Wednesday, April 30, 2014

Numbers tell a story

From the ProPublica story, The Rise of Corporate Impunity,
"[Eric] Holder, who is now the U.S. attorney general, seemed to lament the position government enforcers had found themselves in. 'I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them... If we do bring a criminal charge — it will have a negative impact on the ...economy."
This is an underlying cause for governments and senior civil servants turning blind eyes to economic wrongdoing. It also explains willingness to allow large corporations to exploit public resources with little return to the public.

Apart from favours and rewards owed to resource companies for funding the BC Liberal Party, political leaders are reluctant to make moves that might seem to inhibits the provincial economy. Arguing for their own interests, resource companies declare that taxation, regulation and oversight is restraint. As Enbridge is now proving, coroporations will apply heavy financial muscle and blanket the information marketplace with spin that deflects criticism or damages antagonists.

This was done in recent years to punish the NDP for efforts to tax and regulate natural resource producers. Comparing 2000 to 2010, the value of commodities produced in BC was 13.4% higher in the final year of BCNDP administration than ten years later, according to an inflation adjusted report from BC Stats.

The common assumption of BC voters is opposite, the result of a well executed campaign to advance industrial interests ahead of common good. Just as the international banking industry avoided prosecution for massive fraud, large industries create immunity from rules applied elsewhere in our society.

If you evade taxes, you'll end up in jail. If you don't pay your taxes, you'll have your assets seized. If multinational corporations evade or avoid taxes, they'll earn higher profits and pay bonuses to their executives. Politiians congratulate themselves for astute managment of the economy and Liberals have done that incessantly, assisted by loyalists in the BC Legislative Press Gallery who reading government talking points, not reports from BC Stats.

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Friday, April 25, 2014

Model T and Big Mac parallels

A once convenient version of history stated that a century ago, Henry Ford paid daily wages of $5, double the usual, so workers could afford the vehicles they made. According to myth, Ford thereby helped develop the middle class.

In truth, Henry Ford was the opposite of an altruist. He was forced to pay higher wages because miserable factory conditions caused intolerable staff turnover. The Michigan Historical Center reports,
"In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000."
Without meaningful attachments to jobs, Ford employees failed to perform and often failed to attend. Like chains with broken links, assembly lines don't even work poorly with nonfunctioning stations. In addition to ruinous costs of downtime, Ford faced expenses for recruiting and training new staff, many of whom would vanish without contributing to production.

Ford responded by paying more than competing employers and immediately had a workforce that followed assigned schedules and worked with diligence and dedication. Ford sold cars into a marketplace where demand responded to price and he understood that, in turn, the availability of good workers was affected by the price he paid them.

In Canada, many businesses don't want to pay more, they prefer to import economic slaves from an unlimited third world supply. In return for what Canadians consider modest wages, poor labourers will cope with separation from family, crowded and shoddy living conditions, onerous imposts, unpaid overtime and the risk of being returned to the homeland for even slight intransigence.

An unskilled worker could make $1,000 annually in parts of the Philippines, working long hours, six days a week. The possibility of earning 15 times or more in Canada appeals, even if the worker spends more than half on living, travel and employment expenses. The motivations of employers and foreign workers is understandable; both are trying to improve their own economic situations. Questions to be answered are whether or not the Temporary Foreign Worker Program makes Canada better off and if government policy should prioritize higher business profits ahead of better wages. Analysis shows the program lessens upward pressure on unskilled wages, which are often earned by Canadians living in or near poverty.

Clearly, the HarperCons come down on the side of higher profits. According to a government statement, the Temporary Foreign Worker Program,
"allows eligible foreign workers to work in Canada for an authorized period of time if employers can demonstrate that they are unable to find suitable Canadians/permanent residents to fill the jobs and that the entry of these workers will not have a negative impact on the Canadian labour market."
That might seem reasonable but, in fact, the government spends far more advertising its Economic Action Plan than it spends administering and enforcing rules of the TFWP. As a result, employers learned that abusing the system was profitable and without consequence. Among the worst offenders was Denny's Restaurants of BC, which was forced to make a 7-figure settlement with cooks and servers brought from the Phillipines under TFWP and subsequently abused,
"The BC Supreme Court approved the settlement because Denny’s failed to honour its contracts with the workers. This included offering them less than a full week of work, not paying overtime pay and failing to reimburse them for agency fees and airfare to Canada."
The federal government chose not to enforce rules that allowed more than 100,000 TFW's in western Canada because, as McDonald's Canada CEO John Betts said, all criticism of the staffing arrangement is "bullshit" but "the Minister gets it." Betts, an American, joined MccDonald's in New York 44 years ago and came to Canada in 2008. His words suggest he's worried about PR but not about government eliminating a program that contributes to profitability.

Maybe it's because McDonalds is one of Canada's largest oil consumers and the Harper government has blind dedication to subsidizing and supporting the oil industry. Oh, wait. Wrong Oil. Never mind.

I said above that Henry Ford had no selfless concern for the well-being of others. Michigan Historical Center recounts,
"The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the "American way." They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family."

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Wednesday, April 23, 2014

Our ignorance serves a purpose

Franklin D. Roosevelt,
"Taxes, after all, are dues that we pay for the privileges of membership in an organized society."
If you're older than 30, you remember the nineties. Hard times, said Milton Friedman, were produced by government mismanagement rather than by any inherent instability of the private economy. In most pro-media accounts, mismanagement is what occurred in BC for the decade that ended May 2001. Business writer John Greenwood recounted the disaster in one 2005 example from National Post.
"…By the late 1990s, mining -- once an engine of the economy -- had shrunk to a point were companies had virtually given up on looking for new mines in the province.

"By the time the Liberals came to office, the economy was in tatters.

" 'There was negative economic growth -- mining had effectively been killed off,' recalled John Winter, president of the British Columbia Chamber of Commerce.

