The concepts are indisputable. If you construct a tiny shed, the cost is small. If instead, you build a voluminous warehouse, costs rise dramatically. Which is OK, but only if that’s what you need.
In everyday life, we make financial decisions regularly and, through focus on self-interest, they generally work out. But, when everyone involved in a project gains by escalating size and complexity, who manages the limits? Who says no, when no needs to be said?
When politicians hide financial details of major agreements – as BC Liberals do routinely – it’s parties to the contracts who benefit, not the public. Without restraint and independent oversight, initial budgets grow steadily even if we hear frequent announcements that projects are on-time, on-budget.
As British Columbians know, the current party in power controls the flow of information and feels no obligation for honest disclosure. There is no sense of accountability to taxpayers. Years ago, that would have set the news media afire. Not today.
Transactions worth tens of billions, such as BC Hydro’s private power commitments, are negotiated behind closed doors between current and former associates who can flip sides, from buyer to seller, at will. Detailed terms of the deals remain secret. Thousand year leases, agencies, crown corporations, P3s, publicly owned private companies and other vehicles of evasion are used to shield financial arrangements from public view.
Open public tenders are used to buy paper clips but not hospitals, bridges and highways worth billions. Instead, Requests for Proposals are issued to friends and deals awarded without competition. Terms are secret.
How are citizens of British Columbia protected from massive financial fraud? Simple. We are not protected.
Years ago, when I was learning financial systems, internal control and audit principles, one thing was clear. When opportunities for fraud are present without likelihood of timely discovery, it will occur. That will happen when small sums are at stake; it is even more likely when large sums are at stake.
So, who protects the public interest? MLAs are not allowed to speak except on behalf of approved party policies. News reporters are co-opted and rewarded for cooperation. Publications and broadcasters see lucrative government advertising as due compensation for friendly coverage.
And, of course, the bureaucracy expands to meet the needs of the expanding bureaucracy. Salaries escalate, benefits increase and the ultimate rewards – multiple dipping consulting contracts or employment as a key lobbyist – accrue to the most faithful.
Corruption expands to meet the needs of the corrupt.