Do the RCMP get their man if he is white collar? Nope.

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RCMP rep is collapsing like a house of cards

Postby admin » Sat Mar 31, 2007 11:49 am

Why do Mounties scare politicians so much?
March 31, 2007
Thomas Walkom

Enough is enough. Successive governments have chosen to ignore problems within the RCMP. The explosion this week of the simmering Mountie pension fund scandal shows that it's time they started paying attention.

It is difficult to know what is more remarkable about the revelations made on Wednesday before the Commons public accounts committee. The allegations themselves are stunning. Three current and one retired RCMP officers testified that their efforts to investigate what happened to millions of dollars in the force's pension and insurance funds were stymied at every turn by senior Mountie brass.

The officers used words like "fraud" and "criminal activity" to describe what happened after the RCMP decided to contract out the administration of the funds some time after 2000. They accused their superiors – and in particular former commissioner Giuliano Zaccardelli – of lies and obstruction. Zaccardelli in turn called the officers' allegations baseless. It all made for dramatic media coverage.

But equally remarkable is that it has taken so long for these allegations, which are not new, to be taken seriously. Retired Staff Sgt. Ron Lewis testified that he raised these issues with the former Liberal government and got nowhere. Auditor General Sheila Fraser, while using gentler language, raised many of the same points last fall when the Conservatives were in power.

She wrote that those in charge of the RCMP pension and insurance plans had hired their relatives at exorbitant rates of pay, let contracts of dubious value for inflated prices and improperly skimmed $1.3 million from the funds to cover the fact that their costs were skyrocketing out of control.

Yet that too was met with silence. As was a Star story in December outlining Lewis' complaints about the RCMP's handling of its pension fund. As were similar articles in the National Post.

Yet in an astonishing admission of wilful ignorance, Public Safety Minister Stockwell Day says he didn't know the scope of the problem until he heard Wednesday's testimony. Where was he hiding? Where was his predecessor, Liberal Anne McLellan when this came up before?

The answer is they were nowhere. Governments don't like to cross the Mounties. During the Maher Arar affair, when some inside the federal government were trying to get the Canadian computer engineer sprung from a Syrian torture dungeon, the Mounties were asked if they'd co-operate in a joint appeal to Damascus. They said no, a position that the Liberal government of the day upheld.

"Nobody wants to mess with the RCMP," said former RCMP complaints commissioner Shirley Heafey in an interview yesterday. "And if you do, you have problems."

Heafey should know. Her job, until last fall, was to investigate civilian complaints against the Mounties. During Zaccardelli's tenure, she says, she constantly ran into brick walls. And when one complaint was deemed too close to the bone, she said McLellan – then public safety minister – tried to have her take a paid leave for the roughly 16 months remaining in her eight-year term. (A spokesman for McLellan has denied that allegation.)

That controversial complaint, incidentally, had to do with how the Mounties investigated allegations of sexual abuse by an RCMP officer at the Kingsclear youth training centre in New Brunswick. At the time, Zaccardelli was head of criminal investigations in New Brunswick for the RCMP and had overall responsibility for the investigation.

Thanks to Wednesday's testimony, Day has been forced to order an investigation into the pension scandal. He has promised action.

The easiest solution for the government is to put all the blame on Zaccardelli. He's no longer the commissioner. He's already come under criticism for his handling of the Arar matter. And he's been singled out by RCMP whistleblowers as a big part of the pension fund problem.

But there is a far more fundamental question. Why are Canadian governments so nervous about the RCMP?

We do know that the Mounties can cause sitting governments problems. The RCMP's announcement in the middle of the 2005-2006 election campaign that it was conducting an investigation into the office of then Liberal finance minister Ralph Goodale may well have cost the Liberals the election.

A 1999 RCMP investigation, into allegations that then British Columbia premier Glen Clark had received a bribe, ended Clark's career and assured that his already struggling NDP government would be defeated in the next provincial election.

Eventually, both Goodale and Clark were cleared of any wrongdoing. By then, the damage had been long done.

Day has ordered an investigation into the RCMP pension matter. Its findings will almost certainly be of interest. More interesting, however, would be an investigation of the government's role in all of this.

Why has it taken Stockwell Day so long to bring the RCMP brass under control? Why didn't his Liberal predecessors do anything? Is there something going on that the rest of us should know about?
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Postby admin » Fri May 12, 2006 12:25 am

British Columbia MP Nathan Cullen is afraid to hold the RCMP responsible to even answer to questions.
A 22 year old man was shot in the back of the head at the RCMP detachment after being picked up for having an open can of beer outside the local arena.

Questions to the RCMP about the reasons for no progress on the case after six months were met with "none of your business". This is an unnaceptable answer from a public agency.

Mr Cullen, a new MP at 33 years of age, is unsure whether to hold the RCMP accountable, or whether this might cause them to retaliate against him in some unrelated manner.

Part of the problem might be attributed to the fact that the RCMP in BC, have refused to participate in the province's "B.C. Police Complaints" process.

Are they above the law?

It is starting to sound as if the RCMP has become our own little runaway KGB agency. Would you guys please hire some sensitivity trained personel and get on with the job of working tirelessly to serve and protect?

See Globe and mail article thursday, may 11, 2006 by Gary Mason, front page
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Postby admin » Thu May 04, 2006 8:54 am

Budget renews concerns about RCMP
May 4, 2006. 01:00 AM
JAMES TRAVERS


Is there enough proof in the first Conservative budget to accuse the RCMP of playing politics in the last federal election? No, but there's enough circumstantial evidence to warrant independent investigation of the connections between the iconic police force and the politicians who honour it publicly and mutter about it privately.

Those who recall the turning point in the winter campaign will also recognize a pattern that begins with nagging suspicion and ends in surprising consequences.

Stirred to inquisitiveness by a stock market surge and an NDP complaint, the RCMP wrote an unusual letter confirming its investigation into allegations that the cabinet's income trust decision was leaked.

Now fast forward now to this week and Stephen Harper's politically deft effort to keep promises that helped bring Conservatives to power.

Among the Prime Minister's security commitments is a generous $198 million to allow the RCMP to recruit and train 1,000 extra officers for duties more onerous, if not as theatrical, as the delightfully folkloric Musical Ride.

That dotted line connection between election and budget only intrigues conspiracy theorists if it weren't for the force's long record of getting muck on its boots.

From the distant past of burning Quebec barns and the costly '90s Airbus fiasco to the still pungent effluent from the sponsorship scandal and the Maher Arar affair, the RCMP carelessly mixed the gene pools of Inspector Clouseau and Sergeant Preston.

Remarkably, that hasn't done all that much damage to an image reinforced by a zillion postcards, plastic riders and Mountie knickknacks. In a country that often seems held together by Tim Hortons and hockey, the RCMP remains a chest-puffing example of something Canada has that the world wants.

