Concert loan scandal report out tomorrow

As expected, the city’s auditor general’s report on the concert loan scandal has been agendized for Tuesday, soon after the 10am start of city council’s meeting (item 9.3.1). In public session, with reporters and TV cameras present, auditor general Larry Munroe will make what will likely be a lengthy presentation to council; immediately afterwards paper versions of his full report will be given out, and an electronic version will be posted on the city’s website. I’ll be there live-blogging via Twitter (@twitcoast), and will report more later.

Munroe’s report is titled A Review of Concerts Held on the North Common January 2006 – March 2011, which means that he looked back to the very beginning of the Common concert series, the September 23, 2006 Rolling Stones show. This is good, for several reasons.

First, and most simply, we’ve never been told the truth about the Rolling Stones show. To this day, we don’t know how many people bought tickets for the concert, and if the city provided secret loans to the promoter, Montreal’s Donald K. Donald. There’s always been something odd about the Stones’ show, in that DKD gave up on producing Common concerts after that single show: if The Stones show was really the success we were told it was, why didn’t he return for more? DKD’s exit made possible Harold MacKay’s entrance. In any event, we know that officials straight up lied about the attendance at subsequent Common concerts—essentially allowing the public to believe that ticket sales were twice the real number—so why should we believe the published 50,000 figure for the Stones’ attendance?

Second, it means that the report is exhaustive, with regards to the Common concerts. I know that Munroe interviewed dozens of people, including former CAO Dan English, former Trade Centre Limited president Fred MacGillivray, mayor Peter Kelly, promoter Harold MacKay and an assortment of staffers both at the city and at TCL, and that Munroe has obtained every document related to the loans, including the ones I’ve tried to get without success. I’m assuming that Munroe will tell us why officials thought the concerts were a good idea in the first place, and how the original funding formulas were arrived at. Then, he will tell us how they evolved, and how we got to the absurd point of the city floating the upfront money for a private developer, rather than simply cutting out the cashless middleman and putting on the shows itself.

Third, I don’t see how such an exhaustive analysis can be made without examining the role of Trade Centre Limited, both in the formative stage and as manager of the city bank account through which the improper loans to MacKay were made. Munroe might be overly cautious here, but I’m hoping that his report gives details of the tangled TCL-HRM relationship. So far, TCL has managed to insulate itself from the worst of the scandal fallout by putting forward the rather remarkable claim that as manager of the city’s money it had no responsibility to vet the appropriateness of any use made of that money. I think we’ll see a couple of things in Munroe’s report—he’ll likely call bullshit on TCL’s “We’re not responsible” claim, and more important, he’ll show that TCL was much, much more involved in the concert business than has been let on, right from the start. It’s possible that Munroe will ask provincial auditor general Jacques Lapointe to specifically examine TCL’s role in the concerts.

Still and all, Munroe’s report is necessarily limited—“I needed a specific starting point,” he told me a few weeks ago, explaining that he couldn’t examine the entire history of TCL-HRM dealings, which date back to the old city of Halifax and the building of the Metro Centre in the 1980s [correction, 7 June: the Metro Centre was built in 1978; the operating agreement between the city and TCL was signed in 1982.]. I don’t fault him here; he’s an accountant, not a historian, political scientist or journalist, and he has a specific mandate to look at the concert loans.

But the concert loans should be understood in context of a much broader story about how Nova Scotia decided to become a tourism mecca. There’s an elephant in the room that no one wants to talk about, but there’s a direct line from the Commonwealth Games fiasco to the Common concerts fiasco to the proposed convention centre.

Tourism has long been an import part of Nova Scotia’s economy. In the 19th century the province put our Acadian heritage front and centre in tourism promotion literature spread in the States. Early in the 20th century tourism promotion re-discovered the Celtic culture, and that became the selling point. In recent decades there’s been a “four founding cultures” meme—Mi’kmaq, Acadian, Gaelic and African; I guess we skip over the English who actually ran the place as uninteresting bores, at least so far as potential tourists go. And the Germans who largely built Halifax? I dunno, too confusing for Americans, I suppose.

Anyway, tourism and tourism development is an appropriate government function. The tourism business is mostly comprised of small businesses without the means to market themselves to the US, and so the province steps in and manages that responsibility, creating ads for the international market, maintaining websites, running the information booths and so forth.

But it seems that sometime in the 1990s this basic government service went into cancerous overdrive. As I see it, this was mostly the handiwork of Fred MacGillivray, who turned Trade Centre Limited into a monster that wanted to turn Halifax into a sort of Orlando North, with millions of tourists visiting us every year, making at least some locals rich, rich, rich.

