Tuesday, September 14, 2010

 

BC Rail 'sabotage' plot alleged (2002). President fired for 'clandestine' affair (not Lara Dauphinee)

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B.C. Rail 'sabotage' plot alleged

President fired for 'clandestine' affair claims execs planned for big buyouts

Andy Ivens
Times Colonist - Dec. 15, 2002

VANCOUVER -- A top B.C. Rail executive fired for having a "clandestine" love affair with a colleague claims he's the victim of a plot among senior officials to enrich themselves by "sabotaging" the Crown corporation's profitability.

The allegation is detailed in court documents filed in a wrongful dismissal suit brought by Mark Mudie, former president and chief operating officer, against the [BC Rail] corporation.

The documents allege that B.C. Rail executives conspired to weaken the corporation's financial situation in a bid to force the provincial government to sell it off -- triggering generous severance packages for top officials.

Documents obtained by the Vancouver Province include a letter signed by Bob Phillips, B.C. Rail Group president and chief executive officer, stating that Mudie was fired because of his romantic involvement with Debbie MacLagan, the corporation's vice-president of marketing and sales.

MacLagan, who was appointed vice-president by Mudie, had been with B.C. Rail for 11 years. She was dismissed Aug. 23 this year -- the same day Mudie was fired.

But in a writ filed in B.C. Supreme Court, Mudie says his dismissal was "without just cause and without notice."

He admits to a "personal relationship" with MacLagan but says their affair was a red herring used to get rid of him for other motives and that his dismissal has ruined his career.

Mudie claims he was sacked because he was steering the railway to an improved financial picture, contrary to Phillips's alleged hidden agenda.

In an Aug. 26 letter to the railway's lawyers, Mudie's lawyer, Murray Tevlin, notes: "B.C. Rail has just gone through the best seven months' performance in its history. Perversely, but truly, this is the reason for Mr. Mudie's dismissal."

The letter is included in the B.C. Supreme Court file, along with an affidavit sworn by Mudie.

Tevlin alleges Mudie's dismissal "has apparently been driven by certain senior executives at B.C. Rail with a view to triggering attractive compensation packages which they have negotiated for themselves contingent upon the sale of B.C. Rail.

"In order to ensure the triggering of those rich packages, there has been what Mr. Mudie has referred to as a 'failure strategy.'

"A plan, referred to as the 2004 Plan, was created which was not thought to be realistic in business terms and not well thought-out.

"Mr. Phillips has expressed to a number of officials that the 2004 Plan will not succeed.

"The plan has purposely set out unrealistic objectives so that, when it fails, it will convince the government of British Columbia that there is no option but to sell the railway.

"Mr. Mudie, contrary to expectations of some ... has delivered a superior financial performance," says Tevlin's letter. "In other words, he is delivering performance considerably above the 2004 Plan, which will now give the government the option of not selling the railway and, therefore, not triggering the rich severance package for certain executives."

Tevlin says Phillips "sought to sabotage the Plan by refusing to order new rail cars, which would have increased the profits of the company by at least $700,000. "In addition, (Phillips) has been unsupportive of a renewal of the transportation contract with the railway's largest customer, Canfor. Mr. Mudie opposed Mr. Phillips on this issue and he has now paid the price."

To back up his claim that Mudie was turning B.C. Rail around, Tevlin says the railway had revenues of only $30 million last year, but, as of late August, the 2002 figure was heading toward $70 million. "The target under the 2004 Plan was about $52 million."

Mudie was earning a base salary of $270,000, with perks, such as a membership in the Terminal City Club, and bonuses on top of that.

"For many years I have been accustomed to a lifestyle based on an income of over $400,000 per year.

"I am (now) in a position where I have to draw on my line of credit in order to meet my day-to-day living expenses," claims Mudie, who states he has now moved into a "cheaper" apartment near the University of British Columbia.

In a three-page termination notice to Mudie dated Aug. 23, Phillips says Mudie was fired for just cause because he breached the company's ethical guidelines by having a "clandestine affair" with MacLagan.

Phillips wrote: "You did not see fit to bring this relationship to the attention of the company's ethics adviser.

