Liberal MP Garth Turner of Halton is on a speaking tour of western cities, outlining the multitude of reasons why Stephen Harper and the Conservatives ought to be thrown out of office. One of those reasons is the October 31, 2006 announcement by Finance Minister Jim Flaherty that income trusts would no longer enjoy tax-free status.

That announcement quickly devalued trusts, and investors whose portfolios were top-heavy with income trusts felt burned. That hit seniors particularly hard. Garth Turner says as much:

The Harper Party has repeatedly attacked its own bases of support. It betrayed seniors by taking their income trusts – folks who consistently have voted blue.

Seniors had their income trusts taken away? Why would seniors be so heavily engaged in income trusts in the first place? They are not a low-risk investment appropriate for a retiree's portfolio, at least not in a large proportion. You would think that the advice given by investment dealers is the real problem, especially since the taxation sword had been hanging over income trusts for quite some time.

Actually, you would be right to think that. A lot of seniors are thinking that too. If they are angry with Jim Flaherty, it is because they don't think he's moving fast enough on cleaning up that industry, an industry they believe is home to people who are little better than con men and who have been able to collect fees and commissions while dispensing poor advice to people who were too trusting.

Not exactly the spin Garth Turner has been putting on things.

Don't take my word for it though.

Check out other entries from the Garth Turner Lost Tory Tour category
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Scott Reid had a major meltdown on CTV's Mike Duffy Live last night. But putting aside the humour value of watching a senior Liberal Party strategist foam at the mouth, there is something significant to be gleaned from the outrageous display.

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Who torpedoed Scott Brison's Liberal leadership bid?

The Canadian Imperial Bank of Commerce has turned over an e-mail received from Liberal MP Scott Brison to police and regulators as part of a probe into the income-trust controversy that dogged the Liberals in the recent election campaign, The Globe and Mail has learned.

Sources said the former public works minister, a potential contender for the Liberal leadership, sent an e-mail to one of CIBC's employees the day before Ottawa announced its much-anticipated policy on income trusts last November, in which he suggested the recipient would likely be pleased by the decision. [emphasis added]

It wasn't the bank and it wasn't the RCMP. I say that because people in either of those organizations have little to gain from the leak and a lot to lose if they were revealed to be the source.

So that leaves someone in the Liberal Party itself. Presumably a few key Liberal cabinet colleagues were made aware of Scott Brison's meeting with the RCMP on January 18. The Prime Minister, House Leader Tony Valeri, Public Safety Minister Anne McLellan perhaps, since the RCMP was leading the investigation. Key people in the Prime Minister's Office. But no one else -- the election was only days away, and as bad as things were, a revelation like this could have destroyed the Liberals.

The Liberals end up losing the election on January 23 (though not as badly as some had expected), Paul Martin announces that he will step down, and major Liberal figures (Brian Tobin, John Manley, Frank McKenna, etc) announce that they will not run.

Suddenly second-stringers like Belinda Stronach, Ken Dryden, and Joe Volpe are leadership contenders. Include in that list Scott Brison.

So we have suspects -- Stronach, Dryden, etc -- with motives but no means. Certainly they are motivated to eliminate a potential leadership run by Brison. But how would they have known about his involvement in the Income Trust Scandal?

As I said, I can't believe that the knowledge of Brison's RCMP interview was widespread. Indeed, I expect the circle of people who knew was almost certainly kept very small.

That means one of these key people decided to spike Brison's bid. Is this person trying to help one of the other potential leadership candidates, or is this person just out to get Brison? Or did this person conclude that Brison would damage the party as leader, or even by running for leader? And more intriguing -- is this person acting alone, or with the knowledge of the power players in the former PMO, or even under the guidance of Paul Martin himself?

Or maybe the source of the leak was the bank or the RCMP after all.

And here's a very speculative and very unlikely scenario. What if David Emerson knew? I doubt he did, but let's say he knew or found out. He joins the Conservatives and brings this little nugget of knowledge. Next thing you know, it's splashed all over the papers. Why would the Conservatives have done this, if indeed they did, as unlikely as it is? Well, there could be better a time to reveal this, like during a leadership campaign itself, but that might be so far off in the future that it's impact would be minimal. In any case, Scott Brison might not even run. On the other hand, reveal it now, and suddenly you have a story competing for attention with the Emerson thing, which is good news for the Conservatives. Moreover, you bring the focus back to what the Liberals have been accused of doing (in this case, insider trading) which makes the Emerson thing look like small potatoes.

Just musing out loud.

Posted by: Steve Janke at 01:23 PM | Comments (18) | Add Comment
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The Income Trust Scandal has touched yet another senior Liberal:

The former Liberal government insisted that details of its Nov. 23 plans for income trusts were tightly held and that its staff kept details secret until the announcement was made.

[Former Liberal Finance Minister Ralph Goodale] disclosed during the election campaign that two other cabinet ministers knew in advance about the Nov. 23 announcement: former revenue minister John McCallum and then-House leader Tony Valeri. The campaign began Nov. 29.

Mr. Goodale also said that three of the then-prime minister's senior aides were aware of the substance of the income-trust announcement in advance, but he didn't name them.

