Saturday, February 6, 2016

Difficulties mount for BC Liberal partner


French list Malaysian PM Najib Razak in bribery case file, The Australian, February 6, 2016
Malaysian Prime Minister Najib Razak is facing a new front in a multi-billion-dollar corruption scandal bedevilling his administration, with French investigators probing whether he received bribes as defence minister in a $1.2 billion submarine contract.

The investigation centres on Thales International Asia’s 2002 contract to deliver two submarines to the Malaysian government and whether the company’s former president, Bernard Baiocco, indirectly paid kickbacks to Mr Najib to secure the deal.

Mr Baiocco was indicted last December for allegedly paying commissions to Abdul Razak ­Baginda, a political analyst purportedly close friend of Mr Najib.

But Britain’s Financial Times cited sources close to the investigation — including Mr Baiocco’s lawyer Jean-Yves Le Borgne — confirming that judicial documents also named Mr Najib as a suspected recipient...
Swiss probe finds ‘indications’ of $4bn being misappropriated, Financial Times, January 30, 2016
Swiss authorities said they had found “serious indications” that about $4bn had been misappropriated from Malaysian state companies following a criminal investigation into 1Malaysia Development Berhad, the state development fund.

The Swiss attorney-general said in a statement on Friday that a “small portion” of the money was transferred to accounts held in Switzerland by former Malaysian public officials and former and current officials from the United Arab Emirates.

The statement is a blow to Malaysian efforts to contain the scandal. Najib Razak, prime minister, denies claims of misappropriation of funds linked to 1MDB. The fund, established in 2009, is supervised by an advisory board chaired by the prime minister.

Malaysia’s attorney-general said this week that the premier had no case to answer in relation to $680m transferred to his personal bank account.

The Swiss attorney-general said the funds believed to have been misappropriated “would have been earmarked for investment in economic and social development projects in Malaysia”...
Net may be tightening on Najib, The Strait Times, February 2, 2016
Malaysia may have absolved its prime minister in a huge corruption scandal, but the authorities in other countries investigating suspicious global fund flows are making clear the affair is far from over and that the net may be tightening, say observers.

Malaysia's attorney-general last week cleared Prime Minister Najib Razak of wrongdoing in accepting a mysterious US$681 million (S$974 million) payment from overseas, sparking accusations of a cover-up in the case.

"The Swiss and Singaporeans are obviously worried that (clearing Mr Najib) looks detrimental to their ongoing investigations," said Ms Cynthia Gabriel, head of C4, a Malaysian anti-graft non-governmental organisation.

"But this is definitely far from over and looks like the noose is tightening on Najib," she added, referring to the new details announced by the Swiss and Singaporeans.

Within days of Datuk Seri Najib's clearing, the authorities in Switzerland and Singapore raised the pressure, pointedly responding that investigations into an array of Malaysian money movements were forging ahead and releasing new information...





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Friday, February 5, 2016

Mythbusting

Statistics Canada reports that 27,200 fewer people were employed in British Columbia in January, compared to the month earlier. A single period is an unreliable indicator but StatsCan provides decades of data for analysis; data that proves Christy Clark's government has the weakest record of job creation in the last 50 years.

This is a fact worth remembering when think tanks working for the uber-wealthy, resource companies and other foreign-owned corporations underwrite "citizen groups" to convince voters to keep their proxy government in place come the election campaign that is now a year away.


The numbers reveal significant weakness in job creation for people in the age groups that should form the backbone of the working force: adults of an age when people are most likely to be raising families. There is not a missing data point; during Clark's tenure as Premier, this age category has essentially averaged no new jobs.


The following chart shows one reason that younger people have fewer employment opportunities. It also demonstrates that many Canadians believe they cannot afford to retire.


Source: Statistics Canada CANSIM Table 282-0001

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Monday, January 25, 2016

Vanishing revenues



With land developers, largest funders of the BC Liberal Party are natural resource companies. They've contributed millions of dollars to encourage government sympathetic to their needs. No administration in the province's history has been as sympathetic to natural gas producers as the present one and benefits to the industry measure in the billions.

I offer information about payments made by natural gas producers to the province over the last ten years. The report is drawn from provincial documents and the numbers can be confirmed by anyone with diligence. These show only the natural resource revenue side, without affect of government accounting that spreads certain rights payments over time. That policy has a smoothing effect so that, in the current fiscal year, the province's statement of operations will not directly reflect recent weakness in both royalties and sale of petroleum and natural gas rights.