No one is more sensitive to that star power than politicians. Perhaps it's what is in their closets or simply national pride, but parliamentarians tumble over each other defending the Horsemen.

To be fair, that was not Harper's budget motive. Getting tough on crime is a Conservative priority and there is a compelling case for giving what is largely a provincial contract police force the resources needed to focus on its federal responsibilities — fighting organized and white-collar crime while protecting internal security.

Those are tough jobs. The RCMP can't do them well if it's seen — and it is — as politicized. Far from being just the daft fantasy of the left, that's the conclusion of an April report by the righter-than-right Fraser Institute.

Along with other RCMP judgment errors, author Barry Cooper points to the 1997 APEC summit and the RCMP's willingness to accept crowd control orders from Jean Chrétien's administration as proof of lost independence. That's unacceptable for what Cooper correctly identifies as a "guardian" institution that, like the Armed Forces and courts, must stand above politics.

Where it stands now is the shadow of doubt. It has yet to offer a convincing explanation for has been interpreted as either a stunningly overt or breathtakingly naïve intervention in a federal election.

What's particularly puzzling is that it moved so fast to respond to NDP critic Judy Wasylycia-Leis in a letter that was certain to become public during an overheated winter campaign.

And what's almost as puzzling is that months after the investigation no one has been charged or cleared.

That uncertainty helped keep former finance minister Ralph Goodale out of the Liberal leadership race and is continuing a worry for candidate Scott Brison as he tries to distance himself from an indiscreet income trust e-mail to a financier friend.

But that's not what's most troubling.

After this week's budget, taxpayers as well as voters and concerned citizens have even more reason to demand a full exposure of RCMP actions.

Those reasons are only reinforced by a national capital consensus that, for a policeman, Commissioner Giuliano Zaccardelli is an usually skilled and determined politician.

Getting answers won't be easy. Protected from intrusive oversight, the RCMP launders its linen internally. It's possible Harper's government will wisely edge the RCMP closer to its origins as a federal police force.

But it can't be credible until it convinces the country that it stayed on the election sidelines.

About the only thing Canada needs less than another inquiry is a police force that is so revered, so untouchable, that it can freely play politics.


--------------------------------------------------------------------------------
James Travers's national affairs column appears Tuesday, Thursday and Saturday.

jtraver@thestar.ca.
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Postby admin » Tue Apr 25, 2006 12:38 am

In British Columbia, a new law has come into effect. The Civil Forfeiture Act allows applications to the Supreme Court of BC to seize and sell assets acquired through unlawful activity.

Solicitor Genreal John Les has appointed a director to run a program to oversee or apply this act to areas of criminal activity. It is a welcome sight to see for those of us interested in investor advocacy. Some of us have long maintained (as did Osgood school of law studies on the matter) that the financial predators and criminal minds out there are far better equipped than your average RCMP officer. Sure the RCMP investigator speaks two languages..............but is that any help to catch those who prey on others.

Financial crime is something so misunderstood by law enforcement officials. They seem to almost fear having anything to do with it. Guns they can understand. Blood, no problem. Car accidents? You bet. But something to do with money, lawyers, bay street types, people who live in million dollar homes and wine and dine with the mayor are people they simply are afraid of. In their defense, they have little training in these areas, again probably having had studied official languages more to get their positions than financial crime. They also have no more budget to combat financial crime with than the budget for anything else. Financial criminals, on the other hand, have almost unlimited resources at their disposal to fend off investigation or prosecution.

I applaud the BC decision to use the proceeds of crime to fund the prevention of it and I look forward to similar, forward thinking legislation for the rest of the country.
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Postby admin » Wed Feb 22, 2006 4:45 pm

Sun, June 5, 2005

Canada's puppet police force



Don't ask Mounties to get their man if he is connected to the Liberal party

By Licia Corbella

....... how diligently can we expect the RCMP to investigate AdScam when it's known the RCMP helped launder money for the federal Liberals to help Liberal-friendly advertising companies in Quebec, who then funneled the money back into Liberal party coffers?

Federal Auditor General Sheila Fraser unveiled in April 2004 the feds pumped $1.3 million of the $3 million earmarked for the Mounties' 125th anniversary celebration into the coffers of Liberal-friendly ad firms.

In turn, the RCMP deposited its $1.7-million share of the sponsorships in a separate non-government bank account that was discovered by Fraser's probe.

"We were unable to verify the transactions from the Quebec bank account, because some of the supporting documents had been destroyed," the AG report said.

Fraser concluded Crown corporations like the RCMP were used to quietly pour money into the coffers of ad agencies and we've since learned through the inquiry into AdScam, led by Justice John Gomery, that those ad agencies kicked back money to the Liberals by putting Liberal party workers on their payrolls, handing over envelopes filled with tens of thousands of dollars of cash and making "legitimate" donations with taxpayer dollars.
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Postby admin » Thu Jan 26, 2006 7:31 pm

January 24, 2006

The Mounties give up

The RCMP is walking away from serious investigations, and failing to snag fraudsters, drug traffickers and white collar criminals

CHARLIE GILLIS

On the day of his graduation from the RCMP, red twill blazing and "high-browns" burnished to a lustre, Const. Keith Johnston, 27, is charting a dream career in law enforcement. From here at the Mounties' training academy in Regina, he's off to Didsbury, Alta., a quiet prairie town where he can learn the ropes of day-to-day policing. Then, with a few years under his belt, the native of Campbellford, Ont., plans to return to his home province, where elite RCMP units run many of their operations against the country's most elusive villains: terrorists, international mobsters, white collar criminals. To Johnston, these complex, high-stakes investigations are the stuff that sets the RCMP apart from other police services -- "that something," as he puts it, "that drew me to the Mounties."

Swearing-in day at Depot, as the training facility here is known, is a time for such blue-sky optimism -- a moment for grads to reflect with pride on joining the world's most iconic police force. But reality quickly intrudes. No sooner have Johnston and 27 fellow graduates scattered to postings across the country than the federal auditor general releases a report revealing that many of those positions he covets aren't actually getting filled. Newly released numbers show the Mounties have fallen some 600 officers, or 25 per cent, below normal strength in federal enforcement areas like drug interdiction and organized crime.





Their performance shows it. On drug offences, for example, clearance rates have fallen from nearly 80 per cent in 1995 to 61 per cent in 2004, according to numbers obtained from Statistics Canada (clearance rates are the proportion of incidents effectively solved through charges or other forms of resolution; they are a key measure of a police force's success). The Mounties' rate for other federal investigations -- from immigration fraud to stock market scams to smuggling schemes -- has been even worse, tumbling from highs near 80 per cent in the mid-1990s to 49 per cent in 2004.