Of course, we all know that the suspicion is that someone spilled the beans, that income trusts, which were under threat of taxation, would not be taxed. That afternoon, before the announcement, there was some seriously weird trading on income trusts, as if someone knew that an announcement would be made soon that would pump up the price of these depressed stocks.

Apparently the Canadian Imperial Bank of Commerce has an incriminating email:

The Canadian Imperial Bank of Commerce has turned over an e-mail received from Liberal MP Scott Brison to police and regulators as part of a probe into the income-trust controversy that dogged the Liberals in the recent election campaign, The Globe and Mail has learned.

Sources said the former public works minister, a potential contender for the Liberal leadership, sent an e-mail to one of CIBC's employees the day before Ottawa announced its much-anticipated policy on income trusts last November, in which he suggested the recipient would likely be pleased by the decision.

The bank did not learn of the e-mail until after the federal election campaign began, but when it did, it launched an internal review of its trading activity in the lead-up to Ottawa's announcement. The sources said the review did not turn up anything unusual, but CIBC still decided to bring its report to the attention of the RCMP and the Ontario Securities Commission.

Of course, Brison is denying everything, which is bizarre, if only because the email is actual hard evidence. This isn't someone recalling a conversation. This is an email with headers and whatnot. The email was sent on November 22, a suspicious date indeed.

Even if the CIBC did not act on the information, and it insists it did not, the fact is that there is evidence that a senior cabinet minister sent a nudge-nudge-wink-wink email to a financial house about impending tax law changes.

People go to jail over stuff like this.

If the email turns out to be legit, I wonder exactly why Brison knew about the tax decision. I can't see why he should have known. McCallum as revenue minister and Valeri as House Leader made sense. Public works minister? Don't see it. How did he know about the decision? Paul Martin, Ralph Goodale, John McCallum, and Tony Valeri all insist that they confided only in immediate senior staff, and that no one leaked the information any further.

Someone else is lying.

You know what the bizarre thing is? When Parliament resumes sitting, Question Period will make no sense. The Conservatives, as the governing party, will be asked all the questions. But the answers to all the interesting questions still lie with the Liberals.

Posted by: Steve Janke at 09:45 AM | Comments (21) | Add Comment
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1 I gotta ask it... When does this house of cards we call the Liberal party come crashing down? It is amazing with all the crap and abuse that went on they still managed to garnish 100+ votes, better than the Conservatives did in the previous election. So what is the magical straw that will break this party's hold on the mentality of Canadians? Do we have that many dolts in this country?

Posted by: tomax at March 07, 2006 10:08 AM (jHhd0)

2 I think the real trouble will begin, when MPs start getting arrested. The liberals scream "partisanship" to each corruption charge. Its a little more difficult to make that charge believable when the accusation is contained in an arrest warrant. As unlikely as it will happen, but we really need a special court or tribunal to try these corruption charges. If these political people are tried in the normal criminal system, they will get no punishment. These people need to be punished, so that future governments take our trust seriously.

Posted by: Curtis at March 07, 2006 10:32 AM (heo8b)

3 I remain unconvinced about all this. It seems naturally that such stocks would be heavily traded on the eve of a big announcement. Just as betting is heaviest right before the football game, brokers want to wait 'till the last minute and buy stock with the best information possible. Who bets on Saturday's game on Tuesday? Did everyone see "Two For The Money?" I'm interested to see what comes out of this, but so far I haven't seen anything that's going to change my vote. One more thing, if you're going to have a post dedicated to an email, please post that email in fulltext. Thanks

Posted by: Bowie at March 07, 2006 10:45 AM (f1OpH)

4 Brison used to be Low level VP at Yorkton Securities (there were alot of VPs back then - 30% of employees were VPs of some type.) Its not unusual for Brison to be communicating with his former colleagues. The substance of the email would be very important here. Still unless there was a handoff of information & action its not going to stick.

Posted by: matt at March 07, 2006 10:52 AM (49H6K)

5 Bowie: "Just as betting is heaviest right before the football game, brokers want to wait 'till the last minute and buy stock with the best information possible." Ok, but let's make the scenario a little more like the one we're dealing with. What if those betting on the game had no idea when the game was, nor who was playing. Would you then not be a little suspicious when a few people close to the action make huge bets on the afternoon before the game, and for the exactly correct teams?

Posted by: Johnny Pockets at March 07, 2006 10:59 AM (OR7xL)

6 How do we know whether Liberal MP Scott Brison sent out email to other people that day? We only know about this email because CIBC turn it over to the police - interesting that the Bank saw enough possible problems with the email to turn it in. Since Income Trust company had been lobbying the Government to get changes to the law - I guess Scott Brison's comment that the Government announcement would be liked by CIBC gives no clue as to what the government was about to do?

Posted by: Gary McHale at March 07, 2006 11:11 AM (CdxYW)

7 If Shaprio is investigating Emerson, the CPC better complain and get him to do the same for Brison.

Posted by: Dennis at March 07, 2006 11:29 AM (3qDmJ)

8 Dennis, that Liberal finger puppet is not investigating Emerson as much as trying to besmirch PMSH, and having that tool investigate Brison would only result in a complete exoneration.