"…without the changes put in place by the government the current economic boom would never have happened. The forest industry was the first to catch fire. …meanwhile, the battered mining sector shrugged off its malaise…"

"Mineral-rich British Columbia has been one of the biggest beneficiaries…

"Coal producers -- who account for the largest part of the industry -- are doing especially well. Fording Canadian Coal Partnership [now Teck Resources], one of North America's biggest players, is enjoying a banner year, limited only by the capacity of the railways to move production from its mines in southeast British Columbia to the waiting bulk carriers at the Port of Vancouver…

"After years of laying off workers, mining companies are so busy they can't find enough workers…"
If we examine statistics issued by Natural Resources Canada, a different picture emerges than the one John Greenwood painted. So different that one must question Postmedia's motives for publishing this pro-government puffery shortly before BC's 2005 election.

Despite the journalist's concern for railroad capacity, coal shipments were less in 2005 than 2004 and less even than in 1997.
It's no surprise National Post was campaigning for the BC Liberals and published a dishonest piece, but I am surprised, perhaps naively, that no major media operation bothered, then or after, to make a critical examination of BC Liberal claims about the mining business. If any did, I could not locate them in hours of searching newspaper archives. In fact, I found numerous articles similar to the one referenced, usually quoting business spokespersons.

I assembled natural resource data because I judged something seriously wrong with resource revenues recorded by government. Commodity prices soared dramatically yet the public revenues dropped. Higher prices typically encourage more production and one expects greater mine profitability, particularly when between 1999 and 2005, prices of the most significant commodities, coal and copper, rose 279% and 190% respectively.

My examination of production and price statistics resulted in a concern about government's ability to collect all of the taxes it is due. Under BC Liberals, downsizing and "red-tape" elimination has resulted in reliance on self-reporting of production volumes and revenue and expense reporting. Particularly in precious metals production, government has no way of accurately knowing what is due.

Strangely, they're ok with that.

Courtesy of the Ministry of Energy and Mines and Responsible for Core Review and Graft and Corruption,

The value graph shows steady increase but a chart of kilotonnes produced, from numbers provided by Natural Resources Canada, shows fairly steady quantities. Despite growth in the province's economy of more than 20%, three of the last five years are less than the 20 year average.

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Saturday, April 19, 2014

When special interests buy a government - updated

Before BC Liberals were first elected in 2001, they promised natural resource producers to materially cut the public share of values extracted. They kept their promise and producers filled party coffers in return. There is a fiction in Canada that no connection exists between political contributions and government actions. I disagree.

Producers paid less to extract public resources, even though rising prices increased their ability to pay. This shows the value of resources produced.

Government received amounts shown below. The charts show that resource production exceeded $18 billion in 2011 and government receipts in FY 2011-12 were well under $3 billion. Had the 35% share been maintained as it was during the early to mid 2000s, in one year, an extra $4 billion would have been available for education, healthcare and infrastructure. This province is heading for a crisis point in public education and I believe these simple charts demonstrate this is unnecessary.

Liberal defenders tell me that government revenues are based on profitability of resource companies and declining revenues reflect higher costs. Of course, that is guesswork. When multinational companies ship commodities overseas, there is a tax benefit when costs are assigned to production and profits assigned to post-production activities. In other words, profit calculations at the mine head are unreliable.

When Teck Resources leases offices in Vancouver, they pay rents based on the market value of the building, not on the company's ability to pay. Landlords don't vary the rent according to Teck's profitability. Yet, when Teck extracts billions of dollars worth of BC copper and coal, they want to pay royalties based on what they calculate to be their profits. That's a great deal for Teck, not a great deal for the public that owns the resources.

The BC government's political dedication to collecting resource revenues is one issue; another is it ability to monitor production and enforce existing tax rules. Because of aggressive staff cuts and its "red-tape" reduction policy, the Liberal government lost ability to enforce laws and regulations and began to rely on self-reporting by producers. Complete accuracy may not be important for coal with values over five years ranging from 11¢ to 22¢ per kg. but it is vital for gold, which has moved between $35,000 and $54,000 per kg.

Note: revenue amounts are drawn from public accounts; production values are from Natural Resources Canada reports, Mineral Production of Canada, by Province.

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Thursday, April 17, 2014

On resources with Ian Jessop, Apr 17

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Wednesday, April 16, 2014

Perception supersedes reality

WorkSafe BC is in the news again and Shirley Bond appointed part-time Ferry Commissioner Gord Macatee to review WSBC operations. This is a common government ploy: when one group of patronage puppies screws up, they dispatch a trusted insider to conduct a "review" and suggest improvements. Current WSBC Chair George Moffit has had much experience with these kinds of assignments but now, his organization is targeted.

Gord Macatee set up as a consultant after years as a senior bureaucrat. He worked at VANOC and took on the role of Ferry Commissioner, part of the bloated BC Ferries governance. It's a gig that pays 6-figures but allows opportunities for numerous other assignments. Although he resides in Victoria, Macatee is on the board of Vancouver's Providence Health Care, operator of St. Paul's Hospital and other public health facilities in the city. He's vice-chair of the Victoria Hospitals Foundation and has served on various boards of directors.

Macatee is hardly an independent, disinterested consultant. He's a trusted dependent of the Liberal Government, just as George Morfitt has been. Members of this small community of political beneficiaries are practiced at looking without seeing, at creating polite critiques that harm nobody of importance. This is one of the reasons that public institutions in BC are so inept; they are immune from real examination and real change. Essentially, they are grazing lands for people who are politically useful.

The rest of this piece is from November 2012.

A reader drew my attention to this article from 2.5 years ago. The principles are unchanged so I believe it is worth revisiting.

First published April 23, 2010, republished November 2012.

