Lethbridge Herald, The (Newspaper) - September 21, 1974, Lethbridge, Alberta
Secret 'Operation Patio Project' lands Lougheed EDMONTON (CP) It all began quietly enough, so quietly in fact that only a handful of people were aware of the Alberta government's plans to acquire control of Pacific Western Airlines. But the shock waves of this latest step by the Progressive Conservative government into an area generally considered the private sector's continue to be felt. What's more, the move promises to be a major bone of contention when the legislature begins its fall sitting Oct. 23. Bob Clark, Social Credit house leader, said moments after the purchase was announced Aug. 2 that he would demand a full debate when the house meets this fall. His party has since asked for a closed inquiry by a judge to determine whether anyone profited from ad- vance knowledge of the government's high a common share and for each of preferred shares. Provincial NDP. Leader Grant Notley has demanded the house be recalled to discuss the PWA purchase and the government's total approach to public investment as soon as possible. He government exhibited "an inexcusable abuse of power" by acquiring the air- line through an order-in-council that changed the regulations of the Financial Administration Act. Alberta Liberal Leader Nick Taylor has suggested the million used to acquire PWA could have been better spent on road construction in Alberta. He wants a full-fledged judicial inquiry into the purchase. And Premier Peter Lougheed, for perhaps the first time since he took office three years ago, finds himself fighting from a defensive position, with those on the at- tack including several members of his own party. It took only about a week to accomplish the move that brought about this wave of criticism. Shrouded in secrecy, the original plans carried the code name Patio Project and contained all the elements of high intrigue. Accepted proposal On Wednesday, July 24, Intergovernment Affairs Minister Don Getty, Industry Minister Fred Peacock and Deputy Treasurer Chip Collins met with Premier Lougheed on the premier's patio. They decided during this meeting the provincial government would have to acquire the airline if it was not to fall into the hands of outside interests whose operating policies wouldn't necessarily have been in Alberta's best interests. Mr. Getty suggested to the group the government should abandon its original intention of gathering a group of Alberta businessmen, backing them fi- nancially and having them acquire control and ownership. "The premier accepted my rec- ommendation, provided the takeover would result in control and the minister said later, ex- plaining that Mr. Lougheed did not wish to become in- volved in a bidding war or have injunctions filed against the government. By July 31, Operation Patio Project was ready to roll. The government's negotiator, Calgary lawyer Ritchie Love, approached PWA's board of directors and then Canada Trust-Huron and of whom held a block of with the takeover offer. Meanwhile, National Trust Co. Ltd. moved on behalf of the Alberta government to acquire shares on the open market. Once the two major-block shareholders had accepted, the Patio Project team worked all night to be ready for the Aug. 1 opening of the Vancouver and Toronto Stock Exchanges. The market was checked first thing that morning because any substantial trade would have indicated a leak and the project called off Federal Transport Minister Jean Marchand was in- formed of the takeover bid. Then the snag hit the operation. PWA directors had recommended that shareholders accept the offer, but the Dow Jones financial wire fail- ed to carry the announcement and stock exchange ex- ecutives thus wanted to suspend trading until shareholders were informed. "Tense moments Mr. Getty said later. "The whole operation ran the risk of becoming public. In fact, an injunction could have been filed by the ex- changes." Acquired control The minister said there was a possibility of the government becoming a large minority shareholder but the exchanges were eventually persuaded to let buying continue and investment houses were asked to notify shareholders by telephone. The government acquired controlling interest by noon Aug. 1 and still only a few people knew the purchaser's identity. Premier Lougheed was to make the announcement Aug. 2 but news of the transaction leaked out. although the purchaser was kept secret. PWA President Don Watson said Aug. 1 that the airline was recommending its shareholders accept a offer from "a group well-established in its own field." "While we know who the buyer is, we're not at liber- ty to disclose this at the Mr. Watson said. "I expect they will identify themselves tomorrow." "I think it will come as a surprise to most people." It certainly came as a surprise to Albertans. in his announcement the next day, Premier Lougheed said the government made its decision "as a result of our concern that recent takeover proposals and schemes threatened the continuation of Pacific