And when Johnston speaks to some of his senior colleagues, the picture may seem even bleaker. In interviews with Maclean's over the past few weeks, officers from across the country have depicted a force losing effectiveness even as it receives more money and legal powers from the federal government. Detectives in federal units say they're being forced to ignore intelligence of criminal wrongdoing because they simply can't muster the manpower to investigate. The problem, they say, is that the force is preoccupied with fulfilling its contracts to communities where it supplies street-level policing. Yet patrol constables say they're overburdened, too. In increasingly serious cases, they say, officers routinely try to persuade crime victims not to press charges so they can close files more quickly. "If the public knew," says one officer based in British Columbia, "I think there would be a scandal."

Here lies the dilemma at the heart of the RCMP's ever-expanding mission. Can it answer the need for a nimble, well-staffed federal police agency while simultaneously patrolling the streets of The Pas, Man., or Burnaby, B.C.? Or by trying to do two things at once, are they doing neither well?

The issue seems all the more timely as high-stakes crime reclaims its place at the centre of the national conversation. Finance ministers in both Ottawa and Queen's Park have been drawn into market enforcement investigations over the past year, while the Gomery inquiry exhumed a network of political operatives defrauding the public with apparent impunity. Last fall, Bank of Canada governor David Dodge warned in a speech to RCMP brass that Canada risks becoming "a safe haven for opportunistic criminals who deal in white collar crime." These are matters the Mounties are specifically mandated to handle. Dodge for one is urging them to get busy.

Paul Palango, who has written two influential books on the RCMP, takes the argument one step further. The Mounties, he says, have been falling behind transnational and white collar criminals since the mid-1990s, and the single, galvanizing event since then -- the terrorist attacks of Sept. 11, 2001 -- have failed to prompt any wholesale reassessment, he says. "Nothing has changed. The RCMP's whole point has been to maintain the status quo." In the meantime, he notes, the Mounties have been defined by a well-publicized series of mishaps and investigative failures -- incidents reinforcing perceptions of disarray. The acquittal of suspects in the Air India bombing; the damaging allegations surrounding Maher Arar's deportation to Syria; the fruitless investigation of Brian Mulroney and the Airbus contracts -- all have called into question the Mounties' ability to handle big-time international cases.

On the patrol side, the fatal shooting in November of a teenager in Houston, B.C., and the drowning last summer of an officer wearing his body armour in Lake Okanagan gave rise to accusations of poor judgment or ill-preparedness. So too did the deaths of four officers near Mayerthorpe, Alta., at the hands of a well-known troublemaker. So even as all the major political parties line up to promise money and officers on the 17,000-member force, the troubling question lingers: are the Mounties up to the job?

The RCMP takes these perceptions seriously -- enough to fly a senior officer from Ottawa to Regina to show a reporter what it's doing to replenish its ranks and meet the myriad demand for its services. Courtly and soft-spoken, Insp. Glen Siegersma is the kind of Sam Steele figure the RCMP has purveyed publicly since its inception 132 years ago, and that polls suggest many Canadians still revere. At Depot's monument to fallen officers, Siegersma unfailingly pauses to salute. When cadets snap to attention upon seeing his officers' insignia, he thanks them for their fealty.

These qualities, along with his basic candour, make Siegersma the perfect officer to head the RCMP's recruiting "renewal initiative," the closest the force has ever come to a nationally coordinated recruiting campaign. In each of the next two years, the organization hopes to turn out some 1,600-plus new officers, fully 60 per cent more than the 2005 output. On one level, this response reflects the crisis every government agency faces due to retiring baby boomers. According to the auditor general, vacancies across the RCMP could reach 3,500 by 2010. "I think we'd be foolish not to look into the future, at the demographic trends, and not prepare ourselves," says Siegersma. It's also a way to show they're addressing policing problems slowly coming to public attention. Whatever role the RCMP fills in the future, the need for experienced officers will be a constant.

It won't be easy. Last summer, reports surfaced indicating the RCMP had received 28 per cent fewer applications from Ontario and Quebec than the previous year (Siegersma says that number has rebounded), and the long-term trends are worrying. Whereas 10,000 people typically wrote the RCMP entry exam each year in the mid-'90s, that number has fallen to about 8,000 recently, for about 1,000 positions. That's still plenty to choose from, but viewed as a poll, it's hardly a vote of confidence. Then there's the problem of keeping the good ones. "For many of those who joined in the past, it was the only choice they had, and they tended to stay," said RCMP Commissioner Giuliano Zaccardelli in an interview. "In today's society, young men and women have different options, different alternatives. So if we don't make this profession attractive to them, they'll go somewhere else."

So while Siegersma denies the force is in crisis, he and his recruiters are nevertheless ramping up their sales pitch, touting the job security, 25-year retirement clause and relatively generous pay that has historically drawn a surfeit of hopefuls to the RCMP. In some cases, they've adopted a curiously down-market message. In Manitoba, for example, the organization commissioned advertising spots on radio stations and in campus newspapers emphasizing that applicants don't need a university degree or the ability to speak French to join up. Siegersma dismisses suggestions the force is dumbing down to reach its targets. "I have neither of those qualifications," he says, smiling. "I think I've done okay."

It's been a long time since the Mounties tried this hard to be liked, and if the charm offensive is really about drawing more recruits, the next, obvious question is: where are they going to put these people? That's where the difficulties truly begin. The 20-year agreement under which the force currently supplies policing services to cities, towns and rural communities across the country expires in 2012, with a general review due to begin next year. The Mounties are almost certain to face pressure to bump up their presence in those places where they provide community policing. Numbers tabled last November by the Conservatives in the House of Commons show a net shortage of 358 officers in provincial and municipal contracts. And in the force's recent "client satisfaction" surveys, it scored poorly on the issue of effective deployment of resources. "If the RCMP can't supply the bodies for their contracts, they're going to lose them," says Ronald Stansfield, head of the justice studies program at the University of Guelph. "The municipalities will go out and create their own police agencies."

More troubling still is the word of officers on the street, who say the staffing crisis is already putting public safety at risk. One constable posted in B.C.'s Lower Mainland says he attends between 20 and 40 calls on an average Friday or Saturday night, each of which requires him to write up an investigative file. "Of those, you might get three or four that really need to be investigated," says the officer, and with such a heavy workload, officers spend their days off buried under paperwork. Worse, he says, they begin to cut corners. "Instead of investigating a case, they're looking for ways out. They want to kill that file as soon as possible."

Their means of pinching off investigations are varied. Sometimes officers stop investigating if witnesses can't provide a slam-dunk identification of a perpetrator, the constable says. Or they might try to discourage victims -- implicitly or not so implicitly -- from pressing charges. "Let's say two people who are drunk have beaten each other up fairly badly -- broken noses, bleeding," he explains. "You find witnesses who say, yup, that guy started it by taking a beer bottle and smashing it over that guy's head.