Sean Holman at PublicEye Online reported this April 20, 2010:
Former auditor general George Morfitt has picked up some contract work as a result of being a member of the provincial government's B.C. horse racing industry management committee. That six-person committee was launched in January to help "restore the the industry's financial strength." And now Mr. Morfitt has been hired by the government's gaming policy and enforcement branch to "offer advice from a point of view independent of the horse racing industry." This, according to a government spokesperson. The notice of intent to award that contract - which is worth up to $25,000 - was rolled out last Wednesday. Mr. Morfitt will also preside over administrative review hearings concerning issues such as the revocation of horse racing registration or a gaming license.
Morfitt is obviously a man of talent with expertise ranging from accounting and finance to public policy, horse racing, gambling, ferry operations, car sales, education, pharmaceuticals and public safety including installations involving electrical, gas, pressure vessels, elevating and amusement devices, railroads, etc. That he chooses to practice as a consultant in the public sector arises from his record of success. Success well earned, no doubt.

Firstly, I believe that government and its agencies spend far too much on consultants. Recently, BC Liberals granted huge pay raises to senior officers and civil servants, allegedly so public service could attract the best and the brightest. If indeed we employ so many highly paid experts in the civil service and ministerial offices, why do we spend so lavishly on consultants? And, why return to the same people over and over? Outside experts should be independent, not dependent.

Leaving that aside, I see a problem with Morfitt's activity in the public sector. It is work that should not be available to a former Auditor General. Citizens and MLAs have little opportunity to review government finance in even slight detail. So, we rely on the Auditor General, an officer of the Legislature, to independently investigate financial policies and practices of the government. This position is unique to all others.

George Morfitt completed two terms in this key position and, while he was well regarded, I find it troubling that anyone can act as Auditor-General, then retire to consult for the same government and its agencies. Those organizations were audit subjects and the auditor must always be free of conflict or appearance of it. No person should wonder if the officer shaped opinions or analyses to retain favor of the people with hands on the public purse.  Post-term consulting contracts might be seen as rewards for prior cooperation.

Again, I don't question Morfitt's competence or integrity. Fellowship was bestowed on him by fellow Chartered Accountants and that is a sign of distinction. However, professional accountants have struggled for years to refine practice rules to improve, among other things, public perception of their independence and professional integrity. In the last decade, numerous accounting frauds were attributed to pressure on auditors to report favorable numbers.  Some of those pressures resulted in ethical breaches, none more serious than the cases which led to  dissolution of one of the 'Big Five' accounting firms.  In reviewing a rush of audit fraud, CNN reported that one former corporate accountant said about his profession, "Early on in their career they learn to shave the truth."

Retired Auditors General should not contract with the governments they audited. Independence and credibility is vital to the role. There should be no suggestion, however remote, that post-retirement rewards might flow to a friendly and cooperative examiner.

George Morfitt has taken many provincial appointments and engagements over the past number of years. In one of those jobs, BC Liberals even tasked Morfitt with a role in reviewing the legislature's eight statutory officers, including Auditor General. I doubt a former officer, now a consultant, is going to be suggesting more restrictive rules for consultants.

This may not be exhaustive, but I list here examples of Morfitt's post-retirement engagements in the public sector:
  • WorkSafe BC, Vice Chair;
  • BC Safety Authority, Director
  • Motor Vehicle Sales Authority, Vice Chair;
  • Adjunct Professor, University of Victoria;
  • Consultant for Richmond, Airport, Vancouver Rapid Transit Project (2004)
  • Health Council of Canada, Councilor;
  • Capacity Development Network, Associate Director
  • Consultant regarding regulation of horse racing (2005);
  • Consultant for a comprehensive review of operational safety at BC Ferries;
  • BC Horse Racing Industry Management Committee, Member;
  • British Columbia pharmaceutical task force;
  • One of a four-member panel to review the legislature's eight statutory officers.
Just as private businesses develop strong systems of internal controls to limit potential for inappropriate behavior, so should government. Unhappily, there has grown a culture of entitlement that would shock public servants of bygone days. A generation ago, mandarins each expected one salary and one pension arrangement. Now, many collect varied forms of remuneration and expense allowances, part paid personally, other parts directed to personal corporations and partnerships, more difficult to track, of course. Pensions overlap with current earnings and occasionally one agency funds a large severance payment while another public agency hires that same person to a new arrangement.

Before the province forces layoff of hundreds of teachers, closure of tens of neighborhood schools and hospital surgeries and wards, let us resolve to first stop authorizing extravagant payments to senior executives and consultants.

Hard choices, Liberals. You guys said you were willing to make them.
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Flimflam sham

When conducting hearings on Northern Gateway, the National Energy Board Joint Review Panel denied participation to many and held sessions behind closed doors to limit opposition voices. Its decision favoured multinational industry over affected Canadian citizens and ran contrary to the bulk of testimony heard, including expert claims that “world-leading” standards will not protect our coast from heavy oil spills.

The Northern Gateway review was revealed as a sham and that revelation made authorities uncomfortable. The BC government has had its own experience with bogus assessments - Narrows Inlet comes to mind - so it developed a changed strategy.

The Ministry of Environment has claimed this as its purpose:
"Responsible for ensuring sustainable development of the province's land, water, and resources while protecting environmental values."
Ignoring its stated role, to ensure development at one large and controversial project does not produce evidence that the fix is in and decisions already made, Environment Minister Mary Polak simply removed her department from further review. Fortuitously, she had booked time with Vaughn Palmer's Voice of BC and the two of them will be able to explain government actions before controversy mounts.

Jumbo Glacier Resort exempted from environmental process, CBC News, April 15, 2014
"Environmentalists and the B.C. NDP are questioning the motives behind a government bill signed Monday night that looks set to clear the way for the controversial Jumbo Glacier Resort — and others like it — to avoid any further costly, environmental reviews.

"The order exempts prospective year-round ski resorts in B.C. from the Environmental Assessment process completely..."
The lowdown on changes to BC’s environmental laws, by West Coast Environmental Law.