Additionally, government is now spending unprecedented sums to promote the industry. In fiscal year 2016, despite the absence of associated revenues, the Natural Gas Development Ministry budget was up 11% to $444 million. In addition, BC Hydro is spending billions to deliver subsidized power to producers and fresh water is poisoned in stunning quantities for fracking.

Gas and other natural resource revenues are influenced by a number of factors. The pricing principles applied have more to do with profitability of resource companies than the intrinsic value of public goods produced by private enterprises. (Ask your landlord to use that principle for calculating your dwelling rent.)

I'd like readers to concentrate on the revenue changes since Gordon Campbell departed. There is a connection waiting to be revealed.











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Thursday, January 21, 2016

Expect to resume writing Monday

A short illness compounded by my computer keyboard going dead has left me quiet for a while. I expect to have new working equipment shortly and to resume writing by Monday. Thanks for all the inquiries.

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Tuesday, January 12, 2016

BC Jobs Plan

British Columbia Liberals haven't talked much about the BC Jobs Plan lately, perhaps because they don't want people looking too closely at statistical reports. Those reveal a trend where full-time jobs are being replaced by part-time jobs, not for teenagers or young adults but for people who traditionally form the most stable part of the workforce.

Here is one example taken from Statistics Canada table 282-0001:


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Saturday, January 9, 2016

"Veritable sewer of skullduggery"

I published the following piece about two years ago. It came to mind after I noticed Black Press writer Tom Fletcher claiming on Twitter that the Shawnigan toxic waste dump on a hill, above a watershed, in a rainforest, is A-OK; that reporting observations of uncontained runoffs is mere political rhetoric and that contaminated soils dumped above Shawnigan Lake may not actually be contaminated.


Note the last few paragraphs in this article because it explains why some promedia scribblers are quick to serve vested interests and dump on people not eagerly doing the same. Purported journalists in the dying news industry have limited choices to stay employed and being in favour with government and industry is the best way of keeping alternatives at hand and avoiding unwanted retirement. It's called paving an exit road.
- - - - - - - - - - - - -

Reading through Diane Francis' 1988 book Contrapreneurs, from which the title of this piece is taken, I noted repeated mentions of a person who was, for more than a decade, indisputable bête noir of white-collar con artists in British Columbia and beyond. Former Vancouver trader Adrian du Plessis had developed qualities, says Francis, that separated him from Vancouver Stock Exchange colleagues: honesty and courage. Refusal to facilitate improper stock manipulation and a decision to blow the whistle got him fired from the investment industry. It also led him into working more than a decade as an investigative researcher and independent analyst of stock frauds.

In days before the 1999 creation of Canadian Venture Exchange (now TSX Venture Exchange), even people putting money into the Vancouver market knew it was a place of dirty stock deals, operated primarily for the benefit of member-owners. Respected Sun business writer David Baines wrote that BC's regulatory system in those days had much more bark than bite. Baines could have added that the most most heard sound around the VSE was not a bark, it was "Baaaaaa" from newly shorn investors.

Adrian du Plessis took on difficult foes when he struggled to hold investment companies accountable for frauds engineered or tolerated. This was not David vs. Goliath, it was David vs. a platoon of Goliaths, many who moved in circles of the province's most powerful. When the whistleblower turned full time muckraker, his opportunities for expression were limited. The internet was in its infancy; major journals such as Newsweek considered it a near useless "wasteland of unfiltered data."

Newspapers, then as now, cared more for their own financial interests than for ambiguous public interests. Many investor journals and newsletters were operated by outright shills, paid to promote deals of questionable value. They aimed to be cheerleaders, not critics of the markets. Stockwatch, a reputable service operated by John Woods, employed du Plessis for a period of time but was pressured by the investment community to end the relationship. Threats of violence, even death, were aimed at the man.

Probably the riskiest campaign waged by du Plessis was one involving a man the BBC called the Billion Dollar Don. Semion Mogilevich has also been called boss of bosses of Russian organized crime syndicates and, about the time that du Plessis interfered with his operations, Mogilevich was described in American press as the most dangerous mobster in the World.

Panorama, a British current affairs program, reported on YBM Magnex, whose shares soared from pennies when launched on Canadian stock markets to over $20 in just two years.

After being asked to investigate, du Plessis told BBC investigative journalist Tom Mangrove,
"What I was able to determine about YBM from the documents was that Semion Mogilevich
was an original founder and a controlling interest and in a sense, the brains or the eminence grise
behind the construction of YBM Magnex..."
The Panorama transcript continues,
MANGOLD
Once Du Plessis had burrowed deep into the paperwork, the true pattern of YBM's dealings
became clear.

