Spectrum management: black and white low resolution

At a 5000% mark-up, colour may be too expensive for most of us and we will be back to viewing the world in black and white, low resolution and high noise interference.

In Canada, radio airwaves or spectrum, a public resource, is managed by Industry Canada. The Canadian federal government with a $54 billion deficit hopes to gain c. $ 1 billion dollars through its spectrum 10-year licenses auction to cash in on cellphone industry’s astronomical profits (ex. 2006 total revenue $12.7 billion, 2008 total revenues c. 15.9 billion) Was the 2009 spectrum auction a bargain basement for telecommunications giants?

Rogers Communications Inc., Bell Canada Inc. and Telus Corp, Canada’s largest cellphone providers have held spectrum licences for cellphone services in Canada. In 2006 alone Canada’s cellphone industry total revenue was $12.7 billion, 95% of this going to these three companies who- lacking competition- charged higher rates and provided poorer services than services in peer countries. In 2008 the total revenue for Canadian cellphone companies was $15.9 billion and in 2010 cellphone providers Rogers Communications Inc., Bell Canada Inc., Telus Corp, Fido and Virgin charged up to a 5000% mark-up even calculations included technology and overhead costs. Prices were so high and customer service so bad that Marketplace held a “Canada’s Worst Cellphone Bill” contest (Mesley 2010-03-05).

It is no wonder that Rogers Communications Inc. (NYSE: RCI) is listed by Forbes as having Aggressive Growth potential. Should we applaud the growth for Rogers investors or lament the management of the Spectrum commons?

“Spectrum is a catch-all term for the radio airwaves that many wireless gizmos use to communicate information. Radios use spectrum, as do the rabbit-ear antennas on older television sets. The CBC, for example, is broadcast free to many parts of Canada using a part of the electromagnetic spectrum. Cellphones, of course, also use it. Spectrum is divided into different frequencies and measured in units called hertz. The government extracts big revenue from selling spectrum licences to cellphone companies, because those licences are limited while demand is high. Other telecommunications providers would like to offer cellphone services but can’t, because they don’t have a spectrum licence. The auction is expected to earn the government at least $1 billion. A number of smaller regional companies, including Winnipeg-based Manitoba Telecom Services Inc. and Regina-based SaskTel, also have licences and offer cellphone services (Nowak 2008-05-26).

See map of cellphone costs worldwide.

Timeline

1789 Jeremy Bentham “considered protection from harm, as more basic (and an aim of regulation) than provision of enjoyments: “the care of providing for his enjoyments ought to be left almost entirely to each individual: the principal function of government being to protect him from suffering” (Bentham 1789/1948:301, quoted in Shrader-Frechette 1991:285). An assessor’s prima facie (at first sight) duty is to minimise the chance that an unsafe technology is implemented; in order to minimise public risk. This is a value judgement: is it more important to protect the public from harm (hazards from risky technologies, such as cellular towers), than to provide welfare (benefits from new technologies, such as third generation services and better cellular coverage)? The perception and response type I and type II errors in regulation reveal the rationality of the regulator. The research analyses the national
thresholds pertaining to RF human hazards and spurious emissions (Madjar 2008-08).”

1864 to 1873 James Clerk Maxwell (1831-1894), a Scot theoretical physicist, demonstrated that four relatively simple equations could fully describe electric and magnetic fields and their interaction. He described how charges and currents produce an Electro Magnetic Radio wave (Madjar 2008-08).”

1887, in the research laboratory of a young German physicist, Heinrich Hertz, the first radio transmitter began working briefly over a range of just a few metres (Madjar 2008-08).”

1895-05-07. Alexander Popov (1859-1906) demonstrated his instrument for the detection and recording of electrical oscillations (Madjar 2008-08).”

1895-spring In the spring of the same year, Guglielmo Marconi (1874- 1937) took his wireless experiments outdoors and soon discovered that an intervening hill was no barrier to the reception of electromagnetic waves (Madjar 2008-08).”

1987-1991 New Zealand was the first country to apply the Wireless Act in 1903 (one year before the UK); the first RF Auction in the world occurred there in 1989. Neo-liberal ideologues promoted structural adjustment program which was more drastic than that inaugurated by Margaret Thatcher in Great Britain (Herman and McChesney 1997:178-9). Their 1987-1991 auction of UHF spectrum resulted in the acquisition of RF (Herman and McChesney 1997:180) (Madjar 2008-08:47).”