Update 4:50 pm April 16, 2014

Who knows what pressures caused this quick turnaround. The initial decision was so fundamentally flawed that even the people behind it had to realize its stupidity. RossK asked what was going to be next, would surgeons be allowed to operate without review of qualifications? Would lawyers be allowed to practice without passing the bar?

* * * * *
The following was published at Northern Insight August 22, 2012 and, with current developments, it's worth re-posting.

Bob Mackin has an interesting piece in The Tyee about a newspaper tycoon and BC Liberal abettor. David Black's bluster was about about oil refining but the part of Mackin's story that caught my eye involved one-time Province newspaper publisher Paddy Sherman.

In 1958, Sherman was both a news reporter and an avid mountain man. Apparently, vocation served avocation when he wrote a front page promotion for an unlikely BC ski resort. There was no financing and little substance to the extravagant plan but that didn't bother The Province. Sherman wanted the facility to proceed so they gave it maximum splash.

Mackin provides another newspaper's eventual headline:
"Grandiose Garibaldi Scheme Falls Flat on Its No-Assets."
Some months ago, I tracked the life story of Jumbo Glacier Ski Resort. The proposal has reappeared occasionally since it was first reported in a July 1991 edition of the Vancouver Sun:
"A Japanese-backed company is planning to build a $250-million year-round ski resort on a series of spectacular glaciers west of Panorama..."
In 1993, The Province was calling Jumbo Glacier Resort a certainty involving European and Asian investors. Two years later, newspapers said the project was proceeding with support from a consortium of Canadian, U.S. and European investors. In 2012, the Times Colonist repeated promises the ski hill would soon be operational. NW's Bill Good and others try to paint Jumbo as a victim of regulatory foot dragging but actually Jumbo has been an unfinanced scheme with proponents hoping that media play would attract investors. Shills in the corporate "news" operations are willing partners.

By the way, don't plan your ski vacation at Jumbo just yet.

Media may have people like Bob Mackin aiming to report accurately and sincerely but it has many more who earn a living by shilling for special financial interests. Sometimes, the promoted is a ski hill, fish farming or "ethical oil." Other times, it is a pipeline operator, car dealer or land developer.

The shill factor in media, especially in new media, is illustrated by a report in ZDNet.
"A Federal judge overseeing the Oracle vs. Google patent lawsuit said that search giant has failed to comply with a request to document all payments to bloggers and writers covering the trial.

"...U.S. District Judge William Alsup said in his order:
"The August 7 order was not limited to authors “paid . . . to report or comment” or to “quid pro quo” situations. Rather, the order was designed to bring to light authors whose statements about the issues in the case might have been influenced by the receipt of money from Google or Oracle. For example, Oracle has disclosed that it retained a blogger as a consultant. Even though the payment was for consulting work, the payment might have influenced the blogger’s reports on issues in the civil action...

"Google suggests that it has paid so many commenters that it will be impossible to list them all..."

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Monday, April 14, 2014

Democracy myth exposed

Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Prof. Martin Gilens, Princeton University and Prof. Benjamin I. Page, Northwestern University.
"Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.

"The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism."

Source: Economic Policy Institute - H/T Bob Rae

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Money laundering and casinos, who knew?

CTV Vancouver: Money laundering rampant in casinos, April 10, 2014
"Confidential documents are shedding light on a host of suspicious behaviour at B.C. casinos, where patrons routinely carry bags loaded with small bills onto the gaming floor.

"Government reports obtained by CTV News highlight dozens of instances of suspected money laundering and loan sharking, most at the River Rock Casino in Richmond. And the problem only appears to be growing..."
Link to Video
Unforseen events occasionally damage properties and injure people and no preventative actions were possible. Last year's Chelyabinsk meteor in Russia was an example.

In other circumstances, misfortune might have been prevented but financial factors intervened. Recently, GM chose not to replace a faulty ignition switch because doing so would cost millions. People died. In the seventies, Ford coldly calculated that the cost of a Pinto recall and repair was greater than the value of lives that might be lost. Although British Columbia is an earthquake hazard area, the province does not prioritize preparedness.

It is not unusual for the right course of action to be avoided because it brings with it a financial cost. It may not be right, but it is human nature. Clearly, the government of British Columbia has always been aware of criminal activities such as loan sharking and money laundering in gambling estabishments. However, crime prevention would cost money for effective policing and, more importantly, it would reduce gaming revenues and lead to closures in an industry overbuilt by influential people.

By 2009, BC Liberals had decided that blind eyes were more profitable than diligence when it came to supervision of gambling. They know there are costs in terms of lives ruined and families destroyed but, there are financial benefits to be had. Every now and then, police will complain or a story will appear in the media but politicians are well practiced at promising things will soon change. After reassuring words, everything goes back to normal. Nothing changes and the weak continue as victims.

My supposition is that BC's illegal drug trade is so large that government wants a share and the easiest way to gain it is to skim a share from the extensive money laundering done through casinos.

A short spin through news archives proves authorities have long known that illegal activites are endemic in licensed gaming faciities. Many more examples could be shown:

Tearing the cover off `victimless' crime, David Baines, Vancouver Sun, October 19, 2000
"RCMP Insp. Kim Clark, head of the Vancouver Integrated Proceeds of Crime section, doesn't share the popular view that money laundering is a non-violent, victimless crime. He draws a straight line from the ruthless world of drug dealing to the more urbane, white-collar business of laundering the proceeds.

" 'We have 20-odd unsolved murders in the Lower Mainland related to drug dealing,' he said Wednesday.

" 'There is a direct nexus between drug dealing and violence, and its spinoff, money-laundering. It's looked on as victimless crime, but that's not true at all.' "
How money is laundered, Neal Hall, Vancouver Sun, December 31, 2003
" 'I can say that in general, the spread of organized crime just in the past two years has been like a cancer on the social and economic well-being of all British Columbians,' RCMP Sergeant John Ward said.

" 'Today, the value of the illegal marijuana trade alone is estimated to be worth in excess of $6 billion. We are seeing major increases in organized crime-related murders, beatings, extortion, money laundering, and other activity which touches many innocent lives.'

