Canadian Cover-up?

Need further evidence of blogs exposing corruption and their power to shape public opinion?

Go see Winds of Change and Captain's Quarters and learn of the explosive story (also known as ADSCAM) regarding corruption at the highest levels of Canadian government. 

The Canadian government doesn't want its citizens to know what is going on.  Blogs are keeping the story alive (in some cases at their own peril).  That is right, the Canadian government is seeking to prosecute bloggers for reporting the story and journalists for mentioning these websites.

I wonder what would happen if our government tried the same thing...oh yeah, that is what the BCRA is attempting to do. 

Both are a threat to democracy.

UPDATE: Michelle Malkin has a comprehensive update including the publication ban and its effect on bloggers here and in Canada. 

UPDATE II:  Captain Ed explains why the Canadian ban on publication of this issue is a farce.  He sums it up beautifully:

"In order for a citizenry to remain at liberty, they have to know what their government is doing, and the press needs to report it without fear of government reprisal. The notion that Brault's rights had to be protected over the rights of all Canadian citizens is not only ludicrous but a false choice at its heart."

I'll say this...part of my research on blogs led me to Neil Postman's book: Technopoly: The Surrender of Culture to Technology.  Though he was no fan of technology, Postman said something very interesting on page 66 and 67 in his book.

Postman wrote that America was the "first nation ever to be argued into existence in print."  He cites Paines’ Common Sense and The Rights of Man, Jefferson's Declaration of Independence, and the Federalist Papers which were all written and printed in a valiant effort to make the American experiment appear reasonable to the people.

“There is not a single line written by Jefferson, Adams, Paine, Hamilton, or Franklin that does not take for granted that when information is made available to citizens they are capable of managing it. This is not to say that the Founding Fathers believed information could not be false, misleading, or irrelevant. But they believed that the marketplace of information and ideas was sufficiently ordered so that citizens could make sense of what they read and heard and through reason, judge its usefulness to their lives."

“We need not hesitate to claim that the first Amendment to the United States Constitution stands as a monument to the ideological biases of print.”

Postman was a student of a very famous Canadian named Marshall McLuhan (a famous professor at the University of Toronto).

Captain Ed...you are a true patriot at heart...keep up the great work!

Comments

[Jim Roache]

In Canada, the RCMP rolls out the welcome mat to organized and white collar criminals......e.g. (5)

1. COLUMNIST

Calgary Sun, June 5, 2005
Canada's puppet police force

Don't ask Mounties to get their man if he is connected to the Liberal party

By Licia Corbella -- Calgary Sun

Back in 1998, I wrote how I didn't trust the RCMP as a corporation anymore when it came to investigating anything to do with the federal Liberals.

The sponsorship scandal served to tie a pretty ribbon around this statement.
After all, the RCMP is now given the task of investigating its own corruption and that of its politically corrupt benefactors. Clearly, such an arrangement is an enormous conflict of interest.

What's more, how diligently can we expect the RCMP to investigate AdScam when it's known the RCMP helped launder money for the federal Liberals to help Liberal-friendly advertising companies in Quebec, who then funnelled the money back into Liberal party coffers? Federal Auditor General Sheila Fraser unveiled in April 2004 the feds pumped $1.3 million of the $3 million earmarked for the Mounties' 125th anniversary celebration into the coffers of Liberal-friendly ad firms. In turn, the RCMP deposited its $1.7-million share of the sponsorships in a separate non-government bank account that was discovered by Fraser's probe.

"We were unable to verify the transactions from the Quebec bank account, because some of the supporting documents had been destroyed," the AG report said.

Fraser concluded Crown corporations like the RCMP were used to quietly pour money into the coffers of ad agencies and we've since learned through the inquiry into AdScam, led by Justice John Gomery, that those ad agencies kicked back money to the Liberals by putting Liberal party workers on their payrolls, handing over envelopes filled with tens of thousands of dollars of cash and making "legitimate" donations with taxpayer dollars.