2002 The economist Vernon L. Smith, the laureate of Nobel Prize 2002, published (Smith 1962) that only under perfect competition, the market price establishes equilibrium between supply and demand- at the level, where the value assigned to a good by a marginal buyer is as high as that of a marginal seller (Madjar 2008-08:47).”

Today there are more than 3 billion cellular telephones worldwide.

2007-11 Even though Canada’s cellphone industry made $12.7 billion in 2006, 95% of the total revenue went to Rogers Communications Inc., Bell Canada Inc. and Telus Corp who charged higher rates and provided poorer services than peer countries because of lack of competition (Nowak 2008-05-26)

2008 In 2008 c. 60 % of Canadians subscribed to a cellphone service, subtantially behind the rest of the industrialized world. Countries such as Denmark and Norway where c. 90% of the population are subscribed and rates are much lower (Nowak 2008-05-26)

Instituting special breaks in the auction was the government’s way of spurring competition (Nowak 2008-05-26)

2008 The total revenue for Canadian cellphone companies was $15.9 billion and in 2010 cellphone providers Rogers Communications Inc., Bell Canada Inc., Telus Corp, Fido and Virgin charged up to a 5000% mark-up even when calculations included technology and overhead costs. Prices were so high and customer service so bad that Marketplace held a “Canada’s Worst Cellphone Bill” contest (Mesley 2010-03-05).

2008-08 Haim Mazar Madjar defended his dissertation entitled “An Analysis of Regulatory Framework for Wireless Communications, Societal Concerns and Risk: the Case of Radio Frequency (RF) Allocation and Licensing” at Middlesex University in which he analysed the role of culture and geography in allocation and licensing of the radio frequency (RF) spectrum in different nations. Using an inter-disciplinary approach for example, he explored contrasting risk-management regulatory frameworks/attitudes in the UK, France, US and Ecuador. He summarized and used 3 alternative sociological theories including Mary Douglas et al.’s Cultural Theory (CT) re: categorising countries in terms of perceptual filters. Bounded Rationality (BR) is used to investigate and explain these apparent irrationalities. Rational Field Theory (RFT) showed how beliefs and values guide administrations in RF regulation. Wireless regulation is now divided into two major camps (the EU and the US), which differ in their risk concerns, approach to topdown mandated standards, allocation of RF spectrum to licence-exempt bands and type approval process.

2010-03-04 The Canadian federal government announced its response to the $54 billion deficit which will take the form of $17.6 billion savings (2010-1015) by streamlining and reducing the operating and administrative costs of government departments.

2010-03-04 The Canadian federal budget has confused opposition politicians and industry observers alike as to whether Canada will open its doors to foreign telecommunications companies. The government promised to increase competition and investment in the telecommunications sector, which will lead to greater innovation and lower prices for consumers by removing foreign ownership restrictions on satellites. However, critic Marc Garneau claimed the budget was an overall disappointment in terms of the digital economy as there is no national digital economy plan and future plans include vague allusions to further studies in terms of fast and affordable broadband internet access for all Canadians. Canada was a leader in the digital economy in 2000. Now we are behind other OCED countries. This federal budget promised more on outdoor recreational infrastructure than on high-speed internet in rural areas (Nowak 2010-03-04).

Webliography and Bibliography

Madjar, Haim Mazar. 2008-08. “An Analysis of Regulatory Framework for Wireless Communications, Societal Concerns and Risk: the Case of Radio Frequency (RF) Allocation and Licensing.” PhD Dissertation. Supervisors: Dr. Peter Hough; David Ball; June Burnham. School of Health and Social Sciences. Middlesex University.

Hazlett, T. W.; Munoz, R. E.; Square, V. “A welfare analysis of spectrum allocation policies.” utfsm.cl
“Economic analysis of spectrum allocation policies focuses on competitive bidding for wireless licenses. Auctions generating high bids, as in Germany and the UK, are identified as “successful,” while those producing lower receipts, as in Switzerland and the … “

McMillan, J. 1995. “Why auction the spectrum?” Telecommunications Policy. Elsevier. stanford.edu [PDF]
“Of the alternative spectrum allocation methods — administrative process, lottery, first come first served, and auction — economic theory, as well as various countries’ experiences, show that auctioning works best. As well as raising revenue, an auction assigns licenses to the firms … “

Mesley, Wendy. 2010-03-05. “Canada’s Worst Cellphone Bill.” CBC Marketplace. http://www.cbc.ca/video/#/Shows/ID=1433056621

Noam, E. 1998. “Spectrum Auctions: Yesterday’s Heresy, Today’s Orthodoxy, Tomorrow’s” The Journal of Law and Economics. University of Chicago Press.

