Wednesday, January 12, 2005

Santori's departure says something worrying

VICTORIA - In an odd way, we're a little worse off after resort minister Sandy Santori's decision to quit politics and manage the local golf club.
Santori isn't going to make anybody's list of slick political guys, or influential insiders. The premier's office didn't even manage to crank out a pro forma news release lauding his contribution in time to catch the next day's news reports.
Santori worried too much - "I tend to things a lot more personal," he conceded - and he was one of the last smokers in the squeaky clean Liberal cabinet, the minister I'd see on my way out of the legislature on the back steps, butt cupped in hand. He was thin-skinned and a little rough around the edges, a lot rough really.
Not great traits, of course. But Santori shared them with a lot of people who live in this province, the people who sent him to Victoria. And there is value in MLAs who represent real people, even if they are lousy at talking in sound bites.
The people in Trail thought Santori was a pretty good guy. He was a president of the legendary Trail Smoke Eaters Hockey Club, city councillor for five years, mayor for eight years, chair of the community task force on lead pollution. A hockey player, and insurance agent, the person you would pick to send down to the legislature when you were really fed up.
But as the old old political joke goes, it doesn't matter what party you vote for, you end up electing a government. And once in government, people tend to be swallowed up.
Santori says he decided to call it quits after a health scare at the beginning of December, when he spent three days in hospitals after waking up with chest pains. The doctors ultimately cleared him to return to work - telling him again to quit smoking and improve his overall health. A week later he was nominated to carry the Liberal banner in the May election, saying he was raring to go.
But then Santori bumped in to a friend who told him the manager's job at the golf club was open, and started to think about the appeal of running a country club - no flights back and forth to Victoria, no pressure, no crabby questions from reporters or angry calls from constituents. (I suppose golfers will complain about rough spots on the greens, but that's not the same.)
Then came Christmas, and family gatherings. Santori, with a big history of heart disease in his family, looked around and made his decision. "I don't want to risk not being there next year."
It's not a resignation that's going to rock the government. Unlike Christy Clark or Gary Collins, also gone or going, Santori never had a key political or policy role . And it's a stretch to paint the resignation as another indication that the 'real Liberals' are leaving a Campbell government that's sliding to the right. Santori was still staunchly defending the government's record - although admitting mistakes - in his farewell scrum.
It is bad news for the Liberals in the West Kootenay riding, a safe NDP seat until Santori rode in on the Liberal wave in 2001. Santori faced a tough re-election battle, but he was well-known and had the advantage of being able to talk about representing the region at the cabinet table. The riding now looks like a safe bet for the New Democrats.
Santori's reasons make sense.
But we're now up to more than a dozen Liberal MLAs and cabinet ministers who have quit or decided not to run again, several after just three years in government. The next four years should be the good part, if things go according to the Liberal plan. But not good enough to convince those MLAs that it's worth sticking around.
That should raise questions about the rewards - and the frustrations - of being an MLA.
Footnote: The Liberals now have to find a candidate, and Campbell has to decide which backbencher gets the profile and re-election boost of a cabinet post for the next four months. Look for a woman, from outside the Lower Mainland, who is facing a tough battle to win re-election.

Tuesday, January 11, 2005

Coal boom raises new BC Rail sale questions

VICTORIA - Score one round for Carole James in what will be a long political brawl over the BC Rail deal.
James met the press in the legislature's Hemlock Room this week to complain that the government did a poor job of getting the best price for BC Rail. The railway was about to make a lot of money from a coal revival, but the price CN paid didn't reflect the windfall, James charged.
She had a point, one that stood up even after Transportation Minister Kevin Falcon came to the Liberals' defence.
James said the price CN Rail paid for the Crown corporation didn't reflect a big expected increase in coal shipments from B.C.'s northeast. That could easily add $45 million a year to CN's revenues, but the government negotiated on the sale as if there would be no coal shipments. Taxpayers lost as a result, James said.
Good point.
Falcon, not surprisingly, disagreed when he called into the Press Gallery an hour later - but not that effectively.
He confirmed that the coal revenues weren't reflected in the sale price. BC Rail had been carrying less coal, he noted, almost none in 2004. The projections of future business were unproven. No coal contracts were signed at the time of the sale, he said. "People don't pay for what-ifs."
But of course they do. My past life includes time as a corporate guy, and when it came to buying a business the 'what-ifs' were the important part. Looking ahead, anticipating changes and reflecting them in the valuation, those were the real challenges.
Anyway, the Liberals were pretty positive about the coal mining resurgence. Energy Minister Richard Neufeld spoke glowingly about the coming boom about in the legislature almost two years ago. Companies had announced their development plans long before the sale closed.
The government has pointed to the evaluation by a Boston 'fairness advisor' to show that B.C. got the best price for the railway. But the Fairness Evaluation report notes that it assumed no coal shipping revenues. Based on a coal revival, using the report's numbers, British Columbians could have expected another $70 million to $120 million for BC Rail.
It's reasonable to expect CN would have balked at including any potential coal revenues in establishing the value of BC Rail. Coal prices could fall, and the mines close -or never open, CN would argue. (Falcon made the same argument - what if coal prices fall and the industry tanks?)
But the government's role was to push the potential and try to get more money for the railway. There's no guarantee that the effort would have been successful, but the seller's job is to paint the prettiest picture.
What struck me, listening to Falcon on a balky speakerphone in the Press Gallery, was how the Liberals have been wounded on the BC Rail deal.
Falcon should have been able to say look, we had three serious bidders for BC Rail, and CN offered the highest price. That's the market value. End of argument.
Except that one bidder, CP Rail, pulled out, complaining the process was unfair. Another, OmniTRAX, has been named in the corruption indictments filed against three Liberal political staffers in connection with the sale. (OmniTRAX has not been charged with any wrongdoing.) The end result doesn't look like a real competitive auction - as Falcon acknowledged with his chosen defence.
The Liberals' problem is that they have so many vulnerabilities on this issue.
Some people are mad because they broke their promise not to sell BC Rail. Others are angry about the corruption charges. And now others will be mad because the price wasn't good enough.
The questions threaten to overshadow the deal's significant benefits, and so far the government has done a poor job of answering them.
The result is that even people - like me - who don't believe government should really be in the railway business are left questioning how this deal unfolded.
Footnote: The LIberals have two choices. Tough it out, and hope that people will accept the sale, and the terms of the deal. Or ask the province's auditor general to do a review of the deal and offer an opinion on the process and the value taxpayers got for the Crown corporation. If they're really comfortable with the sale, it should be an easy choice.