"Well, how many times have I seen a police officer go up to the victim and say, 'You know what? I realize your head hurts and you have a black eye, but this guy is an acquaintance of yours, right? This isn't going to court until about nine months from now, and by then you're going to forget all about this. You'll have to take a day off work, maybe two. Your boss isn't going to be happy and you're going to miss the money. So are you sure you want me to charge him with this?'

"When the guy finally says, 'Nah, forget it,' you just write off the file. 'Victim knows assailant. Victim did not wish to make a statement and did not wish to press charges. Concluded here.' That kind of stuff happens all the time."

Like several members who related their experiences for this story, the officer requested anonymity, noting the RCMP has zealously enforced provisions of its code of conduct forbidding officers from "criticizing, ridiculing or complaining about the RCMP's administration, operations, objectives or policies." But several other members working in urban detachments have corroborated his account to Maclean's. And while some consider it "good policing," British Columbians saw the potential result of this practice in September 2004, when a rookie constable, Mike Pfeifer, admitted during a coroner's inquest that he failed to properly investigate a spousal violence complaint in Burnaby. Rather than arresting the accused man, Bryan Heron, as per the force's investigative procedures in domestic violence cases, Pfeifer said he hurriedly closed the file. One week later, Heron walked into his estranged wife's hospital room and shot both her and her 68-year-old mother to death.

Such chilling outcomes are rarer in the world of federal policing. There, RCMP investigations tend to be lengthy affairs aimed at more savvy suspects. Yet officers in federal enforcement are no less vocal, no less urgent than street-level patrolmen about the deterioration of their units. One is Staff Sgt. Gaetan Delisle, a 30-year veteran based in Montreal who has run afoul of his superiors in the past for speaking his mind about problems on the force. Apparently unfazed, he points to Montreal's drug enforcement section when asked about the state of federal policing, saying the unit has fallen from its normal complement of about 75 officers to 20 or 25 as the brass siphons off bodies to fill contracts in Western Canada. Increasingly, he says, members of the Montreal section have watched large-scale violations go by, even when they had solid intelligence of wrongdoing. "They've even been forced to tell international partners wanting them to do investigations, 'Look, we can't. We barely have the manpower to do the bare bones of our duties because all of our personnel have been taken away.' "

Delisle's colleagues in other parts of the country tell similar stories. "Contract's the priority," grumbles one veteran officer in a federal policing unit in southern Ontario. "We have to have the people in uniform to cover our contracts and the attitude is that we'll get people when we can." And while no one's denying that the life-and-death stakes of patrol-level policing demand urgent response, analysts warn the RCMP has little hope of solving cases such as the alleged income-trust leak from Finance Minister Ralph Goodale's office unless it takes its role as a national agency more seriously. "They just don't have the resources to develop the centralized expertise they should be developing," says Ronald Melchers, a criminologist at the University of Ottawa. "Canada has always resisted the FBI model, where the federal agency is really a resource pool for policing, developing innovative technologies, approaches, methods and training. There's a lot to be said for that. Maybe it's something we should look at more closely."

As things are, the RCMP has a great enough challenge funding its meagre federal operations. The force has never recovered from federal budget cuts in the 1990s, and it's true that money troubles continue to plague the force. Much of the extra $1 billion Ottawa has added to the force's annual budget since 1998 has been siphoned away by national security demands brought on by Sept. 11. At the same time, the RCMP is grappling with soaring investigative costs related to technology and legal requirements. Court decisions compelling police to store and process practically every detail of their investigations -- notebook entries, tips, minutes of the officers' own meetings -- have doubled the cost of a single federal policing position from what it was 15 years ago, says Deputy Commissioner Tim Killam. One study released earlier this year by the University College of the Fraser Valley in Abbotsford, B.C., found that the number of procedural steps required to execute a simple drug trafficking investigation has risen seven-fold since the mid-1970s.

The force also cautions against reading too much into its clearance rates. Its drug enforcement data, for example, include cases investigated by a variety of personnel across the country, not just dedicated federal enforcement units, notes Staff Sgt. Paul Marsh, a spokesman in Ottawa. Factors that could influence clearance data included changes to reporting methods, legislative amendments and court decisions. "A detailed analysis would have to be conducted to determine what factors contributed to the change," he says.

The debate over resources, and the uncertainty over performance, merely highlights contradictory forces at the heart of the Mounties' mandate. They are essentially robbing Peter to pay Paul, and the result, say critics, is inadequacy on both sides of their operation. While the auditor general notes the enormous shortage of officers in federal policing, the Fraser Valley College study notes that RCMP-policed cities have fewer officers per capita than neighbouring cities patrolled by city or regional services. "There's not one detachment that's running with the proper resources," concludes Rob Creasser, vice-president of the B.C. Mounted Police Association and a constable based in Kamloops. "Our risk management model appears to be based on God's grace."

Which raises the question of the RCMP's options. Should the Mounties be focusing their resources on areas more worthy of a national police force? Could they abandon patrol functions altogether, becoming a federal law enforcement agency like the FBI? Or might the RCMP evolve into some hybrid, providing both federal enforcement and general policing to small communities, while leaving the taxing job of patrolling expanding urban areas to other forces?

For now, the likelihood of the RCMP shedding any of its contracts seems remote, not least because it would mean conceding a significant part of its raison d'être. "If they're sending their bodies, of which they have too few to do the job, to contract policing, that tells you something about their values and priorities," says Stansfield of the University of Guelph. "It shows where they really think their bread and butter is." Indeed, the RCMP's leadership bridles at the suggestion that patrol detachments are a burden. "Our American colleagues envy us for having the levels of policing we do," says Killam from RCMP headquarters in Ottawa. "Contract policing is where most of us in this organization gain our experience to be good police officers, good investigators. Without it, we'd be hamstrung for expertise."

Moreover, provinces using RCMP services have little incentive to create their own police forces, notes Chris Murphy, a law enforcement expert at Dalhousie University who has studied the RCMP. Under current arrangements, Ottawa picks up 30 per cent of the policing tab for provinces that use the Mounties, and 10 per cent for municipalities. Even if the feds managed to reduce their share after 2012, any province, region or city that starts up its own force would likely save little money. "The RCMP," he says, "are one of the most efficient deployment models out there."

He may not know it yet, but this is all bad news for ambitious young constables like Keith Johnston. Back in Regina, his spirits are running high as the graduation drill display ends, and about 150 or so family and friends of the new Mounties begin filing from the hall. It will be another 20 hours before the auditor general releases her bleak report, and for now Johnston's dreams are full. Commissioner Zaccardelli has made a surprise appearance at the ceremony, welcoming the grads to "the great legacy" of the horsemen. "My grandparents and parents couldn't be more proud," says Johnston, glancing at a clutch of relatives who have come to see him sworn in. "The RCMP is a symbol of Canada."

