Monday, April 14, 2014

Clark's answers on RCI role don't add up

Christy Clark needs to provide better answers about her previously undisclosed role with RCI Capital Group.
In 2007, Clark signed a contract to become founding chair and director of an RCI subsidiary that hoped to win multimillion-dollar contracts to bring international students to Canadian universities. The universities would get high-paying students; RCI would get money for recruiting the students in Asia; and Clark would get finder’s fees and four per cent of revenues.
Since becoming premier, Clark has promoted RCI, which collects fees for arranging foreign investments in Canada, on two trade missions and appeared at a company media event.
The appearance of conflict is unavoidable, especially as Clark failed to disclose her past involvement with RCI. A politically well-connected company that employed Clark is benefitting from her efforts as premier.
And Clark’s explanations have failed to add up.
Initially, she denied a connection with RCI and founder and CEO John Park. 
When a National Post reporter showed her the contract she had signed to work for the company, Clark said she never actually did any work or got paid. 
“When I worked in the private sector, I talked about doing some work with them — but I was never paid for any work with them,” said Clark. 
But Clark didn’t “talk about” doing work. She signed a contract, which promised an annual salary and bonuses - $20,000 if some B.C. universities came on board.
Clark says she left the firm by calling Park and telling him she couldn’t do any work for the company because she was starting a new job as a talk show host for CKNW.
Anyway, she says, she understood the project never went anywhere and the subsidiary was shut down within a couple of months.
But the contract was signed by Clark on Sept. 27. She had already been working for CKNW for a month by then. That claim doesn’t add up.
And reporter Bob Mackin shared a letter that RCI sent to the University of New Brunswick proposing a $52-million deal to recruit and deliver international students. That letter referred to Clark as the company's current chairwoman. And it indicates she was copied on the proposal.
So the claim the company was quickly shut down doesn’t add up.
The other problem is that Clark’s approach to this looks inexplicably sloppy.
She took the time to sign a contract - and even amend it to improve her compensation - to join the company. She accepted a director’s role, which carries serious responsibilities. She allowed her name to be used to promote it.
But when she quit, she apparently never thought of sending a resignation letter. A phone call was supposed somehow to nullify the contract. 
That’s baffling. Any competent person knows the importance of handling business affairs properly. A signed contract can’t be undone with a phone call. A letter of resignation - which Clark should have been able to produce when questions arose - was required.
Parks’ explanations have been equally puzzling. Initially, he denied Clark had ever had a role with RCI. 
Confronted with evidence, he said Clark had been hired, but the company was quickly shut down.
But the province’s corporate registry shows the subsidiary wasn’t shut down until 2011, after Clark was elected premier.
Park blames sloppiness in doing the paperwork to close the company, though he hasn't produced any written evidence to support his claims about when the subsidiary ceased operations.
It’s the second revelation about previously undisclosed and relevant business activities that have emerged. Clark was also a partner in her former husband’s lobbying company during her time out of office, but never revealed her role.
Clark was entitled to work during her break from politics. But citizens are entitled to disclosure of those activities - particularly when Clark is using her position in government to advance the interests of those companies.

Thursday, April 10, 2014

How much longer does Postmedia have?

I’m rooting for Postmedia. But the latest quarterly results released Thursday don’t offer much hope for the future of the corporation.
Since the company took over the assets of Canwest in 2010, it has gone from weakness to weakness. The problems aren’t unique to Postmedia, of course. Newspapers and other traditional media are being hammered by a loss of audience and advertising revenues.
Postmedia was slow to accept that reality. And its response has been inadequate.
Basically, the corporate strategy is to cut costs, increase digital revenue and try to get readers to pay more for content, whether it's delivered by print, online or through mobile devices.
But it’s not working.
In the latest report, revenues are down 9.1 per cent for the quarter. That follows declines of 9.6 per cent for the 2013 fiscal year and 7.4 per cent for 2012. 
Since Dec. 1, 2011, revenue has fallen by $181 million.
The company launched a three-year cost-cutting program in July 2012, and reports it has found $98 million in annualized savings. That’s not nearly enough given the revenue drop. But deeper cuts will reduce quality and service and lead to more revenue losses, a vicious cycle that usually ends badly.
The plan to boost digital revenue has flopped. Digital revenue was down in the quarter.
The effort to get people to pay more for content is likewise stalled. Circulation is down more than 11 per cent compared to a year earlier, and price increases have not been enough to increase revenue.
And people have proved reluctant to pay for online content, despite the introduction of paywalls. 
Postmedia claims 140,000 registered online users, but won’t say how many are paying customers and how many are print subscribers who registered for free access.
In any case, only 5,000 new people signed on in the last quarter, or about 500 per paper over the three-month period. That’s not enough.
Postmedia is hoping that a planned relaunch of the print products and new tablet and smartphone subscription options will turn things around, or at least give management some breathing room. 
If they don’t, the corporation’s future is grim. Based on the current trends, Postmedia is a year or two away from facing major problems in coming up with the cash flow to make the required interest and principal payments on its debt. Asset sales might buy a little more time, but they don't change the fundamentals.

