CBC Investigates

U of C staff suspected Michigan partnership was for Enbridge PR

If the University of Calgary wanted to secure Enbridge funding for a new research centre, it suspected it had to give the pipeline company good publicity south of the border.

Enbridge Centre director warned deal with Central Michigan University might be viewed as 'payoff'

A Canada goose covered in oil attempts to fly out of the Kalamazoo River in Marshall, Mich., in July 2010. An estimated 3.3 million litres of oil leaked from an Enbridge pipeline into the river, coating birds and fish. (Jonathon Gruenke/Kalamazoo Gazette/AP Photo)

In securing corporate funding from Enbridge for a new business school research centre, the University of Calgary was expected to help the pipeline company receive good publicity south of the border. 

Documents obtained as part of a CBC investigation suggest Enbridge wanted to fund the centre, but have the university partner with Central Michigan University, presumably to give the company some positive attention in the American state.

In July 2010, a broken pipeline released more than three million litres of oil affecting 60 kilometres of the Kalamazoo River and Talmadge Creek near Marshall in southern Michigan. It remains one of the largest inland oil spills in U.S. history. 

Enbridge wanted to announce the deal on the first anniversary of that spill. The centre's director presumed the goal was to maximize the company's public relations value.

The director also described the partnership as offering little academic value. However, at the expectation of Enbridge, the U of C reached out to CMU.

Dean OK 'if CMU is the price we pay'

The U of C signed a deal guaranteeing it would give CMU annual funding and host guest lectures. In return, the U of C was able to webcast some seminars from CMU. 

The fact that  Enbridge  had a spill in Michigan and now wants to use this investment as a way to make amends and possibly receive some positive PR is acceptable.- Kim Kadatz of   Haskayne  School of Business

The dean of the Haskayne School of Business, Leonard Waverman, was OK with the partnership, despite hearing concerns from the centre's director.

Waverman wrote in an email, "If CMU is the price we pay in the short run — that's the price."

Centre director worried CMU pairing 'contrived'

Joe Arvai, the director of the proposed Enbridge Centre, spoke out repeatedly about the decision as he saw little value in partnering with the Michigan university. Even when he began working with CMU, he still had reservations.

Crews clean up oil captured by booms placed in the Kalamazoo River near Talmadge Creek in Michigan. (Paul Sancya/Associated Press)

"My strong concern is that people will view the relationship with CMU as somewhat contrived," writes Arvai in an email to Dan O'Grady, Enbridge's national manager for community partnerships and investment.

"To be blunt, some will view this as a 'payoff' of some sort to CMU in the aftermath of the spill in Marshall." 

Arvai, who no longer works at the U of C, argued the centre's reputation was already on the line before the doors even opened.

When Waverman learned of the email, he appeared frustrated. The dean thought it could jeopardize the entire deal with Enbridge. 

"I am tired of dealing with Joe [Arvai] — Elizabeth [Cannon, the university president] will have a fit if she sees this," wrote Waverman in an email to Kim Kadatz, the director of development for the Haskayne School of Business.

Kim Kadatz worked to establish the Enbridge Centre through her job as director of development with the U of C's Haskayne School of Business. (LinkedIn)

Arvai had other complaints including that Enbridge had too much control in changing the name of the centre, its focus and the launch date. The pipeline company also had influence over staffing of the centre.

Kadatz told Arvai every time he raises concerns about CMU with Enbridge, it shows the U of C is not committed to its partnership with the company.

"The fact that Enbridge had a spill in Michigan and now wants to use this investment as a way to make amends and possibly receive some positive PR is acceptable," wrote Kadatz.

Was CMU a deal-breaker?

In an e-mail conversation between U of C officials, titled "confidential," Enbridge is described as choosing CMU as the partner for the centre because CMU gave "very valuable advice on the [oil spill] situation they were dealing with in that state last summer."

Kadatz appears to confirm the partnership with CMU was insisted upon by Enbridge.

"As far as in your words 'telling the truth that the CMU partnership was a condition of the deal,' we would never communicate in this way to the media," wrote Kadatz to Arvai.

Enbridge wanted representatives from CMU to be invited to the centre's launch and to sit on the centre's board. While Arvai took exception to Enbridge's demands, the dean told Arvai to keep quiet.

"This is jeopardizing our relationship with Enbridge," said Waverman in a private voicemail message to Arvai. "Elizabeth [Cannon] is going to take my head off and you are simply too pushy and too sensitive to this CMU thing. I don't understand it, you're causing me grave difficulties."

Enbridge denies partnership was 'public relations'

In an interview, Enbridge says it wanted to have the partnership between the two universities to have a shared learning experience about the company's spill in Michigan.

"This wasn't a public relations exercise, this was really about an opportunity to learn from this experience and, through Central Michigan University, further those studies," said D'Arcy Levesque, vice-president of public and government affairs with Enbridge.

Enbridge's D'Arcy Levesque said the company wanted to have the partnership between the two universities to have a shared learning experience about the company's spill in Michigan. (Kyle Bakx/CBC)

Levesque disagreed with the notion Waverman only went along with the CMU partnership to ensure the company wouldn't pull its funding for the Enbridge Centre.

"I'm not going to apologize for the fact that both the dean here in Calgary and the dean at Central Michigan University thought it was a good idea," said Levesque. "The fact that Mr. Arvai may not have supported the project quite frankly is irrelevant."

Originally, Enbridge had wanted the U of C to partner with the University of Northern British Columbia, but the institution was unresponsive to Enbridge. UNBC is located in Prince George, the same location where Enbridge has an office for its proposed Northern Gateway pipeline.

U of C president Elizabeth Cannon did not offer an explanation why the university only looked to partner with the two post-secondary institutions suggested by Enbridge. She did say the oil spill in Michigan provided an educational opportunity.

"I think from that there's a lot of learnings that can be done and what better place to have those learnings on business processes, decision making, and so on, than our business school," said Cannon. 

"Did it result in collaborative research? I can't speak to that," she said. "But we have to hold our academic leaders accountable for these types of decisions. So I can't comment about whether it was good or bad."

Waverman, who left the U of C in late 2012 to become dean of McMaster's DeGroote School of Business, declined an interview request.

According to the agreement signed between Enbridge and the university, the U of C would provide $1,500 annually to CMU to host a seminar series and an additional $2,500 annually for a student scholarship. As part of the agreement, CMU had pledged to broadcast some of its seminars at the U of C through webinar technologies.

The sustainability unit at CMU was made up of one academic.

If the U of C was looking to partner with an institution with a sustainability centre or program, besides CMU, it could have looked at other Canadian universities such as the University of British Columbia, York University or Dalhousie University.

Tom Rohrer, the director of the Great Lakes Institute for Sustainable Systems at CMU did not return our request for an interview.

Last fall, Enbridge's name was taken off the University of Calgary's centre. It is now just the Centre for Corporate Sustainability.

Under a revised agreement, the company also dropped its funding to the school by $1 million. Enbridge continues to sponsor the centre's seminar series, as well as arrangements with several other university departments. 
An email message provides details about why the U of C decided to partner with CMU.

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