"More importantly, your conduct, both in maintaining the secrecy of the relationship as well as the manner in which you have conducted the business of B.C. Rail in relation to Ms. MacLagan, has put you in a real and apparent conflict between your promotion of the private interests of Ms. MacLagan and the best interests of the company.

"In the conduct of the relationship with Ms. MacLagan, your conduct of the business of the company has become so biased that it has created an adverse impact on the operations and morale of the senior management team at B.C. Rail, your direct reports, and has discredited you as the leader of that team."

Mudie swears his relationship with MacLagan was in the open.

In his letter, Phillips criticizes decisions taken by Mudie "that directly benefited the economic interests and advanced the career interests of Ms. MacLagan ... You have destroyed the trust and confidence the company must place in you as the senior executive."

Phillips refers to MacLagan's promotion to assistant vice-president in 2001 and to vice-president, marketing and sales in February 2002 as events that upset the rest of the management team.

But Mudie's lawyer, Tevlin, counters that MacLagan was properly qualified. He accuses Phillips of harbouring outdated attitudes about women in the boardroom.

"It was (B.C. Rail vice-president of human resources) Kevin Mahoney who recommended Ms. MacLagan for the position of assistant vice-president," Tevlin's Aug. 26 letter states.

"Ms. MacLagan's performance in the position as far as achieving excellent corporate results has been outstanding."

Tevlin's letter also says the decision to raise MacLagan's salary from $120,000 a year to more than $150,000 was recommended by a private consulting firm, Towers Perrin, and approved by B.C. Rail's board of directors human resources committee chaired by Anne Stewart.

Even at $150,000 a year, Tevlin argues MacLagan was underpaid by about $30,000, given the complicated department she headed.


Comments in reply to: BC Rail executive launches lawsuit
12/17/02
Author: hoggerdoug

Actually I think there is some merit in Mr.Mudie's claims, the way things are being run around here a lot of us employees some times think that the BCR is being run into the ground deliberately. Sorry to see Mr.Mudie go as he has an extensive railway background and understands how and why railways operate and by golly I think he was honestly turning things around profit wise etc. Heck of a lot better than the bean counters we got now.
Doug


Date: 12/17/02 19:10
Leykis 101
Author: TopcoatSmith

Never, ever date where you work - even if you like your job.

________________________________________________
And 

BC Rail replies to lawsuit
Statement of Defence by BC Rail executives denies all allegations.

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Special thanks to E.M. for finding this story and tipping us off. I'll be searching for further information: how did the court case turn out? What happened to Mr Mudie and Ms MacLaglan? As for BC Rail ... well ... with friends like he described, who needs enemies? - BC Mary. 
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Thanks to GAB for the Reasons for Judgment on this case ... 

It appears that Mr. Mudie lost:

http://www.courts.gov.bc.ca/jdb-txt/sc/02/15/2002bcsc1515.htm

GAB

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Another interesting comment by E.M., cross-posted here: 

E.M has left a new comment on your post "BC Rail 'sabotage' plot alleged (2002). President ...":

Is this just a coincidence that I gave this info to Mary on the 14th in the Morning on Tuesday, which She posted on the Page, and the Defense used the Mudie Incident?

Mary, any evidence that the defense is visiting Your page?

Vancouver Sun and the Province have the story questioning Kenning about Mudie. ( K. Fraser spelt Mudie/Moody ) The difference in the stories is Fraser's headline "Witness denies 'failure strategy' to run B.C. Rail into the ground"
McCullough noted that B.C. Rail executive Mark Moody had been fired in 2002, a year before the controversial sale of B.C. Rail, and that Moody had sued the government for wrongful dismissal.

He suggested that Moody had settled out of court for “several hundred thousand dollars” — a suggestion not challenged by Kenning.

McCullough said Moody had filed a lawsuit claiming he had been fired because he refused to partake in the strategy to run the railway into the ground.

McCullough suggested the allegation would have been a major concern for B.C. Rail executives, but Kenning said he didn’t recall the statement of claim filed by Moody in B.C. Supreme Court.

“A failure strategy,” asked Kenning.

“Yes,” said McCullough, who represents accused Bobby Virk.