"Drug trafficking generates huge amounts of cash for organized crime, which "launders" illegal profits to avoid prosecution, increase wealth and evade taxes, according to an RCMP report on money laundering..."
Casino loan sharks draw 300 complaints, no charges laundering, Chad Skelton, Vancouver Sun, August 18, 2006
"The provincial agency that investigates crime in B.C. casinos has failed to have a single person charged with loan sharking or money laundering despite receiving more than 300 complaints of such activity over the past two years alone, enforcement statistics indicate."
Gambling enforcement branch no match for the criminals casinos attract, Paul Willcocks, Vancouver Sun, October 23, 2006
"Forget about criminal activity on the streets. The real crime explosion is around B.C. casinos and "gaming centres," where investigations of serious offences like money-laundering and loansharking more than doubled last year.

"The province's Gaming Policy and Enforcement Branch reports it launched 3,414 investigations last year, up 36 per cent from the year before. The number of investigations launched into activities linked to organized crime -- like money-laundering and loansharking more than doubled, to 235 cases.

"Organized criminals like casinos because they offer so many opportunities..."
Money launderers suspected of using casino slots to wash cash; Suspicious currency transactions not reported, Neal Hall, Vancouver Sun, May 22, 2008
"B.C. Solicitor-General John van Dongen is concerned about reports that criminals may be using casinos to launder cash through slot machines and claiming the money as legitimate "winnings."

" 'It concerns me a great deal,' he said in an interview Wednesday"
B.C. too soft on illegal gaming: ex-chief, Sean Holman, Kamloops Daily News, October 21, 2009
"The former commander of B.C.'s now-defunct integrated illegal gaming enforcement team is questioning the provincial government's commitment to "meaningful" illegal gaming investigations.

"Fred Pinnock also described the RCMP's senior management in B.C. as demonstrating "wilful blindness" when it comes to the connection between illegal gaming and organized crime.

"And he said his provincially funded RCMP team should have been expanded, not shut down..."
B.C. Lottery Corp. the only one in Canada to be fined; Casinos across country are lax on money-laundering rules, Kim Bolan, Vancouver Sun, July 22, 2010
"B.C. Lottery Corp. is the only provincial gambling commission to be fined for failing to report suspicious or large transactions at casinos, an official with the federal regulator said Wednesday.

"Blaine Harvey, of the Financial Transactions and Reports Analysis Centre of Canada (Fintrac), would not comment on the $670,000 in penalties imposed on BCLC for more than 1,000 violations under the federal Proceeds of Crime Act. "But Harvey did confirm that Fintrac has not penalized any other gambling commission.

"...A Fintrac review last November identified a number of ways criminals were abusing casinos to launder money. They included buying large numbers of chips and cashing them out almost immediately, and offering winning gamblers a premium for their casino cheques or their chips and using them as currency in criminal activities..."
B.C. warned of organized crime's reach into gambling, Sean Holman, Globe and Mail, August 23, 2012
"An RCMP team targeting illegal gambling in British Columbia wrote a report more than a year ago warning that organized crime figures were likely involved in those activities. Three months later, the investigative unit that was funded by the provincial government was shut down.

"But a separate internal report the unit prepared in December of 2007 evaluating its future stated that high-level illegal gambling targets would conduct their operations with "impunity" if the team were disbanded..."
Province to review cash transaction rules amid laundering allegations; RCMP concerned about suspicious money movement, Andrea Woo, Vancouver Sun, January 8, 2011
"Amid RCMP claims that B.C. casinos are being used for money laundering, Solicitor-General Rich Coleman announced Friday the government will review how large cash transactions are regulated. Coleman, the minister in charge of gaming, will consult with agencies including the B.C. Lottery Corporation, the gaming policy and enforcement branch (GPEB), police and other stakeholders.

"...Insp. Barry Baxter, head of the B.C. RCMP's proceeds-of-crime section, said his investigators began to notice a few months ago that dozens of casino transactions they believe should have been flagged as suspicious were in fact only reported as large."
BCLC not complying with transaction reporting rules: audit, Jeff Lee, Vancouver Sun, September 13, 2013
" The B.C. Lottery Corporation has been under-reporting large cash transactions at its casinos that it is obligated to report to Canada's money-laundering and antiterrorism financing watchdog, according to a provincial audit.

"The audit says that for the last three years BCLC has not complied with rules issued by the Financial Transactions and Reports Analysis Centre of Canada (Fintrac)..."

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Sunday, April 13, 2014

No more reprehensible MP than this guy

Note: April 12, 2014, incumbent Conservative MP Rob Anders was denied renomination in the federal riding of Calgary-Signal Hill. The following was published here in 2012 and is worth repeating once again. Until now, this MP proved that loyalty overcomes stupidity in Stephen Harper's world. 

According to the National Post, Anders satisfies satisfied party bosses, even though his Calgary constituency wants wanted him replaced:
"Rob Anders has done it again. An MP widely considered invisible at best, and horrible at worst, has been saved from local rejection after party headquarters denied his own riding directors the chance to shop for a better Conservative candidate.

"For reasons the national office will not explain, the Conservatives have thrown blanket protection over the Calgary West MP to enforce his apparently unalienable right to carry their banner into the next election..."
* * * * *

Veterans called NDP hacks, Jeff Davis, Postmedia News
"OTTAWA — Calgary MP Rob Anders — who embarrassed himself by falling asleep in the Veterans Affairs committee last week — offered an apology to veterans in the House of Commons Tuesday.

 "...After nodding off in a committee meeting held in Halifax, Anders denied falling asleep. He later went on the offensive, describing two Afghan war veterans, who volunteer their time to help homeless former soldiers, as "NDP hacks" and supporters of Russian strongman Vladimir Putin.

"Anders apologized for his comments about veterans advocates Jim Lowther and David MacLeod, both of whom are card-carrying Conservatives."
I wonder if Rob Anders believes the people pictured below were also "NDP hacks."

