A2 - The Terrace Standard, Wednesday, March 19, 1997

Repap open to money probe

By-JEFF NAGEL
REPAP B.C.’s vice-president of finance doesn’t object to
the idea of an investigation of Repap’s internal finances.

“If somebody wants to look at it, it wouldn’t bother
me,”’ Rudy Schwartz said Friday, ‘‘] wouldn’t want to fi-
nance a third-party investigation, however. The answers
are fairly simple.”’

Schwartz was responding to continued calls from the
northwest for an investigation of Repap's internal financ-
ing over accusations money from B.C. operations
bankrolled other Repap projects to the east.

“f think it’s a Hittle unfair to cast (parent company)
Repap Enterprises as a villain here,’? Schwartz told the
Standard. Repap Enterprises has been totaliy and utterly
committed to these operations for some time.’’

“We've reinvested about $660 million in this province
over the last 10 years, which far exceeds any cash we gen-
erated here,’”

That figure, says Schwartz, relates to investments and
capital spending over and above normal operational spend-
ing. It includes modernization of the Prince Rupert pulp
mill and subsequent improvements at a cost of $189 mil-
lion, construction of the Terrace sawmill at $53 million,
purchases of Carnaby, Smithers, and the Buffalo Head and
Orenda subsidiaries for a total $70 million, plus about $35
million per year in normal capital spending.

The company borrowed heavily to carry out those im-
provements, he added, saying efforts to paint Repap
founder George Petty as a profiteer is misguided.

‘'There’s no better illustration of George Petty’s commit-
ment to the people of the northwest than last year, when
with his company almost on its knees he went out and bor-
rowed another $75 million to put out here,’? Schwartz said,
‘And that move probably had a lot to do with where
Repap ended up. Repap just ran out of gas. The reason
we're in trouble is not that money was sent back east, The
Teason we're in trouble is that our costs are too high and
our prices are too low.’”

Creditors in the northwest who now want to take a swing
at Petty should also look back on the last decade or so as
“the 10 most stable years of their existence,”’ Schwartz

[STOP Press

- NEWS |

“Cocaine seized

AN OLD REMO man is charged with cocaine trafficking
after a weekend police raid netted as much as $45,000 worth
of the drug.

Police said they also seized an estimated $30,000 in cash,
a loaded, stolen handgun, an insecure rifle, and numerous
other items from the home of Rene Joseph Fagan on
Saturday afternoon.

RCMP Cpl. Anders Udsen said the cocaine seized
weighed 245 grams and estimates of its street value range
from $30,000 to $45,000,

Fagan, 63, was charged Monday with possession of
cocaine for the purpose of trafficking, possession of both
cocaine and marijuana. possession of property gained
through the proceeds of crime, possession of a stolen
handgun, possession of an unregistered weapon, and care-
less storage of a firearm.

“We are also seeking one other individual for apprehen-
sion,” RCMP Cpl. Anders Udsen said Monday.

He said they don’t have a definite tally of the cash yet
because the bills are being fingerprinted as they’re counted.

Two other men were arrested Saturday but later released
without charges,

Fatal accident

ONE PERSON was killed and two were injured in a head-
on accident that occurred on Highway 16 Monday afternoon
near Big Oliver Creek,

Police say a white, 1987 Toyota pickup, driven by 59-year-
old Delmer Smith of Stewart was travelling east-bound
when it crossed the center line into oncoming traffic at about
3:30 p.m. and hit a 1996 Ford pickup driven by Denise
Marceau of Mackenzie B.C. head-on,

Smith died from his injuries. Marceau and an 11-year-old
female passenger in the Ford were also injured.

Police say road conditions at the time were very icy and
snow-covered. The accident is still under investigation.

GRIME la
STOPPERS

Terrace Crime Stoppers are asking for
your assistance in solving the break, enter
and theft to a privately owned cabin off high-
way 37 south, on the shore at Lakeise Lake.
Sometime between January 15 and
February 22, 1997, unknown cuiprit(s)
smashed in the front door to a cabin style
residence, a short distance south from the
Mt. Layton Hotsprings, along the banks of
Lakelse Lake,

During this time, the unknown culprit(s)
entered the residence, the garage/workshop
and the garden shed, causing some dam-
age to entryways and stealing a number of
items including various toois, a portable
stereo or “ghetto blaster,” and a buck knife,

lf you have any information about this or
any similar incidents, or if you know the
identity of the person or persons responsl-
ble for this break enter and theft, ‘Crime
Stoppers’ would like to hear from you.

