the day. Mr. Kenning apparently thinks the promise by Gordon Campbell not to sell BC Rail was really none of his business as a director of BC Rail. He was appointed a director to "business model" the railway out of the hands of the people of the province, as I understand his thinking.
He apparently didn't think there was need to follow the format for tendering contract work, a format set out by the Campbell government. In fact, he recommended it not be followed but that CIBC be appointed. In addition, Mr. McCullough declared proper format was not followed when Mr. Kenning was appointed as a director of BC Rail, without the allegation seeming much to bother Mr. Kenning.
Mr. McCullough pointed out that CIBC World Markets - the financial advisor unanimously chosen by the BC Rail Evaluation Committee (according to the witness) - was deep in an ENRON-related regulatory morass out of which it paid huge sums of money for imprudent (to say the least) conduct. Mr. Kennning said, as I understood him, that he only looked at the splendid job CIBC World Markets was doing locally. And he didn't seem to recall that Mr. Virk (sitting on the Evaluation Committee for his minister) suggested that because of the ENRON smudge on CIBC reputation the contract should go to tender.
Significantly, Mr. Kenning made a strong point that his committee recommended the transfer of BC Rail from public ownership on November 5, 2001 and that the Campbell group didn't inform them that the transfer would go ahead for almost a year. When asked if he thought the Campbell group had decided to sell very much earlier, Mr. Kenning insisted the Evaluation Committee acted on the appearances provided by Gordon Campbell.
When Mr. McCullough challenged Mr. Kenning with the general argument among serious economists that any lease of more than 60 years is, in fact, a sale - and that the "lease" for BC Rail tracks to CNR for 990 years is, in fact, a sale. The answer was careful. Mr. Kenning said: "You're not going to get me to say that".
Mr. Berardino, yesterday, had established Mr. Kenning's wondrous array of directorships, chairman positions, and such - seemingly to reveal the nobility and public-service mindedness of the witness. Listening to it, I couldn't help think Mr. Berardino was locked in a period before Enron, the 2008 subprime meltdown and the exposure of hordes of greedy investment agents, CEOs, and directors of various boards wrecking economies - as well as the BP Gulf of Mexico disaster ... and much, much more.
Mr. McCullough made something of a balance when he showed the network of "acquaintances" and friendships within corporate ranks that lead to disasters like the transfer of BC Rail to CNR. And he showed how corporations that Mr. Kenning has worked for or works for now pump money into the Liberal Party. It took Mr. Kenning some time to formulate the suggestion that they did that because they agreed with and supported the Party... though others may think there are additional reasons.
Mr. McCullough - almost as a comic scene (though black comedy of the blackest kind) - slowly toted up the amounts of money Mr. Kenning has extracted from the BC purse in the roles he has played for the Campbell "operation". Funniest (?) of all are the large amounts of money Mr. Kenning has received as a director of BC Rail in its stripped and almost non-existent form - over five years more than $30,000.00 per year, apparently. Mr. Kenning was receiving payments in the tens of thousands annually as director of a corporation that had a list of employees that could be counted off on the fingers of three or four hands.
Mr. Kenning recorded that - in his Gordon Campbell activities - he was paid less than corporate directors (etc.) are normally paid. The jury, almost certainly, took note of that sacrifice for the Public Good. And, indeed, to shine his star of reputation, Mr. Kenning admitted to having met Gordon Campbell fifteen or so times, but would not permit Campbell to be numbered among his friends.
Finally, a tiny crack was sighted in the armour of the witness. Was he not carrying a briefcase around the time of the BC Rail transfer, and wasn't the valise marked with the logo of the passenger service partner of CNR? And didn't Mr. Kenning remember Bob Virk pointing out to him that to carry that briefcase was indiscreet at a time when bidding was going on and choice had to be made about a successful bidder - one of which was CNR?
Mr. Kenning couldn't remember.
... do all govt of BC employees get such limitless and high powered representation when they get charged with a crime while on the job?
... can anyone answer this?