Tuesday, January 20, 2004

Resignation under cloud bad setback for Hogg's ministry
VICTORIA -- Another week, another special prosecutor and another set of big problems for the Liberal government and the ministry of children and families.
The latest special prosecutor is reviewing possible criminal charges against Doug Walls in connection with the bankruptcy of his family's Prince George car dealership.
What's that got to do with government?
Walls is an active Liberal. He was president of a Prince George riding association and was a likely candidate in the 2001 election, until the 1998 bankruptcy hurt his prospects. He's a relative of Premier Gordon Campbell -- their wives are cousins. And Walls has been working with the ministry of children and families, on contract and as the CEO of the interim authority that's taking over about 40 per cent of the ministry's services.
He resigned on the weekend, after news of the special prosecutor was released.
Being manager of a failed business shouldn't bar you from future employment, although this was a messy bankruptcy. The CIBC accuses managers at the Ford dealership of "kiting" cheques -- writing cheques on one empty bank account, depositing them and then writing more cheques based on the phony balances.
The bank, out more than $1 million, handed its information over to the RCMP, which investigated and recommended charges. The special prosecutor is deciding if there are grounds.
But given the potential concerns, why did Walls get the government job a year ago?
Sean Holman, editor of political newsletter Public Eye, broke the story and reported concerns about favouritism have been around for some time.
Holman also found Walls had received a string of untendered contracts from the ministry for $65,000 worth of consulting work before he was hired. Contracts over $25,000 are supposed to be awarded through a competition. But that didn't happen. Walls got a series of seven smaller contracts over six months, so no open competitions were held.
Mostly I feel sorry for Walls. For more than 20 years, since his own disabled daughter was born, he's been a tireless worker on behalf of disabled British Columbians. He's been the volunteer head of local and provincial organizations, including three years as head of the B.C. Association for the Mentally Handicapped in the '80s. He's served on the Prince George school board, and headed up its finance committee.
But common sense demands that under these unusual circumstances any contracts or jobs that went to Walls should have been clearly awarded based on merit, through an open competition.
Children and Families Minister Gordon Hogg had no answers about why this didn't happen. Hogg knew that the CIBC had made the fraud allegations six months before he appointed Walls to the critical job. He says he didn't investigate because Walls had an enthusiastic endorsement from Advanced Education Minister Shirley Bond, who had worked with him on the Prince George school board.
Hogg also knew about the untendered contracts. Members of the authority's transition board had complained to him about them. He said he asked his deputy minister about the contracts, and he said everything was OK.
Hogg's lack of vigilance has helped create a major problem.
The timing of Walls' departure is disastrous. The ministry hopes to hand community living services over to the new semi-independent authority June 1.
This is a huge change -- the services cost about $500 million a year, and are critically important to about 9,000 mentally handicapped people and their families.
But an independent review done for the ministry said the transition is behind schedule and the plan has major holes. Unless they're fixed by the end of this month, the review said, the launch date is too risky and should be scrapped.
Among the key tasks to be done by Jan. 31 was appointing a permanent board and CEO. Now, instead, the project has lost its key manager. It's a disaster, and one that could have been avoided.
Footnote: Appointment of a special prosecutor doesn't mean Walls has done anything wrong. Special prosecutors are appointed anytime it looks like government-employed Crown prosecutors could be asked to make a decision about a politically sensitive case. The move takes the pressure off them, and lets the public see that the decision on laying charges hasn't been politically influenced.

