whistleblowers

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Postby admin » Mon May 01, 2006 1:08 pm

The song and dance that is Enron trial
While Lay tries to deflect blame, whistleblower tells it like it was

Diane Francis
Financial Post


Saturday, April 29, 2006


This week in a Houston courtroom, it has been entertaining to read how Enron Corp.'s Kenneth Lay blames everyone for his firm's collapse except himself and his former CEO Jeff Skilling.

To hear Mr. Lay tell the tale, he was just doing his duty and the whole mess was the result of negative press articles, a crooked CFO, short sellers and pessimism.

Of course, the CFO was the reason behind the negative press articles, the short sellers and the pessimism. And, last time anyone checked, the CFO is a person who is appointed by and reports to the CEO and chair of a company.

What's going on here is Messrs. Lay and Skilling are trying to blame everything on Enron's CFO, Andrew Fastow, who has already gone to jail. But Fastow has testified that Messrs. Lay and Skilling knew about troubles and lied to the public, investors, regulators and employees. The two are charged with fraud.

What is pertinent to remember is that no matter how Mr. Lay recasts the facts, one CFO stealing US$45-million does not a US$25-billion fraud make.

Enron was a rotten culture and didn't suddenly hit trouble. The US$45-million that Mr. Fastow stole was a drop in the bucket compared with the tens of billions that were hidden from balance sheets in offshore entities that Messrs. Lay and Skilling inked.

Take what Enron whistleblower Sherron Watkins said in an interview with me in Banff in 2004. She has appeared as a prime witness this month at the Houston trial.

"Enron was different than WorldCom where just a few people decided to cook the books," she said. "This was systemic. Ken Lay made everyone use his sister's travel agency. People were co-opted. I can't tell you how many times I heard the phrase from executives, 'it's not exactly legal, but I think it'll stand up in a court of law.' "

(This week, Mr. Lay admitted to another "breach" when the prosecutor asked him about a company that he and Mr. Skilling had privately invested in, which was doing lots of business with Enron. Under the rules, the two were supposed to tell the board of directors about such "related party transactions," but Mr. Lay admitted this week they did not.)

Sherron Watkins told me she had doubts about Enron for years, but in 2001 came to understand the byzantine nature of Enron's outside activities.

In her case, she found out the portfolio of assets she was in charge of were used to pump up earnings, hide losses and camouflage fraud.

"The chief financial officer had set up a paper company he and others owned, which was funded with Enron stock options, to do business with Enron. In other words, he was doing business with himself," she said. "You can't do this."

In spring, 2001, she asked for an audience with Mr. Lay after Enron CEO Jeff Skilling suddenly quit, cashing in US$66-million in options, saying he left because he could not keep the stock rising in value.

"It made a bunch of us angry at Enron. We said he didn't call in sick, he called in rich," she said. "It confirmed my fears that something horrible was facing this company."

As a savvy investment banker and accountant, she realized the company and its investors were being defrauded. In summer, 2001, she sent an anonymous letter to Mr. Lay, then followed up by describing in detail all of the accounting irregularities to him in a 30-minute meeting that August.

Things didn't change and the company went into bankruptcy in December that year.

By December, 2001, the company admitted its US$13-billion in debts were really US$38-billion. Sherron testified before Congress and ended up on the cover of Time magazine for her courage.

Despite all the evidence about wrongdoing and billions in hidden debt, Mr. Lay told the jury this week that Enron had no underlying business problems that a little public relations couldn't have solved.

He also blamed his accountants (defunct Arthur Andersen) for restatements of earnings, never mind that the restatements were needed because of bad business practices.

As for Sherron Watkins' letter and warnings, his memory was fuzzy but he did recall that his accountants and lawyers dismissed its allegations.

dfrancis@nationalpost.com

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Postby admin » Wed Apr 19, 2006 8:06 am

04-19-06 FP: "Truth-tellers" -- A company's best defence

(( advocate comment.....This article sums up fairly accuarately the management cover-ups, and retaliation when I reported allegations of double dipping of investment fees on top of commission being charged by certain RBC investment advisors. These and other mutual fund sales practices were being used by some to earn the coveted "vice-president" title given out by RBC to top billers. The response by management to these allegations was to do the exact opposite of what their internal codes call for, and to attempt to shoot the messenger rather than investigate the message. The case to be heard in court in Alberta in '06 or '07))



A company's best defence
CEOs should think of whistle-blowers as friends, not foes -- it just might save them from prosecution


AARON LYNETT FOR NATIONAL POST
Joanna Gualtieri, a lawyer and founder of Federal Accountability Initiative for Reform in Ottawa, says new accountability rules in the United States are making disclosure the cornerstone of every company.

Philip Quinn
Financial Post


Wednesday, April 19, 2006



CREDIT: Dave Einsel, Getty Images
Enron whistle-blower Sherron Watkins wrote letters to former Enron CEO Kenneth Lay concerning questionable accounting practices.

Senior executives in Canada should encourage whistle-blowers -- employees who are prepared to stick out their necks when they spot a wrong -- because they just might help executives save their necks from prosecution and civil action.

"With Kenneth Lay and Jeffrey Skilling [Enron's former chief executives], their defence is going to be that they didn't know [about the illegal accounting practices taking place]," says Joanna Gualtieri, http://www.careeractivist.com/my-articl ... ht-way.htm a lawyer and the founder of Federal Accountability Initiative for Reform in Ottawa. http://primetimecrime.com/contributing/ ... ltieri.htm

Complicating their defence is the fact former Enron executive Sherron Watkins did warn Lay about the company hiding financial losses in so-called Raptor hedges but he dismissed her concerns.

"The obvious question becomes 'well why didn't you listen more closely when you were warned and if they are truly innocent that becomes a sort of hallmark case.' "

A whistle-blower can not only help a company prevent financial losses from theft and fraud but also protect senior executives from prosecution and civil action.

"Yes it [whistle-blowing] assists the company but I'm also suggesting something even more fundamental is that it's going to assist you the CEO or CFO and save you from possible prosecution," Ms. Gualtieri says.

"I tell people that because of these new accountability rules, you want to know what is going on. In other words, disclosure is really the cornerstone of your organization. You want to simply reduce the possibility you as the CFO or CEO will be blindsided by these risks being taken way down the line."

Corporate meltdowns at major U.S. firms such as Enron and WorldCom led to the Sarbanes-Oxley Act -- legislative reform that puts increased responsibility on a company's board of directors to prevent corporate malfeasance.

In Canada, there is both a legislative and corporate lag to making the changes that would help whistle-blowers step forward without fear of suffering job loss or marginalization if they remain at the company.

"Even in the U.S., the whistle-blower still has a hell of a ride," says Ms. Gualtieri, who exposed the excessive costs for diplomatic accommodations at the Department of Foreign Affairs in the 1980s. "Really credible reports are that 85% of whistle-blowers will suffer serious repercussions. In Canada, it's probably higher. I would say closer to 95%. I've never spoken to anybody who has stepped up who hasn't suffered."

http://www.onlineethics.org/moral/boisj ... intro.html

It is in the interest of the bottom line to find out about fraud or misappropriation of goods. One of the key ways to do that is to encourage employees to step forward without fear they will end up being victimized.