Posted by: at March 07, 2006 11:38 AM (MYChe)

9 When Parliament resumes sitting, Question Period will make no sense. The Conservatives, as the governing party, will be asked all the questions. But the answers to all the interesting questions still lie with the Liberals. Uh-uh, Steve. The fact that the Conservatives are now in a position to "spill the beans," as it were, means that they don't need to justify the actions of the previous government. What does change is who gets to ask the questions: in this case it's the BQ and the NDP. The Bloc because they want to discredit the Liberals in Quebec, and those New Democrats who seek to move the NDP to the centre as the true alternative to the Tories.

Posted by: PhantomObserver at March 07, 2006 12:18 PM (U8FJD)

10 Can't remember for sure but in all the liberal denials was it not said many times that only a handful knew which included MP names and some staff none of which included Mr. Brison?? It is also noted that he sent this email the day BEFORE the announcement when the rest of the explanations said that no one knew until that morning. Do we need an email dated TWO days before to be more damning? How about a week? Since this is the only one that has been found out about how many other emails were sent out that day to other banks from Mr. Brison (and others!) which said that they were going to be "happy" the next day? Hell, I am no savvy investor but even I would have known what the "happy" statement implied regarding these trusts!

Posted by: Anne (happier in Ontario) at March 07, 2006 01:13 PM (8StLM)

11 Before we all get too excited, one should realize that email can be easily forged. Thus we should confirm the authenticity of the email before we start thowing people in jail... A nice search warrent for the Mr Bryson's email server should do nicely. But this could easily be the thread that unravels the scarf of liberal lies on this topic.

Posted by: Curtis at March 07, 2006 01:22 PM (heo8b)

12 tomax...The answer is never, the house of cards has jokers in it but the number of good people far outwiegh the bad. The foundation remains solid. The crooks should be questioned in a court of law. Chretien was the ringleader and as such should be dealt with first.

Posted by: Liberal Ron at March 07, 2006 01:35 PM (p9aJL)

13 Before we all get too excited, one should realize that email can be easily forged. Thus we should confirm the authenticity of the email before we start thowing people in jail. That would have to be part of the investigation, of course, but the length of the email suggests it is legitimate. The IT bit was one small part of a much longer email. It is less likely that someone could successfully pull off a fake of that length. Lies tend to be short and sweet. Of course, the other question would be why fake it in the first place? And why Brison?

Posted by: Steve Janke at March 07, 2006 01:39 PM (lPdnn)

14 The email is in the proper hands, RCMP and OSC. Between them they will decide if laws were broken. I would be surprised if this kind of tip-off was not common in the financial community. The potential rewards are just too large to imagine that a few rules would get in the way of making money.

Posted by: steve d at March 07, 2006 01:42 PM (sw5R/)

15 This Income Trust thing stings to high heavens. So Brison knew eh? How many others knew. We need to get to the bottom of this. We will see how many Liberals come to Brison's defence. He and his kewpie doll friend (Stronach) deserve all the criticism they are getting.

Posted by: Mervin Hollingsworth at March 07, 2006 01:44 PM (Y1ykG)

16 Of course, the other question would be why fake it in the first place? And why Brison? Iam not saying it could be or is a fake, Iam saying it could be. As unlikely as it seems it could be. No theory or evidence - just a maybe. But it does point to the larger issue, that the secret was out, and more over, the wording is the similar... Remember the old folks? they where going to be happy too. Now another email sent from another minister to another group, of soon to be happy shareholders... co-incidence? Why not "Iam sure the upcoming announcement will meet with your unqualified approval" that sounds more political speak-ish... than "Happy"... could there be a conspiracy of happiness?

Posted by: Curtis at March 07, 2006 03:24 PM (heo8b)

17 I could have too many coulds in the last post... Deduct one could, and that sentence could make sense.

Posted by: Curtis at March 07, 2006 03:26 PM (heo8b)

18 Pockets. Everyone knew an announcemtn on IT was coming. We knew that it had to do with their taxability. We knew an election was coming, and we knew IT was a huge issue. Nobody should have been surprised to see Finance announce a Bay St. Friendly tax structure. I understand that you want to criticize the LPC. Good on you. Thanks for being involved, but look a little harder and find something better.

Posted by: Bowie at March 07, 2006 03:40 PM (f1OpH)

19 If there is some kind of forgery going on, I'd be looking at some of the other liberal leadership hopefuls. The race started on the weekend at the NS liberal AGM, the games begin now to "cull the herd". Don't be surprised to see leaks being provided to the MSM over the next few months cutting down some of the leadership contenders that have a hope of winning. Somebody is pulling a Martin methinks.

Posted by: gimbol at March 07, 2006 03:51 PM (zElnE)

20 With nobody tossing their hats in the ring for the Liberal leadership, I think there is something more afoot in Ottawa that will make Gomery and Income trust look like chump change. My guess is Harper is finding out that the piggy bank empty and Martin has been running a Ponzi scheme for years.

Posted by: xoip at March 07, 2006 07:56 PM (4rR0I)

21 Hello first time to come to this forum, I like it very much!sd5f46s5df465sd4f

Posted by: Mercurial vapor VIII at December 02, 2012 05:11 PM (aGWaR)

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Heads up! The CBC will be running more on the income trust scandal on Politics (4:30 to 5:30 Eastern on CBC Newsworld), and on The National.

Check your local listings.