Nowak, Peter. 2008-05-26. “Wireless spectrum: Auction of radio airwaves will influence Canada’s prosperity.” CBC News

Nowak, Peter. 2010-03-04. “Budget sows confusion over telecom rules.” CBC News

Davos: Shape of Capitalism to Come: a Beijing Consensus?

One of the questions that surprised veteran New York Times journalist, Thomas L. Friedman, at the 2010 World Economic Forum held in Davos, Switzerland was, “Is the ‘Beijing Consensus’ replacing the ‘Washington Consensus?’ (Friedman 2010-01-30).

The Davos World Economic Forum usually offers accurate indicators of the global mood on its political barometer (Friedman 2010-01-30).

‘Washington Consensus’ is a term coined after the cold war for the free-market, pro-trade, globalization policies promoted by America that by 2010 has evolved into an almost hegemonic system of open markets, floating currencies and free elections that is now under scrutiny for its weak performance on political risk analysis. The United States may very well be monitored as a risk investment climate because of its political instability (Friedman 2010-01-30).

The U.S two-party political system was described by developing countries as in danger of political instability at the Davos Forum as the U.S. administration appears to be unable to deal with health care, infrastructure, education and energy issues (Friedman 2010-01-30).

In his book entitled China’s New Confucianism, (2008-05) Daniel A. Bell explained how in China, Confucianism, Communism and Capitalism are blending. Capitalists can now join the CCP. The reformed Chinese legal system is slowly aligning with the Western legal systems (Chinese businesses are insisting on Chinese laws for arbitration). Bell observes that as China increased its openness to capitalist markets, it appears to be retreating from communism. China is also embracing a new form of Confucianism, evident in efforts made to enhance and encourage civil society in China during the Beijing Olympics. This new Confucianism, Bell suggests, may be a compelling alternative to Western liberalism.

Ramo, Joshua Cooper. 2004-05-11. “Beijing Consensus: The Beijing Consensus: Notes on the New Physics of Chinese Power.” The Foreign Policy Centre: London, UK. Ramo compares China’s shifting ideology to Heisenberg among others, explaining how developing countries look to China as an alternative to the Washington Consensus which focused on molding nation-states into similar malleable entities preparing the ground for market interests to flourish and profit globally.

Who’s Who

The Foreign Policy Centre “is a prominent UK progressive foreign think-tank founded by Robin Cook under the patronage of Tony Blair in 1998 to develop a vision of a fair and rule-based world order. Through our research, publications and events, we aim to develop innovative policy ideas that promote: effective multilateral solutions to global problems; democratic and well-governed states as the foundation of order and development; partnerships with the private sector and NGOs to deliver public goods; support for progressive policy through effective public diplomacy; inclusive definitions of citizenship to underpin internationalist policies.”

Key Concepts

Beijing Consensus According to New York Times journalist Thomas Friedman the “Confucian-Communist-Capitalist” is a “hybrid under the umbrella of a one-party state, with a lot of government guidance, strictly controlled capital markets and an authoritarian decision-making process that is capable of making tough choices and long-term investments, without having to heed daily public polls (Friedman citing Bennhold 2010).” The man who coined the term, Joseph Cooper Ramo “Beijing Consensus”, described it as an alternative to the “Washington Consensus.” According to him, this newer consensus was more attractive to developing countries who wanted recipes for economic growth that did not result in political instability. The Beijing Consensus as dr”: the use of leading-edge high technologies, constant innovation and experimentation, willingness to fail, rejection of a “black hole” GDP indicator, self-determination (as opposed to World Bank/IMF conditions) (Ramo 2004).

Timeline

1984-06-30 Deng Xiaoping spoke with the Japanese delegation to the second session of the Council of Sino-Chinese Non-Governmental Persons. This excerpt is entitled “Build Socialism with Chinese Characteristics.”

2004 Joseph Cooper Ramo coined the term “Beijing Consensus” to describe an alternative to the “Washington Consensus.” According to him, this newer consensus involved: innovation and constant experimentation; rejection of GDP growth above all in favor of sustainability and equality; self-determination (as opposed to World Bank/IMF conditions) (Ramo 2004).