Western's capacity to expand and serve Alberta's growth needs. "We wanted to assure that such a vital part of the transportation system in our province would continue to reflect the needs and interests of the people of Alberta." Premier explains He has reiterated that reasoning many times since, sometimes also taking the opportunity to defend the move against criticism that the Conservative government, which claims to favor free enterprise. ha? again moved into an area once reserved for the private sector. The premier sought to slave off such concern in a quarterly bulletin of the Progressive Conservative Association of Alberta last month. He justified the PWA takeover as part of a program to "increase the number of opportunities available for our citizens to develop free enterprise in a competitive society." Ho went on to say the government will use petroleum revenues to expand PWA's air freight business to a global scale, strengthening free enterprise by solving transportation problems for the province's small businessmen, Mr. Lougheed assured the Calgary Chamber of Commerce this month that the acquisition of PWA does not usher in a new era of corporate takeovers by the province, saying the purchase is not the start of a "socialist blitz" of industry' The British Columbia government also had been interested in baying PWA, although Mr. Watson said he doesn't believe it was serious about a takeover bid. The Lethbridge Herald VOL. LETHBRIDGE, ALBERTA, SATURDAY, SEPTEMBER 21, 1974 20 Cents 104 Pages Fifi wipes out town; feared dead Oil price drop forecast NEW YORK (AP) Saudi Arabian Oil Minister Sheik Ahmed Zaki Yamani predicts a drop in the price of crude oil from his country after it nationalizes com- pletely the Arabian American Oil Co. "Knowing our policy, the price was to be less than what is today prevailing in the Yamani told reporters Friday. He said his country favored a cutback in posted prices, to about THE ASSOCIATED PRESS The Honduran national emergency committee said to- day hurricane Pifi killed an estimated to per- sons, and that rescue workers parachuted into the town of Choloma where most of the 600 residents are believed dead. If the figures are confirmed, the Honduran tragedy would rank behind the cyclone that killed persons in East Pakistan in 1969 and the hurri- cane that killed persons in the West Indies in 1780. Hurricane Flora killed persons in Haiti in 1963. "Rescue brigades and radio hams confirm that in the town of Choloma alone there are be- tween and Col. Eduardo Andino, co- ordinator of the emergency committee, said in a telephone interview. "During the first reconnais- sance flight we made today in air force planes we saw hun- dreds of bodies floating on the waters. "In many places where there had been townships there is now nothing, -only water." Andino said "destruction was tremendous" in towns and ports on the Atlantic coast where Hurricane Fifi struck on Thursday with sustained winds of 110 miles per hour and gusts to 140 m.p.h. In Puerto Cortes, Tela, La Ceiba, Trujillo and Castilla only structures built on high ground had escaped destruc- tion, Andino said. "Everything else is covered by water." He said air rescue missions from Nicaragua and neighbor- ing Guatemala were made im- possible by bad weather, and missions by land and water were extremely difficult. "We are using the 60 launches that we have, but they are not Andino said. He estimated there were persons stranded, "some in nearby hills, some on the roofs of their homes, and still others in trees.... But there are many roofless houses, and people have been balancing on the tops of walls for three days There were reports from San Pedro de Sula. the second largest Honduran city, that authorities there had ordered bodies burned to prevent an epidemic. Andino said the national emergency committee had put together a picture of what happened in Choloma in part from reports broadcast by amateur radio operators. Seen and heard About town Marlenc Marshall saying that the new steak house in Lethbridge will give you a birthday kid for your cake... Hamilton Junior High School football coach Mike Tar- nawski tripping and falling while getting faked out by a rookie player on a pass pattern. You, too may have to register Not only renters, but some property owners or at least spouses of property owners will have to register at city hail to be eligible to vote in the Oct. 16 civic election, an aldermanic candidate has pointed out. Bob Tarleck, one of three North Lethbridge residents running for council, said in many instances ownership of a house is in one spouse's name only and in that case the other has to register. "Many residents, par- ticularly women are affected by this and are assuming they're eligible to vote without registering, but in fact they Mr. Tarleck said. His information was con- firmed by the city clerk's of- fice. "If the property is registered in one name, the spouse has to come in and said city clerk John Geria. Deadline for registration is next Wednesday. Ethiopian upper class