"If they [the employees] notice that management is serious, it sends a strong message," says Ray Haywood, Investigations and Forensic Services, PricewaterhouseCoopers.

"We [executives] are not looking for people to tell tales on the person working next to them but if it's a thing that affects the integrity or the brand or the bottom line of our company, we'd like to know about it and we'll react to it."

Canadian companies often incorporate whistle-blower policies into a larger loss prevention package.

"I think they are much more interested when we talk about this [whistle-blowing] in a much more holistic or expanded sense," Mr. Haywood says. "That it fits in to their whole approach to preventing theft and fraud and other things that impact negatively on the company."

Companies have tried various approaches to handling whistle-blower complaints, such as setting up a corporate ombudsman to deal directly with the issue or allowing employees to file anonymous complaints via the phone or e-mail. Usually, anonymous red flags are handled by third parties who then funnel the information to a company executive or HR department.

Anonymity will most likely be sacrificed as the claim moves forward especially if it involves complex issues. Employees have to feel there is something in place to protect them beyond just words in a policy statement.

"Enron had an ethics professor on their board; Enron had a wonderful code of ethics and a number of the trappings of an integrity program," says David Nitkin, president of EthicScan Canada. http://ethicscan.ca/ "The problem was it didn't have protection for the whistle-blower and the woman who did come forward didn't have her activities acted on."

He says there were at least 50 Enron employees who would put on a show every time Wall Street analysts toured the company to make them believe they were making millions selling energy futures.

"Don't tell me people didn't know, that's my experience whether it's a secretary, whether it's a co-worker or a spouse, somebody knows or suspects."

That fear of how they will be treated often turns potential whistle-blowers silent.

"I think we do need to see more actual examples of people who blow the whistle and are protected by their company," says Mark Schwartz, assistant professor, Atkinson School of Administrative Studies at York University in Toronto.

"Firms still focused on the bottom line continue to abuse and punish their whistle-blowers even if they claim to protect them."

There is the obligation, on the part of the whistle-blower, to report the matter internally before running to the media. They should only go outside the company if there is the chance they will be severely punished and the matter not acted on. In turn, whistle-blowers should be able to expect they will be treated with respect and protected.

"[They need to know] they will be protected from harassment if they do blow the whistle, says Prof. Schwartz. "It's not just a question of putting it on paper. You need to have managers that are constantly reminding employees about all of this right up to the CEO. There are examples of some CEOs saying, 'if you see a problem you should actually feel comfortable contacting me'. Warren Buffett did that right after the whole Salomon Brothers incident, sent out a memo to all employees and gave everyone his home phone number."

There is also enormous pressure on a company's board of directors (of particular concern to Canadian companies trading on U.S. markets) because of Sarbanes-Oxley to stay completely informed about what is occurring at their company, either through a channel a whistle-blower can use to contact them directly or at least making sure the CEO keeps them fully aware.

"I would put the elementary obligation on the independent member of the board," Mr. Schwartz says. "He or she is the final gate keeper and when someone like Sherron Watkins blows the whistle to Ken Lay, he should have presented it to the board of directors and he didn't."

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Postby admin » Tue Apr 18, 2006 11:51 pm

Edmonton Journal

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Mutual fund industry's trading guidelines may not be tough enough for OSC

Lack of protection for whistle-blowers hinders exposure of illicit acts


Ray Turchansky

August 28, 2004

Guidelines released by the mutual fund industry this week to detect and deter inappropriate short-term trading and market timing may be "the calm before the storm," according to a lawyer in mutual fund practice.

"I think this is just the first shoe to drop," said Rebecca Cowdery, a lawyer with Toronto-based Borden Ladner Gervais, and a former regulator with the Ontario Securities Commission.

"I think what everybody is waiting for is, what is the OSC going to do? They have been on site asking 15 companies for more information. There is tremendous uncertainty about how the OSC is going about this review, what they are looking at and what they will allege is improper."

Late trading, where trades are made at the market's net asset value, or NAV, after stock markets close, is considered a non-issue in Canada, where trades are given an electronic time stamp.

But market timing, which involves taking advantage of the "stale prices" of foreign securities used to determine a fund's NAV, and short-term trading, namely buying and purchasing the same securities within a short time frame, do occur in this country.

The practices tend to make money for a few investors while increasing costs and therefore reducing returns for most people.

Investment Funds Institute of Canada guidelines propose imposing fees on short-term moves -- using fair value pricing, where fund managers estimate values of securities that release news after market closing -- and refusing to sell to clients who have made abusive short-term trades.

Reaction to the guidelines has been that many mutual fund companies already adhere to such policies, and that the IFIC has no regulatory power to enforce them.

"If I can criticize the IFIC paper, and I don't mean to, it doesn't go into enough detail about what was so wrong with some of those cases of short-term trading in the United States," said Cowdery.

She cited "sticky assets" as one example.

"You say to market timers, 'You can come in and out of our fund as long as you put $5 million into our other funds.' And in some cases the fund manager almost facilitated the market timing by giving them advance information of what was in the portfolio."

Few people shed light on unethical practices in Canada's investment industry because of a lack of protection for whistle- blowers.

Lethbridge financial adviser Larry Elford found abuses in the mutual fund industry "so prevalent and so pervasive" that last fall he filed a $13.1-million lawsuit against RBC Dominion Securities Inc. and RBC Dominion Securities Ltd.

"Unfortunately, I was naive enough to expect management to truly want to become part of the solution, and I did not recognize that they were in fact part of the problem," said Elford.

Supported in private but shunned in public by colleagues, he retired this July.

Then there's Saskatoon financial adviser Kent Shirley, who has filed a $50,000 claim against his former Assante boss, Brian Mallard.

Shirley alleges Mallard wanted him to participate in or ignore "unethical practices," such as providing insider information to clients, making personal loans to clients, giving stock advice to clients, facilitating trades while not properly licensed to do so, selling personal stock to clients, and issuing personal guarantees on client accounts.

Mallard, as founding chairman of Advocis, the umbrella group of Canadian financial advisers and insurance sellers, said this past January that having security regulators oversee financial advisers and planners was like "killing a bug with a bat."

He suggested letting advisers and planners police themselves.

In 1989 the U.S. beefed up protection for whistle-blowers, but Canada hasn't followed.

"It has been raised before, but I don't know if it's been discussed at the security regulators level," said Cowdery.

"I really don't think it's being addressed in Canada, and probably should be."

Ray Turchansky is a freelance writer and income tax preparer. He may be contacted at turchan@telusplanet.net
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Postby admin » Thu Apr 13, 2006 11:34 am

SUBJECT: Assante pioneer leaves the fold
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One of the first independent financial planners to be acquired by fund distribution giant Assante Corp. has left, presumably to be once again independent.