Posted by: Steve Janke at 12:53 PM | Comments (15) | Add Comment
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From CTV:

The U.S. Securities and Exchange Commission is reviewing last November's alleged income trust leak and may launch an investigation, the regulator revealed in an e-mail sent to NDP Finance Critic Judy Wasylycia-Leis.

The e-mail was written Thursday by Ann H. Sulzber [sic], special counsel to the SEC.

"We are taking your complaint very seriously, and have referred it to the appropriate people within the SEC," Sulzber [sic] writes, and refers to a telephone conversation with Wasylycia-Leis from the previous week.

Sulzber [sic] adds that "the SEC generally conducts its investigations on a confidential basis and neither confirms nor denies the existence of an investigation unless we bring charges against someone involved … As a result, we will not be able to provide you with any future updates on the status of your complaint or of any pending SEC investigation."

The special counsel is Ann Suzlberg, not Sulzber (the Toronto Star got the spelling correct). She works for the Division of Enforcement.

So by my count, there are three simultaneous investigations ongoing into the Income Trust scandal.

But recall that on December 22, this blogger had confidential information that the OSC had initiated an investigation. So by my reckoning, Paul Martin and Ralph Goodale knew for two weeks that the OSC had concerns.

Did they announce the investigation in order to assure the investment community and Canadians at large that the regulatory mechanisms that ensure that Canadian markets operate in a fair and open manner were themselves working?

Of course not:

The next hallmark of the rule of law is transparency.

Transparency is particularly important in financial sector regulation and supervision because of the need for confidence in the system.

Who spoke these words of wisdom? Finance Minister Paul Martin, at Cambridge University in England, on July 12, 1999.

I guess transparency matters only some of the time. At other times, it is important to be evasive and opaque.

How can you tell when? I don't know. Even those rulese are not all that transparent.

Posted by: Steve Janke at 07:51 AM | Comments (12) | Add Comment
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Now that I'm back online (I do have a life beyond blogging), I can give the OSC statement some proper attention.

A complainant, still unnamed, asked the OSC to investigate two issues:

1. insider trader allegations
2. a report that Ralph Goodale's staff tried to silence a CARP member who said the group got advance notice

Thanks to CTV, we know that CARP member was assistant director William Gleberzon. We also know that Gleberzon retracted his comments, much to the confusion of CTV such that the network stood by the original story.

CARP was so adamant that no such communication took place that they made the error of calling Warren Kinsella a liar. Bad move. Within a few days, CARP backed off that allegation.

One shudders at the thought of what Kinsella had to say to them.

But clearly someone got to CARP, and that is even more interesting, and potentially far more damaging, than allegations of insider trading.

If true, someone from within Ralph Goodale's office (or the PMO) threatened Gleberzon in particular, or CARP in general. Threatened with what? A lifetime of audits? Suspension of this license or that?

Even if the threats were bluffs, even if there was no way some functionary within Ralph Goodale's office (or the PMO) could actually follow through on the threat, the utterance of a threat, even a hollow one, is a crime.

Moreover, the allegation suggests that one or more people within Ralph Goodale's office (or the PMO) felt it was appropriate to use the power of the government to protect and preserve the fortunes of the Liberal Party.

This is worse than Adscam. The Sponsorship Program generally involved willing participants in both government and in the private sector engaged in a scheme to steal taxpayers' money. Though some witnesses claimed that they felt pressured to engage in these activities, the threats were of the nature that if they did not play ball, they could no longer expect government largesse.

Unseemly, to be sure. But the crime was the theft of the money, not of behaving boorishly.

But here, the tone of the report suggests that one or more people within Ralph Goodale's office (or the PMO) behaved like soldiers in an organized crime syndicate. Using the threat of violence (in this case, probably financial violence) to compel someone to lie.

This is no longer about Liberal Party bungling and waste. This is no longer about Liberal Party theft. This is about a Liberal Party that, when entrusted with the vast power of the government, sees no problem in using that power to intimidate and punish its enemies.

From the OSC:

"The commission takes allegations of trading on insider information and allegations of potential interference with an investigation very seriously. Your concern has been forwarded to the Enforcement branch of the OSC for further review.''

Has the Liberal Party stopped being merely an incompetent and greedy organization? Is the Liberal Party now a dangerous one?

Posted by: Steve Janke at 11:19 PM | Comments (22) | Add Comment
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The CP is reporting the existence of the official investigation into the Income Trust Scandal by the Ontario Securities Commission, first reported by this blogger on December 22.

However, the OSC was somewhat more forthcoming in a letter sent two days later to another complainant, who asked to remain anonymous, from senior inquiries officer Jeffrey W. Fennell.

This complainant asked the OSC to look into insider trading allegations and also reports that Goodale's staff may have tried to silence a member of the Canadian Association of Retired Persons who indicated that his group got advance notice of the income trust announcement.

Fennell wrote that he'd been asked to "co-ordinate'' a review of the complainant's concerns and added:

"The commission takes allegations of trading on insider information and allegations of potential interference with an investigation very seriously. Your concern has been forwarded to the Enforcement branch of the OSC for further review.''

Fennell further advised that "this may or may not result in a formal investigation'' and warned that the OSC doesn't normally comment on the existence, nature or status of any investigation unless it "brings proceedings in the matter.''

The income trust controversy has dogged Martin throughout the crucial post-Christmas phase of the campaign and has helped reactivate concerns about the Liberal government's ethics as he heads into the home stretch for the Jan. 23 vote.

