Monday, June 8, 2009

How the Coal Industry Stuck it to the Canadian Taxpayer

When George W. Bush first came to power in the United States, part of his election platform was the promise of aggressive action to fight Global Warming. Once in power however, he revealed that his loyalties would be to the energy industry and immediate action was taken to ensure that they became the only voice on environmental issues.

The first to fall victim to this new direction was Jane Hughes Turnbull.
Among the documents ultimately pried out of Vice President Cheney's National Energy Policy Task Force was the resignation letter of Jane Hughes Turnbull, a member of the National Coal Council (a governmental advisory group), which warned that Bush's reversal was "profoundly shortsighted [and] an obvious and expedient response to industry interests." The numerous e-mails and letters of gratitude from coal, oil, and gas industry groups also found among the task force documents hint at the hammerlock in which these businesses held Bush during those early months. It was surely no coincidence that the fossil fuel industry had lavished Governor Bush with almost $3 million in campaign contributions during the 2000 presidential campaign. (1)
Stephen Harper's Reformers were also heavily financed by the oil, gas and coal industries, and one of those to fall victim to his new change in direction was Dan Veniez. And the group who caused his dismissal, was the coal industry, much of it American based. Some of the same people behind the forced resignation of Jane Hughes Turnbull.

Dan Veniez and Ridley Terminals

When Paul Martin was prime minister, he had plans to sell British Columbia's Ridley Terminals, after cost analyses proved them to be too expensive to remain in the public domain. He had a buyer willing to pay 20 million dollars, with 3 million down, while we took back the first mortgage. The price tag may sound low but it was the misuse of tax dollars that concerned Mr. Martin more. Canadian taxpayers had already sunk 400 million dollars into the project.

This move should have fit into the neoconservative plans of privatization. However, the Americans were concerned that if the terminals went private they would have to start paying market prices for their use. So a group got together and sent a letter to Stephen Harper asking him to keep the terminals going with tax dollars from all Canadians, to benefit a few.

Stephen Harper then hired Dan Veniez to work his magic and make them profitable. This he did. But he also recommended that they be sold, since they were too much of a drain on the public purse. This put Mr. Veniez at odds with the Harper government, who had already sided with Big Business.

According to Terrance Corcoran of the Financial Post:
In the great scheme of Canada’s economy, Ridley Terminals Inc. is no big deal. With annual revenue of just under $25-million, the Crown corporation operates a bulk-commodity handling facility off Ridley Island in Prince Rupert, B.C., 1,000 kilometres north of Vancouver. FP Comment’s editorial team has never been to Ridley Terminals, and wouldn’t know a bulk handling facility from the Coney Island Cyclone Ride. What we do know, when we see it, is big time corporate subsidy seeking, backroom politics, scheming lobbyists and cabinet ministers throwing their weight around to satisfy the big time corporate interests.

In this case, the corporate interests include the B.C. and Alberta coal industries, whose coal production flows through Ridley Terminals. The political players include two Conservative cabinet ministers, House Leader Jay Hill and Transport Minister Rob Merrifield. Being Conservatives of the bold free-market mold allegedly found in Alberta and parts West, one would expect Hill, Merrifield & Company to be staunch defenders of commercialized and privatized service delivery through Ridley at market rates.

Alas, Messrs. Hill and Merrifield have no such interests as far as Ridley Terminals is concerned .... (1)
AstroTurf Group to the Rescue

To help sell the public on keeping their tax dollars flowing to the corporate sector, a well organized AstroTurf campaign was started:
The focus of opposition activity is the Ridley Terminals Users Group, a cabal of major B.C. and Alberta coal mine operators, including such giants as Husky Energy, Suncor Energy, Tech Coal and Coal Valley Resources, headquartered in Mr. [Rob] Merrifield’s riding. The listed federal lobbyist for Ridley Terminal Users Group is Philip Cartwright, of Global Public Affairs in Ottwas. With Global Public Affairs leading the campaign, a sudden un-spontaneous groundswell of opposition is sweeping local governments in and around Prince Rupert. (2)
The National Post called them Harper's Ridley terminators.

And naturally they won and Dan Veniez was fired, prompting an immediate response:
The federal Conservatives couldn't wait to get rid of Dan Veniez. Literally. Veniez was, until Friday, chairman of Ridley Terminals in Prince Rupert. Then -- despite having twice offered to resign as of Aug. 30 -- Transport Minister Rob Merrifield fired him, effective immediately.

Merrifield, who, like Hill, represents a coal-mining region, has met several times with lobbyists from the big coal companies, and it has been obvious for months that an orchestrated assault on Veniez and his board has been underway. And these Conservative heavyweights have bought right in to the message -- that public ownership of Ridley must be preserved, despite the dismal history of losing money and allowing the facility to deteriorate and despite the Tory preference for privatizing almost everything else. (3)
Global Public Affairs

The lobbying group behind all of this "grassrooting" was Global Public Affairs, and something the Conservatives failed to mention:
In one of the letters where he offers to resign, Veniez documents the subsidization, the more recent lobbying efforts and how pressure mounted against the board and its management. Houston-based International Commodity Export Corporation and its lobbyists, Global Public Affairs, "have been at the forefront of lobbying you and Mr. Hill for the termination of RTI's Board and management, among other things. They sought the government's acceptance of an arrangement that was flagrantly at variance with the public interest. (3)
And Global Public Affairs also had an association with the Bush Administration. In fact one of their managing directors once worked on Bush's campaign.
Ken Mehlman, Managing Director and Head of Global Public Affairs for Kohlberg Kravis Roberts & Co. (KKR) ... Prior to joining KKR, Mehlman served as a partner at Akin Gump Strauss Hauer & Feld. Mehlman also served as campaign manager for President George W. Bush’s re-election campaign in 2004, and then as chairman of the Republican National Committee from 2005 to 2007.
But so as not to give the appearance of funnelling money to an American PR firm, the Conservatives took unprecedented measures to make sure they still got our money.

Breaking the rules of his own accountability act, Harper removed Erin Wall, assistant to Brian Jean, Member of Parliament and Parliamentary Secretary for the Minister of Transport, Infrastructure and Communities [John Baird] and sent her to work for Global Public Affairs.

Ms Wall was then registered as a lobbyist for the Houston based International Commodity Export Corporation, the largest beneficiary of government subsidies to the [Ridley] terminals. You will notice that her appointment took place on June 19, 2009; just before the firing of Dan Veniez, and on the same day that ICEC underwent a name change to give it the appearance of a Canadian company.

A real sleight of hand magic act.

And as Dan Veniez claimed: "the wool is being pulled over everyone's eyes" by a consortium of coal producers who want subsidized access to Asian markets." (4)

1. The Book on Bush: How George W. (mis) Leads America, By Eric Alterman and Mark Green, Penguin Books, 2004, ISBN: 0-670-03273-5, Pg. 13

2. Tories back coal giants at Ridley: Plan would subsidize Alberta and B.C. coal shipments, By Terrance Corcoran, Financial Post, June 04, 2009

3. Ridley Terminals chief fails to kowtow, is fired, By Don Cayo,Vancouver Sun, June 29, 2009

4. Veniez responds to opposition , By George T. Baker, The Daily News, June 4, 2009

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