Vaughn Palmer, Vancouver Sun
VICTORIA – In the midst of a bitter exchange between the ministry of forests and the auditor-general, there were some telling comments this week from the forest company at the centre of the controversy.
Chief executive officer Reynold Hert from Western Forest Products was responding to a critical report on a government land-use decision that benefited his company.
But it should be noted that Hert did not attempt to challenge many of the key findings by Auditor-General John Doyle.
Rather, he raised concerns that others have aired as well, namely Doyle’s propensity for raising matters that were beside the point at best, spurious at worst.
“In our view, in making his report, the auditor-general went beyond the central issue of the decision process,” Hert wrote in an open letter to company staff released Friday. “This memo is to speak to some of those issues.”
He went on to provide half a dozen examples of what he regarded as “incomplete and inaccurate statements” and “inappropriate opinions.”
Heading the list was the auditor-general’s allusion to possible insider stock trading in the days before the government approving the removal of 28,000 hectares of WFP-owned land from provincially managed tree farms.
Doyle said the evidence of “unusual stock trading” was passed on to the B.C. Securities Commission, which is “undertaking an initial review.”
He did not record that the commission had already closed the file on the matter back in May, having found insufficient evidence to warrant a full investigation.
Hert: “By leaving this issue open, rather than closing it with facts known at the time of the report, the report can lead people to suspect that people from Western were involved in insider trading.”
The forests ministry had voiced a similar concern earlier in the week: “The auditor-general raised the issue that anyone inside the ministry who had advance knowledge of the minister’s decision would have been in a position to profit personally from that information by purchasing WFP shares.
“Such allegations cast a pall over the entire ministry and the more than 3,500 dedicated public servants who work here.”
Returning to Hert’s letter, he offered the company explanation for the suspicious stock trading.
“To be best of our understanding, the large trade that occurred was between outside institutional investors in their normal course of business.”
Hert also supplied the company perspective on another matter left unresolved by the auditor-general — the possibility of a conflict of interest involving forests minister Rich Coleman.
Doyle referred that concern to the conflict of interest commissioner, after learning that Coleman’s brother Stan was a senior manager at Western Forest Products.
Hert: “The process for the withdrawal of the private lands began in late 2004. Stan joined Western in May of 2006 [and] had no involvement whatsoever in the file regarding the withdrawal of the private forest lands.”
Western also took issue with the auditor-general’s complaint about its shares being mostly held by investors from outside B.C.
This, according to Doyle, “raises legitimate questions” about how the benefits of the land-use decision can “flow to British Columbia.”
Hert’s response was to draw attention to B.C.’s need for more investment in the resource sector, from whatever source.
“The fact that at this point more people outside the province believe in the company’s potential than those inside the province should not be a factor,” he wrote.
“B.C. still needs outside investment in the forest industry and we should not be sending a signal that those from outside the province will be treated differently than those within.”
I’ve quoted Hert at some length to illustrate that it is possible to debate the auditor-general without joining Forests Minister Pat Bell in questioning his competence, integrity and professionalism.
I would also underscore that, in taking on the auditor-general, Western produced no evidence to challenge his most important findings from a public policy point of view.
Those being that Coleman and the Liberals made the decision to remove those lands from the provincial forest base without proper consultation, thorough analysis or due consideration of the public interest.
Mind, it may just be that those matters no longer concern Western, the company having gotten what it wanted from the Liberals.
“The auditor-general does not have the authority to reverse the decision” wrote Hert, “nor does he recommend that the decision be reversed.”
Case closed, as far as the company is concerned. But far from the end of the story in the political realm.
- – -
The auditor-general’s full report on this running land-use controversy is posted on his website, at www.bcauditor.com.
Filed under: BC, Canada, Jordan River/WFP, Vancouver Island