Goodale has denied that he or any of his staff leaked information about his income trust decision ahead of time. But it has emerged that Martin, three of the prime minister's senior staff, and two other cabinet ministers, as well as some of their staff, had advance knowledge of the announcement.

INDEX: POLITICS JUSTICE BUSINESS

I will get a web link soon.

Posted by: Steve Janke at 08:05 PM | Comments (8) | Add Comment
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From PoliticsWatch:

[ NDP finance critic Judy Wasylycia-Leis] has also filed complaints with the Ontario Securities Commission and the U.S. Securities Exchange Commission.

She said the OSC will not confirm or deny if they are investigating the trading activity, but the SEC has responded.

"They did acknowledge that the letter has been registered. They've given me a file number, a person that is in charge and say they are having discussions with their international affairs office."

But the SEC has a policy of not confirming an investigation until a case is filed in court and Wasylycia-Leis said they were pretty clear to her they would not divulge any other information regarding her complaint.

Just one more reason for the Liberals to be nervous.

Posted by: Steve Janke at 08:36 AM | Comments (14) | Add Comment
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Donald Black has been caught up in the Income Trust Scandal. He has had close ties with Liberal Finance Minister Ralph Goodale. Goodale, of course, is at the center of the controversy involving the RCMP investigation into the possibility that there was a leak of sensitive information concerning the taxation of income trust funds to select traders before the public announcement.

Donald Black was present at a meeting with Goodale as a director of the Investment Dealers Association. Goodale met with the IDA the morning before the announcement. That afternoon, there was a huge spike in trading in income trusts by certain traders. After the markets closed, Goodale announced that income trusts would not be taxed. The next day, income trust unit values soared, making a tidy profit for those traders who bought the afternoon before.

Donald Black is a fund manager, and his funds include major holding in income trust funds.

Donald Black is a close personal friend of Liberal Finance Minister Ralph Goodale.

Donald Black insists, however, that he is not a political friend of Liberal Finance Minister Ralph Goodale:

Conservative finance critic Monte Solberg described Black as a Liberal insider, so "I don't think he's the right guy to be defending Ralph Goodale on this."

Black had said he was a personal friend of Goodale's, but not a political one.

Really?

On the CBC report on this story last night by Margo McDiarmid, at the 14:49 mark, Margo reveals the following:

[14:49] He [Donald Black] is Goodale's close friend, contributing a quarter of a million dollars to his '93 campaign.

By my accounting, anyone who donates a quarter of a million to the campaign of an MP is a political friend.

Remember that from 1988 to 1993, Ralph Goodale was working at Pioneer Life in a senior position given to him by Donald Black.

Ralph Goodale was elected with the help of that quarter million dollar donation, and was made Minister of Agriculture by Jean Chretien.

In 1995, less than two years after that generous donation, Goodale appointed Donald Black as head of the Farm Credit Corporation, ignoring charges of patronage from the opposition.

I just don't buy the idea that Donald Black is just a personal friend and not a Liberal insider.

Posted by: Steve Janke at 08:20 AM | Comments (6) | Add Comment
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From December 7:

"The day they made the announcement they phoned us and said something is going to be said," the associate executive director of Canada's Association for the Fifty Plus, William Gleberzon, told CTV News.

Gleberzon said the call came from a senior policy advisor in the finance minister's office.

When asked what exactly he was told, Gleberzon indicated the specifics were vague, but the underlying message was clear.

"They said something was going to be announced later in the day. And we assumed that if they told us that ... it would probably be something we'd be happy with."

So CARP got a nudge-nudge-wink-wink call? Well, the next day CARP backpedalled:

There is no truth to the serious accusations that CARP had inside information about Minister Ralph Goodale's announcement regarding Income Trusts. In fact, the political crossfire regarding who knew what, when and how about the Minister's announcement has created the false allegation that there was a leak to CARP.

The record must be set straight! At no time was CARP given an indication by the Minister's office of when the announcement would be made or what it would say.

Needless to say, the Mounties are interested in talking to these CARP folks:

The RCMP interviewed an executive member of a seniors group shortly before launching a criminal probe into a possible federal leak about income trust changes.

Gleberzon says he received a phone call from Finance Minister Ralph Goodale's office indicating there would be an announcement on income trusts.

But he denies being told of the content or timing.

The article doesn't provide more detail on that interview, but tonight on Mike Duffy's Countdown, Mike Duffy said to Ralph Goodale's Parliamentary Secretary John McKay that he, Duffy, "understood" that CARP was reversing its reverse, returning the original story it told to CTV and later retracted.

John McKay had no response, and Duffy let it drop.

Has Bill Glerberzon returned to his story that the phone call from Goodale's office indicated the nature of the decision yet to be announced? If so, why the reversal of the reversal? And did any other elements of the CARP story change?

Stay tuned...

Posted by: Steve Janke at 09:08 PM | Comments (9) | Add Comment
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And you thought blogs don't matter.

The blogosphere's interest in Don Black seems to have been noticed.

My MSM source tells me that Don Black, close personal friend of Ralph Goodale, will be answering questions on a story being aired on CBC Newsworld tonight an 9pm EST and again on CBC's The National at 10pm EST. And he'll be appearing live on CTV Newsnet on Mike Duffy's Countdown at 8pm EST.

