Sexing Up Crocus

There's a cynical saying in modern journalism that one shouldn't let the facts get in the way of a good story.

The recent media feeding frenzy over the Crocus Investment Fund (or CIF to those who actually read the auditor's report) is a good illustration of this maxim in practice.

With the Opposition stepping into a big cowpie over alleged "withholding" of material from the Auditor General, we try to hang on to some hope that Manitoba's journalists haven't completely given up on their responsibility to pursue truth, not just a sensational headline. In that spirit, here's a recap of what we actually know about the recent developments on the Crocus file:

1) The government did exactly what the leaked cabinet document recommends -- saying "no" to Crocus' request for a relaxed set of rules - thereby protecting taxpayers and Crocus shareholders.

In fact, the document says that if the government had done what Crocus asked, the liquidity and pacing concerns would possibly get worse in the future.

However, as it turns out, as the auditor's report actually shows, the liquidity problem that was raised in 2000 never actually occurred.

2) The issues in the leaked document -- whether the Fund would have enough cash to pay back investors without selling off some of its investments (liquidity) and whether there should be changes to how often someone could invest in the fund (pacing) -- were not the reasons why the Fund ultimately failed. Crocus failed because its shares were overvalued -- something the auditor determined the government had nothing to do with and the cabinet document doesn't discuss.

3) And of course, the Auditor General did indeed have the cabinet document in question when he looked at Crocus. Jon Singleton may not remember it, but his former Office has verified that it was part of the evidence they considered when they wrote the report that cleared the government of any responsibility for the Fund's failure. The auditor's report also clearly states that the liquidity and pacing issues -- which were in the Cabinet document -- were well-known by the government in mid-2000 (before the Cabinet document's date of November 2000).

So here's what the big story boils down to:

* there's a document written by government Finance officials advising the government to protect taxpayers, which the government did;
* this document contains information that everyone who actually followed the issue already knows -- because it was reviewed and reported on by the Auditor two years ago; and
* this document is about a totally different issue than the one that led to the collapse of Crocus --- overvalued shares.

Let's face it. The real issues surrounding Crocus is boring. Reporting on "liquidity", "pacing" and "valuation" does not make for front page copy.

It's much more exciting to cover the misguided memory of a former auditor, the overheated imaginations of the Opposition who sexed up the relevance of a leaked 6 1/2 year old Cabinet paper -- and who have constructed an elaborate conspiracy theory that more properly belongs on Art Bell's late night radio show than any respectable news program.

The media has a responsibility to do more than tell a good story. They are trusted to tell the truth -- even when it's desperately unsexy.

Salivating opposition have severely overplayed their hand

Well, well, well.

We now learn the smoking gun turns out to be a puff of smoke.

Despite clear evidence that the 'shocking' leaked cabinet paper contained no new issues that weren't dealt with in Jon Singleton's report, and that (as the auditor's report clearly and correctly delineated) there is a world of difference between liquidity and pacing concerns versus the later Crocus valuation debacle -- the opposition, encouraged by an unquestioning media, kept on perpetuating confusion for days in hopes of creating a "scandal".

An indignant Hugh McFadyen reported Monday that he called Singleton on the weekend and the former auditor didn't recall the document. Ooooh, it must have been hidden said Hugh. And the media was happy to repeat it all.

But chinks in this line of reasoning, such as it was, emerged pretty quickly. Yesterday, to her credit, the Peg Sun's Rochelle Squires got to the heart of the Singleton issue that should have been asked immediately. She quoted the former auditor as saying: "There's nothing about this document that wasn't covered in our report," even though he apparently doesn’t recall seeing it.

Isn’t that the most important thing? Whether this leaked document was at all relevant, not just that it was seemingly new? Why didn’t anyone in the media ask that before?

Too bad few people, including her bosses at the Sun and Tory cheerleader Tom Blowback, paid much attention.

Moreover, it now seems much of the excitement around Singleton's lack of recalling the document was a mere memory lapse.

So we’re treated to days of breathless media coverage based on Jon Singleton’s amnesia? That's pathetic.