Canada's Fallen Veterans - Afghanistan

The following was reported in my February 2 article Uncomfortable Parallels:
"After Rob Anders called Nelson Mandela "a communist and terrorist," Harper said the Calgary MP was a true conservative and faithful supporter."
.* * * * * 
Don Braid, Anders a political crank who deserved to go down, Calgary Herald, April 13, 2014
"Anders will now spend the rest of his term in Ottawa as the lamest of ducks. Which does not mean he’ll stop quacking. There’s remains a chance he could be nominated in another riding..."
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Thursday, April 10, 2014

No free lunches... ever

I published this article a year ago and repeat it because issues are little changed.  Recently, our promedia friends learned that BC Liberal chief Laura Miller was refusing to speak with Ontario police about possible crimes, without first getting immunity. They treated this as a non-story. Going further, Vaughn Palmer served as a Liberal water-carrier and tweeted that Miller had spoken to police seven months ago. His statement ignored the fact she was presently refusing cooperation.

April 9, 2013 Update:
I heard that CKNW's Bill Good responded on his April 5 morning show to selected critics, people he declined to identify other than through reference to hated bloggers. For a number of days, I tried to listen to the station's audio vault but the file for 8am to 9am was not available. Today, it was there and I listened. Mr. Good rants a bit, claiming again that blogs distribute "CRAP!"

He fails entirely to address the issues printed at this blog or Alex Tsakumis' blog. Perhaps because he cannot answer specific questions. Good repeats the tired old line that no management tells him what to say. Of course, the tired old answer remains, "No, they don't have to. They knew what they had when they hired you."

The issue remains that no legitimate or respected newsperson or news commentator should be pocketing cash or favours from organizations affected by their coverage. If they are taking benefits, those should be clearly disclosed, particularly whenever one lays claim to being unbiased in matters political.

Here is the article published April 3 that Mr. Good avoids dealing with.

* * * * *
Radio talker Bill Good received an award recently for distinguished service during his career in broadcast journalism. It came from RTDNA, The Association of Electronic Journalists. I surmise he heard about the award from his CKNW boss Ian Koenigsfest, who happens to be President of RTDNA.

I am a little confused by the award though. If Mr. Good is not a journalist, I wonder why the RTDNA is awarding him for broadcast journalism. If he is a journalist, Article 5A of the RTDNA Code of Ethics should apply. It says,
"Electronic journalists will not pay subjects or sources that have a vested interest in a story. Commentators or contracted experts are exempted.

"Electronic journalists will not accept financial compensation from those who seek to influence news coverage thereby compromising journalistic integrity and independence."
Some guests are paid to appear on The Bill Good Show, by Corus Radio or groups aiming to influence coverage of political, economic and other interests. Theoretically, that bias can be balanced by giving competing parties equivalent access, although neutrality is not universally observed at CKNW.

More problematic is acceptance by journalists of "compensation from those who seek to influence news coverage." According to their agents, the National Speaker Bureau,
"Vaughn Palmer, Bill Good and Keith Baldrey take their popular CKNW radio segment Cutting Edge of the Ledge to the platform, delivering British Columbia's political pulse to audiences, live and current."
The Edge of the Ledge roadshow edition appears before groups that have a vested interest in stories covered by the Bill Good Show, written about in the Vancouver Sun or reported on at Global TV. There are no better examples of apparent conflict than when the journalists are paid to appear before conventions of the BC Chamber of Commerce. The group is dedicated to exercising wide influence over public and political policies in the province. It was a leader in the fight to maintain HST and continues to advocate for:
  •  reduced business taxation,
  •  subsidies of mining and energy producers,
  •  long term tenures for aquaculture,
  •  decreased regulation of businesses,
  •  relaxed labour standards, reduced wages,
  •  limitation of union rights,
  •  voting rights for businesses,
  •  forced amalgamations of municipalities, etc.
These political issues are covered regularly by the Edge of the Ledge pundits during CKNW appearances and in their other works. Vaughn Palmer is regarded as the dean of the B.C. Legislature press gallery. The Chamber and its members, which include railways, banks, fish farmers, private power producers, law firms and other large industrial and commercial operations, have provided critical support to the government and have a particular interest in the continued success of BC Liberals vis-à-vis the opposition parties. It is not unreasonable to conclude that payments and hospitality given to journalists are designed to secure influence and partiality in return. Distributions of cash and favours create conflict for news people.

The Edge of the Ledge trio recently had a paid appearance at the Municipal Finance Authority of BC, a public body established by the BC government and subject to regulation by the BC Liberal administration. They also appeared before The B.C. Road Builders & Heavy Construction Association and the Certified General Accountants Association of British Columbia. Each group is directly affected by public policy and has vested interests in news reporting and commentary about political matters.

The Association of Professional Journalists publishes a Code of Ethics with a section "Act Independently" that speaks to the issue of conflict. It states that journalists should be free of obligation to any interest other than the public's right to know and, among others, includes these specific clauses:
— Refuse gifts, favors, fees, free travel and special treatment, and shun secondary employment, political involvement, public office and service in community organizations if they compromise journalistic integrity.

— Disclose unavoidable conflicts.
Award winning Canadian newsman Harvey Oberfeld spent his career in print and broadcast journalism and was a key part of BCTV's Bell/Bradbury team, widely regarded as North America's best regional news operation in its day. Successor Global TV enjoys benefits from BCTV's insurmountable ratings because The News Hour had become an ingrained habit. Oberfeld believes it wrong for journalists to accept any kind of remuneration or benefits from people or organizations they cover or may cover.
"When I was at BCTV, it was my policy not to accept any form of compensation or freebie from any person, any organization or any company I covered, or might even end up covering. I personally declined the free meals served reporters at events ...accepted only a coffee and, must confess, occasionally a muffin!

