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Commonwealth Games investigation part two: where the money went 

Public money, private players: The Coast uncovers the paper trail of where $8.5 million in public money was spent by the Halifax 2014 bid committee..

A year ago last Saturday, Halifax’s Commonwealth Games bid collapsed in acrimony. Politicians pointed fingers at each other and the public demanded answers. But everyone involved in the bid---provincial, federal and municipal officials, and the executives they placed in charge---kept mum, and refused to say what happened to the $8.5 million in public money that went into the aborted Commonwealth Games pursuit. Citing “privacy concerns,” officials attempted to seal the record forever by locking up the documents and denying all requests for full disclosure.

That’s how it works here in Nova Scotia. On the one hand, government officials have more or less accepted that how they directly spend money---the details of a road paving project, or who waters the plants in City Hall---is a matter of public record. We can simply ask for an accounting and usually a nice clerk will provide the details we seek.

But when government officials want to keep information away from the public, they shuffle millions of dollars into a quasi-public agency that works by different rules. In this case it was an organization called Halifax 2014, which started as a self-appointed group of local businessmen but in early 2006 expanded to include appointees from the city of Halifax, the province and the Canadian Commonwealth Games Association, a federal agency.

The new group cobbled together $3 million from HRM, $3.5 million from the province and $2 million and change from the feds---seed money to compete against Glasgow and Abuja, Nigeria for the privilege of hosting the 2014 Commonwealth Games.

Had Halifax 2014 actually won the bidding contest, the same agency would be in charge of spending of $2 billion, almost all of it public money, to actually produce the Games.

And there would be no public accounting for any of that money. Secrecy ruled, from the start. What would a new Shannon Park stadium cost? They wouldn’t say. Where were they spending the money to woo international Commonwealth Games delegates? Top secret. What companies got the contracts to do what kind of work? None of our business.

That’s a hell of a way to run a democracy.

Six months after the bid collapse, I discovered hundreds of Commonwealth Games-related documents that had been deposited with the legislature. Those documents---meeting minutes, consultant reviews, legislative reports and the like---allowed me to recreate what had happened behind the scenes at the bid society. I concluded that Halifax 2014 was condemned by the very secrecy it embraced, and by simple incompetence.

The Coast published that account on October 4. The next day, the city of Halifax posted all the documents I had used for the article on its website. But we still didn’t know exactly where the $8.5 million in public money went.

Last month, however, I finally convinced city officials to turn over detailed financial records from Halifax 2014---every cheque, every credit card receipt and the petty cash log. I’ve since reviewed 1,137 cheques totalling $8,010,701.37 and $177,877.13 in credit card receipts. (This catches most of the money spent, but there were also electronic and other transfers that bring the total of public money spent by the organization up to about $8.5 million.)

We’ve posted the expenditures in a database at thecoast.ca. Now, one year after the bid collapsed, anyone who’s interested can see where the money went.

But so what? Does any of this even matter?

Maybe we’ve become so jaded in Nova Scotia that we no longer care. Perhaps past experience has led us to give up on what now seems like an unachievable ideal: democratic accountability.

But it does matter. It was our money, after all. And the people who spent that $8.5 million are still here and still running things. They’re in charge of our city and provincial finances, and they’re the self-proclaimed “fiscally responsible” business community that sets much of the political agenda.

If we don’t know what happened with our money in the past, how can we hope to have any say what happens with our money in the future?

The old boys’ network

Let me be the first to say that a good deal of the money spent by Halifax 2014---maybe even most---falls into a yawningly mundane category. Once the politicians opted to chase the Commonwealth Games fantasy, it followed that lots of money had to be spent on the nuts and bolts of the bid process.

But on the other hand, the group of business people who were pushing the politicians to go after the Games with public money were in large part the same group of people controlling how the money was spent, and the same group of people who were selling their services to Halifax 2014.

That’s the very definition of the old boys’ network: They shuffle public money around this way and that behind closed doors, equate their personal private fortunes with the public good and condemn those who question the process as interlopers opposed to “progress.”

Let’s look at some particular examples.

At the centre of the Halifax 2014 story sits Halifax’s most-connected businessman: Fred MacGillivray, chair of the Halifax 2014 board of directors and CEO of Trade Centre Limited.