Disabled adults at risk in ill-planned ministry change
By Paul Willcocks
VICTORIA - The Liberal government appears ready to take serious risks with services for thousands of mentally handicapped British Columbians.
The government wants to hand delivery of services for almost 10,000 people over to a new semi-independent authority, like the regional health authorities. There's wide support from people who believe the authority will be more flexible and responsive to the needs of the developmentally disabled. But with barely four months to go before the planned change, the ministry of children and families' plan still has huge holes, and the impact of budget cuts is unclear.
The risks in this major change are enormous. The ministry's community living programs serve more than 9,000 developmentally disabled children and adults, and make up 40 per cent of its $1.5-billion budget. Some of the people are institutionalized, and require intensive care; others are in supported living or day programs; in other cases, the ministry just provides a break for families that provide care.
And the risks are compounded by the fact that the government is trying to make the change without adequate preparation, and while it is looking to cut deeply into the ministry budget.
These aren't complaints from people opposed to the change, or the government's critics. The concerns were raised in a "transition readiness" review conducted for the government and posted on the ministry's web site, without notice, days before Christmas.
The review panel was recommended in an earlier consultant's report that found major problems with the ministry's restructuring efforts.
The panel came back with bad news, finding critical holes in the ministry's plans. The gaps are so serious that the panel said unless they're fixed by the end of this month, the June 1 transition date should be scrapped.
The panel found that there's still no agreement on who will be accountable for what services, or how services will be delivered under the new model.
As a result the panel is also concerned that there won't be enough money to provide services after more cuts required by the Liberals are made. That's logical - if the government doesn't know how services will be delivered, there is no way to know what they will cost. (Community living services cost about $655 million in the Liberals' first full year. The new authority will have about eight per cent less - some $52 million - to spend.)
The panel also warned that the failure to appoint a permanent board and hire a CEO and staff has created major problems. The review noted that the new board will want time to review the issues and decisions already made, and hiring a CEO will take until May. That will create "an ongoing lack of stability in the new organization," and the authority will move through the critical months ahead without a management team.
And on top of that, the agencies that deliver the services face their own uncertainties. The government wants to cut the money they get; they are in turn looking for concessions in contract talks with some unions representing about 15,000 employees. Talks are continuing, and the employers are taking a lockout vote.
Minister Gordon Hogg promises the change won't go ahead if there is any risk to health and safety.
But he won't accept the panel's recommendation that the transition be delayed if key decisions aren't made by Jan. 31. The review panel said, for example, that unless the permanent authority board is in place by Jan. 31 the change should automatically be delayed.
Hogg says he'll decide whether the change will push ahead even if the deadlines set by the panel are missed.
The ministry has been through a chaotic year. Budget plans have been proven unworkable. Change is far behind schedule. And now it looks as if the ministry is on the verge of pushing ahead with huge change without adequate planning or money.
Footnote: The problems have been made worse by the sudden resignation this week of Doug Walls, CEO of the interim authority. Walls quit because a special prosecutor is looking into the bankruptcy of his family's Prince George Ford dealership. His departure creates more problems for the implementation plan.

Kitimat takes on Alcan and the government
By Paul Willcocks
VICTORIA - It's time to start a pool on how many seats the battle between Kitimat and Alcan will cost the Liberals.
Kitimat has just gone to the BC Supreme Court to try and limit Alcan's sale of power. The town says the company was given the electricity from the Kemano power project more than 50 years ago to smelt aluminum, not to sell at a big profit. And the people of Kitimat are angry at the provincial government for not fighting to enforce the original deal that gave Alcan the public resource.
Kitimat has a good case, according to lawyers who have reviewed the file. Certainly anyone who reads the original 1949 agreements handing over the water rights to Alcan finds the government's intent clear. The power was to be used to make aluminum or for other industrial projects "in the vicinity of the works."
But since then things have changed.
In the '90s, the town says, Alcan was allowed to sell power "surplus to its needs." And when the California energy crisis hit in 2001, the company was selling power - very profitably - while running the smelter at 65-per-cent capacity.
Now neither the company nor the provincial government is prepared to acknowledge any limits on Alcan's right to sell power, or any requirement that it produce aluminum.
It's strange, this spat. Kitimat is a company town, and Alcan is the company. They've been united - mostly - for half a century, and the people of Kitimat and the company have done very well out of the relationship.
And the people taking on the provincial government aren't the usual critics. Kitimat's council and business community are pretty united on the issue. Long-time Mayor Richard Wozney, leading the legal challenge, was even a Liberal candidate in 1996.
The court challenge is a last resort. The town has been trying unsuccessfully to work with the company and the government almost since the election. Now it's asking the BC Supreme Court to review all the agreements with Alcan, and rule on whether the company is breaking them by selling power.
It's a daunting prospect - a small town taking on a massive global corporation and a government. But Wozney says it's a matter of life and death for Kitimat, where property values and population are plummeting, and two of five elementary schools have already closed. Alcan can produce power from the Kemano project for under under $5 a megawatt hour, and sell it for 10 times as much. Energy sales may make more business sense than expanding or maintaining aluminum production. (Alcan told the Liberals' energy task force that it hoped to reduce electricity use at the smelter, acquire other power sources and move into the electricity business.)
Alcan is just looking after its shareholders. And the company notes not one job has been lost due to power sales, and says it is honouring all agreements with the province.
But Kitimat has tough questions for the government about why it isn't enforcing the agreement, making sure that a public resource was being used for the good of British Columbia. When did that requirement change, the town has asked
The answers have been weak. Attorney General Geoff Plant says only that the government has reviewed all the agreements and actions between 1950 and the present and concluded Alcan is acting appropriately. But he won't say when or how the original agreement was changed. And he adds that that the government also fears repercussions from Alcan if it pushes the issue.
So with no satisfaction from government, Kitimat has turned to the courts.
Power issues are already a hot political topic in B.C., and rural B.C. has already stored up grievances against the government.
Now the Liberals are standing alongside a giant corporation in opposing a community that's fighting for public benefits from a public resource.
It's a bleak way for northern MLAs to begin the countdown to next year's election.
Footnote: Alcan and the government both suggest the community needs to work harder at diversifying its economy, as major industries like Alcan will inevitably reduce employment. But Kitimat, built as a company town, has few natural advantages in the fight to attract small business.