GTH land deal: Internal email raises new questions about who knew what, when
Highways left in dark for weeks; no one will explain why
One year after CBC's iTeam broke the Global Transportation Hub land deal story, nagging questions still remain about who ordered the controversial transaction, and who knew what, when.
Until now, the province has said cabinet approved the GTH's purchase of the 204 acres from Regina developer Anthony Marquart in its Dec. 18, 2013, meeting.
But an internal GTH email obtained by CBC News shows there's much more to the story — and the government hasn't filled in the gaps.
Government can't say who told GTH to lead purchase
The email reveals that on Dec. 6, 2013, GTH CEO Bryan Richards was told his organization would lead the purchase of the land and then sell some of it to the Ministry of Highways. That's almost two weeks before the Dec. 18 cabinet decision.
What's particularly striking about this is that while Richards was in the loop, Nithi Govindasamy, the deputy minister of Highways, was left in the dark.
Someone had committed his ministry to a purchase without his knowledge or consent.
Govindasamy testified before the province's public accounts committee on Jan. 12, 2016, he wasn't aware anyone was even negotiating with Marquart until Dec. 19, 2013.
But before Highways could pull the trigger, the GTH slipped in and on Dec. 24, 2013, bought the property for three times more: $103,000 an acre.
Marquart, a well-heeled donor to the Saskatchewan Party, made about $5 million on the deal.
As far as who gave direction for GTH to lead the land buying, I am not certain.- Official in Premier Brad Wall's office
So, who gave Richards the heads up but left Govindasamy in the dark?
CBC's iTeam asked Richards.
His office replied by email that "Bryan does not specifically remember who told him the GTH would be leading the purchase."
When CBC asked Premier Brad Wall the same question late last year, he responded, "I don't recall. I'd have to go through the information."
Later his office replied, "as far as who gave direction for GTH to lead the land buying, I am not certain."
However, the spokesperson did offer a hint as to who may have made this decision.
"Issues are brought to cabinet on several occasions as updates and decisions are made around the cabinet table. I assume the same for the situation here," the official wrote.
That's consistent with what CBC's iTeam uncovered when reviewing hundreds of emails obtained through freedom of information.
The documents indicate cabinet, or a cabinet committee, discussed issues related to GTH land transactions no fewer than four meetings in late 2013.
'Clear there was extraordinary co-ordination'
In the provincial auditor's report on the GTH land deal, Judy Ferguson said the government failed to have the appropriate processes in place, failed to do proper due diligence, and paid too much for the land.
The premier has chalked up these failures to a lack of co-ordination. On Nov. 28, 2016, he told CBC the "communication level between arms of government wasn't where it should have been."
However, when examining the role of cabinet in the transaction, Todd MacKay with the Canadian Taxpayers Federation has come to a different conclusion.
A comparison of documents obtained through freedom of information by CBC and the taxpayer advocate indicate cabinet was paying careful attention to this file.
"It's clear there was extraordinary co-ordination," said MacKay. "Members of cabinet were looking at fulsome packages of information routinely."
He noted that it appears then-Minister of Highways Don McMorris and then-minister responsible for the GTH Bill Boyd "were in the same meeting discussing the same purchase."
That's just what internal emails seem to show, though the Premier's office won't confirm or deny details of what happened in cabinet meetings because of confidentiality considerations.
- Oct. 28, 2013: By email, Ministry of Highways officials tell McMorris they've appraised the 204 acres at $30,000 to $35,000 an acre. McMorris' chief of staff tells ministry officials to not approach Marquart until the minister gives the word.
- Nov. 10, 2013: At Boyd's direction, his senior advisor, Laurie Pushor (from the Ministry of the Economy), begins negotiations with Marquart. The Premier's Office was in the loop. But neither the GTH nor Highways officials were told about the negotiations.
- Nov. 27, 2013, cabinet committee meeting: Boyd and Pushor submitted their "GTH Interchange Land Acquisition Proposal" to cabinet's land buying 'due diligence committee.' Boyd and McMorris were on that committee. (Also on the committee in 2013 were Gord Wyant, Donna Harpauer, Jim Reiter, Nancy Heppner and Ken Cheveldayoff.)
