COVER

THE DECLINE AND THE FALL

THE PREMIER ENDS FIVE STORMY YEARS

PEETER KOPVILLEM April 8 1991
COVER

THE DECLINE AND THE FALL

THE PREMIER ENDS FIVE STORMY YEARS

PEETER KOPVILLEM April 8 1991

THE DECLINE AND THE FALL

COVER

THE PREMIER ENDS FIVE STORMY YEARS

Scandal piled upon scandal, revolt succeeded revolt, resignation followed resignation—it was an awesome spectacle played out in a single term in office. And each time, William Vander Zalm talked tough and fought back. But each time, he also slipped a little further in the polls, and his Social Credit party eroded a little more beneath him. Finally, late last week, it became clear that the pressures had become too great. The premier of British Columbia—elected in 1986, facing another election to be called by the end of the year, trailing the opposition New Democrats, and himself the subject of three separate investigations into his conduct in office—had run out of fighting room. In a succinct, four-minute statement at a Good Friday news conference in Vancouver, Vander Zalm, a handsome and still boyish-looking 56, announced that he would step down after a leadership convention to be held “as soon as possible.” His trademark grin appeared forced as he briefly fielded questions. Then he turned and, with his parting words—“I certainly wish you all a happy Easter”—trailing after him, he was gone.

Bitter: Vander Zalm’s fiveyear term was as stormy as the ocean. But the immediate chain of events that culminated in his resignation began on Sept. 7, when Vander Zalm and his wife,

Lillian, sold Fantasy Gardens, their 21-acre biblical theme park, botanical gardens and mall in Richmond, B.C., to Taiwanese billionaire Tan Yu. That $16million transaction quickly embroiled the premier in a whirlwind of accusations—of not telling the truth in earlier statements that he had handed over control of the business to his wife, and in saying that he was not involved in the sale; of taking advantage of his office for business purposes; of accepting a real estate commission in contravention of provincial regulations. Vander Zalm rejected the implications. But by last month,

the pressure had become intense. The RCMP was investigating Vander Zalm’s business affairs as a result of accusations of impropriety by Faye Leung, the real estate agent in the Fantasy Gardens sale. A special prosecutor overseeing that inquiry also was reviewing alleged liquor act violations at Fantasy Gardens. And B.C. conflict-of-interest commissioner Edward Hughes reviewed the premier’s involvement in

the sale. His report was due this week.

Still, Vander Zalm continued to insist that he had done nothing wrong. Responding to a reporter after his Good Friday statement, he made it clear that he was bitter about news coverage of the Fantasy Gardens sale. Said Vander Zalm: “I’m sure if anyone else had sold a family business, you wouldn’t even care about it. You wouldn’t be questioning it for one

moment.” But it was clear that the weight of the ongoing investigations had tilted the political balance against him. “We all knew that this was inevitable, but I am saddened that it came to this for the premier,” declared veteran Socred MLA Grace McCarthy, who now may become a candidate in the leadership race to succeed Vander Zalm (page 30). Added McCarthy, who resigned from the provincial cabinet in 1988 over Vander Zalm’s leadership: “This is not the best way to leave public life.” In the eyes of some critics, the manner of Vander Zalm’s leaving was not the best way to ensure that the embattled Social Credit party has a chance of success in the next provincial election. If, as he plans, Vander Zalm stays on as leader until a convention, he will continue to provide an easy target for the opposition New Democrats and their leader, Michael Harcourt, now leading the Socreds by as much as 15 percentage points in public opinion polls (page 28). Said McCarthy: “I had hoped that we could have started a clean, new page—rather than carry the baggage of the past few years.”

But until last week, Vander Zalm had fiercely resisted suggestions that he resign, even from his own cabinet. In one emotional encounter in early March, Rita Johnston, the minister of transportation, deputy premier and a longtime Vander Zalm loyalist, told him privately that the Fantasy Gardens scandal was quickly destroying whatever hopes the party still had for re-election.

Stubborn: But stubborn reliance on his own judgment—and convictions—has been Vander Zalm’s trademark. A native of Holland who came to Canada with his family at the age of 13, Vander Zalm first ran, as a Liberal, in the 1968 federal election. He was unsuccessful and switched to the Socreds in 1974 after serving as mayor of Surrey, on the southeastern outskirts of Vancouver. In the 1975 provincial election, he won the riding of Surrey, and was appointed human resources minister by thenPremier William Bennett.