Three organizations under MacGillivray’s TCL umbrella received direct payments from Halifax 2014: $145,378.61 went to Events Halifax, an event promotion organization; $4,208.42 went to the World Trade and Convention Centre; and $6,400.71 went to Windows, the restaurant at the Convention Centre.

MacGillivray claims he has no knowledge of the particulars of any Halifax 2014 contract, including the payments to organizations he oversees in his position at TCL. “That was all handled by the staff---I never got involved in it,” he says. “I’m sure we probably did something.” MacGillivray does concede, however, that such large contracts would have been approved by the Halifax 2014 board of directors, which he chaired. He didn’t abstain from those votes.

The Halifax 2014-Events Halifax connection runs a couple of layers deep: Frank Garner, who had been the executive director of Events Halifax, moved from that position directly to the Halifax 2014 management team, as the director of sport.

But since Trade Centre Limited is a provincially subsidized crown corporation dedicated to bringing tourists to Halifax, is it really such a big deal that the organization also received money from a different pot of public money? Maybe, maybe not. Consider that MacGillivray’s job at TCL is at least theoretically dependant on his job performance and that, according to its annual report, TCL lost $702,002 in 2006. The $155,000 or so in revenue from Halifax 2014 cushioned what would have been a considerably larger figure.

They probably don’t actually smoke anymore, and a handful of women are included in the proceedings, but it’s hard to not envision a smoky room full of suited guys doling out the Commonwealth Games money among themselves.

There was, for example, another Halifax 2014 manager with close ties to a firm that won a large contract from the bid effort. One day, Deborah Hashey was vice president at Colour, a local PR firm. The next day, she worked as Halifax 2014’s director of communications and partner relations. Subsequently, Colour was paid $185,388.59 for Commonwealth Games-related business. Hashey did not return a call for comment.

Colour’s CEO is Steve Parker, who is also a partner in Barrington Consulting Group, [Editor's note, 3 June 2013: Barrington Consulting contacted us today to say that the Steven Parker who is a partner at Barrington Consulting is not the Steve Parker who is CEO of Colour. In 2008, as we were reporting this article, we gave S. Parker at Colour the opportunity to respond, but he declined to clear up the confusion.] which itself received $12,825 in Halifax 2014 payments. In an email, Parker declines to comment on the payments, directing me to Colour president Chris Keevill. Keevil, however, did not return my call.

Colour is one of three companies collected as the CCL Group, along with Blue Ocean Contact Center and Corporate Research Associates. “CCL Group is the hub which connects each of these strong operating companies to the other,” explains Parker, who also is the CCL CEO on the CCL website. “Some of these connections are physical, embodied in shared facilities, systems and human resources. Some are metaphysical: like shared values for instance, and common purpose.”

The vice-chair of CCL is Don Mills, who is also the founder and CEO of Corporate Research Associates, a public opinion research firm that is one of the three “common purpose” CCL companies. Mills’ company very publicly released poll results celebrating what he said was broad public support for the Commonwealth Games effort.

In October I asked Mills if his close business relationship with a large Halifax 2014 contractor biased his poll results. “No,” he told me. “It makes no difference to my life one way or the other if Colour makes money.” He went on to say that he does not receive a salary as vice-president at CCL, and that he was only vaguely aware that Colour was doing any Halifax 2014 work.

But here’s something I didn’t know at the time: Mills’ company---Corporate Research Associates, the firm that did the polling work---was itself paid by Halifax 2014. Frankly, it never occurred to me to ask. That information wasn’t part of the poll questions, it wasn’t included in the Halifax 2014 press release about the poll and Mills didn’t reveal it in his many post-poll interviews with local media. If it isn’t disclosed, getting paid to conduct a poll by the subject of the poll is so clearly a conflict of interest that it was inconceivable to me that Mills would risk his company’s reputation doing as much. But Halifax 2014’s cheque record shows $12,084.00 paid to Corporate Research Associates.

I’ve been unable to reach Mills for the article, but the obvious concern is that Mills had an incentive---because he was paid directly by Halifax 2014 and/or because his business associates stood to gain---to produce a positive poll result that could be used to convince the public to join the Commonwealth Games bandwagon and, more importantly, to not question the large amount of public money spent on the bid.

Certainly, Halifax 2014 spread a lot of dough around local PR circles, most of it spent to convince we mere plebes that the inner circle had our best interests at heart.