Perhaps. But the Mounties are also supposed to uphold something a lot more prosaic than the spirit of a nation. They're supposed to represent excellence in law enforcement, an identity impossible to maintain if their efforts increasingly end in confusion and failure. Preserving the status quo, therefore, may be no favour to officers like Johnston. If the voices of dissent are right, it's both a betrayal of their trust and -- by extension -- a shabby way to treat a national icon.

To comment, email letters@macleans.ca
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RCMP IMET Underdelivers

Postby urquhart » Thu Jan 26, 2006 2:25 pm

Investment Executive
Too few charges, too many changes
IMET underdelivers
Thursday, January 26, 2006

By David Baines

The Vancouver RCMP integrated market enforcement team was inaugurated with much fanfare more than two years ago. But, so far, it has yet to lay a single criminal charge.

“Obviously we haven’t met the expectations of the public,” concedes Insp. George Pemberton, who heads the Vancouver IMET. “In retrospect, the expectations that were set — the promise that cases would go from inception to referral within one year — were overly optimistic. That’s a really aggressive timeline.”

However, it’s not just the Vancouver team that has failed to meet expectations. The Toronto team, which has also been operating for slightly more than two years, has laid only three charges, all relating to relatively minor cases:

> In May 2004, former HSBC Securities (Canada) Inc. employee Steve McRae was charged with stealing stock certificates and laundering the proceeds, estimated at $370,000.

> In June 2005, three officers of Betacom Corporation Inc., a now-defunct company formerly listed on the TSX Venture Exchange, were charged in connection with a relatively small accounting fraud.

> A third charge has recently been laid, but details have yet to be released pending location of the accused. However, Supt. Craig Hannaford, who heads the Toronto IMET, admits that it is “not a big case.”

None of the Toronto team’s larger, more highly publicized investigations, including those into the activities of Nortel Networks Corp. and Royal Group Technologies Ltd., have resulted in any charges. The other two IMET teams, located in Calgary and Montreal, have each been operating for a year and have not laid any charges, either.

That was not the expectation in early 2003, when the federal government announced it would allocate up to $30 million annually for the next five years to set up and operate a series of “integrated market enforcement teams.” The teams would consist of RCMP investigators, city police, securities commission investigators, forensic accountants, Justice Department lawyers and case management co-ordinators to make sure cases move quickly and efficiently.

The RCMP had previously operated market surveillance groups in certain larger cities, but these had been hampered by poor training, high staff turnover and prosecutors’ reluctance to take on complex and time-consuming cases that, due to the high threshold of proof required by courts, were fraught with uncertainty.

The IMET program, however, was to mitigate these problems by recruiting teams of well-schooled professionals with expertise in securities, accounting, finance and law. Recruits would also have to commit to at least five years service, thereby ensuring staff continuity.

The Vancouver IMET had its official opening on Dec. 1, 2003. It was attended by about 50 police officers, as well as government and securities industry representatives, many of whom predicted the program would provide a serious deterrent to would-be stock offenders. Among them was RCMP Deputy Commissioner Bev Busson, head of “E” Division Headquarters in British Columbia, who said the teams would pose “a genuine threat of being detected, investigated and prosecuted.”

The original head of the Vancouver IMET team was Bill Majcher, who had been catapulted from corporal to inspector for his stunning undercover work in the RCMP-FBI Bermuda Short sting operation. It resulted in the arrest of more than 50 individuals accused of wire and securities fraud. Although Majcher was much admired for his undercover accomplishments, his appointment raised eyebrows because he had no prior administrative experience.

Under Majcher’s stewardship, the Vancouver team began probes into several Vancouver-based public companies — including SilverStar Energy Inc., listed on the OTC Bulletin Board in the U.S., and Getty Copper Inc., listed on the TSX Venture Exchange — but was not able to get approval to lay charges. Last July, Majcher surprised people when he ran, unsuccessfully, for the federal Conservative nomination in the Vancouver suburb of Richmond. But why was he looking for a new job when his team had not yet laid a single charge?

Majcher told reporters he had become frustrated with his inability to persuade Crown counsel to lay charges in several cases and thought he might be more effective in politics. This response could not have been well received in Ottawa, where it is considered bad form to publicly criticize the Crown.

There was also a report, which Majcher did not deny, that he was going into a movie deal with Vancouver promoter Kevan Garner, one of the money launderers Majcher had busted in the Bermuda Short sting. The idea of a top cop consorting with a convicted felon probably didn’t impress his bosses, either.

Whatever the reason, within days, Majcher was suspended with pay pending the outcome of an internal investigation. He was replaced by Pemberton. That investigation has degenerated into an unseemly spat. On Dec. 2, Majcher’s lawyer, Dale Pope of Davis & Co. LLP, sent a sharp letter to Busson charging that the force’s conduct toward Majcher “has been egregious, reckless and, in some cases, defamatory of him and has caused him undue emotional, professional and financial harm.”

Pope asked several pointed questions, such as: “Why do so many of the allegations deal with matters several years old and previously investigated? Why did the RCMP inform Insp. Majcher that if he took early retirement, the internal investigation would stop?”

The letter ends by stating that, if the RCMP is not willing to “amicably resolve this matter,” then more formal steps would be taken in preparation for “future potential litigation.”

But that’s not it. There has also been more staff turnover at even higher levels. Peter German, the RCMP’s director general of financial crime — a department that oversees commercial crime, proceeds of crime and the entire IMET program — has been transferred from Ottawa to an unrelated position in B.C. Supt. John Sliter, who runs the IMET program, is in the middle of a six-month leave to learn French. Hannaford, who heads the Toronto IMET — and is acting head of the program in Sliter’s absence — is retiring at the end of January and a replacement has not yet been announced.

Another concern is that the teams have been pursuing high-profile investigations that appear unlikely to result in criminal charges. One is Nortel, which may have been motivated by an emotional reaction to people getting beaten up by the stock rather than a reasonable apprehension of criminality.

Then, there is IMET’s recent decision to investigate the Alberta Securities Commission, prompted by a complaint by the leader of the Liberal Opposition in that province. It is highly unlikely this probe will result in any criminal charges. The bad news for B.C. residents is that, to avoid any suggestion of conflict, members of the Vancouver team have been seconded to conduct the investigation.

All of this may be eroding investor confidence rather than raising it. With so many false starts, the public may find it increasingly difficult to take to heart any IMET-inspired investigations, including the recently announced probe into possible leaks surrounding Ottawa’s tax treatment of income trusts.