Crime Stoppers offers a cash reward of
up to $1.000.00 for information leading to
an arrest and charges being laid against an
individual in this or other unsolved crime. If
you have any Information call Crime
Stoppers at 635-Tips that’s 635-8477.
Callers will not be required to reveal their
identity nor testify in court.

Call 635-TIPS

added. ‘“They’ve all done well in those 10 years,” he said.
“It’s time to remember that when you talk about Repap.”’

He said the licence owners before Repap — Westar and -

its predecessors — did not have as good a record.

‘There were a lot of unstable years there when the mills |

went up and down like yo-yos,’? he said. ‘We tried to
keep it stable, And jt cost us moncy to do so at times.””

Schwartz said it would be more productive for north-
western creditors to find solutions, and not point fingers.

“I'm committed personally to ‘do my damadest to see
these people get every penny back,” Schwartz said.
*'That’s going to be my mission for the next few years. To
do my utmost to pay those people back.”

Schwartz said the government agreeing to Repap's pro-
posed modification to the way pulp logs are assessed for
stumpage will help make the operation viable.

“That levels the playing field between us and the interi-
or,” he said. ‘‘We bave to have that implemented very

“The reason we're in troubie is not that
money was sent back east. The reason
we’re in trouble Is that our costs are too
high and our prices are too low.”

quickly.”

Streamlining the way the Forest Practices Code operates
would also help the long-term picture, he said. And Repap
will be looking to defer its stumpage payments to the
government further, he said.

Schwartz says Repap B.C. owes the province just under
$9 million in stumpage, and has been given permission to
defer to a maximum of $10 million.

“We're almost at that now, so there will have to be some
further discussions.”’

Scwartz said the bottom line is to get to the point that
Repap B.C. breaks even at today's low pulp prices. Prices
will go up, but he said they'll also go down again, and the
northwest can’t afford to be at the verge of bankruptcy
every time prices bottom out.

NDPer takes aim
at Reformer Scott

SKEENA MP Mike Scott's criticism of Repap’s treatment
of its creditors is a case of the pot calling the kettle black,
says a New Democrat planning to run against Scott.

Ken Alton, a Queen Charlotte Islands resident and a
dedared candidate for the NDP nomination here, points to
the failure of a family road construction firm Scott was in-
volved in during the early 1980s,

“Now Mr, Scott is leading the charge to demand corpo-
rate accountability,’ Alton says in a letter to the Standard,
“He may well have some experience to draw from. How
many years ago was it that the creditors of L.G. Scott and
Sons were looking as far afield as the Grand Caymans for
the assets of that company? Working people in the north-
west found only a bankrupt company.”’

Scott worked for the company, but says be didn’t have an
ownership role in it.

“'That was not my company — it was a company my fa-
ther owned,”’ Scott said last week. “‘His , Company did go
bankrupt and he paid for it dearly. He ended up with noth-
ing and had to start out al] over again,”'

The company lost a great deal of money building the
road into the Ridley Island coal terminal near Prince
Rupert, Boggy ground that required huge amounts of fill,
and slow government payments contributed to the failure.

Following that, Scott says, he and several other people
borrowed money from a family friend and purchased the
assets of L.G. Scott and Sons from the receiver. They
formed Kentron Construction, a firm that was later sold to
a Montreal firm.

Scott says the difficulties of the early 1980s are strong
memories for him, leading him to fight even harder in the
present circumstances.

“There was a time in Terrace when real cstate could not
be sold and opportunities to find work were extremely
tight,’’ he said.

Alton says Scott is right to call for an investigation of
Repap’s finances, but argues Scott should have been call-
ing for action for years now.

“When Repap appeared profitable two years ago did he
stand with Local 4 of the PPWC as George Petty kept
workers on strike in a profitable pulp market?’ queried
Alton.

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~ Phone. Laurie Mercer at
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Saturday March 22 and Sunday

March 23 from 9 a.m.

at the NTC Local Office,
4506 Lakelse Avenue, Terrace, B.C.

p.m.

(H) 638-8644,