2008-05 In his book entitled China’s New Confucianism, (2008-05) Daniel A. Bell explained how in China, capitalists can now join the CCP; the reformed Chinese legal system more closely aligns with the West and Chinese businesses are insisting on its use Chinese laws in arbitration. Bell observes that China has increased its openness to capitalist markets, retreated from communism and is embracing a new Confucianism. This new Confucianism, evident in the efforts made to enhance and encourage civil society in China during the Beijing Olympics, may be a compelling alternative to Western liberalism.

2008 Before the Beijing Olympic Games China was still considered to be an emerging economy. China seemed to respond positively to the U.S. and E.U. to lift censorship and to cooperate with the West. Efforts were made to enhance and encourage civil society in China during the Games.

2010 The World Economic Forum was held in Davos, Switzerland.

Webliography and Bibliography

Bell, Daniel A. 2008. “From Communism to Confucianism: Changing Discourses on China’s Political Future.” China’s New Confucianism: Politics and Everyday Life in a Changing Society. Princeton University Press. pp.3-18.

Bennhold, Katrin. 2009-01-27. “Is Europe’s welfare system a model for the 21st century?” New York Times.

Bennhold, Katrin. 2010-01-27. “As China Rises, Conflict With West Rises Too.” New York Times.

Deng Xiaoping. 1984-06-30. “Build Socialism with Chinese Characteristics.“

Friedman, Thomas. 2010-01-30. “Never Heard That Before.” New York Times. Davos, Switzerland.

Gibney, Frank B.; Lin, Paul T. K. et al. 1979-11-26. “We can develop a market economy under socialism.”

Jessica Li, Jessica; Madsen, Jean. 2009-04. “Chinese workers’ work ethic in reformed state-owned enterprises: implications for HRD.” Human Resource Development International, 12:2:171-188.

“Work ethic, as the construct of work-related values and attitudes, directly affects employees’ job performance. Work ethic subjects to the influence of business and social practices. China is in the mix of major economical and political transformation, although little is known about how work ethic has changed for Chinese workers since the economic reform first initiated in 1979. This study is designed to examine work ethic currently held by workers of Chinese state-owned enterprises (SOEs). Findings revealed work ethic perceptions based on the multidimensional work ethic profile (MWEP), a Western work ethic profile, and the Confucian work ethic (CWE), an Eastern work ethic profile, resulted in similarities but often lived different life styles. Differences: perceptions of hard work, self-reliance, centrality of work, education, use of time, delay of graduation. Other MWEP concepts were very similar to Chinese workers’ work perceptions.”

Ramo, Joshua Cooper. 2004-05-11. “The Beijing Consensus: Notes on the New Physics of Chinese Power.” The Foreign Policy Centre: London, UK.

Folksonomy

Content saved to PC .txt files under

Links saved to my bookmarks under folder > subfolder

Linked to other Web 2.0 tools

Digg, delicious, google docs, Google customized maps, social media, Flickr, picasa, slideshare, my social history timelines,

Canada’s Northern Edge: PetroChina Investing in Oilsands

Draft! My Google Map entitled Oil Sands, delicious, papergirls, EndNote, YouTube, Draft!

See also

Places of interest:
MacKay River: In the story on The difference is spelling of McKay in Fort McKay and MacKay River is confusing. Is McKay River (known locally as Red River) the same river as MacKay River? Where is Devon?

National Geographic suggests the potential worth of the Alberta oil sands is $80 trillion.

See also

Notes

Bitumen is basically oil-soaked sand.

Timeline

1965 Karl Clark, a patient chemist, took 45 years to perfect a hot-water process in which bitumen frothed to the top and sand settled to the bottom. He used his wife’s washing machine. In 1965 the Great Canadian Oil Sands Company (now Suncor) ran the first commercial application of Clark’s hot-water process producing 45,000 barrels a day. In order to create the mine to feed the hot-water process, thousands of trees were bulldozed (Nikiforuk 2008).

1976 The Canadian Council of Chief Executives (CCCE) founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development.

1997 Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China.

2002 Suncor began producing oil at MacKay River in 2002, while Firebag stages 1 and 2 began producing oil in 2004 and 2006 respectively. The sequence and timing of additional stages of Firebag and a potential expansion of the MacKay River facility will be considered as part of a review of oil sands growth projects.