DU PLESSIS
YBM was a mix of reality and fantasy, illusion, a sham that at its core had some businesses
but was also engaged in a range of things that were entirely fictitious and in other ways very
dangerous and illicit.

MANGOLD
After Du Plessis published his findings the FBI raided the firm's HQ, the company soon
collapsed and went into receivership.

DU PLESSIS
In early l998, YBM was valued at almost a billion dollars Canadian. That paper is all
worthless now. The bottom line is the public lost tens of millions, maybe hundreds of
millions, in YBM.
Not surprisingly, after YBM, du Plessis ended his role as public protector. His work had been admired internationally and he helped expose a gigantic fraud that involved important players in Canada, including a former Premier of Ontario. Yet, his concern for victims of a corrupt financial system made certain he was anathema to those who reported on or benefited from that same system.

By now, readers may be wondering if there is a current day point to this history lesson. Well, of course there is.

I would like you to remember that at times, communicators outside the corporate media are vital to revealing truth. Newspaper publisher Postmedia, operating at a loss and heavily indebted, will not spend money to examine the markets in which its American owners gain power and rewards. Governments that prefer to believe businesses should regulate themselves will never dedicate sufficient resources to materially disturb their friends and sponsors. Think tanks and, increasingly, the academic world depend on powerful financial interests to enable their activities. As taxpayer supports decline, commercial interests become paramount. Fewer voices speak on behalf of the public.

According to journalism professor Robert McChesney, by 2010, PR agents in the USA had come to outnumber professional journalists by a ratio of four to one. One of the PR conglomerates, WPP Group, based in London, employs about 160,000 people worldwide. Former Vancouver Sun legislature reporter Jonathan Fowlie recently joined Hill + Knowlton Strategies, a unit of WPP. Perhaps even more significantly, H&K works for Enbridge and numerous corporations very interested in favourable treatment in media.

Newspaper writers and editors, faced with continuous downsizing, understandably keep eyes on alternative employment. Canadian radio and television outside of Ontario is largely devoid of journalistic capability and, more importantly, opportunity. These conditions can result in paving of exit roads, which means making friends and establishing relationships that might be helpful in the future. Favours given today are favours returned tomorrow.

These facts are not ones that all people employed in corporate media care to acknowledge. Claiming to hold the legitimate wisdom, they do not appreciate criticism in any form. Instead, some hope to strengthen their current situations by casting aspersions on members of alternative media who add points of view to public debate. Always, the pro media's denunciations are not specific but the generalized pejoratives are repeated.

When you consider points of view, consider whose interests are being served.

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Questions for BC Liberal by-election candidates

One day after Kelowna Liberal MLA Ben Stewart resigned in 2013, unelected Christy Clark called a by-election so that she could seek election and continue as Premier. Weeks later, Stewart was rewarded with a $150,000 a year patronage appointment.

On July 8, Jenny Kwan resigned as MLA for Vancouver-Mount PLeasant and August 14, Douglas Horne resigned as MLA for Coquitlam-Burke Mountain. Both ran in the October federal election; Kwan was successful.

Tuesday, Premier Clark got around to calling by-elections to fill the two vacancies. For one, she had three days to spare since the BC Constitution Act specifies a by-election must be called within six months of a seat in the Legislature becoming vacant.

Perhaps Premier Clark's by-election strategy will follow that used in 2015 by Stephen Harper, her political soulmate. In that case, her candidates will go into hiding and there will be no opportunities for questions.

Joan Isaacs & Gavin Dew
If Ms. Isaacs, a former mutual fund salesperson, and Mr. Dew, a spin doctor who's been working on behalf of Kinder Morgan's project to ship dilbit through Burrard Inlet, appear in public forums, here are a few enquiries that could be posed to them:
  • Why is the Liberal government allowing Shawnigan Lake’s drinking water to be poisoned?
  • Why is the Liberal environment minister refusing to be interviewed about Shawnigan contamination?
  • Why should BC Hydro spend $10 to $20 billion for unneeded electricity?
  • Are you happy with provincial debt and contractual obligations that are budgeted to rise above $170 billion by 2017/18?
  • Why not halt Site C until court cases proceed?
  • Why make new IPP contracts 3x market price for unneeded power?
  • Why pay IPPs double the price BC Hydro sells power to industry?
  • Why secretly subsidize industry through BC Hydro instead of making the supports part of the BC budget?
  • Are you in favour of the BC Public Sector (schools, hospitals etc) spending $millions to purchase dubious carbon offsets?
  • Why charge same MSP premium to person with $30,001 annual income as a person with $2 million income?
  • Why has disability assistance been frozen since June 1, 2007?
  • Why sell Burke Mountain Land to Liberal contributors for $43 million less than assessed value?
  • Why did BC Liberals allow Queen of Chilliwack to be sold for a pittance two years after a $17 million refit?
  • Why fire health researchers w/o justification, then pay them off with taxpayer's dollars and require their silence as part of the settlement?
  • Why pay BC Liberal cronies huge fees to conduct "independent" examinations of wrongdoing by the BC Liberal government?
  • Why have Liberals ignored the duty to document business of government?
  • Why allow governing politicians to take cash from companies they regulate?
  • Since you chose to run for BC Liberals, can you be trusted?
I invite readers to submit additional questions that Liberal candidates might be asked if they appear in open forums. I'll add them to the body of this article.


