BC Rail

Patronage, applied Liberally

Northern Insights recently reminded readers about the BC Liberal Gravy Train that rumbles through obscure and remote locations, boarding a few special travelers.

Despite disposition of its main operating assets in 2003, executive compensation at the near defunct British Columbia Railway Company, caused public outrage. The Times Colonist noted last year that management remuneration was astounding because this company employed only 30 full time equivalents to “run a railway that’s a piddling 39 kilometres long.”

BC Liberals took firm action, resulting in change to the combined earnings of four senior executives, Kevin Mahoney, John Lusney, Linda Shute and Gordon Westlake:

  • 2007 $ 1,244,799
  • 2008 $ 1,209,167
  • Change: – 2.9 %

This modest decline compares with an overall reduction in BCRC operating expenses of 34%. In other words, executive costs rose steeply in proportion to other costs, despite government promises to rein in excesses.

CEO Kevin Mahoney, had his BCRC salary reduction cushioned somewhat because he also serves as Chair of the B.C. Transit Board of Directors where he added $19,421 in remuneration and expenses.

Some observers suggest that generous salaries secure for the Liberals continued confidentiality of the BCR sale. Main stream media pundits believe payments of that sort, akin to blackmail, are not possible. Of course, generous salaries are paid throughout public agencies and corporations.

For example, who knows much about the Columbia Power Corporation where Chair Lee Doney is in charge. Yes, the same retired gentleman who is also CEO of the BC Ambulance Service and CEO of the Health Employers Association of BC and CEO of the Emergency and Health Services Commission. He also owns and manages RLD Strategies Ltd. and has served as a Director of private companies including those who have done business with the Province of BC.

As Chair of CPC, Lee Doney was paid $ 28,168 remuneration and expenses. In 2009, the four highest paid company executives earned, in salaries and expenses,$ 1.1 million. This represented about a quarter of the company’s total management and administration expense. In fact, CPC has only 52 FTE employees so the size of its executive management is surprising. You can be certain that no private companies of similar size have numerous highly paid executives, each carrying six figure expense accounts.

Columbia Power Corporation is a low profile operation, conducting almost all business with a small group of associated corporations. Its primary mandate is to undertake power project investments, as the agent of the Province, on a joint venture basis with the Columbia Basin Trust (CBT).

The CBT has its own Board of Directors and and separate administration for its mandate – sound familiar? – to invest in power projects on a joint venture basis with the CPC. The Trust has a much smaller allocation of funds invested in local community improvement projects.

As near as I can tell, the main reason for establishing two public organizations to venture together on common projects is to ensure that the Province maintains firm control but local residents and businesses perceive they have substantial influence on the Trust.

This also allows BC Liberals to spread patronage rewards more widely. Board room appointments are desirable and these elements keep the back rooms warm and the campaign wheels turning.

Categories: BC Rail

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