The whistleblower who got it wrong

Alana James was convinced that she found serious wrongdoings. James, a relatively new B.C. health-ministry employee in 2012, was sure that contract researchers hired by the ministry had broken the law and misused confidential medical information for personal gain.

former auditor general John Doyle. image: Vancouver Sun

James had been hired to draft and review information-sharing agreements between the ministry and the researchers. But everywhere she looked she found misconduct.

For decades, BC’s health ministry had enjoyed a collaborative relationship with academic researchers on drug safety. For example, one of these researchers Roderick MacIsaac, a PhD student at the University of Victoria, had been reviewing the effectiveness of British Columbia’s new smoking-cessation program. James was convinced that he and others had misused anonymous health records in his research.

Anonymous records such as those found in PharmaNet, stripped of personal details such as names and addresses, had been regularly shared with researchers to evaluate government programs. Investigative reporter Kerry Gold says:

“A record of every prescription dispensed or purchased in the province, PharmaNet is a researcher’s gold mine (Walrus magazine, September, 2019).”

Alana James was so convinced of wrongdoings that she told her boss, Robert Hart. Hart considered James’ allegations misguided. It was his opinion that she didn’t fully understand the complex relationships of those she was accusing, much less the nature of their work. Crucially, she had no evidence of wrongdoing.

James felt dismissed by her boss; she was told “to shut up and go away” in her words. So went over the head her boss to then auditor general John Doyle.

Doyle took James seriously -not because there was any evidence of wrongdoing but because in the previous year a high-ranking health official had pleaded guilty to charges of receiving personal benefits related to a health-records contract he’d awarded to a doctor. The ministry was still smarting from the scandal.

Sensing the possibility of more misconduct, Doyle’s office asked the ministry of health to look into James’s claims. Suspicions from the auditor general gave credibility to James allegations.

Margaret MacDiarmid, the new minister of health, only a day into her job, held a press conference on September 6, 2012, and said that RCMP investigation was underway. This was a big surprise to the RCMP because there was no investigation underway. However, MacDiarmid’s announcement added more weight to James’ claims.

Caught up in the zealous fervour that gripped government, investigators accused Robert Hart, Alana James’ boss, of wrongfully receiving money. Hart didn’t know what they were talking about but he was suspended immediately and escorted from the building. Eventually, he and six others were fired including the student Roderick MacIsaac.

Humiliated, MacIsaac withdrew from his PhD program at University of Victoria. In January, 2013, the introverted forty-six-year-old who had put off his studies to take care of his aging mother through her final stages of terminal cancer took his life.

To get to the bottom of the matter, the government commissioned a investigation by the ombudsperson. The report, called Misfire, began in 2015, took nineteen months to complete and cost $2.41 million. It found no wrongdoing by anyone but by this time lives and reputations had been ruined in the wake of James’ wild claims.

“The episode remains one of the most sensational cases of wrongful dismissal in Canadian history, and it was driven by a set of assumptions that were unfounded and at no point tested—until it was too late,” says Gold.

Footnote: John Doyle completed his term as auditor general in 2013 and went back home to Australia. He hired Alana James, a trained nurse, to care for his chronically ill wife. After the death of his wife, Doyle and James married in Australia where she began graduate work and research at the University of Melbourne.

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Run-of-river has had its run

Former B.C. premier Gordon Campbell’s plan for run-of-river generators was a mistake. It left BC Hydro in debt and with power it can’t use. The NDP government plans to let some of those independent contracts expire.

image: Energy BC –
A 1 MW run of river generator.

B.C.’s auditor general, Carol Bellringer, found that BC Hydro has accumulated $5.5 billion in deferred expense accounts. The government plans to write down $1.1 billion of those accounts on BC Hydro’s books.

While BC Hydro rates will increase, the increase won’t be as much as expected says Minister of Energy Michelle Mungall:

“We were committed to finding the best possible reduction, as much reduction as we possibly could from the existing plan under the B.C. Liberals, and we have looked in every corner to find every penny that we can pinch,” Mungall said at a news conference. “We have found that and were able to reduce the rate increases by 40 per cent (Globe and Mail, February 14, 2019).”

The NDP government has also pledged more oversight over BC Hydro by the utilities commission. That will include less interference by government, I hope.

