Tuesday, October 25, 2011

Cover-up fears as taxpayers pay $30 million to mining company

The provincial government’s $30-million payout to Boss Power Corp. stinks.
Taxpayers are paying compensation to the company because the government bungled its ban on uranium mining
The last-minute settlement suggests the government paid a premium so damaging evidence wouldn’t be heard in court.
And there is every reason to believe politicians ordered government managers to break the law and penalized a manager who tried to do the right thing.
Boss Power had the rights to the Blizzard claim, a uranium deposit about 50 kms southeast of Kelowna. The company could expect fierce opposition to any mine, but a seven-year moratorium on uranium mining lapsed in 1987. The company planned to press on with the project.
In 2007, Kevin Krueger, then the junior minister mines, confirmed the government had no policy or regulations prohibiting uranium development, although he acknowledged public opposition.
In 2008, that changed. The government issued a news released headlined “Government confirms position on uranium development.”
It set out a new approach. Uranium mining wasn’t part of the province’s plans, Krueger said.
Boss Power sued. The company had staked its claim, spent money on developing the deposits and said it had been encouraged by the government.
The ban took away its rights and the government should pay compensation, the company said.
The government’s statement of defence was revealing. It said the ban only applied to new projects. Boss was free to go ahead.
But 10 months later, the government brought a blanket, retroactive ban. The lawsuit went ahead.
Meanwhile, the government, according to the its own court filings, was breaking the law.
Boss Power applied in 2008, before the ban, to do exploratory work on its claim. The law requires the chief inspector of mines, then Doug Sweeney, to assess the application on its merits.
But the then-deputy minister, Greg Reimer, and assistant deputy minister John Cavanagh ordered Sweeney to ignore the application. They had asked the Attorney General’s Ministry for an opinion on whether it was legal.
It wasn’t, they were told, according to the government’s admissions in the legal case.
Then they repeated the order that Sweeney not fulfill his statutory duty.
Sweeney had legal and ethical concerns. He was relieved of his responsibilities for the file, and the marching orders went to more compliant officials. Sweeney ultimately left government, and says his family, career and reputation were damaged by the affair. (Cavanagh disputes the accuracy of the government’s admissions.)
These facts emerged as Boss Power’s case moved through the courts.
When Boss found out what had happened behind the scenes, it added a charge of “misfeasance of public office” to the lawsuit.
Basically, that alleged the government abused its power, which would givethe company a claim to additional compensation.
All this was set to come out in court if the case went ahead. The officials would have testified, and had to answer questions about whether politicians ordered them to break the law.
Until the government came up with $30 million of your money, plus more to cover Boss Power’s legal costs, to end the case.
Which inevitably brings to mind the decision to cover $6 million in legal costs for Dave Basi and Bob Virk to head off the revelation of potentially damaging evidence in that case.
The NDP raised the issue in question period Monday, but got no answers.
So we don’t know who gave the order to ignore the company’s application, or why the Attorney General Ministry’s legal opinion was ignored. We don’t know how much the settlement costs rose because of the government’s abuse of power.
We do know that a government that can’t find money to meet the needs of people with developmental disabilities can come up with $30 million to keep potentially damaging evidence from being heard in court.
Footnote: The government issued a news release on the settlement late on Oct. 19, the day the shipbuilding contracts were dominating the news. If it was an attempt to hide the news, it failed miserably.
The other interesting question is whether this would be an issue, or if there would be ban, if the deposits were in the north, not the Okanagan.


Anonymous said...

PW: You mention various documents related to the Boss Power court case - are these available online anywhere?

Any news on how International Montoro Resources is doing in their dealings with the BC Liberals on this same issue?

Grant G said...

Who are the people behind Boss Power?

Is there a chance that this law-suit was pre-ordained?

Gordon Campbell theoretically, would still be premier today if the HST fraud wasn`t foisted upon us..

A settlement could have been brokered for $4 million dollars, it wasn`t...

The BC Liberals at that time in history had BC Rail brewing, deficits, they also had Suzuki and Berman pimping the BC Liberal cause...

With all the BC Liberal scandals, I find it hard to believe that the BC Liberals were so worried about the mineral claim that they broke the law?

I believe this was done on purpose, the illegal denial of the claim followed by a huge settlement, who needs an active mine to make money...

Who are the players at Boss Power, how much did they donate to Gordon Campbell, how many went to school with Gordon and Michael Campbell.

This law suit was not bad Government policy, this law suit was...


Anonymous said...

Covering Krueger's backside cost $30 million, says NDP mining critic
Andrew MacLeod, The Tyee

The British Columbia Liberal government spent $30 million to cover former mining minister of state Kevin Krueger's backside, New Democratic Party energy and mines critic John Horgan charged today.


"By deliberately not abiding by the law, that allowed the judge in the first go round to look at punitive damages rather than just sunk costs," Horgan said.

Normally the government would only have to pay compensation for the company's costs, but in this case admitted in court there'd been malfeasance on the decision, Horgan said. "$30 million probably looked pretty good for a company that was really mining for compensation, not mining for uranium."

Anonymous said...

@ Grant G: YES !

It would be nice to see someone like The Vancouver Sun's David Baines have a look at Boss Power (~800,000 shares granted to insiders in July at $0.13 each - now worth more than double), Virginia Energy Resources (owns 37% of Boss), other related entities, events and people.

kootcoot said...

This is how Howe Street likes to mine, on paper and in court - it is so much easier than getting all dirty and such.

From the figures I've seen they invested maybe 7 mil (questionable) into an ore body projected to net them perhaps 50 mil over the life of the mine. So to realize 2/3 of the profit for NO WORK to speak of is good work if you kiss enough liberal butt to get it.

You can't even say but they had to pay to go to court, because our wonderful INjustice system included their court costs ON TOP of the settlement. Ambulance chasers seem like honourable heroic knights compared to these sleaze bags and their enablers in Victoria!

Anonymous said...

Energy Minister Rich Coleman defended the settlement Tuesday, saying the province always intended to pay compensation for stripping the company of its rights. But he said the province erred by rushing a policy announcement without providing the legal framework for the change.

“If government made one mistake, it would have been that we didn’t have the [cabinet order] ready when we made the announcement on uranium, which put some of our staff in an untenable position,” Coleman told reporters.


It wasn’t until almost a year after the government’s policy announcement that cabinet passed regulations to give its bureaucrats the legal footing to deny the application.

“It put our staff in an uncomfortable position because they had some statutory obligations, but they also knew we were moving on changing the rules,” Mr. Coleman told reporters Tuesday. “And for that, I’m sorry.”

Justine Hunter, The Globe and Mail

Anonymous said...

Les Leyne's column in the Times Colonist states: "It's still not clear how much an overpayment of $30 million represents. Coleman said Boss originally asked for $60 million, and the government booked $50 millio as a potential settlement cost."

Does that mean that International Montoro Resources is going to get $20 million?