Corporate rule

Here's a question; why has our government worked so hard to make a "deferred prosecution agreement" (DPA) available to SNC-Lavalin?

Here's another one; why has no mainstream media outlet ever investigated how hedge fund sharpie Gerald Schwartz was able to more than double the value of Husky Injection Molding in less than four years?

And another; why was Hunter Harrison universally lauded as a hero in our mainstream Canadian media for eliminating over 5,000 excellent working class jobs at CPR?

Here are some tentative answers.

The purpose of a DPA is to allow corporate entities that engage in bribery, bid-rigging, and other nefarious business practices to get off by paying a fine instead of being charged with a crime. Corporations love it! Paying the fine becomes just another cost of doing business, just like the original bribe. The Trudeau government's rationale for having slipped a DPA provision into law last year, in the back pages of an omnibus budget bill, is that Canada needs to have a level playing field vis-a-vis our competitors. Ergo, if the UK and US go easy on corporate crooks, we must too, or we won't be competitive.

Husky was the life's passion of Robert Schad, a German immigrant who started out with a little machine shop in the mid 50's. He famously made Husky one of the most desirable workplaces in Canada by providing not only good wages, but unprecedented employee perks, from free meals to free day-care to on site gyms. Getting on in years, he sold his baby to Gerald Schwartz's Onex in 2007 for just under a billion dollars.

Less than four years later, Schwartz sold Husky on to another hedge fund for two billion. How did Schwartz add a billion dollars in value to the company that Robert Schad had spent a lifetime building up? He ripped out all that feel-good stuff that detracts from the bottom line, that's how. That's what "building value" looks like in the world of hedge fund operators. 

That's appalling, disgusting, scandalous... but Gerald Schwartz is a Very Big Deal who just donated $100,000,000 to the University of Toronto. No newspaper publisher, let alone reporter, is going to touch that story with a fifty foot pole, because it would be their last story.

Canadian news media lapped up every drop of mendacious idiocy that dripped from Hunter Harrison's lips as Harrison and his hedge fund boss Bill Ackman destroyed more than 5,000 working class jobs at the iconic railroad. Harrison was "the new sheriff in town," don't you know. He was going to "change the culture" at CPR.

And he did. He replaced a culture of collegiality with a culture of fear, and he and Ackman walked away with a cool two billion for their troubles. For that, they are regarded as business geniuses by our business press.

That's what corporate rule looks like. There are innumerable case studies to choose from. Eddie Lampert looted Sears Canada to the tune of billions, leaving 16,000 pensioners in the lurch, but our media claim the company failed because of changing consumer tastes and inept management. The same corporate media still proclaim NAFTA a resounding success, even as all evidence shows it decimated Canada's manufacturing sector.

Which brings us to our current Prime Minister. He serves as an invaluable cover for the greedbags who call the shots behind the scenes. All the talk about feminism and diversity and human rights is designed to take our eye off the fact that he's 100% committed to corporate rule.

Here's a bold prediction. SNC-Lavalin will yet get their DPA. Our media, both corporate and the state broadcaster, will keep hammering away at the credibility of JWR and the (completely bogus) claim that 9,000 jobs are at risk.


Corporate rule will prevail.

Trudeau's "new politics" looks like the same old slime

So how are things looking for PM Sunny Daze' sunny ways, my friends?

Me and the Farm Manager spent five hours in the car today, to take in Horst Packull's funeral. We had the state broadcaster on most of the way. We learned that Canada is marshalling some top scientists to explain to the Chinese that there's really nothing wrong with our canola or our soybeans.

Well, that's nice, but I think most Canadians are probably smart enough to get that our problems in the China market have nothing to do with canola or soybeans, so why bother trotting out such a misleading story? China's ban on Canadian soy product and canola has nothing to do with science, and everything to do with politics.

Indeed, most Canadians fully understand that our current difficulties stem from our arrest, at Uncle Sam's behest, of Meng Wanzhou. Her crime? The company she works for has allegedly violated US sanctions against Iran.

To consider that a crime, one has to buy the argument that the US has a right to unilaterally dictate to other nations, allegedly sovereign states, who they can and cannot do business with. These Iran sanctions do not originate with the UN or any other international body. In fact, they originate in that country whose name we dare not speak.

