Depending on who you talk to, Wiebo Ludwig and Richard Boonstra are either messianic heroes or Bible-thumping cult leaders. On trial right now facing charges of vandalism, Mr. Ludwig and Mr. Boonstra are nevertheless gaining renewed attention in a province fraught with concerns about the health effects of sour gas. The profusion of hydrogen sulphide, a powerful neurotoxin with cyanide-like qualities, in communities across Alberta has inspired a wave of protest that extends well beyond the confines of Mr. Ludwig's Trickle Creek Farm.
But if the Ludwig clan is winning newfound credibility, it's because they aren't the only ones being questioned. The authorities, it seems, were involved in some curious dealings. During the first week of court proceedings in the Ludwig-Boonstra trial, it was presented in testimony that Alberta Energy Co. authored part of the RCMP investigation, funnelled funding to police and paid for travel expenses incurred by police informants. Moreover, the company and the RCMP admit they co-operated in setting off bombs (allegedly to entrap Mr. Ludwig in a campaign of ecoterrorism, while keeping community members in the dark).
The blurred line between law enforcement and the oil business will undoubtedly draw more attention as the three-month trial progresses. But it raises an inevitable question: Where was Ralph Klein's government in this whole mess?
Responsible for oil-patch regulation and environmental auditing, Alberta has been notably absent on many important fronts, many central to the Ludwig trial.
Between 1992 and 1998, for example, Alberta cut funding to its energy regulator, the Energy and Utilities Board (EUB), by 28 per cent, despite a four-fold increase in drilled wells. "The government has lost its capacity to provide a meaningful level of auditing and inspection coverage for oil and gas activities," the Pembina Institute, an independent Alberta-based energy-related think-tank, noted in a report from February of last year.
In fact, when the Ludwig controversy reached full-blown proportions in the late 1990s, Alberta responded with new law-enforcement initiatives instead of much-needed regulatory reform. In November of 1998, Alberta Justice Minister Jon Havelock launched an $8-million anti-crime crackdown by way of a new agency to fight eco-terrorism and organized gangs, announced just after Alberta Energy Co. requested the province's help. "We are supportive of any efforts to try and get at what's going on in northwestern Alberta," said Chris Peirce, spokesperson for the Canadian Association of Petroleum Producers (CAPP).
Even if Mr. Ludwig and Mr. Boonstra are found guilty, you have to wonder: Is Alberta's government too close to its oil patch?
It's no secret that oil and gas royalties account for upwards of one-third of provincial revenues, or that energy companies are generous campaign donors to Mr. Klein's Tories. It's also no secret that the board of Alberta Energy Co. -- Mr. Ludwig's nemesis -- is peppered with several distinguished Tory supporters who occasionally serve as personal advisors to the premier.
But who would have ever thought that Tory MLAs would operate their own oil wells, right alongside the very same companies they are sworn to regulate?
Code-named "Tory Oil," a numbered company was incorporated in 1995 by Mr. Havelock with six other Tory MLAs, including two other cabinet ministers, Clint Dunford and Lyle Oberg. By 1997, this corporation had bought into five wells. As of October last year, five MLAs (but not Mr. Havelock) remained active partners in the venture.
Mr. Havelock, a former Amoco lawyer, has actually been a founding partner in three Tory MLA-owned oil companies since 1995. During his stint as justice minister, he was Canada's only solicitor-general who was also the active president of his own oil company.
Surprisingly, Alberta's ethics commissioner, Bob Clark, cleared Tory Oil of conflict charges in 1997. But what was never mentioned was that the justice minister had in 1996 accepted loan guarantees from Acanthus Resources Ltd., (corporate donor to Mr. Havelock's own 1993 election campaign), for an oil company with Tory MLA Butch Fischer. As documents show, the president of Acanthus is also a partner in the company and a personal Havelock donor.
Alberta's conflict-of-interest legislation affords considerable latitude to elected officials in pursuit of personal gain. While many other Alberta MLAs place questionable assets in blind trust, no less than six current Tory cabinet ministers have active financial declared interests in oil securities or energy companies -- including Gary Mar, Minister of the Environment. It's a mess of ethical and political issues that begin to make Mr. Ludwig's paranoid theories about Alberta seem more plausible.
In fact, the overlap between Alberta's Tory government and the energy sector runs well beyond the confines of Tory Oil. It is possible, for example, to connect corporate relationships from Mr. Havelock's family to a Nevada-based corporation, to several high-profile energy executives, a B.C. fishing lodge and back to Premier Ralph Klein, Mr. Havelock's long-time associate from Calgary city council.
Here's how it works: Mr. Havelock's father, a retired oil executive, is currently a director in a Reno subsidiary of Beau Canada. Beau Canada is a Calgary-based oil company run by Thomas Bugg, a long-time Tory supporter and generous donor who helped fund Mr. Klein's 1993 leadership campaign. Mr. Bugg, in turn, is a director at Prism Petroleum, whose CEO is Scobey Hartley, is a core member of Ralph Klein's kitchen cabinet. Mr. Hartley donated to Mr. Klein's first leadership campaign. And Prism boasts Edmonton entrepreneur -- and AEC board member -- Mathew Baldwin as a corporate director.
In turn, several directors from Prism Petroleum, including Mr. Hartley and Mr. Bugg, co-own an exclusive B.C. fishing tourist lodge with Mr. Klein worth $1-million. Eagle Pointe was purchased in 1998 with business luminaries and campaign donors J.R. Shaw and Douglas Church.
Despite the proliferation of oil barons within Alberta's Tory caucus, there are encouraging signs. Recently, environmentalists and industry have made progress on the issue of gas flaring -- including a 15-per-cent reduction in flares during 1999 -- largely accomplished without government. And rumours are afoot that Alberta will reinstate Energy Utilities Board funding to 1995 levels, ensuring rural communities improved levels of monitoring and enforcement.
But the blurring of energy and government in Ralph Klein's Alberta is substantial. Call it the Alberta Advantage, Part II: As the government continues to slash royalty rates for oil and gas producers, various Tory members directly benefit from policies set by themselves and fellow MLAs, despite a slew of unresolved ethical questions and regulatory issues.
Of course, no one can blame Alberta for the actions of outlaws. But maybe Mr. Ludwig had a point when he surveyed the institutional forces arrayed against him and concluded that polite letters and phone calls weren't going to work. "Will the government tell me the truth," he wondered in a CBC interview last year, "so it can kick itself with it?"
Gordon Laird is author of Slumming It At The Rodeo: The Cultural Roots of Canada's Right-Wing Revolution. He works with the Parkland Institute, a University of Alberta think-tank.