But the RCMP's decline of esteem in the eyes of the Canadian public has been going on throughout the entire 12 years of Liberal rule, long before Fraser's explosive report or Gomery's inquiry. For 12 years, the RCMP has increasingly flouted the laws of this country and has become the PMO's own private goon squad.

Even though the misappropriation or stealing of federal money through the feds and Quebec advertising firms was first revealed in 1999, the RCMP did nothing for three years until Fraser asked them to criminally investigate in 2002. Then, what did the Mounties do?

Instead of using surprise -- though by then you can be sure the players in the scandal had already shredded and destroyed much of the damning evidence -- the RCMP didn't get a search warrant first and then seize all they could. No, they put out a press release announcing they would look into the $1.6 million in federal contracts awarded to Groupaction Marketing Inc. for writing three virtually identical reports (one of which doesn't even exist) that contained information readily available on the federal government website.
Is it any wonder there's never any real accountability in this country?

Canadians no longer have much confidence in the Mounties getting their man -- especially if that man has anything to do with the Liberal party.

URL:http://www.canoe.ca/Newsstand/Columnists/Calgary/Licia_Corbella/2005/06/05/1072040.html

2. White-collar crime a growth industry, committee hears STEVEN CHASE Thursday, May 19, 2005 Page B4 Globe & Mail

OTTAWA -- Investigative units set up two years ago by Ottawa to target white-collar crime are probing activities at companies with a combined market value of $55-billion, a Senate banking committee was told yesterday. RCMP-led teams have seven major, "project status" investigations under way, as well as 26 "somewhat less serious" probes. At least two of these big cases are known -- Nortel Networks Corp. and Royal Group Technologies Ltd. -- but a senior RCMP official declined yesterday to name the five others, saying he wasn't sure they were public.

These integrated market enforcement teams (IMETs) may have to turn away some complaints in the future because of a full caseload, senators heard. "I don't think anyone will deny the fact that white-collar crime is a growth industry," RCMP Chief Superintendent Peter German told the banking, trade and commerce committee.

IMET teams are part of the Canadian government's push to make the country's capital markets safer for investors in the wake of corporate scandals in the United States. Ottawa provided up to $30-million annually for the teams in the 2003 budget. [Like we haven't had SNAFUs from Bre-X to Portus, including Hollinger - JFR]

IMET teams are made up of RCMP officers, securities regulators as well as forensic investigators and other police forces. Chief Supt. German, director general of financial crime, told senators that the IMET teams will likely have to turn away some complaints in the future once they hit their full capacity. "The complainant may similarly be turned away by our Commercial Crime Sections, or other local police jurisdictions, as those units often have a very limited capacity to undertake project-status investigations.," he said.

He said he's not looking for more money, because IMETs are properly funded, but there's "a lot of fraud out there and we could do more." ????

URL:http://www.theglobeandmail.com/servlet/Page/document/v4/sub/MarketingPage?user_URL=http://www.theglobeandmail.com%2Fservlet%2FArticleNews%2FTPStory%2FLAC%2F20050519%2FRRCMP19%2FTPBusiness%2F%3Fquery%3Dpage%253DB4%2Band%2Bsortdate%253D20050519&ord=1119289299031&brand=theglobeandmail&force_login=true

3. Sun, June 5, 2005 (CP)

Dirty money tips ignored
Mounties fail to pursue one-third of financial sleuths' files, report says
By DEAN BEEBY, CP

The RCMP did not pursue more than a third of the money-laundering tips passed on by Canada's financial sleuthing agency, largely because the force lacked the manpower, says a newly released report.

The Mounties did not open investigations on 45 files turned over to them by the Financial Transactions and Reports Analysis Centre of Canada, better known as Fintrac, says the document.

The agency was established in 2000 to gather financial intelligence from banks and other institutions on potential money-laundering schemes. After careful analysis, Fintrac forwards information on the most suspicious transactions to the RCMP and other police forces. The agency also monitors terrorist financing.