“I don’t understand what that means,” said Kenning.

Pressed repeatedly by McCullough to say whether there were any concerns about the lawsuit and its allegation of a failure stategy, Kenning stood by his story.

“That’s an absurd question and the answer is no,” said Kenning. “We didn’t engage in a failure strategy. I don’t know where you’re getting that information.”
--------------
Referring back to my comment, re Mudie losing his case, I said nah, they got paid off, and probably signed a confidentiality agreement.

I am surprized at the two directions between the Two Journalists, Hall really did not say much, and He did not report on Kenning saying he did not understand Failure strategy like Fraser did.

Hall's story


McCullough cited a 2002 wrongful dismissal lawsuit against B.C. Rail by former president Mark Mudie, who claimed he was fired because he refused to participate in the company's "failure strategy" that would involve "running the company into the ground," forcing it to be sold.

"Kenning said Mudie was fired because of inappropriate conduct. He disagreed with Mudie's allegations, which he called absurd. "There just wasn't a failure strategy," Kenning told a jury and B.C. Supreme Court Justice Anne MacKenzie."

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Comments:
Looks Like re Debbie

Another former BC Rail executive sues

Jane Seyd jseyd@nsnews.com

THE former vice-president of marketing and sales for BC Rail Ltd. has filed a lawsuit against her former employer, claiming she was fired without cause and without notice on Aug. 23.

In a lawsuit filed in B.C. Supreme Court on Feb. 21, Debbie Maclagan alleges that BC Rail never gave any reason for firing her.

Despite that, Maclagan's lawsuit states that "certain false and malicious comments have been made on behalf of BC Rail which have defamed (her)" and damaged her reputation.

Maclagan's statement of claim alleges that the Crown corporation also refused to pay her any severance. Maclagan is seeking damages for that severance pay.

The way she was fired "continues to cause her mental distress" and has injured her health, according to the lawsuit allegations.

Maclagan worked for BC Rail for 11 years in a number of senior

He lost the Court case from what I found. I can look further if You like, I suspect they were bought out.

Wonder what happened with that hard drive eh.

http://archive.nsnews.com/issues03/w022303/024303/news/024303nn3.html
 
It appears that Mr. Mudie lost:

http://www.courts.gov.bc.ca/jdb-txt/sc/02/15/2002bcsc1515.htm

GAB
 
hmmmmm I'd say the BVB defence team just found themselves another witness; somebody to counterbalance the spew coming from Kenning, who was on the stand yesterday trotting out the "it was losing money and had to be sold" argument on the government's behalf....
 
This was the same trick tried with the City of Calgary utility Enmax. Sell it off so golden parachutes could be deployed. They couldn't say it was going broke though, everyone knew it made money hand over fist.The spin was that it would be a burden on the City taxpayers to expand and that HAD to happen. They conveniently 'forgot' to mention that the cost of expansion was a cost of doing business with the goal of generating a larger profit for the shareholders. Many people wondered why, if Enmax was such a dog, so many companies were fighting to buy it. The scam failed, we still own Enmax and it generates millions for the City coffers. When the BC Government started their spin on BC Rail's financial troubles, those of us that know a little about utilities (and railroads) recognized this BS right away. As we rely more on the internet than poor quality toilet paper for our information these schemes will become recognized more easily. Right now it's hard to find out what's going on next door.
 
Hi All,

Apologies - author-deleted commented above, was mine.

Have to check a detail or two first to ensure that it was completely accurate.

(sorry about that Mary - I sent you an Email to explain)

.
 
There's a Debbie MacLagan in the executive at BC Ferries in 2005. A Senior Business analyst.

Also, according to the North Shore News,
snip"The company has also demanded she hand over the hard drive from her computer, she said in the court documents - something she has refused to do. "snip
Hmmm, wonder what's on the hard drive. Maybe she could be found.
 
