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'How Many Bottles of Wine to Build a Hospital?'

Libs' audit lets high-flying P3 deal makers off hook: NDP.

By Andrew MacLeod, 22 Apr 2008, TheTyee.ca

Larry Blain

Winer, diner: Partnerships BC CEO Larry Blain.

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After it was revealed last year that Partnerships British Columbia Inc.'s CEO Larry Blain and others had enjoyed much wine and good food at taxpayer expense, a PBC official said an audit into all spending at the agency going back to its 2002 inception was underway.

The Tyee received a copy of that document, prepared for PBC's audit and risk management committee, which includes five members of the agency's board of directors.

Finance Minister Carole Taylor has accepted the Sept. 20, 2007 report, said PBC spokeswoman Jennifer Davies, and "we haven't had any additional request to do anything further."

But NDP finance critic Bruce Ralston said the auditors were asking the wrong questions.

Instead of going through all receipts for the agency, which is responsible for facilitating and promoting public-private partnerships, the chartered accountants at BDO Dunwoody LLP looked at "a random sample of 100 of Partnership BC's corporate and staff expenses, during the period from inception to March 31, 2007."

And instead of judging whether the expenses were appropriate, the auditors checked to make sure the amounts paid out matched the supporting documentation, the approved forms were used and "that items are paid in accordance with policy." They also compared the agency's policies to the provincial government's.

However, they carefully noted, "The above procedures do not constitute an audit of Partnerships British Columbia Inc.'s corporate and staff expenses and therefore we express no opinion on these amounts or on any of its individual account balances."

'Not an explanation'

Finance Minister Taylor and PBC's board of directors had agreed on the limited scope of the investigation, said Davies. "That is all that's planned."

"It's not an explanation, based on what you've just told me," said the NDP's Ralston. "What certainty do you have the items are even selected randomly? If you're selecting randomly, who selected randomly? You could select to avoid the most embarrassing ones."

More explanation is needed, he said, but the government is unlikely to insist on getting one. "It's pretty typical of the political protection they apply to Partnerships B.C. It's a favoured agency."

Questions about spending at PBC came up after a freedom of information request resulted in the release of Blain's expense receipts for fiscal 2005-2006. At one meal, for example, 17 guests at Vancouver's Al Porto Ristorante imbibed five bottles of Wild Goose Pinot Gris, three of Columbia Crest Merlot, two of Penfolds Chardonnay, and three of the d'Arenberg's The Stump Jump.

The bill also included a martini, a cosmopolitan, a rum, three bottles of beer, and a glass of the Scotch whisky Lagavulin. And they went through 13 bottles of San Pellegrino mineral water for $103.35. Along with food, the bill Blain paid and charged back to PBC came to $1,567.11, including taxes and a $235 tip.

Blain, by the way, earned $519,448 in salary and bonuses that year and claimed $45,325 in expenses.

Blain has repaid: Taylor

After stories ran in Victoria's Monday Magazine and Vancouver's Georgia Straight, Ralston observed in the legislature, "The invited guests included board members and senior staff and other honchos from the public-private partnerships world."

As recorded in the Feb. 27, 2007 Hansard, he asked, "Can the Minister of Finance answer this: how many bottles of wine does it take to build a hospital?"

Taylor responded, "It is the practice for Partnerships B.C. not to pay for any alcohol. There were a couple of instances that were found out to be true, so [Blain] has repaid those expenses."

The investigation ordered by PBC and the Finance Ministry, however, failed to go back through all the expense receipts for Blain and other officials to see if there was more taxpayer money he and his colleagues needed to pay back.

Among the small problems the accountants found were an $82.42 error in one claim from 2003, a travel expense of $2,330.59 "which lacked evidence of approval" from 2004 and a staff workshop expense from 2007 that had been submitted without the correct form.

They also found the PBC and provincial policies for reimbursing expenses were "effectively similar in all areas" with a few exceptions. PBC, for example, will reimburse a tip of up to 15 percent, while the province will not.

Auditors overlooked more alcohol

However, even the small number of receipts used for the sample included some of the kinds of expenses that Taylor told the legislature that PBC does not pay, though the BDO Dunwoody accountants failed to note them in their report.