Maybe the media will realize the opposition (and the media themselves to a degree) have severely overplayed their hand. And maybe, just maybe, the media will now begin to be a little more measured while chasing every test balloon the opposition throws out on Crocus.

As to the heart of the whole Crocus issue -- if you believe the government should have rang the alarm on Crocus in 2000 over liquidity gripes faced by almost all companies at some point, then you believe in state socialism. You would therefore believe that the government is responsible for what happens internally in all private firms, that investors are not responsible for their own due diligence and the public should be told by the government who the winners and losers in our economy are.

Who would have guessed Hugh McFadyen and Jon McGerrard are socialists?

Does Singleton have memory problems -- or did Huey simply get it wrong?

Still nursing this flu ... so we've been on the web and watching TV for a good part of the day.

And having done so, we need to ask whether the Winnipeg media are stupid, or worse, complicit in putting forward a lie?

Here's what we mean. This is the new "news" of the day:

Huey says as to the 2000 Cabinet paper that has the media in a tizzy: "I phoned [Singleton] at home and he said that he had no recollection of seeing that document; if he had seen it he would have remembered it, because it was a very significant document."

However, spending a couple of minutes looking online through the Crocus report, which anyone could do, here is a quote from Singleton's report (found in full here) on this very topic of liquidity concerns back in 2000! That's right, 2000.

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- Pacing requirements (new share sale proceeds) that are net of redemptions or removed altogether in favour of a more aggressive maintenance test (70% versus 60%). CIF was very up front with IEDM as early as mid-2000 on the fact that they would run into liquidity problems if pacing continued to be based on 70% of gross sales;
- The elimination of the $30 million sales cap; and
- Increasing the allowable size of investees by using a net asset test rather than a gross asset test

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So, either Singleton has a bad memory -- because in the report he seems clear that he understood the liquidity issue goes back to the same time as the cabinet paper. Or Hugh is either purposefully or accidentally mischaracterizing Singleton.

That the opposition is happy to confuse the liquidity and pacing issue with the actual problems with the value of Crocus's investments that led to shares stopping trading in 2004 is not at all surprising.

They want the confusion.

But that Manitoba news outlets are happily following along, confusing the issues is doing their public a great disservice.

In effect, they are lying to Manitobans.

At home with the flu ...

And the rest of the BBA crew has been generally derelict in their blogging duties. Tut, tut.

Through the fog of ailment, however, we notice a good correspondent has sent us this thought for the day:

"You have to wonder about priorities of the Leader of the Loyal Opposition, who demands the Premier return from Washington early and NOT press the U.S. on passport issues (the top story on CTV national last night and leading national papers today) -- an urgent issue affecting virtually every Manitoban, every Canadian and a huge portion of our economy. Instead, Hugh McFadyen demands the Premier come home to address a six-year-old document that merely confirms what was already known -- that Crocus wanted its liquidity and pacing requirements relaxed and an even bigger tax break, a request which the government denied. All old news.

What sort of message does that send Manitobans about McFadyen's judgment as to relative priority of issues facing our province?"

Good question.

More tomfoolery

So Bunkbeck takes a run at David Suzuki today, retreading the old saw that unless the good doctor tours the country in a Prius, eats macrobiotic salads exclusively and wears a hair shirt, he is a shameless hypocrite and therefore there is no human-created climate change.

Ahh, stretch that out for 400 words and Tom's work is done for the day.

Nice work if you can get it.

It's just another example of the typical intellectual laziness and dishonesty coming from our favourite overpaid blowhard (at least that's what we hear his colleagues at the 'Peg Sun have to say about our Tom).

We also are trying to understand Tom's past couple of days' crusade over Spirited Energy expenditures. We read that he got a printed out list of every single payment made on the campaign, rather than photocopies of the actual invoices. And this calls for, apparently, a look by the Auditor General.

We're not sure what Tom thinks is there, but apart from likely being a waste of Carol Belringer's time, it might be helpful to have her do an audit, if for no other reason than to perhaps further expose Bunkbeck's obsession with his anti-NDP tomfoolery.