Bristol Communications, for example, received $501,986.39 in payments. For what, I don’t know: Bristol president Rick Emberley didn’t return my call. But Bristol had been in the Commonwealth Games game from early on---it was a “domestic bid partner” for the pre-Halifax 2014 effort to get Halifax named the Canadian candidate city for the Games. That was a wise choice for the company, evidently, as it subsequently received a half million dollars in work from the bid committee.

Since Emberley won’t talk to me, there’s no telling if his position as Halifax 2014’s “marketing consultant” influenced how the contracts were awarded. But it appears he was sitting at the table in the no-longer-smoky room.

There was still more money spent on PR. Ad firm Cossette Atlantic was responsible for Halifax 2014’s “HERE” ad campaign, for which it received $433,932.36. (Of that, $7,512 went to The Coast, which ran a handful of four-colour HERE ads.)

MT&L Public Relations pulled in $73,678.01 worth of Halifax 2014 work. “We did one small project, as I recall,” said president Kim West, although she wasn’t sure what that project was.

And Ethos Communications received $19,474.88 in Halifax 2014 payment. Owner Heather Spidell didn’t return my call, but provincial records state that Ethos specializes in “change communications, crisis and issues management.” The crisis, I’m guessing, involved the increasing public distrust of the bid effort.

The twisted path of Halifax 2014 connections is perhaps best demonstrated by two relatively small payments. Canadian Sport Centre Atlantic, a not-for-profit sport promotion company with offices on Spring Garden Road, was paid just $1,092.78. No big deal. But, directors of the non-profit include Ken Bagnell, Jamie Ferguson, Rob Paradis and Julia Rivard. Bagnell and Ferguson were also members of Halifax 2014’s board of directors, and Paradis was a member of Halifax 2014’s sport advisory committee. Rivard? Her private businesses, Rivard Design Group and Queen Street Studios, received $29,783.75 in payments from Halifax 2014.

Were Rivard’s Sport Centre colleagues instrumental in getting some Halifax 2014 graphic design work tossed her way? I don’t know---she didn’t return my call.

It’s apparent that the local collection of politicians and business people that make up the old boys’ network hasn’t learned that unnecessary and unwarranted secrecy breeds distrust.

And why should we trust them? A lot of them continue to refuse to talk about the money they received, evidently considering the funds funnelled through Halifax 2014 as their private business---theirs alone. Never mind that it was taxpayer money.

But for contrast, let’s look at the largest recipient of Halifax 2014 money: WHW Architects. The company pulled in a whopping $2,370,566.17 for designing various Commonwealth Games venues, including the proposed Shannon Park stadium.

WHW’s president, Keith MacGillivray (no relation to TCL’s Fred MacGillivray), returned my phone call the very day he returned from an overseas trip. He was happy, he said, to discuss whatever I wanted to talk about involving Halifax 2014, and we spoke at length about how his company bid on the work and what it did.

The short story is that WHW, the largest architectural firm in eastern Canada, acted as the main architectural contractor and put much of the work out to dozens of smaller firms. MacGillivray offered to open up his company’s books to me, to have me speak with the person who put together the bids and even to detail how much profit WHW made from the work.

See, that’s how it’s done: full public accountability, provided willingly, with no secrets.

It does make me wonder, though, what the inside circle is hiding.

Broken promises?

On August 22, 2006, Halifax 2014 issued a press release celebrating “community support” for the Commonwealth Games bid effort.

As proof of this support, the press release noted that “Halifax 2014 is receiving in-kind contributions that help to keep the costs down, including furniture from Office Interiors and office rent for the Metropolitan Place office tower location from Canadian Real Estate Investment Trust Management.”

But while both Office Interiors and CREIT benefited from the positive publicity of donating to the bid effort, it appears that both firms reneged on their offers.

Office Interiors, on Windmill Road in Dartmouth, is owned by Jim Mills, brother of Don Mills, the CEO of Survey Research, the polling firm.

On March 7, 2007, seven months after celebrating Office Interiors’ donation of furniture with a public press release, Halifax 2014 very quietly dealt with a turn of fortunes at a board of directors meeting. “In early 2006 when the Halifax 2014 Commonwealth Games Bid Society’s office was first established, staff believed that furniture would be provided by Office Interiors at no cost,” read minutes from the meeting. “They were informed in late 2006 that there is a cost, and after negotiations, Jim Mills has offered to let Halifax 2014 rent that furniture at an approximate 70 percent discount with the opportunity to purchase it at any point.”