Be that as it may, you can't do business with Iran because Uncle Sam says so.

Period.

PM Fluffy and his government obviously buy in.

But here's the thing. Anyone with a first year poly-sci grasp of geopolitics could pay lip service to the US sanctions while still avoiding a showdown with China. After receiving the arrest request from Washington, Canada had any number of options in terms of quietly signalling Huawei that travel plans had best take this contingency into consideration. That's what would have happened under Harper, or Chretien, or Mulroney.

That's just big-boy politics.

What Justin's social justice warriors are doing is virtue-signalling their moral superiority over Trump in the foreground, while furiously working to appease Trump behind the scenes, and the Canadian public is catching on.

Trudeau came to office promising a whole new way of doing politics.  And his government has certainly taken virtue-signalling to new heights. He's got a "feminist" government, don't you know! And nosiree, we won't be kow-towing to Mr. Trump! In fact, we welcome the world's huddled masses even while the Orange Ogre is banning Muslims!

The reason Canadians are in jail in China, and our agriculture products are no longer welcome there, is because the Chinese are calling Trudeau's virtue-signalling bullshit.

They're telling us that kow-towing to Mr. Trump has a cost.

Who knew?

Obviously, neither Justin nor his completely in-over-her-head Minister of Foreign Affairs could see this coming. We haven't even had an ambassador in China since January, because the highly respected John McCallum had to be fired, because he did see it coming. The decision to fire McCallum was a victory of virtue-signalling over common sense.

Thanks to the SNC scandal, we've recently been treated to a peek behind the scenes in the Sunny Ways government, and it ain't pretty. Seems the government that strictly observes the "rule of law" on the Huawei file has no problems elbowing the rule of law aside to do some bare-knuckle politicking on behalf of SNC.

Seems the "feminist" PM expects his female cabinet ministers to obey orders.

Seems the Prime Minister of Native Reconciliation doesn't have any qualms about putting the boots to a Native woman who calls him on his shilling for a corporate scofflaw.


Seems to me that politics in the age of PM Sunny Daze are as slimy as they've ever been.

Fluffy's fried

Watched the Jody Wilson-Raybould hearing from Ottawa for a spell this evening. I think PM Fluffy's days are numbered. JWR exudes a confidence and sincerity that Justin has long lost, especially the sincerity part. Justin's hypocrisy has been exposed for all the land to see. The PM who is all about keeping politics out of the judicial system when he's doing gopher work for Donald Trump (in the Huawei case) has no qualms at all about arm-twisting his Justice minister in the SNC-Lavalin affair.

I think Trudeau should resign. The Liberal Party should have a leadership convention, which JWR could readily win, and then they'd have a chance in October. Otherwise, they're screwed.

And we'd be screwed too, because do you really think things have a snowball's chance in hell of improving under a PM Scheer?

Nope!

Ideally, we'd have a party to the left of the Liberals with a little more appeal than what we see there, but I'm not hopeful.

As for those DPA laws, how is it conceivably a "reason" to have them just because the US and UK have them? Oh, because we need to be "competitive." In the US especially, big corporations routinely get the DPA treatment time and again. It's clearly not a deterrent to corporate malfeasance.

I would suggest it's not intended to be. What it is, is a corporate get-out-of-jail-free card. Not for the company or the shareholders, but for the executives caught dealing dirty. Canada's DPA was sneaked into law in the back pages of last year's budget omnibus bill explicitly for the benefit of SNC. If we were really that concerned about the "rule of law," that should never have happened.

Interesting to look back and see what former SNC Chair Gwyn Morgan had to say when the poop was starting to hit the fan for the company back in 2013. Gwyn had absolutely no idea! I'm guessing he'd be all for the DPA. Gwyn's not a guy who believes in government regulation. We should just cross our fingers and hope the greedbags who cut ethical corners, take integrity shortcuts, and skirt the law somehow develop an honest corporate culture.


Really?

Charbonneau Commission piddles away 45 millions to discover Hells Angels and Mafia control construction industry

Hmm...

It's certainly good to see that the think tank here at Falling Downs isn't the only site sceptical about the Charbonneau Commission.