It was the first of many cabinet positions for Vander Zalm. But he quickly developed a reputation as a maverick. After first being sworn in to the cabinet, he complained about able-bodied welfare recipients, declaring: “If they don’t have a shovel, they should get one, because otherwise we’re going to give them one.” That tendency to shoot from the lip extended to politicians on the national stage. In 1979, a song that Vander Zalm wrote and then performed for a party gathering contained the line “When out of the east came the sound of a frog”—a reference to Quebec Premier René Lévesque.

Fellow cabinet ministers also found them-

selves subject to Vander Zalm’s outspokenness. In July, 1982, the government adjourned the legislature without passing a contentious land-use bill. Vander Zalm, who as municipal affairs minister had introduced the legislation, criticized his colleagues as “gutless.” That statement left Vander Zalm isolated within cabinet and the Socred establishment. And on April 1,1983—also a Good Friday— he resigned from both cabinet and the legislature. A year later, he and his wife purchased Fantasy Gardens for $1.7 million.

Two years later, when Premier William Bennett retired, Vander Zalm returned to politics to seek the party leadership as an outsider. In his July 30, fourth-ballot victory, he mounted an appeal to grassroots Socreds and defeated 11 other candidates that included four members of the Bennett cabinet and current federal Justice Minister Kim Campbell.

The Vander Zalm government attempted to present a united front. But almost immediately, there was trouble at Fantasy Gardens. Only days after Vander Zalm was sworn in as premier, a B.C. government agency approved a rezoning request that raised the assessed value of a portion of the site to $4.9 million from $800,000. New Democrats reacted with outrage and allegations of conflict of interest. But the accusations failed to dent the new premier’s popularity—as the outcome of the October, 1986, provincial election quickly made clear. With Vander Zalm portraying the NDP as spendthrift socialists who would bankrupt the province, the Socreds surged to an overwhelming victory, increasing their representation in the newly expanded 69-seat legislature to 47 seats from 32—while the NDP increased their standings by only one seat, to 22.

Early: But Vander Zalm’s postelection honeymoon was short-lived— with both the electorate and the party faithful. A string of cabinet resignations over alleged conflicts of interest contributed to the erosion of Socred support in the polls. More damaging were the early and persistent rumbles of an incipient revolt against Vander Zalm within his own party. First, in June, 1988, Brian Smith, who had placed second in the leadership campaign, resigned as attorney general— condemning the premier for interfering with his duties. A week later, McCarthy, who had become economic development minister, followed—citing much the same reasons. Vander Zalm attempted to ignore the wave of dissent. But by October, 1989, the party had fallen eight percentage points behind the NDP. At an emergency caucus meeting that month, Vander Zalm’s own ministers told him that the party would not survive another election with him at the helm. Still, the premier refused to step down.

Less than a year later, Vander Zalm announced the sale of Fantasy Gardens. The sale was concluded at the end of a visit by the purchaser and his daughter to British Columbia, during which they received a red-carpet reception from the B.C. government—including an elegant lunch with B.C. Lt.-Gov. David Lam. The NDP accused Vander Zalm of using

provincial hospitality to promote private business transactions. Vander Zalm denied any such connection. He claimed that the sale had been handled by his wife, who, he said, was the majority shareholder in Fantasy Gardens. That last assertion was challenged when The Vancouver Sun revealed that the premier himself

remained the majority shareholder—with 83 per cent of the stock—in a Fantasy Gardens holding company. The premier responded that he was guilty of “stupidity” for not knowing his precise stake.

Meanwhile, the fuse was ticking on a bombshell. In February, as part of her defence in an unrelated civil suit, Leung filed a suitcase of

documents with the B.C. Supreme Court. Included among them were papers bearing Vander Zalm’s signature, indicating that he had been intimately involved in the Fantasy Gardens sale—and contradicting his own assertions that his wife had handled the negotiations alone. The documents also included an Aug. 26 letter from Lillian Vander Zalm to Tan Yu, in which she assured the Taiwanese businessman that “my husband, the Premier, has arranged for meetings with Government Ministers regarding the establishment of a new bank in British Columbia or the takeover of an established bank.” On Sept. 6, the day before the Fantasy Gardens sale, Tan Yu in fact met with then-Finance Minister Melville Couvelier and senior finance department officials.