A $998.57 bill from the "stately waterfront" Grand Okanagan Resort in Kelowna in 2003, for example, included three bottles of beer, five bottles of red wine and three bottles of white wine.

And a 2005 bill from the Penticton Lakeside Resort, "reminiscent of ancient Tuscany," had on it two glasses of Penfolds cabernet shiraz and four bottles of Sol beer. The diners were Marven Hounjet from Johnson Controls International and PBC's then assistant vice-president Rudi van den Broek, who now works for the Vancouver Island Health Authority.

A Tyee request for all expense receipts for all members of PBC's management team and board of directors resulted in a $3,972.50 fee estimate. The records would be about 4,250 pages and would require 35 hours billed at $30 an hour to prepare, the estimate said.

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Andrew MacLeod is The Tyee's Legislative Bureau chief in Victoria. You can reach him here.

16 Comments:

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  • Luke Skywalker

    4 years ago

    This Story Reminds Me...

    This story reminds me of the infamous "Pouilly-Fuisse" incident of 1982 whereby a Socred cabinet minister purchased several bottles of high-end wine at a Vancouver restaurant at taxpayer's expense.

    Then again Derek Corrigan, New Democrat appointed head of Translink, leased a high-end Saab 960 at Translink's expense during the 1990's.

    A pox on both their houses.

  • ME2

    4 years ago

    Our modern Aristocratics must eat well.

    This certainly seems to me to be a tempest in a teapot. My guess that a bill of $1600 for food and wine for a fairly large group of affluent people is chicken feed, given the expense-account lifestyle CEOs etc regularly bill back to their companies, and which we eventually pay for in profits, even if not in direct taxation.

    What is the issue? Is it that government should not pay for alcoholic beverages? That seems a pretty antediluvian attitude to me. Is it that we think they should instead do their entertaining at McDonalds?

    To me, the larger issue by far is the paying of $500,000 + a year, plus bonuses (for what?) plus expenses, to the CEO of the euphemistically named "Partnerships BC". Beyond any question, this is a prime example of Campbell-style pork barreling.

  • Luke Skywalker

    4 years ago

    BC CEO Pay...

    Quote:
    To me, the larger issue by far is the paying of $500,000 + a year, plus bonuses (for what?) plus expenses, to the CEO of the euphemistically named "Partnerships BC". Beyond any question, this is a prime example of Campbell-style pork barreling.

    To put things into perspective, during 2006, the top BC CEO salaries were as follows:

    1. Paul Reynolds $8,992,403

    2. Timothy Hoare $8,962,277

    3. Darren Entwistle $6,793,415

    4. Bruce Aitken $4,644,939

    5. Craig L. Dobbin $4,383,900

    6. Joe Houssian $3,962,988

    7. Peter Brown $3,343,854

    8. D.R. Lindsay $3,312,283

    9. D.S. Fulton $3,282,356

    10. Michael Greenwood $3,222,097

    11. Jon Feltheimer $3,167,279

    12. Sylvain A. Allard $2,698,500

    13. Dennis Campbell $2,630,451

    14. Duncan K. Davies $2,432,329

    15. Lindsay Gordon $2,385,850

    16. S. R. Rogel $2,132,555

    17. Douglas Whitehead $2,125,332

    18. Michael Burns $2,078,857

    19. D.A. Thompson $2,026,501

    20. John Watson $1,915,901

    http://www.canada.com/vancouversun/news/business/story.html?id=de1cafb7-ee71-4193-ac4e-ffee61ed7b1c&p=2

    Whether one agrees or disagrees with P3's, billions of dollars of projects are under their purview.

    Former New Democrat Premier Mike Harcourt also sat on the committee vis-a-vis Translink's new salary structure... and here were his thoughts:

    Quote:
    Harcourt said the new meeting pay structure was determined by comparing the board members' salaries to other similar boards like the one at the Vancouver Airport Authority.

    "The compensation we're giving the members is similar and suitable to what the airport authority is giving," he said.

