Canada Cover

FALL OF A SCRAPPER

Glen Clark protested his innocence. But a criminal investigation into a casino deal forced him to resign.

Jennifer Hunter August 30 1999
Canada Cover

FALL OF A SCRAPPER

Glen Clark protested his innocence. But a criminal investigation into a casino deal forced him to resign.

Jennifer Hunter August 30 1999

FALL OF A SCRAPPER

Canada Cover

Glen Clark protested his innocence. But a criminal investigation into a casino deal forced him to resign.

Jennifer Hunter

In the spring of 1996, Glen Clark was British Columbia’s golden boy, a 38-year-old street-smart politician from Vancouver’s scrappy east end who led the New Democratic Party to a stunning victory. He cast himself as a feisty populist and promised jobs and megaprojects.

But things soon began to unravel: there was the misleading quality of the province’s election budget; expensive schemes, such as the fast ferries, went awry; jobs evaporated; key cabinet ministers resigned. Still Clark, the working-class guy with a hide of steel, managed to tough it out. What finally brought the premier down was a very small project: a deck built in his backyard by a neighbour, Dimitrios Pilarinos, another east-end guy trying to get ahead by seeking a licence for a charity casino from the province “his friend” the premier ran. That small deck led to a series of astounding events that spun out of Clark’s control: beginning with a police raid on his home on March 2 and concluding with a mounting political crisis that forced his resignation on Saturday.

Still, an unrepentant and cocky Clark went out on Aug. 21 with a typical bravura performance on a sunny Victoria after-

noon. He called the charges against him “scurrilous and unfounded allegations” and said he fully expects to be exonerated. The third B.C. premier since 1991 to be forced from office under a cloud, Clark told a news conference that ever since police searched his home he felt he might have to resign. But he maintained his only fault was not recognizing his friendship with Pilarinos would be distorted in “a despicable” manner. “The neighbourhood for me has been a bit of a refuge from politics,” said Clark, who lives in a modest East Vancouver I home. “The challenge is, as premier, ‘can you § continue that kind of arrangement?’ and I I think now that is probably not possible.”

Clark’s resignation leaves the governing NDP in the fourth year of its mandate without an obvious successor and trailing Gordon Campbell’s Liberal party badly in opinion polls. Clark says he intends to stay on as MLA and, jokingly, didn’t rule out joining someone else’s cabinet if the special prosecutor clears him of wrongdoing. He said it was only 10 days ago that he found out what was behind the March raid of his home. But when B.C. Attorney General Ujjal Dosanjh announced on Friday that “the premier is under criminal investigation,” British Columbians knew the end was near. The RCMP, it emerged, had kept Clark under scrutiny for seven months, trying to

determine whether he used his influence to shepherd Pilarinos s controversial casino application through the right government channels.

Dosanjhs stunning announcement followed a decision earlier that day from B.C. Supreme Court Justice Patrick Dohm to allow much of the search warrant material used in the RCMP raid on Clarks home to be made public— everything except information gathered by wiretaps, ffe also refused Clarks request to quash the search warrant on his house, saying there was enough evidence for police to believe documents relating to the casino licence could be found at his residence. The police were trying to learn whether Clark had received a benefit—the construction of a deck valued at $16,000—from Pilarinos—“as consideration for co-operation, assistance, exercise of influence” in obtaining cabinet approval for a licence. Clark told his news conference that he paid in full for the deck and wrote three cheques for it.

But Fridays revelation of the lengthy criminal probe— and the fact that Clark had vastly understated his friendliness with Pilarinos—left NDP loyalists reeling. “People are shocked by this,” said BillTieleman, Clarks former press secretary. “Clark has always said he was not under criminal investigation.” Caucus members felt they had been misled by the premier about his relationship with Pilarinos. He had originally described him as “a neighbour of mine, we see each other occasionally, our children attend the same school and they play together.” Later, it came out that not only had

Pilarinos built the deck on Clarks residence, he had vacationed at the Clark family cabin near Penticton, and had constructed another deck there. Last Feb. 17, police spotted Pilarinos leaving the North Burnaby Inn, the site of the proposed casino, and driving to Clarks house. That was the same day Pilarinos learned that the casino licence for which he and his partner, Steve Ng, had received conditional government approval might go up in smoke. Unknown to Pilarinos, the RCMP was watching his movements and they noted that he arrived at Clarks home at 5:51 p.m. carrying a piece of white paper and left three minutes later. At 8:45 p.m., Clark went to Pilarinos’s home and stayed for more than half an hour. All told, Pilarinos and Clark met at least 12 times over the five-week period of police surveillance in January and February of this year. At one point, on Feb. 25, Pilarinos came to Clark’s house with a stack of papers and stayed for almost an hour. On Saturday, Clark dismissed any sinister reading of the visits and said the two neighbourly families, with their children, regularly went back and forth.