A letter making the rounds on e-mail lists informs clients that “We, at Brian Mallard and Associates, have decided to transfer our mutual fund registrations from our current dealer, Assante Financial, to Quadrus Investment Services Ltd.”

The letter adds, “While you are not a new client to me, you will be a new client to Quadrus.” It asks clients to confirm their identification with proper documentation in order to “comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.”

In recent months, consumer advocate Joe Killoran did jail time after trying to shed light on the alleged suicide of Mallard’s former assistant and would-be whistleblower Kent Shirley. Regulators, Advocis, the press and now Assante all seem happy to leave this one swept under the rug.

--60--
Posted by Jonathan Chevreau on 4/13/2006 10:39:42 AM
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Postby admin » Thu Mar 16, 2006 3:08 pm

article below demonstrates how whistleblowers are never looked upon as welcome by the company's or organizations they work with. They are considered as traitors worthy of discrediting or worse by many. Their only crime is in holding the interests of the public, the safety of the public or some other principle above and beyond the interests of that of the company, or a select few members of the company.

read on


March 16, 2006






Famed Enron Critic Watkins Helps
U.S. Shine Light on Lay's Conduct

By JOHN R. EMSHWILLER and ANN DAVIS
March 16, 2006; Page C3

HOUSTON -- Federal prosecutors drew on a bit of star power in their effort to prove that former Enron Corp. Chairman Kenneth Lay1 took part in a criminal conspiracy to hide financial problems at the company in the months before it collapsed into bankruptcy in December 2001.

Former Enron Vice President Sherron Watkins2 is probably the closest thing to a public hero to emerge from the Enron saga. Her efforts in the summer of 2001 to warn Mr. Lay about possible accounting scandals at the energy titan have won her praise in the media and Congress.


In testimony yesterday at the conspiracy and fraud trial of Mr. Lay and former Enron President Jeffrey Skilling3, Ms. Watkins recounted how she went to Mr. Lay in August 2001 with concerns about some of the company's financial transactions.

The transactions, which masked hundreds of millions of dollars of losses on Enron investments, were done with partnerships run and partly owned by the company's chief financial officer, Andrew Fastow4, who was Ms. Watkins's boss at the time.

Prosecutor John Hueston went through Ms. Watkins's memos to Mr. Lay, including one containing her now-famous warning that Enron might "implode in a wave of accounting scandals." Enron's bankruptcy filing a few months later was partly caused by rising public concern over Enron's accounting and its dealings with the Fastow partnerships, known as LJM1 and LJM2. (See Watkins's memo to Lay5 and a glossary of Enron terminology6.)

While Ms. Watkins didn't break any new ground, she did give prosecutors an opportunity to raise questions about Mr. Lay's conduct through a witness untainted by the problems that have burdened several others.

Among the previous government witnesses in the trial's first six weeks were former Enron executives who have pleaded guilty to company-related crimes, including Mr. Fastow.

Like Mr. Fastow, Ms. Watkins drew a nearly packed courtroom, and the crowd didn't seem to faze her. She appeared relaxed and animated, often gesturing with her hands as she looked at the jurors and elaborated on a particular point.

In describing her August 2001 meeting with Mr. Lay, Ms. Watkins said the Enron chairman "seemed surprised" by some of her concerns, but "seemed to take me seriously" and promised to investigate.

However, she again criticized both the scope and independence of the resulting internal investigation. Ms. Watkins also criticized as misleading some of the public statements Mr. Lay made subsequent to their August meeting about Enron's financial condition and its dealings with the LJM partnerships.

During cross-examination, Chip Lewis, one of Mr. Lay's attorneys, pointed out that the LJM transactions had been approved by accountants and attorneys inside and outside Enron. He also emphasized that Mr. Lay had listened to Ms. Watkins's concerns, ordered an investigation and protected her from possible retribution from Mr. Fastow.

He noted that in that same 2001 third quarter, Enron decided to unwind the LJM-related transactions that Ms. Watkins had complained most strongly about.

The closing down of the "Raptor" financial vehicles resulted in a more than $500 million charge to earnings that quarter. While Ms. Watkins conceded some points to Mr. Lewis, she didn't back down from her principal criticisms of what occurred at Enron.

In an apparent effort to take some shine off Ms. Watkins's public image, Mr. Lewis probed her sales of Enron stock in August and then in October of 2001. She acknowledged that "I had information the public didn't have. I wish I hadn't sold."

However, Mr. Lewis, perhaps mindful that his client had also cashed in large amounts of stock during this period, said it wouldn't be insider trading if there was not a fraud.

Ronald Woods, a Skilling attorney, criticized Ms. Watkins for "making outrageous statements" about the defendants, including comparing Mr. Skilling to a mob boss, in speeches and interviews she has given since Enron's collapse. He said that if the pair were acquitted, Ms. Watkins could see her income source from the speeches -- at as much as $30,000 a pop -- dry up. Ms. Watkins replied that her speeches were mostly about leadership, and whatever the trial's outcome, the men would "remain failed business leaders."

In questioning earlier in the day, defense attorneys worked to repair any damage done on Tuesday by the testimony of Vince Kaminski, a former Enron risk-management executive, who had said Mr. Skilling transferred his group in 1999 to another part of the company after he criticized an LJM-related transaction. Yesterday, Mr. Kaminski acknowledged that transfers at Enron were commonplace, and that he wasn't unhappy about the 1999 move. He added that Mr. Skilling had never done anything to restrict the work he did.

The trial is scheduled to resume on Monday.

Write to John R. Emshwiller at john.emshwiller@wsj.com26 and Ann Davis at ann.davis@wsj.com27

URL for this article:
http://online.wsj.com/article/SB114244181551699039.html
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Postby admin » Wed Mar 15, 2006 9:25 am

I feel that whistleblowers are still not well enough protected. The myriad of ways that management or superiors (or others) can use to obtain the "bureaucratic payback", or "ostracization" of someone who makes the mistake of committing the truth cannot even be imagined, much less protected against by the legislators. Examples, stories, awareness and work with those who have gone through it are needed to make this kind of abuse a thing of the past. See an Enron example below.

Watkins set to take the stand today

By Greg Farrell, USA TODAY

The first time Sherron Watkins tried to tell the truth about Enron, in an anonymous memo to Enron's CEO in August 2001, she stood alone. No one else was willing to point out what the world now knows: Enron achieved its stunning earnings growth through questionable accounting gimmicks.

Sherron Watkins wrote a memo warning that Enron could "implode" from accounting misdeeds.
By Shawn Thew, AFP

But when the former Enron vice president takes the stand Wednesday as a prosecution witness in the government's trial of former Enron CEOs Ken Lay and Jeff Skilling, she'll no longer be alone.

Instead, the woman who is perceived as the lone truth-teller in a company built on lies will come before jurors as one of many witnesses in the prosecution's case against Enron's top management. (Watkins memos: August 2001 memo to Ken Lay | October 2001 memo)

In the summer of 2001, Watkins joined Chief Financial Officer Andrew Fastow's global finance group. A former accountant at Arthur Andersen, she soon learned the secret to Enron's success: a bogus accounting gimmick that allowed the company to hide hundreds of millions of dollars in losses from investors.