Frankly, we lost all faith in the Commission when they pulled that Donnie Brasco stunt. Yup, here's this government inquiry into corruption in the Quebec construction industry, and they pay to fly in this guy who wrote a memoir about his time in the New York City Mafia?

Thirty years ago???

That's when we knew the Charbonneau Commission was guilty of what they were accusing everybody else of; sucking too hard on the government teat.

But yes, they did manage to stretch things out for four long and lucrative years, and they did manage to shine the spotlight on those mostly irrelevant corners of "corruption" wherein some bikers and some Italian guys might have made a bit of pocket change.

Those are the folks who made it into the headlines now that the final report has been released.

The SNC Lavalin guys and Arthur Porter, both vetted at the highest levels in the PMO, who scammed the system beyond the wildest and greediest dreams of those Italian guys and the bikers, are totally lost in the fine print.

Nice cover-up, Madame Charbonneau!

And nice job stretching a redundant "inquiry" out to four long years and $45 millions!

I say we need another inquiry to get to the bottom of the Charbonneau inquiry...

Canadian business to be shut out of Iran's rebuilding bonanza thanks to John Baird

Executives from companies across Europe, from Asia, and from the US are preparing for a business bonanza as sanctions on Iran are lifted.


But thanks to the buffoonish reign of error of former Foreign Minister Baird, it's unlikely Canadian companies are going to be getting a significant piece of the action. Baird never missed an opportunity to slander and antagonize the Tehran government, culminating in the abrupt shuttering of the Canadian embassy three years ago.


Look at the areas in which Iran plans to invest billions: oil and gas infrastructure, rebuilding the country's airlines, mining and steel-making infrastructure - all sectors in which Canadian companies have considerable expertise. And with the Canadian economy in the tank, Iran could have been a lifeline for companies from Bombardier to SNC Lavalin to dozens of mining and energy contractors.


Billions of dollars worth of contracts will instead go to countries that maintained a civilized dialogue with the Iranians and kept their embassies open in spite of their differences.


That's called "diplomacy," and it is something most countries expect of their Foreign Ministers.

How fighting corruption entrenches the most corrupt

The following comes from the website of Canada's Department of Foreign Affairs. On the face of it we appear to be dealing with a well-intended if somewhat patronizing attempt to impose Dudley Do-right norms on Canadian companies and their business ventures around the world. Let's take a closer look. (Italics mine.)

Strengthening Canada’s Fight Against Foreign Bribery

February 5, 2013 - Foreign Affairs Minister John Baird today announced that the Harper government is taking further steps to combat corruption and bribery by tabling amendments to the Corruption of Foreign Public Officials Act in the Senate. He delivered the following remarks in Ottawa:

“Our government’s top priority is securing jobs, growth and long-term prosperity. In our international dealings, this takes many forms.

(Securing jobs, growth, and long-term prosperity for who? For a relatively small clique of well-established corporate entities, their shareholders and their management.)

“It involves positioning Canada as a reliable supplier of the resources emerging markets need to grow.

(Reliable supplier of resources? As in hewers of wood and drawers of water? Most of our "resources" go to the developed world. Virtually none of our resources go to "emerging markets," and when they do, the Conservative government is easily persuaded to let foreign companies bring in foreign workers, which clarifies who Baird is "securing jobs" for above. Most of Canada's resources are owned by foreign entities.)

“It involves pursuing an aggressive, pro-trade agenda.

(For the benefit of who?)

“It involves creating the conditions for Canadian businesses to succeed.

(Aha! How do we "create" those conditions?)

“But our government also expects Canadian business to play by the rules.

(Here's the rub; whose rules?)

“Canadian companies can compete with the best and win fairly.

(A harmless bit of nationalistic jingoism, but we're getting to the nitty-gritty...)

“To signal our commitment and our expectation that other countries do the same, I am pleased to announce that our government is redoubling our fight against bribery and corruption.

“Today, reforms are being introduced in the Senate that will further deter and prevent Canadian companies from bribing foreign public officials. These amendments will help ensure that Canadian companies continue to act in good faith in the pursuit of freer markets and expanded global trade.

“Canada is a trading nation. Our economy and future prosperity depend upon expanding our trade ties with the world. This, we hope, is a good faith sign that Canada’s good name retains its currency.”