Check your local listings.

Posted by: Steve Janke at 03:04 PM | Comments (7) | Add Comment
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Donald W Black, good friend of Ralph Goodale

Update: Check out Stephen Taylor's review of just how honest Ralph Goodale has been over the years, including some new insights into the cosy relationship between Ralph Goodale and Donald Black. Some of that information has been added below.

We all know, after some initial denials, that Ralph Goodale met with the Investment Dealers Association just hours before letting the rest of us know that income trusts weren't going to be taxed (too late, of course, for the rest of us to do anything about it):

Finance Minister Ralph Goodale had an hour-long meeting with senior representatives of Canada's investment community -- at which the issue of income trusts was discussed -- only hours before his decision on the issue was announced, CanWest News Service has learned.

An official in Mr. Goodale's office confirmed yesterday that the previously undisclosed meeting with the executive committee of the Investment Dealers Association of Canada (IDA) took place, but said those who attended left the morning meeting "no wiser" about the decision that was announced later that day after markets closed. [emphasis added]

Of course, Goodale's people insist it was all on the up-and-up:

"There was a very vague, very general discussion," [John Embury, Mr. Goodale's director of communications,] said, adding it dealt with the association's planned submission on the income trusts issue. "They left the meeting no wiser than when they came through the door."

Really?

Let's look at who would have been at this important meeting. I have a source who tells me Donald Black was at the meeting. Donald Black is a director at the IDA:

Donald W. Black, C.M.
Chief Executive Officer
Greystone Managed Investments Inc.

Greystone manages funds, including this fund, Hartford Growth and Income Fund (D), that invests heavily in income trusts:

Top Holdings as of Nov 30, 2005
TSX Group: 4.32%
Canadian Oil Sands Trust: 4.16% [income trust]
Bank of Montreal: 4.12%
Fortis Inc.: 4.00%
Great-West Lifeco: 3.99%
Canadian National Railway: 3.96%
Royal Bank of Canada: 3.93%
AltaGas Income Trust: 3.92% [income trust]
IGM Financial: 3.90%
Bank of Nova Scotia: 3.86%

I guess that's why he was at the meeting. Of course, Black is particularly eager to make sure that Greystone thrives:

Based in Regina, with offices in Edmonton and Winnipeg, Greystone offers a full range of investment products and services to a national clientele. Greystone is majority owned by its employees, more than half of who are shareholders.

So who is Donald Black? Just what are his links to Ralph Goodale and the Liberal Party?

In December 2003, following the advice of Prime Minister Paul Martin, Black was made a member of the Order of Canada:

A distinguished leader in the Canadian financial services sector, Donald Black has been instrumental in restructuring many large companies and redirecting them to financial profitability. Equally committed to the welfare of his community, he has given generously of his time and expertise in support of a myriad of charitable, healthcare and educational organizations. A long-time supporter of the United Way of Regina, he created and sustained its Leadership Giving Program. In addition, the Hospitals of Regina Foundation Inc., the Saskatchewan Indian Federated College and the CNIB have benefited from his dedication and leadership.

He is also Ralph Goodale's good friend and a generous contributor to Goodale's campaigns (see this update as well). They worked together at Agriculture and Agri-Food Canada, and Goodale helped him out in getting this plum patronage appointment:

OTTAWA NOTEBOOK
October 29, 1998
Western Producer Barry Wilson

Regina investment manager Donald Black has been re-appointed chair of the Farm Credit Corp. for a second three-year term. It is a part-time position for the president of Greystone Management Inc. When he was appointed in 1995, the announcement was greeted with some skepticism by opposition politicians because Black was a friend of then-agriculture minister Ralph Goodale. [emphasis added]

His re-appointment was made by Goodale's successor, Lyle Vanclief. The minister praised Black as "a strong proponent of corporate governance" who has helped create the rules that separate the duties of the FCC management from the responsibilities of the directors.

Of course, that plum appointment was a return for Black helping out Goodale (see Stephen Taylor for a longer history):

So, how close are Goodale and Black? Greystone Capital Management is based out of Regina, Saskatchewan. Black ran Pioneer Life Insurance and gave Goodale a senior position in the firm during his brief stint in the private sector [1988-1993]. According to some sources, Goodale was appointed this senior position to allow the now Minister of Finance to continue working on his political ambitions.

No wonder the opposition squawked in 1995. Can you blame them for not trusting these two to be in the same room together and not exchange favours?

I wonder if the skepticism the opposition members voiced in 1995 when Donald Black got this little plum from Ralph Goodale will be repeated when they realize he was in that critical income trust fund meeting ten years later?

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From CTV via Bourque:

Finance Minister Ralph Goodale met Tuesday with RCMP investigators to talk about the income trust affair.

"Well, obviously it's not a normal part of the campaign, but it's a circumstance that has to be dealt with, and I'm very glad and happy to deal with it because I'm absolutely confident of my position," Goodale said from his campaign office in Regina.

But yesterday we were being told that the meeting had been postponed:

[Jason Kenney, a Conservative MP,] noted the finance minister's spokesman said earlier Tuesday there would be no meeting with the RCMP this week. "Yet it turned out he was meeting with him today. What is there to hide?" he asked.

