The improper loans to Power Promotions were funnelled through the Metro Centre, a city-owned facility that is managed by Trade Centre Limited. Officials at TCL have said that they were under no obligation to vet the appropriateness of the loans—the city owns Metro Centre, so when city official Wayne Anstey called them up and directed them to loan Power Promotions money from Metro Centre accounts, they simply complied without asking questions.
But what if Anstey had called and directed TCL to cut a cheque to his wife? Would TCL have complied without question?
What exactly are TCL’s responsibilities to vet Metro Centre expenses? That question will no doubt be taken up by the city’s auditor general Larry Munroe, who’s now investigating the matter.
At the centre of the question of TCL’s obligations is the 1982 contract between the city and TCL for operating Metro Centre. The relevant portion is the surprisingly short Clause 4:
These are questions for lawyers and accountants, but here are some of the issues:
Does the operating agreement allow city officials to intervene in the day-to-day operations and cash flow of the Metro Centre? If not, doesn’t the impropriety of the loans to Power Promotions fall directly on TCL’s lap?
Since the financial accounts of the Metro Centre are required by the contract to be kept separately from the accounts of other TCL obligations, how is it possible for city officials to secure loans made through Metro Centre with ticket sale revenue collected by a separate TCL operation—Ticket Atlantic—that has no financial connection to the Metro Centre? More, didn’t the repayment scheme—based on future ticket sales—put the risk in TCL’s hands? Since the accounts are separate, doesn’t TCL have the obligation to make good on the defaulted loans? And if so, did TCL officials act improperly with regards to their obligations to the province?
I don’t know the answers to those questions, but I’m sure readers will have opinions. You can read the entire operating agreement here.
For The Coast’s complete coverage of the Common concert financing scandal, click here.
This article appears in Mar 17-23, 2011.
Metro centre has a GST number. It cannot be the same as HRM because the CFO claims.
How often does TCL report to HRM the revenues and expenditures ?
Or does TCL not report to HRM until the year end ?
TCL will rely on their claim that the CAO told them to make payments to Power and that the Mayor was in agreement.
I am surprised they did not ask for a resolution of council before agreeing to make any payments.
Funds in any govt. organization – whether City Hall, School Board, province – are spent according to the budget passed by the majority. Period.
Interesting that the very Charter they breached was only completed in 2008 – would Mr. Kelly have been one of the signatories?
All that you are saying here Tim presuppose that the spin we’ve been given is true, that Mr. Anstey after 30 plus years of very prudent conservative civil service goes rogue for the Black Eyed Peas et al (presumably his favourite bands) and starts throwing his weight around and influencing the poor “I’m just following orders” folks running TCL.
Or that Mr. Anstey is Darth Vader to Peter Kelly’s Emperor.
I don’t think that either is the case.
Of course the conclusions drawn and the people named and the mayors comments don’t make sense because the basic premise is misconstrued.
In absence of inside information, consider whole thing again with TCL and their crowd driving the whole thing; having the established relationship with the promoter, setting the goals, deciding the agenda, pressuring the mayor and civil servants, throwing around money and influence, comping tickets and cleverly using the weaker, poorer, more vulnerable mayor, council and acting-CAO for cover.
Then the whole thing is straight forward top to bottom with no confusion about who knew what when, how it was all done or why… the old stand-bys power and money, along with a passionate ideological belief in the possibility of a leisure economy for Nova Scotia.
Will we ever know? I’m jut trying to make sense of it all. There is little chance an auditor can do anything about this because the problem is systemic and these folks are technically unaccountable.
Nobody went rogue. Mr. Anstey’s words on his departure were very crafted. He wasn’t saying he was sorry for acting unilaterally and arbitrarily. He was saying he knew he should have not gone along with this scheme but because of the culture and traditions of the backroom community he did.
The only rogue is Cathie O’Toole. She didn’t go along with it and clearly she paid a high personal price. Everyone else… it’s just not their responsibility.
It’s funny how guilt can be divided in to small forgettable pieces.