Wednesday, April 09, 2014

Three numbers that will tell the tale for Postmedia

Postmedia will releases its latest quarterly results Thursday.
Here are three numbers that will tell if the company is making any progress toward a viable future.
Revenue: The amount of money the company takes in has been plunging since Paul Godfrey and hedge funds bought Canwest’s assets. Nothing can save the company unless the freefall is arrested. 
Revenue will still be lower than the previous year, but unless the rate of decline slows to five per cent or lower, there is little hope.
Digital revenue: Postmedia’s digital strategies have fizzled, and managers have come and gone. The company needs to show some sort of digital revenue growth - at least four per cent.
Digital subscribers: A key element of the corporation’s strategy is getting readers to pay more for the content. It hopes tablet editions will help, but the current indicator is digital subscribers. Last quarter, Postmedia said 135,000 people have registered for access to newspaper websites. But it refuses to say how many are paying customers, and how many are subscribers registering for free access.
If the strategy is working, that number should increase to at least 150,000.
The quarterly will present information on cost-cutting and restructuring. But revenue losses - 17 per cent in the last two fiscal years - have far outstripped expense reductions. 
Unless the company can find a way at least to slow the loss of revenue, its future is bleak.

Sunday, March 30, 2014

BC Liberal's executive director refuse to answer questions in Ontario police investigation

No one has to co-operate with the police when they’re investigating a possible crime. You’re free to tell the officers that you have no interest in helping them and won't say a word.
But not if you’re a politician or political operative who hopes to be credible and trusted.
Laura Miller, the executive director of the BC Liberal Party, has refused to meet with police officers from Ontario’s anti-racket squad to answer questions. Police believe she could help with their investigation of breach of trust in an alleged high-level illegal coverup in the office of former premier Dalton McGuinty, where she was deputy chief of staff.
The investigation is focused on David Livingstone, Miller’s boss. Police believe Miller’s partner was enlisted to go through the computers of everyone in the premier’s office and illegally delete documents relating to the Liberal’s pre-election decision to kill two gas-powered power plants - one partially built - that might have cost it swing seats. The decision cost Ontario taxpayers more than $1 billion in sunk costs and compensation for the companies involved. (The story is complex - a good summary is here.) 
Serious stuff. If the truth had been known before the 2011 election, the outcome might have been different. 
McGuinty resigned, Miller moved on to help with Christy Clark’s election campaign and was then hired to run the BC Liberal Party.
And now, according to Gary Dimmock’s excellent coverage in the Ottawa Citizen, Miller is refusing to be interviewed by police.
That’s a citizen’s right. But politicians and political parties make a big deal about believing in the justice system, supporting and police and helping them keep communities safer by co-operating in crime investigations.
When the most senior party staffer refuses to sit down answer questions, that all is revealed to be hypocritical rubbish. We want you ordinary people to co-operate wth police, Clark and company are saying. We’ll act in our own self-interest.
And it raises serious questions. Why, exactly, is Miller refusing to answer questions about what she knows? What does Christy Clark think about the party executive director’s refusal to co-operate with an extremely serious police investigation?
And what does that say about Miller’s attitude toward accountability and the law in her B.C. job?
Norman Spector has been asking why Miller’s refusal hasn’t been covered in B.C. media. It’s a good question.