    Harcourt added that one can argue the salary might even be low because the TransLink board is responsible for a $1-billion operation whereas the airport authority only has a spending budget of $100 million.

    http://72.14.205.104/search?q=cache:OhlkRiLqnMIJ:www.canada.com/vancouversun/news/westcoastnews/story.html%3Fid%3Dc625ecaf-1317-489e-b61a-1af12865674c+MIke+Harcourt+Translink+salaries&hl=en&ct=clnk&cd=1&gl=ca

    We could always hire someone cheaper at, say $100,000/year, but will they be more capable?

    I dunno.

  • lynn

    4 years ago

    Divine right of .....

    Quote:
    We could always hire someone cheaper at, say $100,000/year, but will they be more capable?

    Is that "the royal we" you are using, Luke Skywalker?

  • kootenay

    4 years ago

    Salaries

    This argument that we should be comparing Politician salaries to CEO's in the Private sector is a load of bunk.

    The Private sector is all about making money, maximizing profits and pleasing share holders. If you are a CEO, that's what's expected of you and we shouldn't be surprised by their exhorbinate salaries.

    However, when one enter politics, the goal is to represent the people and give them what they need at the best price possible. Paying Politicians the same rate of pay as a CEO only attracts persons with the same principles as a CEO.

    If the salaries are kept reasonable then perhaps we'll attract people who are interested in serving the public they have been appointed to serve.

    Higher salaries don't attract better people to public positions, they tend to attract more pigs to the trough. Many of these positions are given to political friends as rewards for massive donations.

    The kind of people currently being attracted to these high paying positions aren't there to serve the public only to serve themselves and their political puppets.

  • Luke Skywalker

    4 years ago

    Well...

    G West:

    Quote:
    Is that "the royal we" you are using, Luke Skywalker?

    Nope, but from the mindset of We the People as in the first words of the U.S. Constitution.

    kootenay:

    Quote:
    This argument that we should be comparing Politician salaries to CEO's in the Private sector is a load of bunk.

    But there was never any argument about politician's salaries. Read ME2's post above. It was in reference to CEO's as in the CEO of Partnerships BC. Here is PBC's modus operandi:

    Quote:
    Partnerships British Columbia is a company responsible for bringing together ministries, agencies and the private sector to develop projects through public-private partnerships.

    As a company registered under the Business Corporations Act, Partnerships BC is wholly owned by the Province of British Columbia and reports to its shareholder the Minister of Finance.

  • Grumpy

    4 years ago

    God know.........

    I could run TransLink for a fraction of the money paid for the Liberal 'porkers' horking down at the public trough, at the taxpayer's expense.

    All this is, is friends of the government enjoying the high-life at someone else's expense.

    I guarantee you, if there was real 'public' control at 'private sector' corporations, those massive corporate pay packages would not exist. Because the government do not watch their friends screwing the shareholders, huge wages are paid. It all so corrupt.

  • lynn

    4 years ago

    Pirates n' Pigs BC

    Not surprised you chose the "U.S." Constitution to quote from, Luke. We do, as Canadians, have our own....including our own Charter of Rights and Freedoms.

    Quote:
    A Tyee request for all expense receipts for all members of PBC's management team and board of directors resulted in a $3,972.50 fee estimate. The records would be about 4,250 pages and would require 35 hours billed at $30 an hour to prepare, the estimate said.

    That pretty well reveals the depth and breadth of the corruption.

  • Perry

    4 years ago

    Time to Eat the Rich

    Grumpy said:

    Quote:
    All this is, is friends of the government enjoying the high-life at someone else's expense.

    You can read about those someones in another Tyee story today "Poverty Built into BC's System".

    Maybe it's time for the poor to eat the rich. After all, with their luxurious, alcohol soaked diets they are probably a lot more nutritious than anything the poor are able to scrounge and barely subsist on. I suggest they start with these government fat cats living high on the hog.

  • monty

    4 years ago

    Let 'em eat cake

    What the hell? It's only our money these lunatics are spending. And don't think we won't be paying for the current damage for the next 20 years.
    The 60% increase the Board at BC Ferries has awarded themselves is, of course, utter nonsense. They are hugely subsidized by the taxpayers but Falcon says he can do nothing. How can they have it both ways! We'll take your subsidy but don't try to control us.
    Harcourt has sold out to the Corporate world. Cheers.