Scores of executives, lawyers and accountants had approved the company's financial statements. But Watkins realized immediately that the company couldn't hedge its losses with partnerships that were capitalized with Enron's own stock.

Timeline of events
Feb. 12, 2001: Jeff Skilling named CEO.
Aug. 14: Skilling resigns. The next day, Sherron Watkins sends anonymous letter to Ken Lay, now Enron's chairman and CEO.
Aug. 22: Watkins meets with Lay to discuss her concerns.
Oct. 16: Enron reports $638 million third-quarter loss and $1.2 billion reduction in shareholders' equity in company.
Oct. 24: Chief Financial Officer Andrew Fastow ousted.
Oct. 30: Watkins meets with Lay again and gives him another memo.
Nov. 8: Enron restates earnings for previous five years to account for $586 million in losses.
Dec. 2: Enron files for bankruptcy-court protection.
Jan. 23, 2002: Lay resigns as chairman and CEO.


After Jeff Skilling resigned abruptly as CEO that August, she wrote her now famous anonymous memo, warning Lay that Enron could "implode in a wave of accounting scandals." A few days later, she came forward and met with Lay, now chairman and CEO.

After Jeff Skilling resigned abruptly as CEO that August, she wrote her now famous anonymous memo, warning

Thinking that Lay had been duped by Skilling and others, she urged him to get an outside law firm to review the transactions approved by Enron's auditors at Andersen and the company's lawyers at Vinson & Elkins.

When Fastow learned that Watkins had gone behind his back to complain to Lay, he was furious. Watkins eventually told a congressional committee that she feared for her safety.

When Watkins met with Lay again in October, she urged him to fire Andersen and Vinson & Elkins, restate Enron's earnings, and blame Skilling and Fastow.

Lay didn't do that, and Enron wound up in Chapter 11 bankruptcy protection. Watkins eventually became one of Time magazine's persons of the year for 2002, and she co-authored a book about her experience at Enron, Power Failure.

Witness for the prosecution

Watkins is expected to testify about her conversations with Lay. Through the first six weeks of the trial, prosecutors have introduced a parade of cooperating witnesses who have implicated Skilling, but it wasn't until last week, when Fastow testified that he warned Lay repeatedly of Enron's financial problems, that the government did any real damage to Lay.

"Sherron Watkins will testify that she told Lay Enron was a house of cards," says John Coffee, an expert in securities law at Columbia University. "She is going to be a bridge from Fastow, who is not the most reliable or credible witness."

Defense lawyers are expected to remind jurors that auditors and lawyers approved all of Enron's accounting transactions. They're also likely to point out that Watkins sold $48,000 worth of stock after meeting with Lay and advising him of the accounting problems.

On the questionnaire all prospective jurors fill out, at least one of those chosen said she admired Watkins' bravery in writing to Lay. According to a court transcript, the unidentified juror said she could be open-minded about Watkins' testimony, but knew how women were sometimes treated at big companies.

"I know how it is with a woman in the corporate world," she told Judge Sim Lake during jury selection.

Lay's lawyer is "going to have to be diplomatic," says Christopher Bebel, a former federal prosecutor. "If someone's up there, and he's 280 pounds and he wears a leather jacket that says Hell's Angels, you can be pretty tough, but if you've got Mother Teresa on the stand, you've got to be balanced."

March 15, 2006 USA Today
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Postby admin » Tue Feb 07, 2006 11:10 pm

Fired LCBO accountant alleges money missing
Files $800,000 lawsuit

Leslie Roberts and Kelly Patrick
Global News Hour and National Post


Tuesday, February 07, 2006


An accountant fired by the Liquor Control Board of Ontario alleges the arms-length government corporation may have misplaced as much as $55-million, Global News Hour reported yesterday.

John Alexopoulos, the LCBO's manager of retail accounting from April, 1998, until November of last year, says he lost his job for repeatedly pointing out "discrepancies" in the provincial alcohol retailer's books, according to a lawsuit filed last month.

"I observed that there were some discrepancies between warehouse shipments and retail store receipts," he said in an interview broadcast last night.

"I was off balance on a daily basis. I felt as if somebody was trying to put me off balance on a daily basis."

Citing the legal action, officials with the LCBO refused an interview request. But in a written statement, the liquor retailer said it is "confident in the integrity of its inventories."

The Ontario government owns the LCBO and oversees its near-monopoly on liquor sales. Its profits are poured into provincial coffers.

In an $800,000 wrongful-dismissal suit filed on Jan. 19 in Ontario Superior Court, Mr. Alexopoulos says that even after he put his concerns about the missing money in writing, his supervisor refused to investigate the problem.

The allegations contained in the lawsuit have not been proven in court.

"On or about March 11, 2005, the plaintiff submitted a project report to his supervisor analyzing the defendant's system of inventory regarding its product warehouse and retail outlets, after having expressed his concern from time to time," the lawsuit reads.

"The plaintiff reported that the defendant was experiencing annual inventory shortages between warehouse shipments and retail outlet receipts in the range of between $16-million and $55-million."

Mr. Alexopoulos reached the figure after examining the numbers at 21 of the province's liquor outlets, then extrapolating for the LCBO's more than 600 stores, Global News Hour reported.

The lawsuit says that after Mr. Alexopoulos submitted the report, "harassment and criticism from his supervisor intensified and created a poisoned workplace environment."

The suit also says Mr. Alexopoulos was diagnosed in September, 2004, with "reactive depression and generalized panic disorder," a condition the suit says was caused by job-related stress and prompted him to take two medical leaves from the LCBO.

The Ontario Progressive Conservatives are calling for a full investigation.

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Postby admin » Thu Jan 26, 2006 7:34 pm

Whistle-Blower Suit Says Device Maker Generously Rewards Doctors
By REED ABELSON
A prominent surgeon in Wisconsin was paid $400,000 a year by Medtronic for a consulting contract requiring him to work just eight days. Another doctor in Virginia received nearly $700,000 in consulting fees from Medtronic for the first nine months of 2005.


Kate Medley for The New York Times
Jacqueline Kay Poteet, formerly a senior travel manager for Medtronic, arranged doctors' trips to conferences.
These doctors work in a growing field, complex back surgery, and this makes them particularly valuable to the spinal-implant division of Medtronic. In recent years, the company has spent tens of millions of dollars on consulting contracts and other types of payments to them and numerous other prominent surgeons, according to papers filed as part of a whistle-blower lawsuit. The suit contends that some of these payments were made to attract or retain the doctors' business.
Medtronic, based in Minneapolis, is one of the country's largest medical device makers, with $10 billion in annual sales.

The documents shed new light on a matter that has troubled the medical device industry for years: the assertion that companies employ a variety of financial ruses to pay doctors who use their devices, a practice that medical and legal experts say is unethical and possibly illegal. But despite industry efforts to clean up such practices, the documents and accusations made by former Medtronic employees suggest that the problem persists and may have gotten worse.