- Dec. 3, 2013: Boyd brings an information item to the GTH board meeting: a recommendation that the government buy Marquart's land for $105,000 an acre (later would be decreased to $103,000) and then sell some of it to the GTH.
CBC asked the Premier's Office if that recommendation came from the Nov. 27, 2013, cabinet committee meeting. The Premier's Office hasn't answered that question.
- Dec. 4, 2013,cabinet meeting: Cabinet approves the sale of 145 acres from the GTH to Saskpower for $25 million, giving the GTH enough cash to do the Marquart deal.
- Dec. 6, 2013: Richards is told the GTH will lead the purchase of the 204 acres and sell some of the land to Highways. The deputy minister of Highways says he was unaware of this until weeks later.
- Dec. 11, 2013, cabinet meeting: According to an email from Boyd's chief of staff, the GTH's "land acquisition concept" goes to cabinet on this date.
- Dec. 16, 2013: Pushor writes to Richards, "I understand this will receive final consideration on Wednesday [Dec. 18] and then you can proceed with the offer."
- Dec 18, 2013, cabinet meeting: Cabinet decides the GTH will buy the land from Marquart.
- Dec 19, 2013: The deputy minister of Highways is told the GTH, not his ministry, will lead the purchase.
- Dec 24, 2013: The GTH buys Marquart's land for $103,000 an acre or $21 million.
The Premier's Office hasn't explained why the Ministry of Highways was left in the dark.
MacKay said given this chronology, "it's hard to imagine why nobody told Highways what was going on. It's hard to imagine why Minister McMorris and his office didn't let their deputy minister know what was going on."
"This wasn't a lack of information or co-ordination. This was an informed decision. What we don't know is why they made that decision," he said.
CBC News asked McMorris, who now sits as an independent, to talk about this. He didn't respond to our request.
GTH left Highways in the dark
Richards knew a lot about what was going to happen with that 204 acres weeks before Govindasamy. Yet, there's nothing to indicate he shared that information with Highways, despite having plenty of opportunity.
By Dec 6, 2013, Richards knew:
- The GTH would be buying the 204 acres.
- The GTH would then sell some of the land to the Ministry of Highways.
- Boyd, through his senior advisor, had negotiated a $21-million price with Marquart. Richards learned about this from the information item Boyd presented in a Dec. 3, 2013, GTH board meeting.
- He knew that negotiated price was much higher than the GTH's own appraisal of that land.
If it wasn't incompetence it was because somebody made a decision to keep Highways in the dark.- Todd MacKay , Canadian Taxpayers Federation
Internal emails show that from Dec. 6 to Dec. 17, 2013, Richards and his staff met with or were part of email exchanges with Govindasamy and his staff no fewer than 12 times.
Yet Govindasamy testified to the public accounts committee that at that time, early December 2013, he didn't know any of this.
"If it's really true that Bryan Richards never told Nithi Govindasamy that the GTH was looking at buying that land as well, that's stunning incompetence," said MacKay, though he concedes there's another possible explanation.
"If it wasn't incompetence it was because somebody made a decision to keep Highways in the dark," said MacKay.
In an email to CBC's iTeam, the GTH said Richards "has no recollection of being told to keep information from MHI [Highways]."
'Massive waste of taxpayers' money'
Recall that the ministry had an appraisal that said the land was worth $30,000 to $35,000 an acre, and that would form the starting place for negotiations in its effort to buy or expropriate the property. In other words, the ministry would have begun negotiations with Marquart in the range of $7 million.
MacKay said if Richards had spoken to Govindasamy they may have saved taxpayers millions.
"Given that literally nobody has been held responsible for this massive waste of taxpayers' money, it seems at the very least Mr. Richards either has to provide a more fulsome explanation as to why he didn't tell Highways or the GTH needs a new CEO," said MacKay.
CBC asked the GTH why Richards failed to pass on this information. It responded by referencing the provincial auditor's June review of the GTH land deal. It said: "The auditor determined communication gaps within government and deficiencies in our processes. We accept responsibility for that." And it says in the future it vows to do better.
But MacKay said acknowledging a problem isn't the same thing as explaining why it happened.