Lack of oversight is what got BC Hydro in trouble when Campbell decided in 2002 to push his ideology of privatization on BC Hydro. It was a clever move in some respects because he could carve out some of BC Hydro’s public generating facilities to privately run generators while claiming to promote “green power.”

BC Hydro was forced to pay a higher rate for electricity generated which included run-of-river hydro, wind and biomass power.  According to a report commissioned by the government entitled “Zapped,” those contracts are expected to cost the utility $16 billion over the next 20 years.

One problem with run-of-river hydro is that it generates power in the spring when rivers are full and not much in the winter when electricity is needed for heating.

We don’t need all the 131 independent power projects that BC Hydro has signed on to. In the past 12 months, BC Hydro has let three energy purchase agreements expire without renewal and more are targeted.

One of those targeted is with the Hupačasath First Nation on Vancouver Island. They are still in debt from the $14 million investment made in their run-of-river facility in 2005. It was supposed to be a model for Indigenous clean-energy opportunities. Now, BC Hydro says it may not renew the contract in 2025 – just as the project is expected to finally deliver profits to the community.

The NDP will face a lot of flack by changing the course of BC Hydro, including protests from some Indigenous communities, from conservatives like the BC Liberals who believe that private companies can do a better job, and from environmentalists who think small is beautiful and that BC Hydro is a corporate monstrosity.

It makes sense to me that a public utility can deliver electricity at a cheaper rate than a private one because no profits go to external shareholders. We are the shareholders of BC Hydro and barring government interference, we should be the beneficiaries. It’s our dam power.

BC Liberals suppressed Hydro rate hikes

For decades, B.C. governments have hidden the true cost of Hydro rates -especially the BC Liberals.

image: Common Ground

Under the direction of the BC Liberals, the Crown utility used “inappropriate” accounting to pile $5.5-billion in what are known as deferral accounts says B.C.’s auditor-general.

“That debt amounts to $1,300 for every residential customer, more than $10,000 for each commercial and light industrial ratepayer, and almost $5-million for each large industrial consumer,” according to the Globe and Mail, February 7, 2019.

Deferral accounts are not improper when correctly accounted for. They can be used as a temporary measure to avoid the shock of sudden rate hikes. After rates are gradually increased, the deferral account can be paid off.

But that’s not what happened. To keep voters happy and to make governments popular, BC Hydro rates were kept artificially low leaving future governments to deal with the problem of billions hidden in deferral accounts.

“BC Hydro was not allowed to charge its customers enough to cover its operating costs each year,” Auditor-General Carol Bellringer wrote.

The current minister responsible for BC Hydro, Bruce Ralston, said his government is committed to fixing the problem but it will take time given the size of the debt. “We are going to keep rates affordable. No one’s rates are going up by $1,300 in a year.” His government has already reduced the deferral accounts by $950-million by bringing that debt onto government books.

The NDP government also intends to prevent misuse of deferral accounts by future governments by restoring the role of the independent regulator, the BC Utilities Commission (BCUC) and ensuring that BC Hydro adopts ordinary accounting practices.

Industries who are used to cheap hydro are not happy with the prospect of paying the real cost of producing electricity. Industry representative Richard Stout says industrial customers shouldn’t absorb the shock of getting Hydro back on sound financial footing. Since the government is responsible for the mess, they should pay:

“I think most would agree the appropriate source of paying down the debt should be from government, rather than the ratepayer.”

Huh? He wants taxpayers (the government) to pay for the meddling of former governments rather than ratepayers? Last time I looked Hydro users and taxpayers were one and the same.

Critics of BC Hydro will point to the debt incurred in building the massive hydro dam at Site C as an additional source of the problem. The project was started by the BC Liberals and given green light by the NDP who said the project had gone too far to abandon.

The government is faced with a hard choice, says Bellringer: “You can either have a rate increase or you can end up with a deficit that ends up getting covered by the government at some point.”

Hiding Hydro debt, which in reality is our debt, is not an option.

Transferring BC Hydro’s debt to the government’s books is the right thing to do but government debt is not popular with voters because it’s visible. Turning control of BC Hydro over to an independent regulator is the right thing do but hydro rates will go up.

We’ll see if doing the right thing pays off for the NDP in the next election.