Breaking news It only looks like... Trade Centre Limited loaned Power Promotions $600,000 without city approval

According to documents, authorization for spending city funds came 18 days after money was loaned.

Update, 2:35pm: Trade Centre blames sloppy paperwork and misplaced cell phone for the miscommunication that resulted in the article below. See here for the latest information

Up to now, the official narrative on the concert loan scandal is that it was all Wayne Anstey’s fault: For several years, the city’s deputy CAO acted alone and without authority to advance $5.6 million to concert promoter Power Promotions through a Metro Centre bank account.

Mayor Peter Kelly was involved in discussions with Anstey and Power’s Harold MacKay, but Kelly says he knew nothing about the improper loans---it was all Anstey’s doing, says the mayor.

Likewise, even though the province's Trade Centre Limited manages the city-owned Metro Centre, TCL officials maintain they did nothing improper. “We were given direction by HRM to release the funds from the Metro Centre account,” TCL spokesperson Suzanne Fougere told The Coast two weeks ago. “In the case of this particular issue, Metro Centre was directed by HRM to release financial support for the promoter---it was done solely at the direction and authorization of the acting CAO.” Again, according to TCL, it was all Anstey’s doing.

But documents obtained by The Coast directly implicate Trade Centre Limited in the scandal.

On June 6, 2010, TCL advanced $600,000 to Power Promotions for a concert on the Halifax Common. Only 18 days later, on June 24, did TCL controller Robert Kanchuck ask Anstey to authorize the payment through the Metro Centre; Anstey then retroactively OKed the payment and guaranteed it with city funds.

The advance payment to Power was one of seven cash transfers made in 2010, a total of $2.25 million that year. There were similar transfers to Power made in 2008 and 2009---in all, some $5.6 million was transferred to Power. The arrangement of transferring money from the Metro Centre to Power violates the city charter, and the payments were made outside the city’s normal financial controls.

Officials at TCL have maintained that TCL was not involved in wrong-doing because they were directed to make the payments by the now-disgraced Anstey. But the documents clearly show that TCL, not city officials, initiated the $600,000 payment to Power.

• • •

The concert loan scandal became public earlier this month when city council declassified a report on the loans written by city finance director Cathie O’Toole. Attachment C to that report is a list of the seven 2010 payments, and the authorizations that permitted TCL to make each payment. Six of the seven authorizations are dated; the seventh, for the June 6 loan, is not. See Attachment C here.

“TCL provided the schedule for Attachment C to me,” confirmed O’Toole Monday. “To meet the FOIPOP [Freedom of Information] request, the [city’s] FOIPOP administrator had to go to TCL for the files I believe and also search Wayne Anstey's paper and electronic files.” 

The Coast has obtained all seven authorizations. The authorizations for six of the payments were made either before or the same day the money was advanced. But the authorization for the seventh authorization---the undated authorization on the TCL-produced Attachment C---was given on June 24, 18 days after TCL had advanced the money to Power Promotions.

The June 24 authorization came only after Robert Kanchuk, who is TCL’s financial officer, emailed Anstey at 1:49pm. “Hi Wayne,” Kanchuk wrote, “could you please authorize the additional cash advance to Power Promotional Events Inc - Harold Mackay of $600,000 for the upcoming Concerts.”

In the email, Kanchuk even wrote the proposed language of the authorization: “HRM will insure and cover any shortfalls to Halifax Metro Centre that may arise from these events.”

Five minutes later---at 1:54pm---Wayne Anstey responded to Kanchuk: “Approved. Wayne.”

Anstey’s email was cc’d to Scott Ferguson, TCL’s president. See the email exchange here.

Unlike some, but not all, of the other authorizations, the June 24 authorization was not accompanied by a signed agreement between the city and Power Promotions. The risk was entirely placed on the city, with no guarantee from Power or Power’s financial backers.

Clearly, Kanchuk needed the authorization for a payment that had already been made. Arguably, as the chief financial officer of TCL, a provincial crown corporation, Kanchuck should have known that a transfer of $600,000 in city funds needed to be approved by the Halifax city council, but he neither sought that approval nor notified city officials that city money had been improperly advanced.

Reached Monday, Kanchuk declined to talk to The Coast, referring all questions to TCL’s spokesperson Fougere. Fougere has not immediately returned a call for comment.

This story will be updated with more information this afternoon.

For The Coast's complete coverage of the Common concert financing scandal, click here.

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