To be fair, IMET members have many investigations and legal briefs in the hopper that may yet come to fruition. They have also informally intervened in many cases, and provided considerable assistance to U.S. authorities in their pursuit of stock market crooks with Canadian connections.

But the bottom line is criminal charges. And, so far, there haven’t been nearly enough to justify the outlay of money, which Hannaford expects to approach $30 million annually during the next fiscal year.

As Pemberton says: “I think it’s fair to hold our feet to the fire.” IE
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RCMP Must Work Independently of SROs/Commissions

Postby urquhart » Wed Jan 25, 2006 11:27 am

January 25, 2006


Slapping Down a Dynamic Duo
SEC and the Justice Department
Fight Financial Crime Together,
But Is It an Unfair Double-Team?
By PETER LATTMAN and KARA SCANNELL
Staff Reporters of THE WALL STREET JOURNAL
January 25, 2006; Page C1
The Justice Department and the Securities and Exchange Commission long have worked in concert in fighting corporate wrongdoing, securing convictions and settlements in recent years against former executives at WorldCom Inc., Enron and elsewhere.
The SEC can bring civil charges and seek to impose financial penalties and to ban transgressors from top jobs at publicly traded corporations or from the securities industry. The Justice Department can bring criminal charges and seek prison sentences for the most serious white-collar violators.
In two recent cases, however, federal judges have taken the agencies to task for using what the judges deemed an unfair one-two-punch approach in criminal cases.
In Oregon this month, a judge dismissed criminal charges against three corporate executives, saying the Justice Department unconstitutionally pursued a stealth criminal investigation under the cloak of a less-threatening civil proceeding by the SEC. And in Alabama last year, a judge dismissed charges that former HealthSouth Corp. Chief Executive Richard Scrushy lied to the SEC, ruling that he should have been warned that the Justice Department already had opened a criminal investigation when the SEC questioned him.
In both cases, the judges found the line between the agencies' roles had become improperly blurred.
"It is entirely appropriate and necessary for courts to make sure that line is clear," says defense lawyer Jacob Frenkel, a former SEC lawyer and federal prosecutor.


Also, for more on the prosecutor in the U.S. v. Stringer case, visit the Law Blog3
The SEC and the Justice Department long have run parallel investigations. Business scandals prompted President Bush in July 2002 to create the Corporate Fraud Task Force, which stepped up coordination between federal agencies.
"It's important that those of us with expertise in the securities field can lend that expertise to criminal prosecutors and work together," says Linda Chatman Thomsen, the SEC's director of enforcement. "All of us do have to worry about making sure we do it right while protecting fairness and due process."
The SEC refers matters to the Justice Department if the agency decides violations merit criminal investigation. But defense lawyers say the system becomes unfair if prosecutors use a civil SEC probe to secretly advance a criminal case.
Without an explicit threat of jail time, executives have a greater incentive to cooperate in SEC investigations. Subjects of SEC probes can assert their Fifth Amendment rights against self-incrimination and stay silent, but judges and juries are allowed to draw "adverse inferences" from such assertions in civil trials. In criminal trials, such inferences aren't allowed. It puts corporate defendants in a Catch-22: If they talk to the SEC, they might help criminal prosecutors. If they don't, they will be disadvantaged in the civil case.
Though no statute articulates how parallel civil and criminal proceedings work, courts for years have allowed the U.S. agencies leeway: They can communicate regularly, exchange information and discuss strategy, though prosecutors can't share anything they learn via grand-jury proceedings, which are by law secret.
In a 1970 case involving the Food and Drug Administration and criminal prosecutors, the Supreme Court confirmed that parallel proceedings are constitutional. But it said that case didn't involve the government's using a civil action "solely to obtain evidence for its criminal prosecution" or failing to advise a defendant that he faced criminal charges -- suggesting that such tactics might be unconstitutional.
"Up until now, the courts have mostly taken a hands-off approach to parallel proceedings," says Peter Henning, law professor at Wayne State University Law School in Detroit and a former federal prosecutor and SEC lawyer.
He adds: "Judges are trying to find a line to accommodate the cooperation between civil and criminal investigations without allowing the civil investigation to be a facade for the Justice Department."
In the Oregon case, U.S. v. Stringer, U.S. District Judge Ancer Hagerty dismissed criminal indictments against three former executives at Flir Systems Inc., a technology company.
The judge pointed to a Federal Bureau of Investigation memo about a 2000 meeting with the SEC and federal prosecutors. The memo said that because one of the defendants had agreed to an SEC interview, the FBI -- an arm of the Justice Department -- wouldn't conduct any interviews that would flag a criminal investigation "so as not to jeopardize the opportunity to obtain statements from these individuals."
Another memo cited by the judge indicated that prosecutors opted against opening a grand-jury investigation so they could "passively observe the results of the SEC's work" -- a strategy that "provided good investigative results, at little cost." The judge also cited an SEC lawyer's handwritten note to herself to "make sure court reporters won't tell" a defense lawyer about Justice Department involvement.
Judge Hagerty's Jan. 9 ruling was blistering in its criticism, accusing prosecutors of spending "years hiding behind the civil investigation to obtain evidence, avoid criminal-discovery rules and avoid constitutional protections." The judge accused prosecutors of using "deceit and trickery" to conduct a criminal probe "behind the guise of a civil prosecution."
The U.S. attorney for Oregon, Karin Immergut, says the Justice Department is reviewing appeal options and "we disagree with the court's decision based on the facts and the law." The SEC declined to comment on the case, which was the subject of an Oregonian newspaper article Jan. 15.
The judge's opinion "clearly shows judicial aversion" to the close working relationship between the two agencies, says Mary Jo White, a former U.S. attorney for the Southern District of New York. While the conduct "sounded scuzzy," she adds, "I don't think it's going to have broad repercussions."
In dismissing the perjury counts against HealthSouth's Mr. Scrushy, U.S. District Judge Karon Bowdre criticized the government for "failing to advise Mr. Scrushy or his attorneys about the criminal investigation."
The judge based her decision in part on a 2003 ruling by U.S. District Judge Inge Johnson in the SEC's civil case against Mr. Scrushy. Reversing a court-approved freeze of Mr. Scrushy's assets by the SEC, Judge Johnson also criticized the two agencies.
"The government had undoubtedly manipulated simultaneous criminal and civil proceedings," she wrote.
Thomas Sjoblom, a former SEC lawyer and Mr. Scrushy's lawyer in the asset-freeze hearing, says parallel probes were more carefully conducted in his days at the agency. Defense lawyer Ralph Ferrara, a former SEC general counsel, agrees. "These folks are moving in shadows with one another," he says.
Judges don't always act on defendants' complaints. Lawyers for Jeffrey Skilling, the former Enron chief executive, sought to bar Mr. Skilling's SEC deposition testimony from being introduced at his coming criminal trial, citing the Oregon case. Monday, the judge denied the request.
Write to Peter Lattman at peter.lattman@wsj.com4 and Kara Scannell at kara.scannell@wsj.com5
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Postby admin » Fri Jan 20, 2006 9:42 am

January 19, 2006

The Silence of the Cops

The RCMP's income trust investigation provides a lesson for Canada's market regulators: time to open up.