faces trial ADDIS ABABA (Reuter) Ethiopia's former ruling elite today faced the prospect of trial by court martial on charges of corruption and ex- ploiting the poor. About 170 once-influential representatives of the regine of deposed Emperor Haile Selassie are being detained in the heart of Addis Ababa. Among them are rich land- owners, ex-government minis- ters, provincial governors and officials. The country's military rulers announced Friday that they would be tried by general court martial once investigations into their ac- tivities are completed. The announcement was made by General Aman An- dom, chairman of the provisional military council now running the country. Accusation LONDON (AP> Martha Mitchell said in a television interview here Friday night Governor George Wallace of Alabama told her that former president Richard Nixon was behind an assassination attempt on him. Mrs. Mitchell, estranged wife of former United States attornev-general John Mitchell, said Wallace had told her: "Nixon was the one who had me shot." v.l BILL GROENEN photo still beaming down Bountiful sunshine is giving area farmers a hand drying out harvest crops, like the stocks piled in the field of this farm near Beaver Mines. The Kenyon Field weatherman expects the current pattern of cool nights and warm, sunny days to continue over to tr the weekend and into next week. Inside I 1 'StiH not married. Miss Classified....... 30-34 Comics............24 Comment........ 4. 5 District............21 Family.....22, 23. 25 LocalNews 19.20 Markets....... 28. 29 Religion........ 12-14 Sports.......... 16-18 Theatres........... 7 TV................ 6 Weather........... 3 LOW TONIGHT 35, HIGH SUN. 78; SUNNY, WARM -S BONNERS FERRY. Idaho (AP) Tensions relaxed in this Idaho town today as the Kootenai Indians prepared to negotiate with federal of- ficials while continuing their nonviolent "war" to regain what they claim are lost tribal lands. The first day of the war pledged by the 67-member tribe ended Friday without arrests or incidents, other than name calling by some whites who drove by the down- town tribal headquarters. The war started when five Indians, accompanied by about 25 reporters and photographers, established two toll collection points along Highway 95, asking motorists driving through the land the Indians say is theirs to volunteer a 10-cent toll. Advance notice on the war said the Indians would block the highway, but, under threat of arrest, they did not do so. The Indians, who have never had a treaty with the United States, are demanding a re- serve of acres and an additional to an acre for 1.6 million acres of ancestral tribal land for which they were paid 36 cents an acre in 1962 based on 1855 Idhd values. The tribe says it lost its land in northern Idaho and western Montana because it was not invited when an 1855 treaty was signed at Hellgate, Mont. Industry greets boost in gas export price warmly OTTAWA Energy Minister Donald Macdonald announced substantial increases in the price of natural gas exported to the United States Friday and in return won strong support for the move from industry spokesmen. As of Jan. 1, the price for exported gas will jump to per thousand cubic above One average 60 cents now charged for the energy source. Mr. Macdcmald's announce- ment was warmly greeted in Calgary, where John Poyen. president of the Canadian Pet- roleum Association, said the step is "a recognition that more incentives arc required by the industry to continue oil and gas exploration." Producers of natural gas have argued that consumers would switch to gas from oil because the price of the gas was far lower and 'under valued." That would put more pressure on already dwindling supplies of gas, they said. Most of the trillion cubic feet of natural gas exported to from Canada to the United Slates in 1973 went to the west and midweslern states. Mr. Macdonald said that the government has ordered the National Energy Board, which held hearings on export prices last spring, to amend all exist- ing export licences and change the prices by Jan. 1. But two export licences in British Columbia will be amended and .have their prices raised to the new level by Nov. 1. The new prices are expected to bring an additional mil- lion annually into Canada from the United States. "I expect these increases will not be greeted with un- diluted joy in all sectors of the United Mr. Mac- donald told reporters. Under the changes. American importers wilj be given the choice of paying higher prices or continuing at the present rates for two years. But if they choose the second option, the export licence would be cancelled after two years and the gas reallocated for domestic con- sumption. Bill Dickie. Alberta's mines and minerals minister, said the announcement was in step with the province's argument that natural gas was un- derpriced. He did not say if Alberta would increase its royalties. John Rhodes, chairman of the British Columbia Petroleum Corp.. said the price increase on exported gas should not affect domestic prices.