Brief: The premier attempted to shrug off the uproar over Fantasy Gardens. But he could no longer ignore accusations that he had used his position to arrange business access to his ministers. In response, he handed £ the matter over to Hughes on Feb. 14. I But any hopes that he may have held “ for a brief respite from attacks quickly I disappeared. On March 6, Couvelier “ shocked the party by resigning, ex| plaining that he had been unable to g convince Vander Zalm that it would be o improper for the premier to remain in " his position while Hughes conducted the inquiry.

Meanwhile, Leung’s suitcase of surprises produced other problems for the premier—including a supplement to the Fantasy Gardens deal handwritten by Vander Zalm himself. It called for commissions on the sale of land adjacent to the Vander Zalm property—which Vander Zalm did not own—to be split equally between Vander Zalm’s company and Leung. Under British Columbia’s Real Estate Act, it is illegal for anyone other than a real estate agent to collect commissions. Leung raised the pressure on Vander Zalm even further when she alleged publicly that the premier accepted $20,000 (U.S.) in $100 bills as an advance on commissions that the two were to split.

Edited: Then, on March 18, Leung released edited tape recordings of two telephone conversations that she said she had held with the premier on Dec. 3 and 4. On the tapes, Leung referred to the cash advance. “Well, the $20,000 cash I even turned over to you, I was supposed to hold it in trust,” Leung said on the tape. Replied Vander Zalm: “Oh, that’s in trust. No problem.”

Meanwhile, the premier had come under siege on other fronts. Amid widespread rumors that Vander Zalm was under police investigation, Attorney General Russell Fraser confirmed on March 21 that the RCMP’s commercial-crime unit was looking into Leung’s allegations. Two weeks earlier, Fraser added,

his deputy minister had appointed a special prosecutor to oversee the police investigation and look into possible liquor act violations at Fantasy Gardens. Those investigations, coupled with the impending release of the Hughes report, clearly convinced Vander Zalm that he had to take decisive action.

The next election will tell whether time also has run out for the Social Credit party. Resignations within the Socred hierarchy over Vander Zalm’s leadership have left the party severely weakened, while a string of successive byelection losses to the NDP since June, 1988, has reduced the Socred caucus to 43 seats, compared with 26 for the NDP. Indeed, many experts are dubious about the party’s chances of rebounding before the next election. Said political scientist Paul Tennant, of the University of British Columbia: “Maybe there will be a transformation under a new leader—but that would be pretty close to a miracle.”

Others, though, would not rule the Socreds out. Noted Donald Blake, another UBC political scientist: “There are a lot of people out there who were not particularly enthusiastic about knocking on doors with Vander Zalm as leader. With a new leader, a considerable number of them will come back.” And some Socreds say that the party will then be able to concentrate on one overlooked aspect of the past five years: the government’s legislative achievements. Noted Tennant: “There have been major accomplishments under Vander Zalm—but they have to a large extent been obscured by his style.”

Healthy: In fact, the Socred government has presided over a healthy provincial economy that appears to be weathering the recession better than other areas of the country. It has also gained a reputation for fiscal responsibility—largely due to Couvelier’s efforts. And Tennant, for one, pointed to other Socred accomplishments, among them a more equitable redrawing of the province’s electoral boundaries and an education bill that reformed the public school curriculum and provided students with a greater choice of disciplines. But that record is not without weak points. Among the most recent controversies: a pension plan for doctors, announced in February, that has resulted in widespread public criticism. The Socred drive for balanced budgets may also spell trouble. In March, the government pushed through its 12-point Taxpayer Protection Act, which froze taxation rates, as well as promising balanced budgets for the next five years. That promise, in turn, has raised the possibility of future cuts to government services and programs.

Still, freed from Vander Zalm’s shadow, the Socreds may indeed have reason to be hopeful. But, noted Couvelier last week, “He has left us precious little time.” Indeed, that may be Vander Zalm’s final, ironic legacy to his party. By announcing only his intention to resign, he once again delayed his actual departure—and may in the process have weakened his party even more.

PEETER KOPVILLEM with HAL QUINN and JOHN PIFER in Vancouver

HAL QUINN

JOHN PIFER