"At BCTV I and a producer led the effort that developed a written policy barring anyone in the newsroom from accepting freebies offered, like free ski passes, weekend car rentals, hotel stays etc.....and since we didn't want to be rude, any "gift" sent by fans or firms to an individual or the newsroom staff were just to be left on a table for all to share. That was then.

"So you can imagine, I would NEVER offer myself or accept paid speaking assignments from anyone or any organization I could have covered in the course of my reporting. Who could ever prove that payments for participation in an event isn't intended to soften coverage.

"It's not just a question of whether there's anything wrong with that: the fact that anyone reading, listening or watching could be concerned about it would be enough to put me off."
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Monday, April 7, 2014

Guts and glory - updated

Title of the final article on Ian Reid's website, The Real Story, began with the words: Guts and glory. Of course, he was not writing about himself but those word applied to Ian, along with wisdom, dedication, loyalty and generosity.

His journey ended Saturday. That it lasted until April 2014 was evidence of extraordinary courage.

Rest in peace friend. We'll miss you.

   Goodbye to my friend Ian, by RossK

   A salute to a man we can all admire, a Northern Insight piece published previously.

   It is never easy to say goodbye..., Facebook entry by Alex G. Tsakumis, republished with permission:
"It is never easy to say goodbye to a pal and colleague. Ian Reid served as Chief of Staff to my friend Carole James before she was disgracefully removed as leader of the BC NDP. He died last night after a lengthy battle with cancer, and this province is all the poorer now that he is gone.

"Through his writings as a blogger and our lengthy conversations about the destruction of democracy in this province at the bloody hands of the BC Liberal thugs, l learned more about social justice and community than I did in any classroom, workroom or backroom. Despite my philosophical conservatism, we found great common ground and often met in the middle, because, as he liked to put it, 'Alex, common sense knows no political stripe.'

"Ian was brutally honest, startlingly intelligent, exceedingly gifted, and utterly lovable. In this province, he was a brightly coloured comet of honesty and integrity in a business of pallid etchings across dark skies by darker men and women, who almost always work for 'families first'--theirs. He knew the arranged theft of BC Rail as well as anyone. He wept for our teachers and paramedics; Ian understood what was necessary to end the tyranny of the last decade, in May of 2013, unfortunately, few listened. It wasn't about politics, it was about people--he knew it and he lived it. Ian's wish for more civil, meaningful political discourse in British Columbia may one day be realized.

"Sadly, he won't be here to see it. My deepest condolences to his husband Paul and Ian's children, and, indeed, to any and all that loved and appreciated such a remarkable man."
A loving farewell to Ian Reid, by the NOW Team
"A mighty heart has stopped...

"That compassion shines clearly throughout his life. As much as Ian enjoyed politics and the cut and thrust of strategy, what truly drove him was love: for Paul; for his children, his friends and the people he mentored and worked with; but also for the community around him, near and far.

" 'An injustice to one is an injustice to all' was far more than a slogan to Ian. He felt it keenly, and his level-headed demeanour belied a strong, often fierce passion..."
A tribute to Ian Reid in the Legislature of British Columbia by John Horgan, MLA, April 7, 2014
"I rise with sadness in my heart to announce to the Legislature the passing of my friend and a very well-known colleague of those on this side of the House, Mr. Ian Reid. Ian passed away this past weekend after living for 12 years with cancer. He did so with dignity and with a sense of grace that one only discovers when you're in your final moments.

"Ian leaves behind his son, Shamus; his daughter Jordan and other daughter Alexis; his dear spouse, Paul; and the mother of his children, Jane. He leaves a vacuum for me as a friend but also for those of us on this side of the House.

"He started in politics working for Darlene Marzari. Those who are from the downtown Vancouver area know Darlene. The only person that could keep pace with her style and panache was Ian. His taste for ties and socks was legendary. He started as a constituency assistant and rose to the position of chief of staff for my colleague the member for Victoria–Beacon Hill — and every job in between. He did it, again, with passion and verve.

"He understood polling better than anyone. He was a business partner of mine when we were not involved in politics. He was much sought-after by industry, by municipal politicians and by politicians at every level.

"Despite his professional acumen in the areas of understanding of the art of politics, it was his passion for people and his understanding that what we do here, all of us, regardless of where we come from, is grounded in trying to make the world a better place and to ensure that we have the respect of our peers and our communities.

"I think that for all of us, regardless of our political stripe, today we've lost an outstanding individual. Always at the forefront for him were the people that we serve. I'm going to miss him tremendously, and I would ask the Speaker to send the House's condolences to his family at this difficult time."

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Thursday, April 3, 2014


An old item, published January 30, 2013 and updated in March with an audio clip from The Bill Good Show on CKNW. Brought to the top again in October 2013. This one is an all-time favourite and after reviewing NW's April 2 segment, with the estimable Sandy Garossino replacing Ms. Kurl, this should be brought forward again. I could have written a new piece with new examples of falsities, but this will suffice.

Don't miss the later article, Pundit, partisan, or? Enjoy:

* * * * *

Monday, in Something Big, Out of Something Small…, Alex Tsakumis mentioned a fact obvious to anyone paying attention, that Bill Good and his CKNW show are dependable instruments playing in the BC Liberal band.
"At the end of this morning’s ‘Bill Good Show’, the Vanilla One and producer Jennifer Gares, huffed and puffed about accusations that they take set calls by BC Liberal sycophants and plants by operatives."
Good and his radio friends don't enjoy being taken to task. It's not something that comes up often when you choose the guests and the callers and use a tape delay and kill switch to maintain your own dignity. Of course, ladies and gentleman of the corporate media don't have a kill switch on blogs, something they obviously regret.

It was on Bill Good's show that pundit Vaughn Palmer described his attitude toward bloggers he described as nut cases,
"Nincompoops ranting in their underpants is the term for people blogging, for me."
Two days after AGT found fault with NW's morning show, the host was still annoyed. Bill Good chose a segment to defend himself that ensured his defence had zero credibility and reinforced Tsakumis' description of him as "breathtakingly foolhardy."