The lawsuit, filed in United States District Court in Memphis two years ago and since amended, was brought by the whistle-blower, a former Medtronic employee. The Justice Department, which has the right to intervene in the case but has not yet done so, is seeking to recover Medicare funds. According to legal filings, it proposes that Medtronic settle the matter by paying $40 million.

The suit, which was sealed until Jan. 13, accuses Medtronic of giving spine surgeons "excessive remuneration, unlawful perquisites and bribes in other forms for purchasing goods and medical devices."

The plaintiff, Jacqueline Kay Poteet, a senior manager of travel services for Medtronic until 2003, has also accused the company in a supplemental complaint of continuing these improper payments in 2004 and 2005. Her lawyer, Andrew R. Carr Jr. of the firm of Bateman Gibson in Memphis, has objected to the proposed settlement offer as too low. Whistle-blowers typically receive a share of any settlement. A Justice Department spokesman declined to comment.

All the doctors involved in the lawsuit who were reached for comment said that the payments to them were appropriate and fair compensation for work done for Medtronic.

The company, which said it continues to cooperate fully with the government to resolve the case, declined to comment directly on the accusations, saying they remained the subject of litigation.

In a written response, a spokesman, Rob Clark, said, "We take these allegations very seriously and we do not tolerate conduct that is illegal or unethical." Consulting arrangements with doctors to improve devices, he said, "are critical, in our view, to the delivery of state-of-the-art health care and are perfectly legal."

Medical device makers, with billions in sales at stake, have for years actively courted physicians who prescribe their products and recommend them to other doctors. Companies frequently compensate doctors through generous consulting fees and speaking honorariums, or by underwriting their trips to attend medical conferences, former employees and industry consultants say.

The internal Medtronic documents filed as part of the suit offer an unusually detailed glimpse of the intense campaign that device makers wage to win doctors' loyalty. They show that Medtronic spent at least $50 million on payments to doctors over some four years, through June or later in 2005.

Both doctors and device companies defend the financial relationships they have as essential for the development of what are often life-saving products. But critics contend that these financial ties exert too much influence on medical decisions, and that the payments are rarely, if ever, disclosed to patients.

The payments become illegal when they are linked to a doctor's use of a particular device and violate the federal law against kickbacks, which says that payments and other benefits cannot be provided to doctors if the payments are intended to induce them to use the company's products.

But even if the payments are within the law - and Medtronic has not been found guilty of any illegal activity - the increasing amounts being given to doctors distort their judgment, said Arthur Caplan, a medical ethicist at the University of Pennsylvania, who said such industry payments were "too damn lucrative to believe anyone can resist."

In addition to consulting fees and other payments, the lawsuit said, Medtronic played host at medical conferences where the "principal objective" was to "induce the physician, through any financial means necessary" to use its devices. According to the Medtronic documents, the company closely tracked the use of its devices by the doctors who attended the conferences, choosing some for "special attention."

Ms. Poteet, the whistle-blower, worked for Medtronic until an injury forced her to leave in 2003. She was also involved in a legal dispute with Medtronic over her disability benefits; it has since been resolved. At Medtronic, she arranged trips for doctors to the company's conferences and became familiar with attempts to win the doctors' favor.

Because the devices are so profitable, the money being spent by Medtronic "is peanuts," said a former employee who still works in the industry and insisted on not being identified for fear of retaliation. Sales representatives earn generous commissions, so they will work hard to satisfy the doctors' demands, the employee said, adding, "You're going to make sure you do whatever he wants, whatever it is."

In recent years, the device makers have become a big source of additional income for surgeons, many of whom are increasingly reliant on their generosity. "The amount of money is astronomical," said Dr. James Herndon, a former president of the American Academy of Orthopedic Surgeons. The device makers, he said, "know the volumes these surgeons have."

"They seek them out, and they seek relationships with them."

Such financial relationships have attracted government attention, and United States attorneys in Boston and Newark issued subpoenas last year to eight major manufacturers, including Medtronic, as part of a wide-ranging investigation into the relationships between doctors and device makers. Medtronic is also the target of another whistle-blower lawsuit in Memphis, where its spine division is based; that suit also accuses it of making improper payments to doctors.

This heightened scrutiny has caused some companies to scale back their efforts, industry consultants, lawyers and former employees say. In addition, the industry trade group AdvaMed has issued voluntary ethical guidelines for companies; the guidelines, for example, disapprove of serving as hosts to conferences at luxury resorts.

"Over the last couple of years, companies are saying no" more often to doctors, the former Medtronic employee said.

But the lawsuit asserted that any changes by Medtronic might have been only temporary. Its "bribery program," as it was described in the suit, "has not only failed to cease, but continues unabated with increased payments made to many physicians," the suit said.

While payments to some doctors slowed during 2004, when the company was first under investigation, they rebounded last year, it said. A doctor in Virginia, Hallett Mathews, for example, made $300,000 in consulting fees in 2003 but only $75,000 in 2004. Last year, the company paid him nearly $700,000 for his consulting work through September.

Dr. Mathews, who was not named as a defendant in the suit, said the spike in payments was a result of a change in how he was paid, requiring him to document his work before he received any money and therefore increasing the amount he received last year. The consulting fees he gets from Medtronic, he said, are compensation for his time spent away from his family and his practice.

Spinal implants are used in complex back surgery, known as spinal fusion, to help make a patient's spine more stable. The cost of the components involved in typical fusion surgery for the lower back is around $13,000, according to Orthopedic Network News, an industry newsletter in Ann Arbor, Mich., and the overall United States market has grown to about $4 billion a year.

Medtronic's overtures to doctors often began when the surgeons were still in training, Ms. Poteet said. The company commonly paid for doctors to attend any of 200 professional meetings a year. If the doctors wanted to go snorkeling or play golf, the sales representatives or Medtronic employees almost invariably paid for the expense, she said.

When the doctors visited Memphis, she said, Medtronic employees would take them to a local strip club, PlatinumPlus, disguising the expenses as an evening at the ballet.

A Medtronic lawyer, Todd N. Sheldon, raised concerns in 2003 about whether the company should pay to take doctors sailing or fishing, or ask for contributions, according to a company e-mail message that is part of the legal filings. "When we are sending scores of doctors to a nice resort like this under the guise of training and education on our products," he said, "I think we need to be more careful and stick to the limits of our rules as best we can."

Medtronic said it had been a leader in pursuing industry ethical guidelines that suggest that device companies provide only "modest meals and receptions" and not pay for costly leisure activities.

A spreadsheet compiled by Medtronic for a June 2003 meeting in Dana Point, Calif., indicated what Medtronic hoped to accomplish with each doctor attending an event, Ms. Poteet said. This list of 230 or so doctors included an estimate of the dollar value of the devices each doctor used in surgery, including the value of the devices made by Medtronic. One doctor is described as "a 100 percent compliant M.S.D. customer," while others were cited for "special attention." M.S.D. referred to Medtronic Sofamor Danek, the largest competitor in the spinal device market.

