Tuesday, August 05, 2008

BC government stonewalling again - this time on ICBC "little chop shop of horrors" scandal

Bill Tieleman's 24 hours column

Tuesday August 5, 2008

Costs continue to climb in ICBC scandal


Maybe we'd like to disclose more, but legally we're disclosing everything we can.

- John van Dongen, cabinet minister responsible for ICBC

Or, maybe, the B.C. Liberal government really wouldn't like to disclose exactly what happened with the Insurance Corporation of B.C.'s little chop shop of horrors.

Because, maybe, we would find out exactly how big a scandal this is and get answers instead of a massive, expensive cover-up of government incompetence.

So far, Solicitor-General van Dongen has claimed that "privacy laws" prevent him from telling us even the most basic facts about how some ICBC managers ran a scam deep inside the publicly owned corporation.

Nearly 100 cars written off as wrecks at the ICBC Material Damage Research and Training facility were secretly repaired and sold for big bucks without disclosing the damage to buyers - all without detection for years.

How did this happen under the watchful eye of ICBC senior management, including former B.C. deputy finance minister Paul Taylor, who became ICBC CEO in 2004 and left - unconnectedly, he says - just after the story broke?

None of your business, says the government, forgetting that the public actually owns the business.

But we do know that an ICBC employee tipped the corporation in May 2006 that staff and friends were buying repaired cars at favourable prices - and nothing was done.

And, despite an outrageously expensive PriceWaterhouseCoopers investigation - the firm that was already ICBC's auditor - there are still lots of questions.

Like these: Is Canada Customs and Revenue Agency investigating ICBC managers or others for fraud by failing to declare additional income on their taxes?

Or for underpaying the true value for repaired cars and evading GST and provincial sales taxes?

How many employees were fired at ICBC, how much severance were they paid and why?

Why was PriceWaterhouseCoopers paid an additional amount - ICBC told me Sunday it is estimated to be $600,000 to $700,000 - to investigate what happened when they were ICBCs existing auditors of record?

One thing we do know - the report says in 2002, ICBC demanded an increase in corporate revenues from salvage operations - the chop shop was told to make money but not told how.

One other conclusion is clear - the profit-hungry private insurance industry is licking its own chops at the prospect of privatizing ICBC. It wants to use the scandal to persuade drivers that private car insurance is cheaper.

But that's just not true.

The Consumers Association of Canada studied car insurance rates several times, and concluded that for the overwhelming majority of drivers, public auto insurance in B.C., Saskatchewan, Manitoba and Quebec is far cheaper than private insurance in Ontario or the U.S.

So chopping ICBC could be the scandal’s worst result of all.


darlenemary chidley said...

When will someone actually tell the whole truth about this mess that Canadian authorities have been doing FOR YEARS!
To wait for a fair trial is only giving 'them' room to cover-up. It won't get any better.

North Van's Grumps said...

ICBC may be John van Dongen turf, but its Iain Black's turf when it comes to answering who was on take at BC Auction for accepting a $100bribe to insure that rebuilt wrecked cars were returned (33 times) to staff/employees/family members at the ICBC "Experimental" farm without one of them being suspended without pay.

Budd Campbell said...

Bill, if it was your job as an ICBC manager to help yourself to some private gains as part and parcel of a scheme to seriously tarnish the Crown Corp's image as a preparatory move towards privitization, would you expect to be fired or otherwise disciplined for doing what they wanted you to do?

DPL said...

I own two Volvo's, the newest being a 1983 sedan.My statiojn wagon is a 82. Some clux drove into the side of me, while I was stopped. He didn't like the lane he was in so tried mine instead. Wrote off one front fender.and a pop out piece of corner light. 100 percent his fault said ICBC. The estimator did his best to raise the damage claim, even wrote down 50 bucks for the paint on a two piece hubcap. He was aiming at 1700dollars. I told him if he insisted on writing it off, I'd buy it back as the paint was origional, the engine had a top overhaul a month earlier, zero rust, and if push came to shove I was going over his head because I really didn't believe it was heading for Budget Steeld to be squeezed. Somebody wante a car that could have the 25 year old designation for cheap insurance. Total repair was a used fender and a paint match which is real easy.The pop in lightb part was easy as I had a couple of spares. Labour was around 4 hours max. There was no reason to write it off and I will be driving it for years to come. But ICBC with soem crooked staff removed would return again to OUR insurance company. Oh. and they tried it again with our daughters BMW convertable. It was rear ended and the guy as found 100 percent in the wrong. It is sort of a desirable model in the mid 90's. She stuck to her guns and is driving it right now. a few crooks can make any outfit look rotten.

BC Mary said...

Dark deeds at ICBC ... right after Dark deeds surrounding the ALR ... right after Dark deeds which transformed sacred Tree Farm Licences into common real estate developments ... all of it reminds me of an old saying:



Harris said...

The link to the car insurance quotes has been reviewed several times. The problem with the study is that it used average quotes compared to ICBC or other provincial plans.
It did not compare actual premiums paid. If you need car insurance, or any other insurance or good or service, and you get quotes from several sources, you do not take the average and buy the good at that price. All else equal, you would pay the lowest price for the quality you needed. The CAC did not do this.

G West said...

Someone who has bought insurance in a public insurance province AND in Ontario and Alberta, as I have, would not entertain a moment's consideration about the costs of insuring vehicles for similar perils in the various jurisdictions: The fact that a particular driver might be able to find a private insurer and save him or herself a hundred dollars or so a year is simply, as always, the exception which proves the rule.