The police monitoring of Pilarinos and his partner Ng started last January after an informant began to circulate allegations that Clark had assisted Pilarinos in obtaining a conditional charity casino licence for the North Burnaby Inn that would have 300 slot machines and 20 gaming tables. The informant was Dimitris Vrahnos, a Revenue Canada employee who Pilarinos asked to help fill out the casino application forms. Pilarinos, Vrahnos suggested, was not going to put up any money but would receive a 30-per-cent stake in the casino profits “as a result of his contribution of Clark’s support.” The informant also said that Clark had been offered a 15-per-cent stake in the operation but turned it down. “That’s not what I do it for,” Clark is reported to have said. According to Vrahnos, Pilarinos tried to thank Clark by building decks on his home and cottage at little or no charge. But, Vrahnos added, Clark may not have solicited the construction and may have been an unwitting “dupe” in Pilarinos’s scheme. Still, in a memo that went to the Liberals, Vrahnos wrote that Clark “had personally reviewed” Pilarinos’s casino application and was doing his utmost to manoeuvre it through government channels. Clark dismissed that allegation, suggesting that he had only helped Pilarinos direct his application to the right people, the way any MLA would help a constituent.

In the conspiracy theory, Clark was allegedly trying to bypass the gaming commission and take the issue direcdy to the cabinet because the application scored very low points in an assessment and would not likely receive the nod from gaming officials. “The premier was involved with trying to raise the numbers and to try to find a way to get it passed by

The premier said he paid for the deck in three instalments, denying that Pilarinos had done the work for nothing

the cabinet,” the informant said in the memo that was part of the search warrant material. (The Pilarinos/Ng group received only 46 points out of 100—the lowest among the 10 casinos approved at the same time.)

Although the police decided that some of Vrahjios’s information was not true, they accepted much of it.

The Pilarinos/Ng application was given provisional approval by Clarks cabinet on Dec. 17, 1998, despite its low points and vociferous objections from Burnaby city council. Under provincial gaming policy, local municipalities must approve the location before a casino licence can be issued. Burnaby councillors rejected the Pilarinos/Ng proposal on Hastings Street in favour of an alternative site on Halifax Street in another part of town. According to police, when Pilarinos and Ng realized their casino would never win the endorsement of the Burnaby council—even after they had the provincial go-ahead—they tried to buy the Halifax Street property. They then asked the minister responsible for gaming, Mike Farnworth, to approve a change of site. On Feb. 17, the same day the police observed the comings and goings between the Pilarinos and Clark residences, Farnworth had sent the group a fax rejecting the change, saying it would amount to too great a divergence from the original application.

RCMP interviews with Steve Letts, director of the gaming audit and investigation office—which checks out casino

applications before they are approved—show he was extremely concerned about the propriety of giving the Pilarinos/Ng application the green light well before the Farnworth letter, indeed well before the cabinet gave its conditional approval. It was unclear to the gaming office who else might be partners in the project. “From the beginning, it became apparent that some of the people involved had criminal records and one of the operators was involved in a strip club,” said Letts. “In terms of integrity and public perception, the gaming audit and investigation office would have difficulty in approving an application that had such associations.” The strip club Letts referred to is owned

Downfall o' a premier

Oct., 1997 A numbered company owned by Dimitrios Pilarinos, a neighbour of the premier, and Steve Ng, a hotel owner, applies for a licence to operate a casino in Burnaby.

Dec. 17 A building permit is issued

to Pilarinos for the premier’s home. July 14, 1998 A new deck, valued at $16,000, is completed.

July 17 A memo from an aide notes the premier is to be kept out of the casino decision.

July 29 The casino case goes to the cabinet.

Aug. 26 Burnaby’s mayor tells the cabinet the city will reject the application.

Sept. 3 An informant gives the Liberal office damaging allegations, which are passed on to the RCMP Mid-Oct. The gaming audit office begins an investigation.

Dec. 17 Minister Farnworth announces licence approval in principle; the Burnaby mayor again says no. Jan. 11, 1999 Gaming officials receive fax from Vancouver Sun and informant suggesting improprieties.

by North Burnaby Inn owner Ng who also runs a hotel in Vancouver’s seedy Downtown Eastside.