A surgeon in Phoenix, who used an estimated $400,000 in devices, favored a rival maker, Spinal Concepts, the spreadsheet said. Company representatives were urged to make overtures to him. "M.S.D. corporate involvement at this program," it said, "would help us earn a bigger share of his business on a grand scale."

In the case of an orthopedic surgeon, Jesse Butler, Medtronic was competing with a spine company, Acromed, now part of a Johnson & Johnson unit. Acromed had previously asked Dr. Butler to take part in a research study of one of its devices "to buy his business," the spreadsheet notes said. The sales representative wanted Dr. Butler to use more Medtronic implants. "He has a consulting agreement for this, yet has not done much in the way of it," the notes said.

Johnson & Johnson declined to comment on the matter.

Dr. Butler, who was not named as a defendant in the lawsuit, said his participation in the study had nothing to do with a preference for Johnson & Johnson devices. "We don't make any money off these studies," he said.

Companies are eager for his business because he is a busy surgeon, but Medtronic "never did anything inappropriate," he said. The consulting arrangement "didn't really go anywhere," he added.

The notes for one doctor suggested an expectation that those offered an arrangement where they helped design a device would become loyal users. For example, K. Daniel Riew, an orthopedic surgeon in St. Louis, who is named as a defendant in the lawsuit, was described in the spreadsheet as using a substantial dollar amount of competing devices in his surgery. "He will be designing a new plate with M.S.D.," the notes say, "so all of his business will gravitate our way in the near future." Dr. Riew could not be reached for comment.

Many doctors were paid consulting fees far higher than the $3,000 a day a surgeon might typically expect, documents from the legal filing suggested. Dr. Thomas A. Zdeblick, the Wisconsin surgeon, signed a 10-year contract in 1998 that required him to consult with the company for two days every three months, a total of eight days, for which he would be paid $400,000 a year, according to a copy of his contract. Those payments stopped in 2004.

Dr. Zdeblick, who is a defendant in the lawsuit but who said he was unaware of the accusations against him, said he worked much more than what was required, as many as three or four days a month.

"I was working like crazy in those years," he said, and was being paid at market value for his work. He now does a minimum amount of consulting for Medtronic and is being paid per diem, he said.
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Postby admin » Sat Jan 21, 2006 10:35 pm

Saturday, January 21st, 2006




Probe teachers' fund, education critic says


Saturday, January 21st, 2006

By Martin Cash


THE Teachers Retirement Allowance Fund is the next public sector agency the auditor general should investigate, Tory education critic Myrna Driedger says.

Driedger wrote the auditor general this week citing concerns about the teachers' fund, where another whistle-blower lost his job in a situation similar to the one outlined in this week's auditor general's report on the Workers Compensation Board.

Driedger's letter said that in light of the auditor general's scathing analysis of the botched handling of a whistle-blower at the WCB this week, the TRAF matter needs investigation.

"The parallels to this case and the one with the WCB are startling," she said.

The auditor general's report on the WCB was initiated by a letter from its former CEO, Pat Jacobsen, to the minister in charge of the WCB, outlining concerns about alleged abuse of power by the WCB's longtime chairman, Wally Fox-Decent. That letter was sent back to the board and Jacobsen was eventually forced to resign.

The TRAF allegations are mostly contained in an 18-page letter dated Sept. 7, 2004, from Tom Ulrich, former president and CEO of TRAF, to the minister of education and the premier. Among other things, he raised concerns about the evaluation of potential investments, and alleged undue influence and potential conflicts of interest in some of TRAF's investment decisions.

Ulrich had been president and CEO of TRAF for five years. The letter was written around the same time the board informed him his contract would not be renewed. He was subsequently sued by the board for unspecified damages over the letter, a matter that Ulrich said is outstanding.

TRAF is responsible for close to $2 billion worth of pension money invested on behalf of Manitoba teachers.

"The auditor general's report on the WCB confirmed my concerns," Ulrich said in an interview this week. "These are all pieces of the same problem and it is growing like a fungus. There needs to be a broad investigation to get at the whole picture."

Many of Ulrich's concerns revolved around the TRAF board's decision to invest $10 million in Manitoba Property Fund, a downtown real estate investment fund promoted by the Crocus Investment Fund. The auditor general's report on the WCB focused special attention on that deal. His report on the WCB raised concerns about the possibility of poor investment decisions being made in that deal because of a number of potential conflicts of interest.

The $25-million Manitoba Property Fund, primarily designed to invest in the redevelopment of downtown Winnipeg's heritage buildings, was announced in July 2004. Ulrich raised significant concerns about the TRAF investment, based on an independent real estate analysis, he said.

Meanwhile, the interconnections between the partners in the deal were substantial:

* Alfred Black was chairman of the TRAF board at the time and was also chief investment officer of the WCB, which committed $10 million to the fund promoted and managed by the Crocus Investment Fund. Black would subsequently be seconded to become the acting CEO of Crocus in December 2004;

* Sherman Kriener, former CEO of Crocus, was an outside adviser to the WCB investment committee when the WCB agreed to invest in the Manitoba Property Fund;

* During that same time, Wally-Fox Decent was chairman of the WCB (and its investment committee, which did not have to report to the WCB board) and he was also on the Crocus board and chaired its investment committee.

In his report on the WCB, the auditor general went into great detail about these potential conflicts of interest and how such potential conflicts could lead to poor investment decisions.

Jon Singleton, the provincial auditor general, said he does not intend to investigate TRAF, but his office is monitoring the board's handling of the Ulrich affair.


martin.cash@freepress.mb.ca
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Postby admin » Sat Jan 14, 2006 11:06 pm

Whistling in the dark

Canada's real-life whistle-blowers say Ottawa's new protection bill will only make it harder to speak out

Jamie Tarrant - December 12, 2005

Whistle-blowers may be popular these days, but it hasn't always been so. Ask Brian McAdam. He spent a 30-year career in the Canadian Foreign Service, but after preparing a report revealing that known Chinese spies and criminals were regularly being issued Canadian visas, he was harassed by his bosses and eventually told to resign. Had McAdam gone public about government malfeasance today, he'd be hailed as a hero. Whistle-blowers have become the taxpayers' best friend, thanks to the ones who tattled on government wrongdoing and helped uncover the federal sponsorship scandal. In an effort to side with the do-gooders, the federal Liberals are rushing to pass whistle-blower protection legislation. But the whistle-blowers who inspired it say the new bill makes it less likely scrupulous employees will come forward in the future.


Allan Cutler was the government procurement officer who, after losing his job for refusing to authorize bogus Liberal contracts, told a Public Accounts committee about the funny business going on in the Public Works Department. In his Nov. 1 report on sponsorship, Justice John Gomery singled out Cutler as "[t]he only subordinate who challenged [ministry official Chuck] Guité's authority when he was told not to follow required procedures ... and the consequences of his defiance were immediate and dramatic." Gomery noted: "If whistleblower legislation is to have any meaning, it must protect public servants from the kind of retaliation to which Mr. Cutler was subjected."