One thing we don't know is the nature of this meeting. Was Goodale deposed? Was there counsel present? Was Goodale warned of his rights and obligations?

Or was this a planning meeting? A get-together to sort out schedules and arrange for a proper interview?

One thing is for certain, and that is we can't depend on the Liberals to clarify any of this. Their only hope now is to keep the situation confused and murky. As long as we Canadian are not quite sure what is going on, a significant number will find it easy to ignore the whole thing and vote Liberal.

Clarity is Paul Martin's enemy.

Posted by: Steve Janke at 07:54 AM | Comments (10) | Add Comment
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The income trust scandal is becoming more and more muddied. As we all know, on November 23, after trading had closed, Liberal Finance Minister Ralph Goodale announced that income trusts would not be taxed. The next day, the value of units in income trusts surged.

Curiously, trading in income trusts surged in the hours before the announcement. Was there a leak? The RCMP is investigating.

One of those traders who made a lucky trade was TSX CEO Richard Nesbitt, who invested over $700,000 that afternoon, and on November 24, realized a profit of $100,000.

In my piece on Richard Nesbitt, and his simultaneous role of a stock exchange CEO, a major personal investor, and a lobbyist registered to talk to the government on income trading, which might or might cover income trusts, I mentioned that one of Nesbitt's team, David Ablett, had worked closely with Jim Peterson in the past.

Jim Peterson is Ralph Goodale's cabinet colleague. Peterson is the Minister of International Trade. That ministry is works closely with Finance.

I wondered if Peterson knew what was going to happen. Until yesterday, the Ralph Goodale and Prime Minister Paul Martin were the only two cabinet ministers to have stated that they knew what was going on.

Until yesterday.

From CTV:

However, Goodale appeared flustered when asked if other cabinet ministers were in the loop of his Nov. 23 announcement on income trusts.

"There where [sic] ministers that obviously were involved in the discussion because they simply had to be," he said.

Did that include Jim Peterson, a person who had worked closely with David Ablett, a member of the lobbying team of Richard Nesbitt, who profited so handsomely by making trades ahead of the announcement?

And even if it did not, just who did it include? And who among their staff?

Or maybe it would be easier just to tell us who didn't know. Other than small investors, of course. We know they had no chance to make a quick profit.

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From the CTV Election Blog:

Last Friday, Finance Minister Ralph Goodale told CTV's that he would be meeting with the RCMP "next week" to discuss the RCMP's income trust investigation. He said that during an interview with CTV's Craig Oliver that was aired Sunday on CTV's Question Period.

Well, that was Ralph Goodale's understanding. Or assumption. Or wish, hoping to get the interview over with as quickly as possible.

Well, if wishes were fishes...

On Monday, we asked Goodale's press secretary Pat Breton what day of the week this meeting would take place and whether or not it was taking place in Regina or Ottawa. Today, Breton sent this reply:

No mtg has been scheduled.

He went on to say:

it's up to the RCMP to determine precisely when. And they haven't.

If we assume all the facts are true as reported, the RCMP has decided to investigate further. This is a double blow to the Liberals, as I see it. First, it means that the scandal will not die an early death in terms of being in the news. Even if there are no new revelations and the story fades, the interview is certain to thrust it back into the spotlight. The closer that interview is to January 23, the worse it is for the Liberals.

Also, and I could be wrong with this, but an interview has two purposes -- to ask questions about information already known, and to reveal new information. The more precisely planned the former, the more likely that you will succeed at the latter.

If the RCMP is investing more time before the interview, I suspect it is because they feel that they haven't exhausted the first level of investigation. That can't be good for Ralph Goodale or anyone else who is going to be interviewed. The more the RCMP can dig up ahead of the interview, the more nasty that interview will be.

[Thanks to reader JW]

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TSX CEO (and registered income trust lobbyist) Richard Nesbitt

Recall the CTV report that was quite brutal in providing evidence that a leak happened just prior to Ralph Goodale's announcement that income trusts would not be taxed?

The allegation of insider trading following that leak has led to a formal criminal investigation by the RCMP into the highest levels of the Paul Martin Liberal government, dealing a body blow to the Liberal Party during this election.

One of the revelations from the CTV report was that Richard Nesbitt, the CEO of the Toronto Stock Exchange, made out very well for himself:

Richard Nesbitt, CEO TSX Group: According to CTV, Nesbitt purchased $759,000 worth of stocks hours before the announcement and made $100,000 in profit the next day. However, he could not be reached for comment, yet his spokesman said that he was only filling up his core holdings before the calendar year end.

What the spokesperson did not mention was that since August 19, 2005, Richard Nesbitt was also a registered lobbyist, and still is today.

What topics did he discuss?

2. discussions with the Department of Finance with regards to fixed income trading.

Fixed income trading includes trading in income trust funds. In fact, it's mostly about that.

Now that the CEO of the TSX talked to the Minister of Finance and his people about income trusts and tax policy is probably fine. But then one wonders whether he really was just "filling up his core holdings" at exactly the right time.

Of course, the fact that part of his team included David Ablett, now VP of Public and Corporate Affairs at the TSX, and formerly a Senior Assistant Secretary to the Cabinet in the Privy Council Office, couldn't hurt. Now that was a long time ago, 1978 through 1983. That doesn't mean that he hasn't had his hand in government business, of course. For example, Ablett helped Jim Peterson write this report on the preparation of budgets, and public participation in that process, in 1995.