'LIMITED RESOURCES'

An internal Fintrac report, obtained under the Access to Information Act, found the Mounties did not chase 45 of the 131 high-quality tips the agency had produced to the end of 2003. Virtually all of the cases not pursued were suspected schemes in Vancouver, Toronto and Montreal, where the force places most of its proceeds-of-crime investigators. And about three-quarters of the abandoned tips were not investigated simply because the RCMP had "limited resources."

"There is no shortage of evidence against these individuals committing crime, just a shortage of investigators to bring all the criminals to justice," says the 31-page report from 2004.
The findings suggest the extent of money-laundering in Canada, most of which stems from drug trafficking, far exceeds the ability of the RCMP to investigate. Fintrac found that the Mounties were abandoning almost half of the tips they were given in Canada's three biggest cities.

One result/example [JFR] --- when a group of investor advocates - including a whistle blower from inside a company presented evidence to RCMP IMET of malfeasance that may have cost investors over a BILLION dollars, IMET refused to accept the evidence or open a file! Here is the e-mail of confirmation from the head of IMET:

---- Original Message -----

From: "Craig Hannaford"

To: @sympatico.ca>

Sent: Monday, May 09, 2005 3:13 PM

Subject: Response to your recent phone call

Mr. K:

This e-mail is in response to your recent phone call.

The IMET program has been specifically designed to focus on recent large capital market criminal infractions. We have been resourced in order to bring significant resources to bear on individual cases. That being said, we have a limited amount of cases that we take on and case selection follows an established protocol. Our investigations generally focus on issues within publicly traded companies. Thus the clear link between our mandate and IMET devoting resources to such cases as Royal Group or Nortel. I am sure you can appreciate that the RCMP IMET must be strategic in selecting cases of this nature to work on. I should also add that nothing the RCMP does limits any other police agency (ie. OPP, Toronto Police) from conducting a fraud investigation if the alleged offence has a nexus in their jurisdiction.
Our cases generally come from referrals from regulators or SROs and some of our larger cases have come to us in that manner. Unless the matters you are concerned about are referred to the RCMP IMET through one of our participating agencies (OSC, IDA, MFDA, MRS) it will not be considered for investigation.

Yours truly,

Supt. Craig S. Hannaford
Officer in Charge
GTA Integrated Market Enforcement Team
Royal Canadian Mounted Police

3389 Steeles Avenue East
3rd Floor
Toronto, Ontario
M2H 3S8

Office: 416-790-3202
Fax: 416-790-3203
E-mail: Craig.Hannaford@rcmp-grc.gc.ca

June 08, 2005

===================

4. The ghost of Bre-X rises
Mysterious Mike de Guzman is said to be dead, but for some he lives on

STEVE MAICH

Is Michael de Guzman dead or alive? Eight years after the Bre-X Minerals fraud was uncovered, the fate of its central figure still haunts us. Last month, it seemed, he briefly stepped out from the shadows. And just like that, he was gone again. Or was it all just another hoax?

We want to believe he's out there, that we might catch him one day and make him pay for his sins. But our hopes for justice and answers are in vain. Deep down, we know it. And that's why we still care.

According to the official version of events, Bre-X's exploration manager threw himself from an Alouette helicopter on March 19, 1997, while it was cruising 800 feet above the Indonesian jungle.

Lots of theories, deep doubts, and nothing more. But a couple of weeks ago, the ghost of Bre-X reappeared. One of de Guzman's widows said she received a $25,000 money order from her supposedly dead husband earlier this year. She told a reporter from Malaysia's The Straits Times that the money arrived from a Citibank branch in Brazil

Thousands of people, most of them Canadians and Americans, lost a fortune when the truth about Busang was revealed. But the humiliation of Bre-X goes deeper than that. Canada has long carried a reputation as a haven for swindlers and stock promoters. In 1989, Forbes magazine labelled the Vancouver Stock Exchange the "scam capital of the world." We've never been able to shake that image, and Bre-X still stands as Exhibit A for those who consider this country an investment backwater of crooks, liars and ineffectual cops. That, more than anything, is what sustains our fascination with de Guzman: the nagging realization that no one has ever really been brought to justice for Bre-X. And, in all likelihood, no one ever will be.