Solidarity not quite forever

In the file called strange news releases, we add to the one noted by Mia about Steven Fletcher's odd decision to use taxpayer resources for a partisan congratulatory message, by noting this one from newly-minted Treasury Board president Vic Toews.

On the surface, it is a completely ignorable document congratulating his own government for its agriculture initiatives -- itemizing increased payments in some sectors and other things totally indistinguishable from a policy point of view from the previous Liberal administration.

But then, there's the way this news release -- of no apparent news value -- ends:

On Western Canadian wheat and barley producers, Minister Toews said the following:

"We have a world-class product and farmers should have the option to maximize their returns and earn their money directly from the marketplace if they choose. Canada’s New Government listened to Western Grain producers when they said that they wanted marketing choice for wheat and barley while continuing to preserve a strong Canadian Wheat Board. The government is giving them an opportunity to stand and be counted by voting in a plebiscite."

Out of the blue, for no apparent particular outward reason, Toews gives a bland, lukewarm nod to the referendum on the Wheat Board.

We can just imagine the phone conversation that led to this document.

Chuck Strahl: Hey, Vic. It's me, Chuck. You know, you've been kinda silent on this Wheat Board thing.

Vic: Well, you know Chuck, it's kind of divisive in my back yard. You know most Manitoba farmers don't like what we're doing.

Chuck: Yeah, Vic. It's that kind of team solidarity that makes me warm and fuzzy all over. I'm also hearing you're dissing me to anyone who will listen.

Vic: Well, er ...

Chuck: Fix this, Vic. Set the record straight -- or this will be at Cabinet.

Vic: Sure thing, Chuck. You got it.

One tepid statement of support, coming up.

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And while we're referring to inappropriate interventions by Steven Fletcher, his apparent cold call to Mia Rabson last week to go nuts over the East Side transmission line was a bit of a head scratcher.

We thought now in government, Fletcher may have less time on his hands to play silly-bugger. Apparently not.

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While we're looking at the Wheat Board vote, why isn't the Manitoba government making some hay over the three ridiculous ballot questions being asked by Strahl?

We mean, really, the party that brought us the idea of the Clarity Act is now imposing a referendum on farmers that is anything but clear.

We could hear the clip now: "We wonder why the Conservative Party feels clarity is important for Quebec referendums, but it's not good enough for Western producers?"

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Lastly, we feel for the Peg Sun's John Gleeson, as we think he must hate his job.

Last week he lamented Sun readers' apparent lack of intelligence with their anger over some businesses' opposition to a new holiday in February.

As he made the stock drive-by slurs on our province with a bunch of Saskatchewan-envy lines straight out of Adrienne Batra's talking points (they have some lower tax rates than us, you know -- it's outrageous) and an attempt at a clever turn of phrase ("It's like the public is saying, 'Give us the circus, but you can hold the bread'"), the overall message from Gleeson is clear.

His readers are stupid.

That must really suck.

It’s time the Flat Earth Society had its due

Tom Blowback’s latest weekend missive attacks media coverage of the most authoritative report on climate change ever made public. It was authored by 2,500 of the world’s leading climate scientists.

His basic point was the reporting was one-sided – where were the climate change deniers? How sloppy, he said.

Well, there’s a simple reason why – the consensus, actually, is one-sided and most observers, even the-not-too-diligent media types, are now generally aware that these doubters are a tiny minority in the science community and most can be easily demonstrated to be funded by big oil and other non-renewable energy interests like Exxon.

This has been well demonstrated. They have been exposed, debunked, outed.

Their last hurrah in Canada was last year when some 60 signatories sent a letter to Prime Minister Stephen Harper urging him to ignore the legitimate science and overwhelming evidence.

As it turns out, only 19 of the signatories are Canadian (speaking to the American base of this organized, funded denial campaign). One example of the Canadians to sign (as outlined at desmogblog.com), Ross McKitrick, a senior fellow with the Fraser Institute was one of the signatories, received $120,000 from ExxonMobil over the last three years.