Citizen involvement in budget-making was seen as a good thing.

Where is David Ablett's friend, Jim Peterson, today? He's still in government, in cabinet in fact, as the Minister of International Trade. One wonders if Peterson was on the "need to know" list.

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Anne McLellan, Liberal MP for the riding of Edmonton Centre, is Deputy Prime Miniser and Minister of Public Safety and Emergency Preparedness.

That's relevant because the Minister of Public Safety is responsible for the Royal Canadian Mounted Police.

As such, it would be interesting to ask Minister McLellan whether she believes that Commissioner Zaccardelli is on a wild goose chase now that the RCMP has decided to initiate a formal criminal investigation to determine if the decision not to tax income trusts was leaked to select traders prior to the formal announcement on November 23.

Would Anne McLellan support her Mounties?

"I support the Commissioner's conclusion that a criminal investigation in the matter of a potential leak from either the Finance Minister's Office or the Prime Minister's Office is justified. The professionalism of the Royal Canadian Mounted Police is beyond question, and I know they will serve Canadians by following the investigation wherever it leads."

Or would she undermine the federal police in favour of her fellow Liberal cabinet ministers?

"I am certain that there is no evidence of wrongdoing to justify the allegation of a leak from within the government. An investigation will certainly show that the market was responding to speculation, and not leaked information. This is an exercise in response to an opposition ploy to use the RCMP to embarrass the finance minister, a man above reproach, the prime minister, and the Liberal Party, during an election campaign."

Prime Minister Paul Martin has already decided that the Mounties are wasting their time and has said so publicly:

Martin said Friday the investigation is taking place solely because NDP Finance Critic Judy Wasylycia-Leis requested it.

"The statement by the RCMP said there's absolutely no evidence to demonstrate that there is, in fact, any wrongdoing here at all," Martin said while campaigning south of Montreal. "And we're dealing with opposition allegations in the middle of an election campaign."

I wait for a reporter to ask the question of Anne McLellan.

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"the same old same old"

1. something that has not changed (Cambridge Dictionary of American Idioms)
2. an attitude that potentially spells doom for Canada's Liberal Party

The new year opens with an Ipsos Reid poll showing the Conservatives and Liberals in a tie, but significantly, the Conservatives slightly ahead and the Liberals slightly behind.

And momentum is favouring the Conservatives.

What about attitudes?

With three weeks to go, attitudes are souring against the Liberals:

Just one-third of Canadians now agree with the statement "I'd be comfortable voting for Paul Martin and the Liberals in the next election because they will govern very differently next time due to the lessons they learned from the Gomery Inquiry"

That's down 7 percent from a week ago, when Paul Martin garnered more support.

Paul Martin scorched the Liberal Party landscape when he succeeded Jean Chretien. The entire cabinet was replaced. Chretien loyalists like Sheila Copps were hounded out of the party, or turfed at the 2004 election.

The goal was to make the new Liberal Party different from the old Liberal Party.

Why? The old Liberal Party was the party of corruption. The new Liberal Party is the party of integrity. That's what we were supposed to believe. The suspicion that the changes were driven by Paul Martin's desire to be surrounded by loyalists was unfair. This was about cleaning house and earning the trust of Canadians.

Canadians want change? Fine. Vote for the Liberals. They're different. They've changed.

The old Liberal Party was the party of Adscam.

The new Liberal Party is the party of ... um ... the Income Trust Scandal?

Not really all that different. And Canadians are realizing that. Last week 40% of Canadians bought that line. This week, it dropped to 33%. Next week? Who knows? But it's not trending well for the Liberals.

Old Liberal Party? New Liberal Party? Same old same old.

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From CTV:

As he prepares to answer to RCMP investigators in a matter of days, Ralph Goodale remains defiant in the face of unyielding calls by Tories and New Democrats to step aside from his post as finance minister.

Mid-campaign allegations of insider trading have rocked the Liberal Party, threatening to derail Paul Martin's quest for victory in the Jan. 23 election.

But Martin has unequivocally backed his minister of finance. And Goodale repeated Sunday on CTV's Question Period that he's "absolutely confident" he and his staff will be absolved of any wrongdoing in a criminal investigation into allegations that his Nov. 23 plan for income trusts was leaked in advance.

"I am determined to stand my ground, based on over 30 years of ethical conduct that I'm very proud of," said Goodale in an interview with Question Period co-host Craig Oliver.

A number of observers thought December 31, 2005 would see Ralph Goodale step aside. Well, we are now well into January 1, 2006, and there is no hint of a resignation. Anyone who had December 31 in the resignation pool has lost out. Indeed the rhetoric has become more defiant, more strident.

My guess is that the Liberals have decided to ride out the RCMP investigation. If nothing changes between now and January 23, they've decided that the investigation will fade as the campaign focuses on attacks on the Conservatives.

What will it take to change things? The RCMP could announce, or leak, some preliminary findings that establish that a leak happened in November. Alternatively, the opening of a second investigation, by the OSC (which I know to be in progress, though I can't prove it), or by the SEC in the US, could make the situation untenable.

Three weeks to go. We might have have to put up with Ralph Goodale's protestations for the duration.

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