Playing tag team with three guests, each appropriately described as a BC Liberal insider, just wasn't the correct moment to claim your show is not loaded with bias in favour of the party it is accused of serving so faithfully.

Let Bill and friends speak for themselves (the short audio clip portrays a bit of their emotion):

CKNW'S Bill Good, January 30, 10 am hour:
"[Producer] Jessica [Gares] and I have been, ah, oh, under attack, small attack, small people, small minds, I think, accusing us of, um, taking stacked calls. In this case, that particularly either favour the Liberal Party, or are deliberately hateful towards the NDP. And I try to. First of all, I say, what's a stacked call, or what's a planted call?"
Bridgitte Anderson, Alise Mills, Shachi Kurl  in unison:
Mr. Good:
"...Um, I'm not sure what a stacked phone call is..."

You know what I would say has changed? Not so much social media itself, like Twitter and Facebook. Blogs! The blogosphere! Because there are some that just propagate toxic waste, poison, and they make crap up!
"Mumble, mumble."
Bridgitte Anderson, former Press Secretary to BC Liberal Premier Gordon Campbell:
"...Some of the blogs out there are horrendous, the kinds of things that they say about people that are simply not true. But, then they get repeated and so it's that viral effect online. I would love to see if there is some sort of, I don't know, check and balance system, I don't know how you do that but honestly, people are starting rumours that are no basis of fact on blogs. They're just horrible."
Alise Mills, BC Liberal strategist:
"I don't know how they do that, I don't know how they do that knowing you have a family or that you have a profession or that you've worked sooo hard in your life and, those, I knew this conversation was coming up and I looked at some of the blogs and they're just garbage.

"They're absolute garbage. I mean the National Inquirer is a better publication than half those blogs out there, in political life in BC."

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Wednesday, April 2, 2014

Baksheesh, bustarella, schmiergeld, kuroi kiri

Reprinted from November 2013.

Organizations that aim to safeguard assets create effective operational and audit controls. They also respect codes of ethics like that of SCMA, a group of professionals working in procurement, contract administration and materials management. It states,
"...members must ensure that the objectivity of their decisions is not compromised or unduly influenced by the acceptance of gifts, gratuities, or hospitalities of any kind. Members should be discerning in their business and social relationships and activities..."
Protections are particularly needed in the public sector where citizen interests are scattered but the values of controlled assets can be enormous. This fundamental principle of commerce is routinely ignored in the business of government; especially right here, right now.

For years, the BC Liberals have been financed by what the Sun's Gordon Hoekstra, in Corporations fill Liberal coffers, called "a well-heeled corporate coterie." Among the lead supporters is gas company Encana, which, with Teck Resources, added $2.5 million to Liberal accounts. These and other companies made large contributions for reasons of self interest. Indeed, they got results.

In 2005, BC's revenue from natural resources was 18.5% of the value produced. In 2012, the revenue share was 11.4%. Had the percentage of 2005 been applied to the most recent fiscal year, the province would have recorded additional resource revenues of $1.2 billion.

As Everett Dirksen might have said,
"A billion here, a billion there, and pretty soon you're talking about real money."

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Tuesday, April 1, 2014

"Cardboard box? You're lucky..."

Vancouver firm promises to build home in Third World for every local condo sold, The Province, Feb 2014
"Two Vancouver businessmen have started a real-estate gifting program with the lofty aspiration of providing 30,000 homes by 2020..."
Humanitarian movement, scam or novel self-promotion? We don't know and we're unlikely to learn exact details because the newspaper quoted one entrepreneur,
"We are not a registered charity. With our corporate charter, any profits are put back into the buildings and gifting of homes."
Roughly translated, "Trust us, we'll be good."

I wondered what sort of house would be constructed in the Third World if I rushed out and bought a new condo. That stimulated recall of a famous discussion between four Yorkshiremen. I think I was in a conversation like theirs after a reunion with high school classmates from the sixties.

If you're my age, you've probably had one that included a bit like this,
"I had to get up in the morning half an hour before I went to bed..."
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Premier Clark ditches coal & LNG for renewables

Christy Clark announced today that British Columbia is terminating coal exports and ending negotiations to provide free land, power, natural gas feedstock, shipping facilities and other capital and operating supports demanded by the fossil fuel industry. Along with permissions for temporary foreign workers, the subsidies would have allowed multinational energy companies to ship British Columbia LNG to Asian markets at acceptable levels of profitablity.

Despite more than $20 billion in coal exports from the province during her three year tenure as Premier, and the promises of gas exports worth trillions of dollars soon after the next election, Clark says it is time to bring greater focus to our "bountiful supply of renewable resources."

Because Clark's aim is to grow the economy to provide her close friends, family and ex-family with a strong, secure and wealthy future, she personally designed and guided a new project under the BC Jobs Plan. Liberals plan to initiate the export of clean, fresh, renewable, nitrogen-rich mountain air to smog-addled cities of Asia.

Bags of unprocessed, organic, naturally fresh air are to be hand-packaged near the sacred headwaters of the Skeena, Stikine and Nass Rivers, in the rugged mountains of BC's remotest reaches, at the stunningly beautiful edge of the Spatsizi Wilderness where the headwaters begin for three of the world’s most important salmon rivers: The Skeena, Stikine and Nass. Without this new industrial activity, the Wet’suwet’en people would have been required to endure coal bed methane development in their traditional territories.

Clark has worked steadily to realize this vision. She says successful marketing has required endless travel, an unprecedented wardrobe and far too many photo opportunities, events she always resists.
"No premier in British Columbia's history has needed as many changes of clothing and few voters realize the pressure this imposes on my team of dressers. They must meticulously record the outfit I wear for every engagement to ensure I never repeat myself. One of my staff is tasked with wearing new shoes before I put them on to ensure I don't serve the people while my feet are sore."

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