A few days after Prime Minister Harper received that letter, another came from 90 of Canada's most senior climate scientists and oceanographers. This second letter cited "an increasing urgency to act on the threat of climate change", and called upon the government to develop a national policy on climate change and strategies to adapt to what it said was "the inevitable changes that will affect us all".

As most Canadians understand, global climate change caused by human activity is real and must be addressed. That's why Harper is running hard to catch up to the issue.

To give the Exxon-funded deniers more media bandwith would simply be a tragedy. They’ve had too much space already.

It would be like giving equal air time to the Flat Earth Society.

We’re not sure who Tom is trying to impress.

It sure won’t be his children and grandchildren.

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The Mountain Avenue opinion and editorial typing school demonstrated again last week how totally out of touch they are with the Manitobans whose political and policy views they are trying to influence.

Former city hall reporter, now editorialist, Dave O’Brien launched a tirade on Gary Doer’s convention speech last week – specifically his comments about the Tories’ propensity for privatization.

O'Brien states that when Doer pointed out that McFadyen would undoubtedly take Manitoba Hydro down the privatization road, it was nothing more than a scare tactic.

Huey McFadyen highlighted in his own bios that he sat around the cabinet table and helped orchestrate the sale of MTS.

O’Brien stated the issue is now “so politicized” that we can never find out objectively if actually privatizing Hydro would be good or bad.

He asks the wrong question. It's not about looking at studies and reports. It's about motivation. And the motivation behind privatizing MTS was not efficiency, but greed.

Undervalued stocks led to a very successful public offering, and lots of Manitobans made money, to be sure. But that money was made off of value created by decades of ordinary Manitobans’ investments – you, us, our parents, our grandparents. And that’s all gone.

On top of it, it has led to increased rates in many areas outside Winnipeg. This is in stark contrast to SaskTel, providing quality service at low rates.

The motivation for privatizing Hydro would not be efficiency. Regardless of the outcome of a dozen reports it would be the same, greed.

The chink in McFadyen’s tin armour is his history. As we noted he has admitted to a key role in organizing the sale of MTS. He was one of Filmon’s top advisors when Filmon first promised not to sell MTS and then did just the opposite after the 1995 election.

Then there's Hugh’s own history with the Mike Harris government as a consultant on deregulating Ontario Hydro – which was not successfully fully privatized due to public outrage. But it was chopped up and Ontario’s power system is a true mess as a result – including outrageous power rates.

So when the Premier speaks about the Tories selling Manitoba Hydro, it's not a scare tactic it's a reference to past performance by Tories. It's in their blood.

O’Brien and company can try to sell Hydro privatization to the broad public. But we think that dog won’t hunt.

Note to Mr. O'Brien: it's not a scare tactic when it's true.

Holiday rap

It looks like virtually everyone wants a February holiday.

Spurred on by the introduction of "Family Day" in neighbouring Saskatchewan, local radio jocks Tom and Joe at 92 CITI have been waging a campaign the past while, including an online petition with thousands of signers. Late last week the Free Press got on the bandwagon.

But it looked like the Manitoba government was the big stick in the mud with labour minister Nancy Allen turning a cool shoulder on the idea, saying it wasn't a government priority at the moment.

Tom Blowback wakes up to the issue today, giving credit to the CITI guys and others for driving the issue and slamming the premier as Gary-come-lately, while not saying where he stands nor why the Sun never woke up to this issue at all.

Either on purpose or accident, he gets the history of this little thing totally wrong.

"The issue even made it on the agenda at the NDP convention over the weekend, receiving overwhelming support from voting delegates," he writes.

Even made it on the agenda?

Here's the last line from Mia Rabson's Jan. 31 story previewing the NDP convention:

"There is competition afoot over a statutory holiday on Feb. 15. The St. Norbert NDP wants it to become Flag Day, while the Riel constituency wants the same day designated Tommy Douglas Day."

Not just MADE it onto the agenda, but there were two competing resolutions.

Further, as Tom wouldn't know or bother to find out, the deadline for submission of such resolutions from constituencies was Dec. 19.