Saturday, March 29, 2014

So long, Copan Ruinas, and thanks

We’ve been counting down the lasts for a while now. 
The last four-hour bus trip home from San Pedro Sula a week ago. Last trip to the pool with the kids from Angelitos, the care home/orphanage we’ve been helping out, on Sunday. Last concept note for Cuso International. Last trip up the hill for a $1.25 haircut yesterday. Last boiling up of three pounds of chicken menudo for the dogs. (The slogan should be ‘now with more chicken feet.’)
It’s not much fun. Partly, it’s just stressful trying to pack up life in Copan Ruinas after more than two years, cram our stuff into two backpacks and big suitcase and head off to who-knows-what in Canada. (Lugging along an accordion and a dog.)
And partly there is a sense of unfinished business. 
My partner Jody and I have been Cuso International volunteers here, placed with local development agencies and tasked with ‘building capacity’ in communications. I’ve spent a lot of time on interesting projects for the Cuso Honduran office as well.
It is a great experience. We’re living in Honduras, experiencing life in an entirely different culture, discovering the challenges of life in a poor, unequal and largely dysfunctional country. It’s year-round summer, and life is lived - loudly - on the street. Or it might as well be, as every house in our neighbourhood is built right to the street and windows are always open. I can pretty much sing along with one neighbours music choices by now. 
And it’s not like visiting. 
We know the neighbours and the people in the market stalls. We’ve been through the afternoon rains, and the April heat, and had a chance to see how people live in a poor country. We ride the buses and cope with the power failures and, as we’re paid stipends equivalent to Hondurans doing similar work, pay attention to what things cost. I’ve been touched by how genuinely sad some people are to learn we are leaving.
Which, I suppose, is one reason I have a sense of unfinished business. It takes time to become more than a visitor, and to be an effective contributor in the important work Cuso International and its partners are doing. After two years, I’m much more useful and understand much more. And as a result I wonder how much more could be done with more time.
And any time of leaving is, for me, a time of regrets. I was walking White Dog, who is going to Canada, and Crazy Pup, who is not, today and noticed a path heading up into the hills east of town that I hadn’t seen before. There are a lot of paths not walked.
I’ll be glad to tick off some of the lasts. Sometime before Monday morning at 7 a.m. we will have the last power failure, and the last resulting loss of Internet service. And at some point, I will utter a last frustrated complaint about the creeping pace of web access when it does work.
And I’ll read the last story in a Honduran newspaper that leaves me baffled at how things could be so messed up. (The current contender is a La Prensa piece yesterday on a public school in La Moskitia that offers its 610 students one diploma program, in technology and computer skills. The area has no reliable electricity and almost no opportunities in computer work. And in any case, the school hasn’t had any actual working computers for students since it opened seven years ago. Miraculously, hopeful students keep showing up.)
Leavings always seem to come in a rush of farewells and hurried preparations, with too little time to think much about all that’s left behind. I’m writing this perched one of two plastic chairs that are our remaining furniture, with clothes spilling out of the half-packed bags on the floor. We’ve got a couple of steaks to fry up for dinner, two plates and two knives and forks. 
Maybe the rush is a good thing. There will be time to figure out what all this lasts mean when we’re settled, for a while, in Canada.

Monday, February 17, 2014

Five questions about the Leslie moving expense furor

Former Canadian Forces lieutenant-general Andrew Leslie - and federal Liberal advisor and prospective star candidate - is being attacked by the Harper Conservatives for claiming $72,000 in retirement moving expenses under a policy that applies to RCMP officers and the military.
The Intended Place of Residence policy covers retiring Mounties and military personnel for one last move after they retire. The idea is that if you end your career in Newfoundland, but want to move back to be closer to your grandkids in Saskatoon, the government will pick up the cost. It’s a reward for accepting a series of transfers over the course of a career.
But the Leslie case raises some questions.
1) Was the information about Leslie’s expenses a political smear engineered by the Conservatives? CTV News broke the story, saying it had “obtained” documents on the moving expenses. But the TV network did not say how it got the documents, or from whom. That should be part of the story.
2) Is the Conservative government suggesting its policy should be changed, and the costs of a last move should not be covered by taxpayers? If so, why has the change not been made over the eight years the Conservatives have governed?
3) What was Leslie thinking? Just because the benefit is in place doesn’t mean you need to claim it. Leslie was highly paid, over $250,000 a year, and retiring on a pension that most Canadians could only dream about. He decided he wanted a different house in Ottawa. Why did he choose to have taxpayers pick up the costs - moving fees, real estate commissions, property transfer taxes - for what was a personal choice?
4) How much is the policy costing taxpayers? About 3,500 Mounties and Canadian Forces employees are retiring each year.
5) And given that volume, why hasn’t the federal government negotiated a better deal? The largest chunk of Leslie’s expenses were real estate fees. Surely the government, with thousands of moves a year, could get a better deal on real estate commissions.

Tuesday, February 11, 2014

Honduras seizes 'crime zoo,' animals go hungry

Back in September the Honduran government started seizing the assets of Los Cachiros, an alleged drug and crime organization. The $500 million in seizures included a zoo and resort business the organization had established between San Pedro Sula and Tegucigalpa. We had meant to go; the TripAdvisor reviews were pretty good.
Uh-oh, I thought, when news of the seizure broke. Those animals were a lot better off in a zoo owned by narcos than one run by the Honduran government, which has demonstrated a consistent lack of competence in almost everything it touches.
Sadly, that seems to be true. La Tribuna reports today that the government agency responsible for seizures has fumbled around with the zoo, with no one consistently responsible. (A Google translate version of the story is here.)
The only money available to feed the animals and maintain the zoo comes from park revenues, which have fallen because there is no advertising or promotion, many people think it was closed after the seizure and it is not being maintained.
The current revenue isn’t enough to cover food and vet care for the animals - tigers, giraffes, zebras and a collection of animals native to Central America.
The government could have put in a trustee to manage the zoo, with a budget to run the business and look after the animals. Or it could have hired a competent management company on contract. Instead there has been a succession of people within government responsible. 
That’s not just bad for the animals. The zoo and resort provided jobs and economic activity in the region. As the government bungles its management, those will be lost.
The seizures from Los Cachiros were co-ordinated with the U.S. government, which had targeted the family-based group under the “Kingpin Act” aimed at foreign crime groups.
The zoo’s struggles raise questions about government management of other assets on the U.S. hit list and apparently seized, like African palm plantations, cattle ranches, hotels and mining and roadbuilding companies.