A month later, a $33,490.98 check was cut to Office Interiors. No press releases were issued to clarify the record.

As for CREIT, monthly rental checks around $5,500 were issued to the firm from April through November of 2006. This strikes me as a pretty good deal: Halifax 2014’s office on the 11th floor of Metropolitan Place, the office tower next to the Dartmouth end of the Macdonald Bridge, had a spectacular view of the harbour and the Halifax skyline. I’d suspect that the market price for such a space would run maybe four times as much.

Funny, though, that on November 20, 2006, Halifax 2014 cut a $112,920.60 cheque to CREIT. If, as I suspect, that cheque reflects a change of heart on CREIT’s in-kind offer, then it is a back payment that would bring the total monthly rent for the previous months up to around $19,500. And, sure enough, monthly rent cheques after that point are in the $19,500 range.

Sure, that’s a guess on my part. CREIT could clear up the confusion, but when I called Wendy Heisler, CREIT’s leasing agent for the building, she referred me to CREIT vice president John Morehouse, who has not returned my call.

My gut feeling, though, is that there was a lot of winking and elbow-nudging going on as Halifax 2014 execs sent a signal to both Office Interiors and CREIT that there was enough money sloshing around the office that it’d be OK to turn those previous charitable offers into old-fashioned profit.

It was just the taxpayers’ money, after all.

In the office

The documents I reviewed also give some indication of the work culture inside the office with the spectacular view.

I’ve spent my working life in the blue collar world or in notoriously cheap newsrooms---a cup of coffee on the boss has been a rare treat---so I’m probably not the best person to assess the office perks of high-powered business execs. Still, I wonder if the kind of budgetary restraint and penny-pinching most small businesses pursue was standard at Halifax 2014.

Food and drink were seemingly a part of every business day. The bid committee paid $6,594.83 to Quickies, the cafe on the ground floor at Metropolitan Place, for a constant supply of coffee and muffins, and pizza shops around Dartmouth landed a few hundred dollars in sales for various committee meetings. Staff birthdays were celebrated with cakes, staff departures noted with small gifts.

The food and drink money was spread around town: $2,354.38 was spent at Pacifico Bar & Grill one night, $942.47 for a “board of directors event” at the Thirsty Duck on another, $1,796.53 at Murphy’s on the Water on a third. Meals and/or drinks were consumed at The Old Triangle, Henry House, Montreal Grill, Soho Kitchen, Mac-Askills, La Perla, Ducky’s, Salvatore’s and Stayner’s. Oh, and don’t forget the $6,400.71 spent at Windows, in the Convention Centre.

Visiting Commonwealth Games representatives were taken to the Seven Winebar, for $457.50, and given $83.96 in gifts from the Port O’Wine store, $250.93 worth of lobster from Clearwater and $2,804 in trinkets from Nova Scotia Crystal.

All that socializing on the public dime is a little rich by my way of thinking, but maybe I’ve got a little class envy going.

Certainly, Halifax 2014 staff did OK, salary-wise.

I was allowed to see every cheque the organization wrote, but names of most individuals were redacted---officials say this information is privileged, a claim I contest---so I don’t now know who received the paycheques. I do, however, know the amount of the paycheques.

Judging by their take-home pay, the office clerks pulled in a modest $32,000 or so annually. But at the other end of the scale, one employee was bringing home $3,143.99 every two weeks, another $2,498.69, a third $2,341.80. That’s take-home pay, after taxes, so I’m figuring these were six-figured annual salaries. Additionally, someone with a Toronto address was receiving a regular $2,153.73 biweekly paycheque, and five or six others were pulling in just under $2,000 in take-home pay.

Aside from paycheques, there are at least two dozen cheques ranging up to $31,000 written to people in care of the Halifax 2014 office, with either no explanation at all or simply “reimbursement” written on the cheque memo line.

Travel

At least some of those reimbursements were for a massive junket to the other side of the planet.

True to form, after 27 people associated with the bid committee travelled to Melbourne, Australia for the March 2006 Commonwealth Games, Halifax 2014 and governmental officials tried to keep details of the trip under wraps. But after several months of increasing public outrage at the secrecy, the organization announced in July that $733,000 had been spent on the trip.

