'We urgently need an immediate moratorium on any further privatization deals.' - George Heyman, BCGEU
Victoria (29 April 2008) - In a scathing review of one of British Columbia's flagship privatization schemes, B.C.'s Auditor General has identified critical lapses by the Campbell Liberals, calling into question the financial case to justify privatization in the first place.
The case involves the U.S. multi-national EDS (Electronic Data Systems Corp.) and the collection of provincial revenue.
"We are almost halfway through more than $1 billion in long-term privatization deals, and now Auditor General John Doyle suggests that the Gordon Campbell government may be making inaccurate or incorrect decisions about outsourcing important services," says George Heyman, president of the B.C. Government and Service Employees' Union (BCGEU/NUPGE).
"We urgently need an immediate moratorium on any further privatization deals until all of the outsourcing deals inked since the Liberals took office are put under the microscope," Heyman says.
At the heart of Doyle's review is the 2004 deal between the Campbell government and EDS that saw the U.S. multinational take over provincial government revenue collection services. His report offers several key findings:
- The Campbell government, lacking basic baseline financial data, entered into a one-sided deal with EDS that gave the U.S. multinational the opportunity to reap windfall profits.
- The lack of basic information "can also lead to the wrong decisions being made on whether to outsource at all."
- The government low-balled the costs of negotiating privatization deals and ongoing contract management requirements, making the privatization appear more appealing.
- As a result, there is an immediate need for conflict of interest guidelines governing privatization.
"We were greatly alarmed to learn about the windfall profit opportunities and shocked to learn for the first time that the Campbell government secretly extended the revenue collection contract for another two years in order to close the windfall profit loophole," says Heyman.
He urged the auditor general to go one step further and couple his call for tough conflict of interest protection with a two-year ban on political contributions from any of the companies involved in the privatization bidding process.
Elections B.C. reports show that the Campbell Liberals have received political contributions from many of the companies that won contracts or that submitted bids. NUPGE
More information:? B.C. opens private bank and credit data to U.S. scrutiny