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Certainty of Site C massive cost overrun is 86%

A repeat, first published December 17, 2014:

BC's Minister of Energy said in mid October that the $7.9 billion budget for Site C had been examined by top international experts and was assuredly "reliable." Two months later, Premier Clark revealed the dam budget had jumped to $8.5 billion. Days passed and when project approval was announced, the budget had jumped to $8.775 billion.

Once again, the British Columbia Liberals demonstrate practiced mendacity. They are consistent though since mega-projects of the past five years typically doubled between first announcement and completion but were invariably pronounced to be on-time and on-budget. The mantra will be used again for the Peace River project, and it will be echoed by the compliant proMedia, even if the dam costs $18 billion. Overages will be accepted,
because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know.
A comprehensive study, published in Journal of the American Planning Association, was titled Underestimating Costs in Public Works Projects, Error or Lie? The front page sidebar states,
Based on a sample of 258 transportation infrastructure projects worth US$90 billion …it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading. Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts.
The Oxford University authors make the following observations,
  • Costs are underestimated in almost 9 out of 10 projects. For a randomly selected project, the likelihood of actual costs being larger than estimated costs is 86%.
  • Actual costs are on average 28% higher than estimated costs.
  • Estimated costs are biased, and the bias is caused by systematic underestimation.
  • Costs are not only underestimated much more often than they are overestimated or correct, costs that have been underestimated are also wrong by a substantially larger margin than costs that have been overestimated.
  • Underestimation of costs at the time of decision to build is the rule rather than the exception for transportation infrastructure projects. Frequent and substantial cost escalation is the result.
  • Underestimating the costs of a given project leads to a falsely high benefit-cost ratio for that project, which in turn leads to two problems. First, the project may be started despite the fact that it is not economically viable. Or, second, it may be started instead of another project that would have yielded higher returns had the actual costs of both projects been known. Both cases result in the inefficient use of resources and therefore in waste of taxpayers’ money.
The Sierra Club believes that latter point is significant,
British Columbians will be shelling out up-front, B.C. will be losing big time on the jobs front. Building geothermal plants to the same capacity would employ almost 1,900 people – compared to only 165 for Site C. And this doesn’t even take into account development of the agricultural sector in the valley.
According to The Common Sense Canadian,
The retired head of the Association of Major Power Users of BC, Dan Potts, estimates the proposed Site C Dam would lose $350 million a year for taxpayers and BC Hydro ratepayers. The 30-year pulp mill manager told media in Vancouver yesterday that the project, estimated to cost $8 Billion or more, is “fundamentally uneconomic” – based on its outmoded technology and power trading prices that are likely to remain far lower than the cost of electricity produced by Site C.
Prof. Bent Flyvbjerg was co-author of an article in the Harvard Business Review about the runaway cost of a project at a large American clothing company,
A $5 million project that leads to an almost $200 million loss is a classic “black swan.” The term was coined by our colleague Nassim Nicholas Taleb to describe high-impact events that are rare and unpredictable but in retrospect seem not so improbable. Indeed, what happened at Levi Strauss occurs all too often, and on a much larger scale…
Former Premier Glen Clark created a $200 million black swan intended for coastal waters. The cost of Christy Clark's rare bird will be measured in billions.


Read this article Lies my energy minister told me from December 12.

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Thursday, January 7, 2016

Medical services poverty program

Readers of an age to receive a monthly Old Age Security cheque will be thrilled to notice a 57¢ increase in January. As I mentioned on Twitter, cautious saving of that amount might allow a splurge next Christmas.

Unfortunately, there may be no cauliflowers for Christmas among seniors in British Columbia. Premier Clark's government just took more than five times the January OAS increase by raising an individual's medical services plan premium from $72 a month to $75. In the current year, MSP premiums will bring in more than 40% of the take from personal income taxes when Christy Clark took control of the Liberal government.

Here is how medical revenues have changed over time.


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