That, insists Treasury Board president Reg Alcock, is what C-11 will do. Unlike its previous incarnation, Bill C-25, which was introduced in March 2004 but died on the order paper ahead of the June election, the latest whistle-blower bill improves employee protection, he says. Critics complained that under C-25, wrongdoing must be reported to senior bureaucrats--cabinet appointeees like Guité. The new bill calls for the installation of a special parliamentary commissioner. "If a whistle-blower comes forward and says they have been harmed or acted against because they raised a concern, the commissioner has the ability to act and correct that," says Alcock.


But the man who helped expose Adscam says whistle-blowers are safer now than they will be under the proposed law. Cutler notes that, under C-11, officials accused of wrongdoing are entitled to a taxpayer-funded lawyer, while the whistle-blower may only request legal assistance from his superiors--the very people he may be challenging. What's more, he adds, ethical employees will still risk everything. "There is nothing in there that says you have to compensate . . . a whistle-blower," Cutler says. "It was a bad bill when it was tabled and, in spite of [opposition] efforts, it is still a bad bill."


McAdam notes there's no guarantee of whistle-blower safety with a commissioner, who is bound to be just another government patronage appointee, just as susceptible to ministerial pressure. "Anybody that is part of that is part of the inner circle," McAdam says. Moreover, C-11 says the commissioner will report findings back to the self-same senior bureaucrats who may be at the heart of the misconduct. Meanwhile, information provided by a whistle-blower becomes confidential for five years, so the complainant is further prevented from tipping off the media. It also blocks the sort of access to information requests that reporters used to verify tips they received about Adscam--information that eventually uncovered the massive Liberal kickback. Canada's information commissioner John Reid recently told a parliamentary committee that, far from protecting whistle-blowers, the Liberals' new legislation is "designed to keep the details about alleged wrongdoing secret."


Joanna Gualtieri, a former portfolio manager at the foreign affairs bureau who was fired after revealing unnecessary expenditures in her department, calls the new legislation "a disaster." Says Gualtieri: "It's nothing more than the government trying to protect itself and fooling people into believing they've acted when in fact they have made things worse." She's formed an advocacy group, the Federal Accountability Initiative for Reform, intent on stopping the bill, now before the Senate. The group hopes to convince a Senate committee of the dangers of C-11. But they'll have to work quickly. With an election in the offing, the Liberals want the new law ratified by Christmas as a demonstration to voters that they're making efforts to ensure Adscam can't happen again. But if government corruption does rear its head once again, the new bill might just see to it that Canadians never find out.
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Postby admin » Sat Jan 14, 2006 11:37 am

Hugh Clowers Thompson Jr.

A courageous U.S. "whistleblower" -- he was a hero

Guardian http://www.guardian.co.uk/obituaries/st ... 93,00.html


Obituary

Hugh Thompson

US pilot who tried to stop the My Lai massacre of civilians in the Vietnam war

Michael Bilton
Wednesday January 11, 2006
The Guardian

Hugh Thompson, who has died aged 64, was the helicopter pilot who tried to halt the My Lai massacre of more than 500 villagers by American troops during the Vietnam war. At one point, he rescued 15 defenceless civilians while training his machine guns on US infantrymen commanded by the infamous Lieutenant William Calley, threatening to shoot if they did not stop the slaughter.

By the time he arrived in Vietnam in late December 1967, Thompson was a 25-year-old chief warrant officer reconnaissance pilot with the 123rd Aviation Battalion. On March 16 1968, he was flying his H-23 scout helicopter, with its three-man crew, over a part of Quang Ngai province known as Pinkville, supporting a three company search-and-destroy assault on several villages, which faulty intelligence had indicated were heavily defended by Vietcong troops. The US 1/20th Infantry Battalion attack was led by Charlie Company, commanded by Captain Ernest Medina, who sent in the 1st platoon, led by Calley, to clear out My Lai and several neighbouring hamlets.

Early on, Thompson spotted a young woman injured in a field. He dropped a smoke cannister to indicate she needed medical help; he claimed in a court martial later that Medina went over and shot her. During the massacre, Thompson discovered the bodies of 170 executed villagers in a drainage ditch. One of his crew rescued a child and flew it to hospital at Quang Ngai.

In another incident, he challenged Calley to help a group of civilians hiding in a bunker rather than attack them. When Calley refused, Thompson ordered his helicopter gunners to open fire on the 1st platoon if they advanced any closer. He then called down gunships to rescue the civilians.

On returning to Chu Lai military base, Thompson reported everything to his commanding officer. But a local inquiry whitewashed his complaints, claiming the civilian deaths had been caused by artillery fire. An elaborate cover-up ensued and Thompson was awarded the Distinguished Flying Cross for saving the lives of Vietnamese civilians "in the face of hostile enemy fire" - he threw the medal away, believing his commanders wanted to buy his silence.

A year later, the Pentagon learned the truth and a high-level inquiry was conducted by Lieutenant General William Peers. Thompson later appeared as a witness at the courts martial of several men involved in the massacre or the cover-up, though the only person convicted was Calley, who served a few months in jail before having his life sentence reduced and being given parole.

During his time in Vietnam, Thompson was shot down five times, finally breaking his backbone. He received a commission, but back in America some colleagues regarded him as a turncoat. When evidence of the atrocity was finally made public in late 1969, he was castigated by pro-Vietnam war politicians in Washington.

It was only 30 years later that Thompson was recognised as a genuine American hero by the Pentagon, after a nine-year letter-writing campaign. The US army had initially wanted his Soldier's Medal, the military's highest award for bravery in peacetime, to be presented quietly, preferring to keep what happened at My Lai in the background. But Thompson resisted. He wanted a ceremony at the Vietnam memorial in Washington, DC, and the bravery of his fellow crew members recognised as well. In March 1998, he finally got his wish.

Thompson was born in Atlanta, Georgia, to strict Episcopalian parents, and moved to nearby Stone Mountain when he was three years old. His father served with both the US army and navy during the second world war and spent 30 years with the naval reserve. His paternal grandfather was a full-blooded Cherokee Native American, forced off tribal land in North Carolina in the 1850s and resettled in Georgia. Thompson joined the US navy in 1961, and spent three years with a Seebees construction unit. After a brief return to civilian life in 1964, during which he became a funeral director, he re-enlisted in the army, as it was becoming engaged in Vietnam.

The My Lai experience affected him badly. He grappled with alcohol and had several failed marriages. After service in Korea, he returned to the US, dropping the name Hugh and calling himself Buck as a way of distancing himself from past events. He left the army briefly and then re-enlisted, flying with medical evacuation units and instructing trainee pilots. He retired from the army in November 1983 and worked as a helicopter pilot for oil companies in the Gulf of Mexico. Later he was involved with the Louisiana department of veteran affairs for six years, giving lectures to students and schoolchildren and speaking about ethics to military academies.