There is no doubt that the costs of insurance are reduced by eliminating the need for corporate profits - it's simply a fact.

That the current management of ICBC is now caught in the middle of a scandal wherein the principle of cooperatively sharing the costs of self-insuring (which is what public insurance is all about) appears to have been thrown on the scrap heap while catering to the Gordon Campbell clique is the real question that needs to be explored and PUBLICIZED.

Keep after them Bill, they're hiding a lot more information than you've already discovered. Only by exposure can this kind of thing be rooted out.

There are also indications of preferential treatment for certain 'classes' of body shops that need to be investigated.

Well done!

tinaz said...

When will criminal charges against those ICBC Managers and ICBC Senior manager be laid?

And why isn't Canada Revenue Agency not investigating these people who cheated the citizens of this country, not only the province.

Are those people in position of trust so confident in committing crimes because they know the authorities will do nothing in Canada?

Following is a recent article in the Globe and Mail, entitled, "Corruption? Who, me?"

If Canada does not shape up and continue to turn a blind eye to corruption committed by officials, we will be in a position where sanctions will be imposed on us, like Kososvo.

The fact that our AG and the Crown prosecutors are not laying charges, should be enough to realize that we have a very serious problem in BC with authorities who have recently been given a raise for doing nothing for the residents of this province. What can we do with such blatant corruption?Tina Z


Globe and Mail Update

August 8, 2008 at 6:12 AM EDT

OTTAWA — When German conglomerate Siemens AG decided last month to sue 11 of its former executives for not cracking down on corruption, it barely rated a mention in the Canadian business press. Yet it is the kind of news that should have executives all over the world shaking in their boots.

The company has already paid a sizable fine in Germany and is facing potentially a much larger one in the United States for bribing governments to secure contracts between 2000 and 2006. Not content to leave it at that, Siemens has now decided to sue two former chief executive officers and nine other former senior executives for not doing enough to avoid the bribes-for-business scandal.

This precedent-setting move in Germany received a lot of attention in countries, such as Germany and the United States, where governments are coming down hard on corruption and bribery offences. Sadly, Canada is not in that number.

Our collective response, reflected in the business press, is that corruption is not our concern. It happens somewhere else to someone else. Readers of a certain age will recognize this as the Alfred E. Neuman reaction to problems: “What, me worry?”

The federal government says all the right things about corruption, how it undermines democracies, human rights and the rule of law. The so-called accountability report published at the recent Group of Eight summit in Japan, detailing the steps each government has taken, makes Canada sound like a potential saint.

(This wasn't a huge surprise, given that each country appeared to have written its own section.)

Canada has signed and ratified the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business, the Inter-American Convention Against Corruption, the UN Convention Against Transnational Organized Crime, and the UN Convention Against Corruption. We've funded training for officials here and abroad, financed and attended seminars and conferences to discuss the problem, and set up not one, but two, dedicated anti-corruption units with the RCMP.

It all sounds impressive until you realize that this is all about process and not about actual results. For information on those you have to turn to a report, quietly tabled in the House of Commons last November by the Minister of Foreign Affairs, that details what progress has been made since Canada passed the Corruption of Foreign Public Officials Act in 1998.

The report goes on at some length, with an especially long section on awareness-raising that talks about all the information that various government bodies have put on their websites. But the truly relevant section is the one labelled “Prosecution,” which starts with the following line: “There has been one successful prosecution under the Corruption of Foreign Public Officials Act.”

That's right. One prosecution in the last decade. It involved a U.S. immigration officer at the Calgary airport who accepted bribes from Hydro Kleen Group, an Alberta firm. The immigration officer was deported and Hydro Kleen paid a fine of $25,000. There have been no other provincial prosecutions, according to the report, and no federal prosecutions at all.

Little wonder then that Canada was criticized in another report on corruption that also came out around the time of the G8 summit. This one, written for Transparency International, a non-governmental organization based in Berlin, was a good deal more critical than the G8 whitewash.

It noted that 16 of the 37 countries that have signed the OECD convention against bribery were actively enforcing it, whereas in 18 others, including Canada, there was little or no enforcement. Canada, according to the report, was the only one of the 37 to prohibit its tax inspectors from reporting suspicions of foreign bribery to law enforcement officials. It is also the only country to reserve the right to allow prosecutors to take into account a range of restrictive considerations in the decision to prosecute.

The criticisms don't end there. The definition of foreign bribery that Canada uses is inadequate, according to the report, because it limits offences to those committed for profit. As well, Canada limits the application of its law to offences committed in Canada, instead of applying it to offences committed overseas by Canadian nationals. Finally, Canada's federal structure meant that there is no centralized office to organize enforcement, although co-ordination of efforts was deemed satisfactory.

The predictable result of all this is a dismal national record on enforcement. Will it change?

It's been well over a year since a report co-authored by both industry and non-governmental groups recommended that the government at least extend its anti-bribery laws beyond Canada's borders. The government has taken no action to date. For those hoping for a more robust approach to corruption, the lack of movement on this one issue is a strong indication they should not hold their breath.

North Van's Grumps said...

Seimens AG eh.

Isn't that the same outfit that provided the propulsion system for the BC Ferries Coastal Renaissance which was built in Germany. Its only been in service since April of this year. On Wednesday it pulled out of its run from Departure Baby because something was wrong with its Propeller........

Aron said...

yeah, definitely dark deeds.