So just so everyone is clear, the party was WAY ahead of CITI and the others.

Now that a February holiday seems like an unstoppable train, it's little wonder Tom took a pass on his usual modus operandi of quoting the largely interchangable Batra-Starmer-Martin-Angus surrogate Conservative Party talking heads to begin mounting an opposition campaign.

He's not that dumb.

If the government didn't want to seem ahead of the issue too early and simply be slammed as "anti-business" by the same baying proxy Tories mentioned above, who can blame them?

The way it's turned out, Gary Doer should get credit for bringing in the holiday with Manitobans and credit within the party for turning a grassroots convention resolution into law.

And he can also credibly tell the business community it wasn't an idea the nasty socialist government has foisted upon them, but a widespread movement that all parties got behind.

It's just too bad it doesn't look like it's going to be "Tommy Douglas Day", but a day off next February sounds pretty good to us.

Vic's stenographer

Today CTV reports that the C-17 contract is all but signed and Quebec is "only" getting about 25%-30% of the desirable aerospace contracts, while Manitoba retains about 20%.

On the surface, this appears to contradict reports Quebec senior cabinet minister, Sen. Michel Fortier, whose signature is needed to finalize any deal, would not sign the papers unless 40% went to Quebec firms. These suggestions raised the spectre of the CF-18 affair -- an episode in pure pork barrel politics from a Conservative government in Ottawa with Manitoba at the losing end over Quebec.

Following that point in time, even mentioning Brian Mulroney's name in this province could cause fisticuffs for years to follow.

However, today's news would seem to vindicate Tom Blowback’s recent column asserting forcefully (particularly forcefully) that the reports of Fortier's interference were just that -- made up, invented reports by malicious media types.

"Just a media "report" alleging he's "reportedly" doing it (that's media-speak for we don't really know but we'll say it anyway), regurgitated by other media and splashed on the front page like a cow's breakfast at dinner time."

Slap down time, Tom! Nice one. Hit 'em agin'.

Of course Tom went on to extensively quote Vic Toews about how the whole thing was nonsense and after all, Fortier was never quoted anywhere saying anything like that.

True enough.

But isn't it odd that several national media had attributed in separate stories comments like that to Fortier at the same time, quoting senior, yet anonymous, federal government sources? Did they really just make it up? Or could they have been just repeat something some idiot told them without checking?

What's the deal?

Consider this from the Globe and Mail this past Tuesday, by reporter Daniel Leblanc:

"Public Works Minister Michael Fortier, who is also the minister responsible for Montreal, had been fighting behind the scenes to obtain the "maximum for Quebec," a government source said. But Mr. Fortier failed to secure benefits in the 40-per-cent range for Quebec as he had hoped, and the government is now publicly thwarting any effort to increase benefits in favour of a specific region...

"The issue has created touchy relations between Mr. Fortier and the Department of National Defence, which wants the planes as soon as possible and feels that his demands for benefits in Quebec are unrealistic."

Seems like it maybe wasn't all nonsense now, does it? A quick Google search of Daniel Leblanc and you find out he's a veteran on Parliament Hill and one of the journos who broke the sponsorship scandal (whut dat?).

So, you decide who's more likely to have had the goods: an investigative journalist with serious sources in Ottawa, who stands by his story even after official government denials; or a cartoonish Winnipeg columnist who regularly does steno work for Vic Toews?

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So why did Fortier actually lose? Because of the great power of Vic Toews?

Hmm. Maybe.

Or maybe the PM remembers all-too-well CF-18 and how it served to alienate the West from not just Eastern Canada, but from Mulroney's Tories, giving rise to the Reform Party.

He should remember it very well, yes?

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ANNOUNCEMENT: We're introducing a new feature called Kevvie Watch. In today's instalment, we merely want to extend our well wishes to the soon-to-be-former-(again) MLA for Inkster who plans to pay for an observer seat at the NDP convention this weekend. Enjoy yourself, sir. We're sure the party will gladly take your money. (Try a few raffle tickets while you're there.)