Interesting. I was looking at BC Ferries to see if Ms. MacLagan is still there. Haven't found her yet, but guess who's on the Board of Directors there? Why, it's Mr. Brian G. Kenning! Himself! "Brian G. Kenning
Brian Kenning is presently a Director on the Boards of MacDonald Dettwiler and Royal Oak Ventures. Mr. Kenning is past Chair of the BC Cancer Foundation and past Governor of the BC Business Council. He was formerly a Director of Catalyst Paper Ltd., and Managing Partner of Brookfield Asset Management (formerly Brascan Corporation) and British Columbia Railway Company. Mr. Kenning has an Honours Bachelor of Arts in Economics and a Master of Business Administration."

Mr. Kenning is like Gordon Campbell's axeman or something. This Government and Howe St. are looking positively incestuous!

I didn't find anything about her lawsuit, but I bet the BC Ferries job was payola, in part.
 
Sorry to put this here, but after the following quote:

... the way things are being run around here a lot of us employees some times think that the BCR is being run into the ground deliberately... Doug


I've heard through the grapevine, similar things are going on over at BC Hydro. Take it down, sell it off.
 
Anonymous 8:04,

that's the worst news ... jeez, and they keep saying that British Columbians are mad as hell because of the HST. Wow. They just don't listen, do they?

I figure British Columbians have been bottling up rage for the past 9 years. Only now, with the HST, has there been an outlet for this much anger.

Will it be enough to rescue BC Hydro before it's too late?
.
 
Hi Mary,


Last week Gordon Campbell came back from “holidays” and in two interviews he mentioned his wife wondering why he doesn’t retire.

I’m sure this was PAB trying to garner sympathy for the very happily married man.

Then in two interviews this week standing right by his side was none other than the spy-manoeuvring Lara Dauphinee.

Arrogance, now he doesn’t mind showing off his taxpayer funded girlfriend, but it’s still our little secret….wink..wink.

How very sad.
 
Today, the defense used Mr Mudie's plight as a battering ram looking for answers as to why he was fired when, in the Witnesses view, and that of his fellow board members at BC Rail, that he was doing a good job.
 
Is this just a coincidence that I gave this info to Mary on the 14th in the Morning on Tuesday, which She posted on the Page, and the Defense used the Mudie Incident?

Mary, any evidence that the defense is visiting Your page?

Vancouver Sun and the Province have the story questioning Kenning about Mudie. ( K. Fraser spelt Mudie/Moody ) the difference in the stories is Fraser's headline "
Witness denies 'failure strategy' to run B.C. Rail into the ground

"
McCullough noted that B.C. Rail executive Mark Moody had been fired in 2002, a year before the controversial sale of B.C. Rail, and that Moody had sued the government for wrongful dismissal.

He suggested that Moody had settled out of court for “several hundred thousand dollars” — a suggestion not challenged by Kenning.

McCullough said Moody had filed a lawsuit claiming he had been fired because he refused to partake in the strategy to run the railway into the ground.

McCullough suggested the allegation would have been a major concern for B.C. Rail executives, but Kenning said he didn’t recall the statement of claim filed by Moody in B.C. Supreme Court.

“A failure strategy,” asked Kenning.

“Yes,” said McCullough, who represents accused Bobby Virk.

“I don’t understand what that means,” said Kenning.

Pressed repeatedly by McCullough to say whether there were any concerns about the lawsuit and its allegation of a failure stategy, Kenning stood by his story.

“That’s an absurd question and the answer is no,” said Kenning. “We didn’t engage in a failure strategy. I don’t know where you’re getting that information.”

--------------
referring back to my comment, re Mudie losing His case, I said nah, they got paid off, and probably signed a confidentiality agreement

I am surprized at the two directions between the Two Journalists, Hall really did not say much, and He did not report on Kenning saying He did not understand Failure strategy like Fraser did.

Hall's story

McCullough cited a 2002 wrongful dismissal lawsuit against B.C. Rail by former president Mark Mudie, who claimed he was fired because he refused to participate in the company's "failure strategy" that would involve "running the company into the ground," forcing it to be sold.

"Kenning said Mudie was fired because of inappropriate conduct. He disagreed with Mudie's allegations, which he called absurd. "There just wasn't a failure strategy," Kenning told a jury and B.C. Supreme Court Justice Anne MacKenzie."

----
Just noticed today when I copy and paste from Times Colonist,Vancouver Sun and the Province, the URL of their website is included,Read more and the Url is included.
 