  • brian gough

    4 years ago

    6.00 dollar an hour starter wage

    6 dollar an hour starter wage----8 dollar an hour minimum wage-----carpenter 28 dollar an hour---plumber 35 dollar an hour---mla 90 thousand a year--gordon(the gargler)campbell 190 thousand a year----luke skywalkers comments priceless! (in the world of the absurd)

  • RickW

    4 years ago

    Legal Entity

    Remove the designation "legal entity" from the description of "corporation", then see what happens.........

  • ME2

    4 years ago

    RicK W

    I don't see how legal entity particularly favours a corporation.

    Do you mean instead, bestowing upon the corporation the rights of personhood?

  • Skywalker

    4 years ago

    And you wonder why most CEO's ...

    ...are completely out of touch with reality. Now we want the people that are running the government branches to be the same. How does running Translink compare with a private corporation? It doesn't because if they mess up on Translink, does it come out of the Directors pockets. Oh no! We pay. They job was done for a lot less by people who we elected and could hold accountable from time to time. Now it has become a depository of patronage for the Liberals with us paying the tab.

    If Mike Harcourt made the recommendation, it only proves that Mickey has become elitist himself now that he is on the receiving end of some of these consultations.

    I think brian gough has it summed up perfectly.

  • zalm

    4 years ago

    Roll out the barrel

    The only problem with some of the defenders of Larry Blain's largesse is that Larry has his customers handed to him on a platter - the other CEOs mentioned don't.

    Who the hell was he wining and dining on the government tab? Certainly not me and my board! We've been trying to get a 125 bed extension built on our extended care hospital in Richmond for damn near 5 years now, and as the government interferes more and more, the costs keep rising, the timing gets delayed again and again, our plans are set back, until finally a $17 million project turned into a $54 million project, and now we fall under the purview of Partnerships BC.

    That means our project MUST be funded as a P-3, once the project cost is above $50 million. NO EXCEPTIONS. We had to apply to Larry and the boys to fund our project even though we provided all the land and assets and private financing through the banks. AND, we had to pay $50,000 to apply to Larry and his boys! No good, says Gordo - you must showcase our Partnerships BC strategy by building and operating this as a P-3 - IT IS THE LAW.

    Well, of course, you know what happened. We Mennonite builders had cut costs to the bone and called in a lot of debts to get the budget as low as we could. We'd structured land swaps for the property and donations for some materials, and with all that, there isn't enough money for a P-3 to make a profit, so they don't want to touch us.

    THOU SHALT BE A P-3 sez Gordo.
    THERE IS NO MONEY IN IT sez the market.

    And now we're stuck - we've invested almost half a million of our own money to push the project, and now we're hanging in the wind. And the taxpayers of Richmond, who like everyone else in BC were promised 5000 new beds just a few years ago, are also left to swing in the wind. Only 542 new beds since that promise was made, and 320 of them are replacement beds - ergo only 220 new beds in four years.

    So what the hell was Larry Blain doing? If our board is his hostage, why doesn't he get us our contract? What good is he?

  • brian gough

    4 years ago

    shinanigans

    p3s are the flavour of the day,I don`t believe that they are in the best interest of the province. p3s end up with much higher finance charges,the province can borrow money much cheaper than the private partners. p3s should only be used if its a real risky venture( a building doesn`t qualify)-----gordon( the gargler )campbell is quick to mention that the trade and convention center was not a p3 , and look its 500million over budget! yet he fails to mention his good buddy ken dobell was in charge of that project, I have a funny feeling that the convention center was deliberatly run over budget, now campbell and falcon state " see what happens when its not a p3" ------but as for your project ZALM --the real reason the gargler put the death to it is--it would cost money after its built,seniors long term care is not free. also the next generation of seniors haven`t established their private accounts to pay for their care!---can we not impeach provincial leaders,---do we bcers have to supply lifetime security details for exleaders ( like the american presidents) or will gordon(the gargler)campbell hide in maui!

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