There’s always been screwy thinking about tourism. For instance, tourism has been sold as our economic salvation, but most of the jobs in tourism pay shit wages, are seasonal and have no benefits or long-term stability. Also, parallel with the drive to increase tourism has been a drive to utterly transform Halifax into just another interchangeable cityscape, with a characterless downtown of soulless skyscrapers. Nevermind that the economics of skyscraper building simply don’t work in big town/small city Halifax—more to the point is the irreconcilable tension between soulless development and tourism. Anyone who wants to hold onto Halifax’s old school charm, the very essence of our tourism trade, is derided as anti-progresss and an impediment to the kind of economic success tourism is supposed to bring us.

Harold MacKay’s history with Trade Centre Limited needs to be understood in the context of Fred MacGillivray’s drive to turn Halifax into Orlando North. That relationship dates back to the late 1980s, when as marketing manager of Moosehead Brewery, MacKay started the Mooseheads hockey team as a sort of loss leader for the brewery—the brewery evidently didn’t mind paying a high rent for the TCL-managed Metro Centre, because it had exclusive rights to beer sales at the games, and it got the added advertising benefit of the hockey team.

But the deal between MacKay and MacGillivray wouldn’t work without the beer company. When Bobby Smith bought the Mooseheads, he found the rent at the Metro Centre was too high, and was willing to play hard ball to get it reduced, going so far as to work out a deal to move the team to the city-owned Halifax Forum to avoid renting the city-owned but TCL-managed Metro Centre. The Mooseheads played one preseason game at the Forum in 2004 before MacGillivray backed down and agreed to a reduced rent for the Metro Centre.

In the 1990s, MacKay was also putting on Formula One Grand Prix car races, first at Shearwater, but then moving over to the streets around the Halifax Common, a sort of precursor to the concerts 10 years later. [correction, 7 June: I have the order reversed; the races started around the Common, and were then moved to Shearwater.] I’ve gone back and read some of the literature around the races’ move to the Common; I haven’t yet found that TCL was directly involved, but I’m still guessing it was. It seems likely.

MacGillivray’s Orlando North obsession went into hyperdrive last decade, when he spearheaded the Commonwealth Games initiative. He and about a dozen other insiders locked themselves behind closed doors and went on to secretly blow $9.5 million of taxpayers’ money on chasing the bid, flying themselves around the world and bestowing “gifts” (don’t call them “bribes”!) upon Commonwealth Games Association officials in nation after nation. Ultimately, then-premier Rodney MacDonald shut the effort down as it was cascading into a mammoth spending scandal.

The Commonwealth Games fiasco is indicative of the Orlando North mindset. Absolutely no expense was unwarranted, and no price tag was too expensive. MacGillivray and company had sold the Games as a “right sized” $600 million project, and then proceeded to draw up plans for Games that would cost at least $2 billion. Anyone who objected to the price tag was derided as anti-progress and so forth, and a slew of bogus economic impact arguments were trotted out to justify the huge expense. (The way these economic impact arguments work is the more money you spend, the more impact you get; every cost overrun is an additional benefit.)

The concerts on the Common started exactly as MacGillivray was gearing up for the Commonwealth Games bid. There’s no question that Trade Centre Limited was involved with the 2006 Rolling Stones’ show, and I guess we’ll learn tomorrow if there were upfront loans, etc, for the show. The day of the show MacGillivray was telling city councillors that the (alleged) success of the concert proved that Halifax was capable of putting on the Commonwealth Games.

So understand that the Commonwealth Games and the Common concerts were jointed at the hip, part and parcel of Orlando North. Certainly TCL was the conduit for the province’s $300,000 forgiven loan for the Paul McCartney show, and, starting under MacGillivray’s watch, TCL was managing the Metro Centre bank account from which the $5.6 million in improper loans to MacKay was made.

And let’s not forget the proposed new convention centre, another TCL project, and in many ways also MacGillivray’s baby. Again, no expense is too much, no inventive bookkeeping is questionable, bullshit economic impact projections are pulled out of thin air and anyone who questions the project is derided as anti-progress and so forth.

You gotta wonder why Nova Scotians sit back and take this, time and time again.

Look, tourism is important. We should pursue it with reasonable aggressiveness. But let’s be clear: Halifax is not, and never will be, Orlando. We’re an interesting place, with a quirky culture that has some appeal, but we’ve got shitty weather for three-quarters of the year. No one’s interested in setting up Disney World here, and we can’t afford to do it ourselves. Them’s just the facts.

This article appears in Jun 2-8, 2011.