Action? In the end this will all be well worthwhile if it causes a total rethink of the practice of downloading responsibilities to unaccountable ABC&C’s (agencies, boards, commissions and consultants).
While a resolution would have been appropriate it would have let the “cat out of the bag”before everyone was ready.
Lucky
A resolution would have been appropriate but probably would have “let the cat out of the bag”before everybody was ready.
Tim is trying to throw mud on TCL in the hope that he can damage their reputation and thereby derail the CC project. The Save The View bunch has taught you dirty tricks very well.
The fact is that TCL disclosed the payment immediately to both their Board Chair and to their Deputy Minister. As CEO, those are the only places Scott Ferguson can go. What those individuals chose to do with that info is their issue, not TCLs.
Mr. JW Chisholm seems to have overlooked the fact that while TCL did indeed take charge of the first few concerts, HRM wrested that responsibility away from them for the last few. TCL provided ticket and some admin services but it was HRM that was doing deals with promoters, all to advance the mayor’s career. Does anyone have any doubt that the mayor made it very clear in that meeting that Anstey should advance the finds to save face? The mayor’s image could not stand the damage that a cancellation would cause. Of course now his image is utterly shot.
Bo Gus – Fred McGillivray was the boss at TCL in the years 2008 and 2009.
Ferguson only told his chair and deputy about the advances made in 2010, and that is because he was the boss in 2010.
Neither Kelly nor Anstey have given an explanation of the advances made in 2008 and 2009.
This issue came to light for one simple reason – $360,000 net is such a small amount in the accounts of HRM that it would not be classed as ‘material’ and therefore not be footnoted in the financial statements.
The amount is ‘material’ in the accounts of the Metro Centre and therefore would have been footnoted in the statements for the year ending March 31 2011. The audit was/is being prepared and Anstey had to choose between waiting to see it in print and in public or tell O’Toole.
TCL Board Member Bio
28june2010: SWSDA’s Anderson booted from Industrial Commission and World Trade Centre…the once-powerful South West Nova economic czar Frank Anderson seems to have met his Waterloo in the form of the current NDP government and has become somewhat of a pariah in government circles.
Anderson has been embroiled in a series of lawsuits over recent years, was the subject of a complaint to and investigation by the Ombudsmans Office and a government-provoked audit has been publicly rebuked by Premier Darrell Dexter and privately by senior government staffers.
Recently, the government stripped Anderson of his prestigious board membership in World Trade Centre in Halifax and the Yarmouth Area Industrial Commission (YAIC) announced last week he had been let go as CEO, where, according to the Ombudsman, he oversaw the agency’s predeliction for back-room deals, questionable financial transactions and other dealings. YAIC general manager, port manager and former senior SWSDA staffer Dave Whiting will do double duty as GM/CEO.
“He’s finished doing business around here,” said one economic development official of the beleagured Anderson. Word in local government circles is that any meeting involving government funding will not take place if Anderson is present. The full extent of repercussions from Anderson’s peculiar style of doing business is yet to be felt, if recent reports are at all accurate.
A construction company is owed $370,000 Anderson allegedly spent on other projects, the local tourism committee committee is complaining to SWSDA of monies gone awry and consultant bills not paid and the current tenants of the Sandy Point sound stage appear to have cleared out for good after racking up $66,000 in unpaid mortgage fees and $150,000+ in unpaid taxes. Apparently, the pair of American land speculators have allowed the once multi-million dollar property to degrade under their watch so that it would bring “less than half a million”, according to a source familiar with the property
There is also speculation that a recent forensic audit of SWSDA’s books from the Anderson years might also result in further investigation by the RCMP, with the potential for criminal charges being laid. Economical Development Minister Percy Paris was reported on Friday to say that the nine municipal units which comprised SWSDA have to bear the full weight and responsibility for the economic consequences of Anderson’s actions.
With SWSDA’s new slogan of “We spend your money like it’s our money, hard to tell how many hundreds of thousands of dollars CEO Frank Anderson will let Kendrick and his muse rack up before Anderson comes to folks in Shelburne County, claiming it is really we that owe him the money?