After his role in trying to stop the massacre was recognised in the US, Thompson and his surviving crew member, Larry Colburn, were taken back to My Lai, where they were introduced to three women who had survived the massacre. On a second visit three years later, he met an electrician from Ho Chi Minh City who, aged nine, had been one of the children Thompson had rescued from the bunker.
Thompson is survived by three sons and his partner Mona Gossen.
· Hugh Clowers Thompson Jr, pilot and whistleblower, born April 15 1943; died January 6 2006
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Postby admin » Mon Jan 09, 2006 3:57 pm

from
http://www.it-can.ca/blog/?p=13

Canadian IT Law Association Website


Brian Mallard Insurance Services Ltd. v. Shirley, (Alta. Q.B.)
December 1st, 2005
Defamation, Contempt of Court

Brian Mallard Insurance Services Ltd. v. Shirley, (Alta. Q.B.)

The Plaintiffs sued the Defendant, Kent Shirley, an employee, for breach of fiduciary duty. They alleged misappropriation of confidential and proprietary information and public disclosure of privileged information, including making of statements defamatory to the Plaintiffs. Meanwhile, at the Saskatchewan Court of Queen’s Bench, the Defendant had earlier commenced action against the Plaintiffs for constructive dismissal, damages and aggravated and punitive damages. In the present action, the Court granted the Plaintiffs’ motion for Anton Piller Order requiring Mr. Shirley to grant access to his residence to KPMG Forensic team as well as the Plaintiffs’ counsel to conduct a search and seizure of Shirley’s computer and paper record for purpose of obtaining Plaintiffs’ confidential and proprietary records. This Order was carried out accordingly and an interim confidential report was prepared and sent to eligible parties, including the Court, pursuant to the Anton Piller Order. There was clear instruction on the confidential and restricted nature of this report and consequential liabilities for breach (para.7).

Meanwhile, while the action pended, Mr. Shirley died tragically. Apart from his lawyer, Mr. Shirley had a relationship with a certain Mr. Killoran who self-styled as investor advocate. Killoran claims that before his death, Shirley had requested his assistance as an expert professional witness and investor advocate with a privileged status. Killoran’s relationship with Shirley was not approved by the latter’s counsel. Following Shirley’s death, Killoran took advantage of his access, under unproven circumstances, of the KPMG interim report. He disseminated the report by e-mail and website postings to many targeted individuals, including the CJ of Saskatchewan, and securities regulatory agencies in Canada and the US, calling it “smoking gun evidence” and claiming that Shirley was a truth-teller or a whistleblower (para. 23). He described Shirley’s death as “collective murder” arising from “the refusals of EVERYBODY to publicly disclose” that the Plaintiffs were involved in fraudulent securities activities (para. 15) with a third party, Assante. He also described the Anton Piller Order obtained against Shirley as a “felony”. Meanwhile, the Plaintiffs had moved the court in Saskatchewan to find that Mr. Killoran’s conducts (publication of several e-mails) was in breach of that court’s existing order and therefore in civil contempt of the Saskatchewan court.

For obtaining and utilizing the KPMG interim report and incorporating same into his attacks of both the Alberta proceedings and the counsel for the Plaintiffs, and for tying these proceedings to the death of Shirley, the Plaintiffs moved the Court to convict Mr. Killoran for contempt of court. At the hearing of the motion, Mr. Killoran represented himself. The Court declined to convict Mr. Killoran of contempt in the face of the court as urged by Plaintiff counsel because of the former’s remarks that associated the proceedings with the death of Shirley. This, according to the Court, was because of Killoran’s inability “to separate his, and for that matter Mr. Shirley’s, concerns about the securities industry from the scope of the action” (para. 32).

However, Killoran’s refusal to be properly sworn and refusal to disclose where and from whom he obtained the KPMG interim report as well (para. 40) as his “deliberate and knowing disobedience of the use restrictions set with reference to the Anton Piller Order, and thus in deliberate and knowing disobedience of the Anton Piller order” (para. 49) amounted to obstruction of justice and a violation of the sub judice rule. The Court found that he “clearly attempted to hijack this action to pursue his own ends giving credence to the alleged premeditated securities fraud in Canada and United States involving applicants and Assante, attributable only in part to his relationship with Mr. Shirley” (para. 51). The Court declined to hold that Killoran’s conduct was one of criminal contempt partly because Killoran’s intervention only impacted negatively on private settlement initiatives between the Plaintiffs and the Shirley’s estate. There was no conclusive evidence on the public impact of Killoran’s action because “for the most part, [it was] unsuccessful in generating any meaningful response by industry regulators, politicians and the police” (ibid.).
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Postby admin » Thu Dec 15, 2005 9:57 am

"mess with us and we can destroy your life" seems to be the message some corporations are choosing to send with suits like this.
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Postby admin » Wed Dec 14, 2005 12:01 am

In my opinion this topic post (SLAPP's) has the feel of the kind of legal attack that was put upon the late Kent Shirley and also Joe Killoran. It succeeded in that it completely took away the spotlight on the evidence and the allegations made, and turned the heat of legal retaliation towards those making the allegations instead.

WHAT ARE SLAPP's?
Generally, a "SLAPP" is a (1) civil complaint or counterclaim; (2) filed against individuals or organizations; (3) arising from their communications to government or speech on an issue of public interest or concern. SLAPPs are often brought by corporations, real estate developers, government officials and others against individuals and community groups who oppose them on issues of public concern. SLAPP filers frequently use lawsuits based on ordinary civil claims such as defamation, conspiracy, malicious prosecution, nuisance, interference with contract and/or economic advantage, as a means of transforming public debate into lawsuits.
Most SLAPPs are ultimately legally unsuccessful. While most SLAPPs lose in court, they "succeed" in the public arena. This is because defending a SLAPP, even when the legal defense is strong, requires a substantial investment of money, time, and resources. The resulting effect is a "chill" on public participation in, and open debate on, important public issues. This "chilling" effect is not limited to the SLAPP target(s): fearful of being the target of future litigation, others refrain from speaking on, or participating in, issues of public concern.

The filing of a SLAPP also impedes resolution of the public matter at issue, by removing the parties from the public decision-making forum, where the both cause and resolution of the dispute can be determined, and placing them before a court, where only the alleged "effects" of the public controversy may be determined. For example, imagine a company asks for a zoning variance to place an incinerator in a residential area. When local residents object to the city council, the company sues them for "interference with contract." The judge hearing the suit cannot decide the real issues -- the location of the incinerator -- but will have to spend considerable judicial resources to decide the side issues of the alleged "damages" or other consequences of the public debate on the real issues.
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Postby admin » Wed Dec 07, 2005 5:28 pm

Send us your tips, stories and ideas to CTV Whistleblower:

Email address: whistleblower@ctv.ca
Phone number: 416-313-2494

Mailing address:
Whistleblower
c/o CTV News Toronto Bureau
444 Front Street W.
Toronto, Ont. M5V 2S9
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