But we don’t really know exactly how or where that money was spent, because the Halifax 2014 execs didn’t start using credit cards until August.

Those credit card records, however, reveal a non-stop global adventure. Halifax 2014 paid $316,944.71 between local travel agencies Carlson Wagonlit and Maritime Travel, and another $43,733.57 to Air Canada.

They needed bags for their flights, and sure enough we find $821.37 in purchases from Kelly’s Luggage. And obviously we’d want them to look good, so no doubt the $8,350.80 spent at Vogue Men’s Wear was entirely justifiable.

The places visited would make a geography teacher proud: Frankfurt, Germany; Colombo, Sri Lanka (they stayed at the Hilton); Malé in the Maldives (Paradise Island Resort); Limassol, Cyprus (They chose the Hawaii Beach Hotel, a five-star resort that lists on the internet for 527 Euros per night, over other five-star hotels, such as the Four Seasons, which lists from 137 Euros); St. Ann’s, Trinidad and Tobago; St. George’s, Granada; St. Lucia, Dominica; Cardiff, Wales; Belfast, Ireland; Glasgow, Scotland; London, England; Johannesburg, South Africa; Brisbane, Australia (this was a second Australian trip); Port Vila, Vanuatu.

Halifax reps went twice to Doha, Qatar. Both times they stayed at the Marriot, and during the second visit they spent $5,746 at the swank Diplomatic Club for a reception.

Moving on, they went to Nassau; Swaziland; Maputo, Mozambique; Windhoek, Namibi; Flic en Flac, Mauritius; Gibraltar; Accra, Ghana; Dakar, Senegal; Banjul, Gambia; Nairobi, Kenya; Yaounde, Cameroon; Christ Church, Barbados; St. John’s, Antigua; and back to... well, you get the idea.

There was also considerable travel to and in Canada. Some $60,575.53 was spent for accommodations at the Holiday Inn Harbourview in Dartmouth, which is adjacent to Metropolitan Place tower.

And the last week in April 2007---nearly two months after provincial officials shut down the bid effort---$8,226.77 was paid to the Westin Nova Scotian.

Politics

Fred MacGillivray, the chair of Halifax 2014 and of TCL, tells me that I should forget about the Commonwealth Games and instead think about the future. “I don’t know why you’re so obsessed with this,” he says. “This was a lost opportunity. Instead of dwelling on it, we should move on, and look for the opportunities we can grab from here on.”

Hmmm. And who would be put in charge of grabbing those future “opportunities”? Unless something changes, the very same people who bungled the last one.

MacGillivray rejects the notion that any of the public money that went through Halifax 2014 was misspent. “It was audited,” he points out.

But Andre Vincent, a partner at Deloitte & Touche, the accounting firm that conducted a final audit of the Halifax 2014 books (for the price of $82,365.00), tells me that his company was hired simply to assign categories to the money spent---not to assess whether those expenditures were appropriate or worthwhile. Asked if he thought the money was wisely spent, he says that he “is not at liberty to discuss particulars” of the audit.

Regardless, the same inner circle that controlled Halifax 2014 is indeed “moving on” to other opportunities.

Just a couple of months after Halifax 2014 made its last purchase ($57.37 worth of groceries from the Wyse Road Market on July 5, 2007), a new political group called Citizens For Halifax announced its existence, and said it was dedicated to removing every Halifax city councillor from office and putting its own candidate in the mayoral chair.

Those mentioned in media reports as members of the group include Fred MacGillivray, Don Mills and Rick Emberley---all of whom were closely connected to Halifax 2014. MacGillivray says he is “not active” with the group. But one of his closest business associates, TCL communications manager Barb Stegemann, is at the forefront of Citizens For Halifax.

Moreover, Citizens For Halifax readily admits that it is modelling itself after Vancouver’s Non-Partisan Association, which successfully advocated for the Vancouver Olympics. Many people and companies associated with that organization also did work for Halifax 2014.

Hey, it’s a free country: MacGillivray and the rest can form whatever political organizations they want, and argue their case as they wish.

But let the record show that these folks aren’t so much “Citizens For Halifax” as they are people looking to make a lot of money from the public purse, but without public scrutiny.

You’ve been warned.

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