Friday, October 22, 2010

On selloffs

Greg Weston's piece on Michael Fortier's involvement in directing millions of dollars in consulting fees to his friends at Canada's big banks is well worth a read. But lest anybody be under the mistaken impression that the Libs would be any less likely to sell off Canada's public assets while well-connected corporations take a chunk of the value, he also offers up this reminder:
Fortier also had close political ties to two employees of the winning bidders — Rick Byers, then an expert in government privatizations for the Bank of Montreal, and Michael Norris, an equally qualified investment banker at the Royal Bank.

At the time, Byers had been a prominent Conservative fundraiser, organizer and provincial candidate with links to Fortier dating back to the 1998 Progressive Conservative leadership race.

All three investment bankers also worked on Scott Brison’s campaign for the PC leadership in 2003 — Byers and Fortier were his campaign chairmen; Norris was one of the chief fundraisers.

Brison lost the leadership, but defected to the Liberals in time for their 2004 federal election victory. He then became public works minister in Paul Martin’s government.

Almost immediately, Brison announced the new Liberal government wanted to get out of property management and would consider selling off billions of dollars of federal office buildings to private operators.

The first phase of the project was to have been a $3-million study of all federal real estate, followed by a possible sale of buildings.
The project was resurrected when the Conservatives came to power in 2006. Fortier was appointed to the Senate and named public works minister.

Six months later, Fortier’s department awarded a $250,000 contract to two winning bidders — RBC and BMO — to study which federal properties should be sold.

It also gave the two banks the right to broker the actual real estate sales for hefty additional commissions.

The final deal involved nine properties that sold for $1.35 billion and generated about $10 million in commissions: $3.75 million each to BMO and RBC, and another $2.5 million to Deutsche Bank Securities, which was brought in by Public Works to vet the final sales.

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