The RCMP abandoned its criminal investigation in 1999, after spending almost two years reviewing more than 600,000 documents related to the case. The Mounties said there wasn't enough evidence to hope for a conviction. The six-year statute of limitations for securities violations and insider trading has also elapsed, so even civil charges against de Guzman are out of the question.

David Walsh, the rotund, chain-smoking founder of Bre-X, made close to $35 million selling stock. He withdrew to the Bahamas when his company began to unravel, and denied any part in the fraud.
In 1998, he died after suffering a brain aneurysm. Whatever he knew about the Busang heist, he took to the grave.

Felderhof, the chief geologist who made $84 million selling Bre-X stock, is the only person ever to face charges.

Even more depressing is the knowledge that it could all happen again. The scandal exposed weaknesses in the system that have never been fixed. Canada's police forces still lack the resources to track and prosecute sprawling frauds, and the various provincial market regulators remain uncoordinated, underfunded and undermanned.

Eight years have passed, and still the memory of Bre-X provokes shame and anger in this country. It made fools of us all: the analysts and journalists who breathlessly reported the faked results, the executives who clamoured to partner with Bre-X, the investors who got sucked in to the hype, and the authorities who were seemingly powerless to do anything about it.

Is Michael de Guzman dead or alive? Our abiding interest gives the answer. He is alive and well, living the high life somewhere . . . in our minds at least, if not in reality.

He always will be.
5. Why the Mounties can't get their men
National Post
Monday, June 27, 2005
The RCMP complained this week that it had too few qualified recruits last year to replace the number of officers who retired. Applications were off by 28% and only 232 new officers joined, rather than the 300 hoped for.
The force attributes the dearth of prospective recruits to competition: There are too many other attractive career choices for young men and women. Its solution? Buy a brightly colored van and cruise Ontario and Quebec campuses looking for warm bodies; maybe conduct some focus groups to see why young people aren't attracted to RCMP careers.
We can save them the trouble (and taxpayers the expense).
>snip>
In 1999, the RCMP eliminated recruits' pay while they are training in Regina. Now, during the 24-week academy, recruits typically have to come up with $4,600 of their own for expenses. Room and board is provided, but nothing else. (And even that is treated as a taxable benefit by the Canada Revenue Agency.)
In addition, there is the obvious politicization of the Mounted Police. It is no longer perceived by many as an independent force. Rather, it is now seen as a branch of the Solicitor-General's office like any other. The commissioner has the standing of an associate deputy minister. This has enabled Cabinet to ally the RCMP too closely to unpopular programs such as the firearms registry. Enforcement of Ottawa's gun controls has made the force less popular in places where it was once revered, such as Atlantic Canada and the rural West.
The Mounties also received $3-million in Adscam money, and is widely seen as ineffectual at investigating corruption scandals. The perception is growing that the once proud police organization -- often called the best in the world -- is in the process of becoming a tool of politicians and social engineers.
The Mounties' lustre can also be restored by ensuring the service is fully independent of political interference. The commissioner should become an officer of Parliament rather than a bureaucratic appointee. His or her selection should be made by an all-party committee, rather than by Cabinet.
Before senior Mounties authorize their recruiters to commence their psychedelic bus tour of Central Canada in the search for new trainees, they might want to consider addressing the real causes for the recruitment drop.
© National Post 2005

====================

Catch 22 - the regulators here are industry funded and part of their mandate is industry promotion. They have a terrible record of enforcement --- in this case they might be open to a class action since it was a special exemption in 1999 the special provisions of which they did not monitor, complaints from managers and advisors they did not investigate and most recently their refusal to accept evidence offered from several sources which leaves them just as culpable (arguably) in the civil courts. You can just bet they won't investigate or instruct the RCMP IMET to do so.

The cruncher is that at every level here, when they talk about problems in financial service, the authorities blame ENRON, TYCO, etc in the US for a possible loss of investor confidence - not the slew of home-grown embarrassments we have had. But we have had NO perp walks in Canada!!!