STEVE MAICH

It's safe to assume Canada's market authorities are now investigating the alleged Nov. 23 leak of the federal government's decision not to tax income trusts. The Ontario Securities Commission, Market Regulation Services, and even the Investment Dealers Association, are populated with professionals who take seriously their obligation to protect investors and sniff out wrongdoing in the markets -- so you can be pretty sure they're doing their jobs.

But let's say you don't want to assume. Let's say you're the type of person who likes to know about possible criminal activity, either when picking stocks or choosing a government. In that case, you'd be out of luck because the organizations charged with enforcing the rules of Canada's capital markets prefer not to talk about such things if they can avoid it. For the most part, you're stuck assuming.

The market cops like this system. It gives them an easy line to feed reporters, and keeps a lot of unpleasantness on the Q.T. Every once in awhile, however, a crack appears and a little light spills in. For one reason or another, the powers that be sometimes tip their hand and let you know where suspicion lies -- as in the current kerfuffle over Ottawa's income trust misadventure. We know the RCMP is looking into the matter -- they told us so a few weeks back -- and this burst of transparency has made things a whole lot more complicated in the parallel worlds of politics and business.

Buzz Hargrove, for one, figures the Mounties screwed up big time when they announced, in the middle of an election campaign, that they were investigating whether somebody in Ralph Goodale's federal Finance Department blabbed the trust decision, and triggered a little rush of insider trading. He told CBC Radio listeners that the Mounties' revelation was "not proper police work," and hinted that the RCMP might be politically motivated. It was left to listeners to guess at just what those political motivations might be, but this much was clear: Buzz figures democracy works best when voters aren't troubled by peripheral issues, such as criminal investigations into the sitting government.

Bay Street heartily agrees. The traders, fund managers and analysts, who live on the ebb and flow of privileged information, figure the probe is a wild goose chase. Most say the spike in the trust market on the day of Goodale's announcement was just clever investing. A skeptic might wonder how so many seemed to get the same brilliant idea, simultaneously, on the very day that the good news was released. But when it comes to police meddling in their trade, Bay Streeters aren't a very curious bunch. Questions make them queasy.

The average citizen feels differently though. The public is, in fact, very curious about such things. Many even subscribe to the quaint old notion that they have a right to know. To them, it's pretty obvious the RCMP was right to reveal its investigation, even if it upset some politicians and their pals. The problem isn't openness, it's inconsistency -- you just never know when the market cops are going to level with you, and when they're going to enter the cone of silence. And in cases like this one, with some cops talking and others keeping mum, things get especially problematic.

The OSC and other provincial agencies like to say that secrecy protects the stability of the markets, the rights of the accused, and the integrity of their investigations. But the commission's own guidelines allow for disclosure when they're looking into "credible allegations" that are "substantially in the public domain," and when the failure to inform the public may harm confidence in the markets and the regulator. The income trust case meets all the criteria, and yet the OSC still refuses to discuss the trust matter.

The silence would be easier to grudgingly accept if the market regulators stuck to an iron-clad policy of non-disclosure, but they don't. A couple of years ago, for example, the commission announced that Biovail Corp. was under investigation for possible breaches of accounting and securities laws. The OSC said it made the announcement because Biovail had hinted publicly that no such investigation was underway, so it was duty-bound to correct the record. It's a rather fine hair to split: no information is okay, but information that could be misunderstood is unacceptable.

More often, investigations drip out into the open. Once the media get wind of problems, speculation morphs quickly into presumptions of guilt, and silence from the authorities does nothing to calm investors. Such probes are generally considered material information, so companies are forced to reveal them anyway. All in all, the veil of confidentiality begins to look pretty thin.

Like any system in which the rules are arbitrarily and inconsistently applied, Canada's regulatory system produces lousy results for all concerned. The public never feels like it has the whole story, companies live in fear of breaking arcane regulations, and investigators leave themselves open to accusations of abuse whether they opt for openness or secrecy. The only way out of the quagmire is to have rock-solid standards that apply equally to everyone. If regulatory probes in the public markets are material information, then the only reasonable solution is to disclose them all, except in extreme cases where the public interest is better served by temporary suppression.

It wouldn't be perfect. Some innocent companies would have to deal with the stigma of being named as targets. Misguided probes might cause needless worry among investors from time to time. But there's a useful lesson in the RCMP's recent candour: given the choice between the problems of too much openness or too much secrecy, take troublesome transparency every time.

To comment, email letters@macleans.ca
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Postby admin » Sat Jan 14, 2006 12:27 am

CAN YOU BUY YOUR WAY OUT OF JAIL TIME?


This morning over my coffee I read an article in the Toronto Star (one of the two papers to which I subscribe). It was an article about an Ex-CIBC managing director who had criminal charges dropped after CIBC agreed to pay $125 million to settle claims by Spitzer and the SEC.

This is $125 million of shareholder's money paid to cover up wrongdoing at the top. No "rogue broker" this one.

As a subscriber I did a search of thestar.com thinking I could e-mail this intriguing article to others. But I could not find the article on the Star website, although another article on the same page D7 "Ex-broker barred, fined" about Octagon Securities broker Barry Leung appeared on the website.

I guess the Star believes the web readers are more interested to read about small fry being fined $100,000 and banned (this ensures the fine will not be collected) than reading about one of our prominent banks spending $125 million of shareholders money to cover up the criminal activities of the former managing director of CIBC.

However I did find an article on another website and append a copy. The following is an excerpt.

"Mr. Flynn was charged with five felonies, including two counts of grand larceny, for allegedly

bankrolling a pair of hedge funds that engaged in illegal late trading and "deceptive" market timing

of mutual funds. At the time, Mr. Spitzer's office accused him of stealing more than $1-million

from mutual fund investors. ...

CIBC, which struck a twin settlement with both Mr. Spitzer and the SEC, also declined to discuss

the matter. The bank promised to pay $100-million in restitution to investors, and an additional

$25-million in penalties, to settle allegations it knowingly financed hedge funds involved with

manipulative trading practices.

It reminds me of the time the major papers in Toronto seemed to believe that two small investors taking BMO Nesbitt to court over Bre-X (once touted as scam of the century) would not be of interest to Canadians most of whom suffered some degree of loss due to that fiasco. The two Ottawa evening papers covered the court case on the first day but then fell strangely silent the next day.