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In the first place, while Baird may sincerely harbour delusions about "signalling... our expectation that other countries" play by the same rules, they don't and they won't. In the international arena Canadian mining companies and engineering conglomerates are up against competition from the US, Israel, Brazil, Germany, South Korea, and so on, none of which are bound by Canadian law. The only reason serious Canadian-based international players ever became that are because they were spreading the schmier-geld around like everybody else. 

The recent revelations about SNC Lavalin make a great example. Getting billion dollar contracts sometimes takes millions of dollars of "bribes."

But whatever else he is, Baird is not a stupid man. He knows full well that the big dogs won't be effected by this legislation. The SNC Lavalins and Ledcors and so on can pay their schmier-geld legitimately. Legitimate lobbying. Legitimate consulting contracts. Legitimate advisory fees.

At the highest levels, US conglomerates have Hilary Clinton making their sales calls. That's all perfectly legitimate. In Canada Baird and Harper do the same thing for the big Canadian multi-nationals. All totally legitimate. 

What this legislation is intended to do is keep the competition out, the little guys, the young entrepreneurs who want to do an end run around the sclerotic status quo. Guys like Dan Gertler or Brad Griffiths.

So the Harper gang puts through this bit of legislative tomfoolery designed to cast them as moral exemplars, while the real purpose of this initiative is to protect the establishment and keep the new guys out of the game.

The blissful certainties of a black-and-white world

Gwyn Morgan, according to the brief bio beneath his byline in the Globe and Mail, is "a Canadian business leader and a director of two global corporations".

Yesterday Morgan's astute analysis cut straight to the heart of the global economic crisis. The world is divided into two camps. On the one side you have the "givers". These would be your hard-working right-voting folks; entrepreneurs and wealth creators.

On the other side is your left-tilting grab-bag of liberals, Democrats, socialists of all stripes, welfare cheats, drug addicts, the sick, the halt, the lame, the weak of back and slow of mind, et. cetra. These are of course the "takers".

Quoting reverently from Glenn Beck's idol Friedrich Hayek, Morgan warns the reader that the long-suffering "givers" are on the verge of giving up. It's clear to Morgan that the insatiable demands of the "takers" are threatening the very future of the free enterprise model, which history has irrefutably proven to be superior. He cites two vastly over-simplified examples.

Look at Germany when the wall went down. Free-enterprisers on the one side. A socialist wasteland on the other. Germany was able to absorb those Eastern slackers and become the manufacturing powerhouse of Europe, but now all these "takers" in Greece and Spain threaten to break the back of the German miracle.

He finds an example in Canada as well. Look at those student protesters in Quebec. Talk about thankless "takers"! The lowest tuition in the land and yet they march for lower tuition?

And the "givers" in his Canadian scenario are the tax-payers of Alberta, who work tirelessly digging their self-created oil wealth out of the ground so that they can provide the "lions share" of the 7 billion in equalization payments that the rest of us bestow on Quebec every year.

But no economic analysis by this Fraser Institute regular is complete without a gratuitous slap at the NDP, the former socialist party with aspirations to form a government in the event that Canadians ever wake up and smell the Harper.

So Morgan has got the pro-labour NDP leader Thomas Mulcair marching to the barricades with the Montreal students. There they go, students and unionists arm in arm, rallying to "replace free-market capitalism with government controlled socialism".

The final triumph of the "takers" over the "givers".

Then it struck me that both the students and the NDP leader would be more than comfortable in Germany!

No tuition!

Government mandated union representation on corporate boards!

And suddenly I realized that it's not such a black-and-white world after all. Maybe there are other options besides "free-market capitalism" and "government mandated socialism".

Maybe a government regulated capitalism?

Perhaps we should embrace the German model, Mr. Morgan!

But his economic analyses aren't all that's dodgy about Gwyn Morgan.

In the course of his business career Morgan built Encana into North America's second largest natural gas company, leaving a trail of despoiled communities all over the continent as a result of his wholesale embrace of industrial-scale fracking practices.

Since leaving Encana he has become Chairman of the Board of SNC-Lavalin, the Canadian conglomerate currently under a cloud of suspicion over corruption in Bangladesh, Mexico, Libya and Switzerland.

And here's the punch line; he's on the speakers circuit these days, giving lectures around the world on the topic of business ethics!