The anonymous informer also told police the North Burnaby Inn “is a major gambling and minor drugdealing operation. ” Police estimated there was $ 100,000 floating in the club every day, including cash in the till and chips on the table. So, while the RCMP was investigating the Pilarinos/Ng licence bid, they were also looking into allegations of illegal gambling at the inn.

One officer reported buying drugs from a bartender and Pilarinos was eventually charged with being found in an illegal gaming house.

At the gaming audit office, Letts told the RCMP that he advised Mark McKinnon, executive director of the government’s gaming policy secretariat, that the audit group was having “some difficulty” with the Pilarinos/Ng application and his recommendation “would be to hold off on it.” Letts was stunned when McKinnon told him in early December, 1998, that the application would be approved by the cabinet in a few days.

Later, after Ng and Pilarinos applied to change the location of their casino, Letts learned that one of the premier’s assistants, George Ford, had summoned McKinnon to his office twice. McKinnon gave Letts few details of his meetings with Ford, but did say he was “receiving pressure from politicians why there was no approval for the move.” After the Ford meetings, McKinnon decided “to put an end to the request for a change of location” which led to the Farnworth letter on Feb. 17.

In his allegations, informant Vrahnos said Clark paid little or nothing for the decks constructed by Pilarinos. In their application to quash the search warrant, Clark’s lawyers said the premier paid for the costs of the backyard deck in instalments but “near the completion of the project, Mrs. Clark gave a cheque in the amount of $5,000 to Mrs. Pilarinos to give to Mr. Pilarinos. Mr. Pilarinos, however, ripped up the cheque and told the premier that he did not owe him that much money. As a result, the premier had a hunting knife made by an Indian chief and gave that knife

to Mr. Pilarinos.” That is a different account than the premier gave at his parting news conference. The deck cost the Clarks approximately $11,000, the premier said; the city assessed the work at over $16,000.

The details in the search warrant material—which reached almost 100 pages—quickly fuelled a political fury. Liberal Leader Campbell claimed the NDP “have been focusing on trying to cover up this seemingly deep corruption that flows through the entire government.” And it has made stalwart NDPers worry about the future of the party. “You don’t have to be a rocket scientist to see that when the party is 14 per cent in the polls that it’s all over,” said Tieleman.

Within hours of Clark’s resignation, the caucus announced that Energy and Mines Minister Dan Miller, 54, would become interim premier. The party is hoping to hold a leadership convention by mid-November.

Attorney General Dosanjh and Finance Minister Gordon Wilson are almost certain to seek the party leader-

Jan. 15 The RCMP interviews senior gaming official; surveillance begins. Jan. 15, 16, 17 and 23 Police surveillance of Clark and Pilarinos meeting. Early Feb. The premier’s aide summons a gaming official twice to inquire about application.

Feb. 14 Wiretaps are authorized.

Feb. 17 Minister rejects approval for change of site; Pilarinos and Clark meet three times.

March 2 Thirteen search warrants are authorized, including one for the premier’s home.

March 16 Police search Clark’s office in Victoria.

July 23 Clark’s lawyer files an application to quash the search warrant. Aug. 20 The publication ban on the search warrants is lifted; the attorney general reveals that Clark is under criminal investigation.

The NDP will choose

a new leader in November with time running out on the party’s mandate

ship. Former finance minister Joy MacPhail and populist Agriculture Minister Corky Evans are also considered potential candidates (page 17). But who really wants the leadership of a dispirited and unpopular party that seems destined to suffer crushing defeat in the next election—especially when reverberations from this affair are far from over.

In six weeks, the RCMP are expected to hand in the results of their investigation to a special prosecutor who will determine if charges should be laid against any of the players in the drama. David Gibbons, Clarks lawyer, main-

tains his client’s innocence and says he will appeal the judge’s decision regarding the quashing of the search warrant. The province’s conflict of interest commissioner is also pursuing an investigation that could touch on how other cabinet ministers dealt with the casino application.

Clark himself took over the party in February, 1996, after former leader Mike Harcourt resigned, taking the heat for another party scandal involving a charity bingo, the so-called Bingogate affair. Clark, with his scrappy personality and workingman roots pulled off the seemingly impossible by winning re-election in June, 1996. Hardly anyone believes the NDP can pull that rabbit out of the hat again.

Paul Willcocks