Stan

Stan I. Buell
Small Investor Protection Association
P.O.Box 325, Markham, ON, L3P 3J8
Tel: 905-471-2911
e-mail: stanbuell@sipa.to
website: www.sipa.ca


INVESTOR ALERT - Limitation Periods reduced from 6 years to 2 in AB, ON, SK & NL. Investors with a complaint should first consult legal counsel regarding limitation periods.
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Postby Dorcy » Fri Jan 13, 2006 9:41 am

A retiring professor has lodged a complaint against BMO FMF with the RCMP's reporting crime online program. He said the process was cumbersome. What's interesting is the securities commission is excluded from the complaints process. The reply stated his complaint information was sent to the RCMP, Internet Crime Complaint center in the U.S. and IMETS. I'm wondering if the RCMP would look at the complaint if it had nor been mentioned in Barry Critchley's column in the Financial Post.
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Postby Donald » Wed Jan 11, 2006 6:35 pm

Key institutional salespersons at Haywood Securities recruited from First Marathon Securities to lead the development of the institutional division.

Mob Magnet: Ontario's securities watchdog didn't stick any sanctions on former Ontario premier David Peterson for his role as a director of a disgraced magnet firm. However, in July, five other former directors of YBM Magnex International Inc. were banned from sitting on corporate boards and ordered to pay penalties. The harshest penalties levied by the OSC were against two brokerages that agreed to underwrite financing being considered by YBM Magnex in 1997. Griffiths McBurney & Partners and National Bank Financial Corp. (formerly known as First Marathon Securities Ltd.) were each ordered to pay investigation and hearing costs totalling $400,000. (TSun)
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Postby admin » Tue Jan 10, 2006 4:41 pm

the following article started me thinking once more of allowing the RCMP to utilize (seize and use) the proceeds of crime in efforts to help fund their white collar criminal investigation activities. Otherwise they will never be able to compete with the industry in Canada.

_____________________________________________________________
Crime Stoppers to pay RCMP salaries
Last Updated Tue, 10 Jan 2006 14:06:00 EST
CBC News
Private funds will pay the salaries of some RCMP officers in a B.C. city, in what is being billed as a national first.

The program is being set up in Kelowna, where Crime Stoppers is raising $240,000 a year to pay the salaries of three new officers.

Crime Stoppers says it's a stopgap measure to deal with a critical shortage of police in the Central Okanagan, which left the force unable to follow up on many tips called in to the organization's anonymous hotline.

"That's why Crime Stoppers is getting involved. It's because the tips are not getting responded to quickly enough right now," Crime Stoppers vice-president Vern Nielsen said in Kelowna on Monday.

"It's the first time in North America that something like this has been done, the most progressive program that Crime Stoppers has ever come up with," he told a joint news conference by Crime Stoppers and RCMP.

Outside funding won't sway police, RCMP says

Kelowna RCMP Supt. Bill McKinnon said that, as far as he knows, it is the first time private funding from companies and individual donors has been used to pay for general duty RCMP officers in Canada.

There have been some cases of private funding paying part of the salaries of specialized officers, such as those who speak to young people about alcohol and drug addictions.

McKinnon assured reporters his police force will not be influenced by any outside agency.

"There's no direction from the Crime Stoppers board," McKinnon said. "It will have no effect on any impartiality. All they're doing is raising the funds and providing the officers, and I take it from there."

But there is one small string attached.

In return for that funding, the RCMP has agreed all three new officers will be permanently assigned to follow up on Crime Stoppers tips.
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Postby admin » Mon Jan 09, 2006 4:08 pm

From THE AUSTRALIAN
--------------------------------------------------------------------------------

Print this page
Canada doesn't always get its man, and corporate crims know it
Madelaine Drohan
25nov05

CONRAD Black may live in Canada and run his businesses from the country, but it was US - and not Canadian - authorities that filed charges against the former media baron.

The reason, critics of the Canadian justice system say, is that Canada is soft on corporate crime.
The US practice of parading executives in handcuffs in front of the media - and the stiff sentences for corporate malfeasance handed down by US courts - does not have a parallel in Canada.

Canadian sentences tend to be light, if indeed the case ever goes to court. David Dodge, governor of the Bank of Canada, warned the business community a year ago that Canada was viewed by foreign investors as the "wild west" when it came to securities regulation.

More progress was needed to prosecute white-collar criminals and impose stricter penalties, the central bank governor said.

While some moves have been made to tighten enforcement, there is still a wide gap between the two countries.

Canada recently amended its criminal code to provide tougher sentences for those convicted of corporate crime and instituted new criminal sanctions for insider trading and retaliation against whistleblowers.

However, maximum sentences are rarely imposed. Russel Chamberlain, a Vancouver criminal lawyer whose practice includes corporate clients, says fraud of more than $C5000 ($5775) carries a heavy penalty in Canada.

"However, it is rare for a commercial crime case in this country to carry a sentence of more than two years."

Harder attitudes towards corporate crime in the US have meant that Canadian investors seeking redress often go south to file a case. This is the preferred route of the Ontario Teachers Pension Plan, which manages $C88 billion in assets.

"One of the reasons we do class actions in the US is that we don't have the opportunity in Canada," says Lee Fullerton, the pension group's spokeswoman.

The pension plan is suing Nortel Networks and Biovail Corporation in the US for issuing false and misleading information to shareholders.

A report released in September by KPMG Forensic said Canada was a haven for criminals, partly because of its lenient sentencing of white-collar criminals.

The report, on money laundering, said the banking sector had become more vigilant, with an increase in the number of suspicious cases being reported to the police.

However, the report said law enforcement officials were struggling with the volume of reports and faced difficulties in persuading political authorities to provide necessary resources.

The federal Government recently established integrated teams that bring together federal and provincial officials to investigate corporate fraud.

But the $C30 million program was only approved when the Royal Canadian Mounted Police, the national force that investigates corporate crime, commissioned its own study to prove to the Government that corporate crime cost the economy an estimated $C5 billion a year.

Part of the problem in Canada is fragmented securities regulations - with 13 securities commissions in the country. The 10 provinces and three territories have resisted efforts by the federal Government to create a national regulator that would be more efficient and effective.

Attitude is another problem. In the aftermath of scandals such as Enron and WorldCom, a poll by Compas Research found a majority of CEOs thought Canadian executives were more honest than their US counterparts.

Chamberlain says it would have been far better for Black if he had been tried in Canada, where his chances of ending up in jail "are not very high".
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Postby Donald » Thu Jan 05, 2006 11:56 pm

Lobbyist fraud among public companies in Canada is huge.

http://biz.yahoo.com/ap/060105/lobbyist ... .html?.v=1
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