Is this a coincidence the Defense is using the Mudie court case the day after the story was posted here? I like to think not.

Keith Fraser had more on the defense questioning Kenning about Mudie (not Moody like His story )

In a comment on Tuesday, I sugested the Court case wasnt lost, and they settled out of court, seems I was right on that.

Keith Fraser Story on the day in Court on the 15th.was all about Mudie.

Witness denies 'failure strategy' to run B.C. Rail into the ground

McCullough noted that B.C. Rail executive Mark Moody had been fired in 2002, a year before the controversial sale of B.C. Rail, and that Moody had sued the government for wrongful dismissal.

He suggested that Moody had settled out of court for “several hundred thousand dollars” — a suggestion not challenged by Kenning.

McCullough said Moody had filed a lawsuit claiming he had been fired because he refused to partake in the strategy to run the railway into the ground.

McCullough suggested the allegation would have been a major concern for B.C. Rail executives, but Kenning said he didn’t recall the statement of claim filed by Moody in B.C. Supreme Court.

“A failure strategy,” asked Kenning.

“Yes,” said McCullough, who represents accused Bobby Virk.

“I don’t understand what that means,” said Kenning.

Pressed repeatedly by McCullough to say whether there were any concerns about the lawsuit and its allegation of a failure stategy, Kenning stood by his story.

“That’s an absurd question and the answer is no,” said Kenning. “We didn’t engage in a failure strategy. I don’t know where you’re getting that information.”

( I say from BC Marys website, teehee)

Read more: http://www.theprovince.com/news/Witness+denies+failure+strategy+Rail+into+ground/3530355/story.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3a+canwest%2fF228+%28The+Province+-+News%29#ixzz0ziLlQJLv
Read more: http://www.theprovince.com/news/Witness+denies+failure+strategy+Rail+into+ground/3530355/story.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3a+canwest%2fF228+%28The+Province+-+News%29#ixzz0ziLEwbNd
 
Sorry I think I double posted two versions of this, it looked to me like I lost the comment.
 
Here is another story written by a sceptic about Mudie.
BC Rail restructuring under attack
By: Walter Robinson
Posted: December 20, 2002
Ironically this is from the Canadian Taxpayers Federation webpage

With BC Hydro, ICBC, and BC Ferries out of the way, the last stop on the anti-privatization train is BC Rail. The usual suspects are already sharpening their knives.


Not unlike the Nettleton letter that cried wolf over a BC Hydro sell-off, Mudie's charges are another veiled attack on the Liberal's mandate to reform BC Crown Corporations.

Mudie claims he was the foil to a master plan to sabotage the railway's profits and that's why he had to be removed. Otherwise BC Rail, presumably under his direction, would reverse a history of deficits and threaten to post profits, dashing hopes of an easy privatization.

Mudie's sabotage test has wide-ranging implications. If failure to make money for BC Rail constitutes "sabotage," then the RCMP should be called in to investigate random acts of sabotage carried out by the previous NDP government and their crown corporations.

British Columbia as "have-not province" today is the NDP's tribute to a decade of misguided policy, if not a sabotaged economy.

Mudie's smoking pistol that proves top executives initiated self-destruct and privatization sequencing is the railway's poor financial showing. (Disregard for the moment the restructuring and down sizing saved the railway even greater losses.) Since when are losses incurred by a BC Crown Corporation the precondition for looming privatization It would have to be the exception to the rule judging by the experience of BC Ferries and ICBC.
snip
If you believe Mudie's other serious charge that BC Rail execs were angling for compensation packages to be awarded through privatization, you'll likely fall for the argument that the NDP deliberately erased itself off the electoral map so that defeated politicians could cash-in on generous severance and pension plans.

snip
Yes, the NDP were the authors of their demise. Suggesting it was a deliberate act of political seppuku is going a bit too far, as does Mudie in his accusations against BC Rail's top brass.

In the post-Enron era, there's no satisfying the public appetite for stories of reckless and unethical CEOs. But this dog-eats-man story is better suited to the pulp fiction pages.

http://www.taxpayer.com/british-columbia/bc-rail-restructuring-under-attack
 
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