2006 “In 2006, more than 100 of Canada’s public companies were acquired by foreign interests. The list includes some of the oldest and most well-established companies across a broad spectrum of industries – everything from hotels to retailing, to metals and mining. And the trend continues. I sometimes worry that we may all wake up one day and find that as a nation, we have lost control of our affairs. I think we ought to have a vigorous debate about the extent to which it matters whether or not ownership of our economy resides in Canada. I believe that ownership matters a lot. It matters not only for economic reasons but, more importantly in my opinion, for our own sense of self-esteem and pride in our country. My concern is not rooted in any chauvinism or in any antipathy towards foreign investment. Far from it. I happen to believe that globalization is a very positive development and that trade and investment across borders is to be encouraged. Canada benefits mightily from being “open for business” and we mustn’t do anything to change that. My concern stems from the fact that the world is awash with capital and that the consolidation trend in many industries will inevitably continue. We are a small country with a relatively small population. Canadian companies typically are not of a size to be global players. All too often, decisions affecting the future of important firms and the communities that they sustain are made solely with a view to the short-term financial consequences. I find it particularly bothersome that so many of our natural resource companies – which I would argue represent unique and irreplaceable assets – are now owned elsewhere. So what are some actions that we might consider taking? Well, what if we were to consider the feasibility of adopting ownership restrictions for certain sensitive sectors of our economy that would be similar to those that now apply to our financial institutions? After all, I would argue that it is a demonstrable fact that public policy regarding the ownership of our banks and insurance companies has served the country well; there is no shortage of competition in the financial services sector and the services available to Canadians are as comprehensive and as affordable as exist anywhere in the world. Securities regulation is another area where some useful debate could be undertaken. Many feel that Canada now has the most bidder-friendly environment in the world and that this may not always be in our country’s best interests. Under our rules, shareholder rights plans – also known as takeover defenses or “poison pills” – fall away after a very short 60 or 90 days, leaving the target company’s board with far too little time in which to explore alternatives. I believe that it is important for us as Canadians to have companies based here that are global leaders (D’Alessandro 2007-05-03).”

2005-11-18 “CEO Mission to China Builds on Canada’s Strategic Partnership with the World’s Largest Emerging Market.” Seventeen senior business leaders representing a wide swath of the Canadian economy will arrive in Beijing on Sunday for a five-day mission to further the development of stronger trade and investment ties between Canada and the People’s Republic of China. Organized by the Canadian Council of Chief Executives (CCCE), the mission marks the first purely private sector visit to China by a broadly based group of chief executives from among Canada’s largest enterprises. “Since the Council several years ago designated China as a country of the highest strategic importance, we have continued to seek opportunities to build an ever-broader foundation of mutual trust and fruitful bilateral cooperation.” The mission is led by Mr. d’Aquino and Richard L. George, Chairman of the CCCE and President and Chief Executive Officer of Suncor Energy Inc. Other participants include the CEOs of AGF Management Limited, Bentall Capital LLP, Brookfield Asset Management Inc., Canadian Oil Sands Limited, CanWest Global Communications Corp., Enbridge Inc., Harvard Developments Inc., Palliser Furniture Ltd., Pengrowth Management Limited, Petro-Canada, Polygon Homes Ltd., Power Corporation of Canada and Yanke Group of Companies. The CEO mission to China follows the recent establishment of the Canada-China Strategic Partnership by the Right Honourable Paul Martin, Prime Minister of Canada, and His Excellency Hu Jintao, President of the People’s Republic of China. The Partnership, which was announced during President Hu’s visit to Ottawa in September, represents a watershed in relations between Canada and China, encompassing a wide range of bilateral and international areas. China is Canada’s second-largest trading partner, after the United States. The Canadian and Chinese governments have pledged to double bilateral trade within five years, to about $60 billion a year by 2010. The Canadian CEOs will spend three days in Beijing followed by two days in Shanghai. The agenda includes meetings with senior officials of the Ministry of Foreign Affairs, the Ministry of Commerce, the National Development and Reform Commission, China International Capital Corporation, the China Securities Regulatory Commission and CITIC Group. “The emergence of China as a world economic power is opening up huge trade and investment opportunities for Canada,” Mr. d’Aquino said. “The Canadian Council of Chief Executives is committed to working closely at home and abroad to transform opportunity into success.” The CCCE, founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development. In addition to Mr. d’Aquino and Mr. George, the members of the CCCE’s Executive Committee are: Honorary Chairman A. Charles Baillie; and Vice-Chairmen Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Gwyn Morgan and Gordon Nixon, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., EnCana Corporation and Royal Bank of Canada.

2009-09-01 “In a blockbuster [tentative] deal, privately owned Athabasca Oil Sands Corp. said PetroChina International Investment Co. Ltd. will buy a majority stake in its operations for $1.9 billion, marking the largest venture by China in the Canadian oilsands to date. [This is still to be reviewed by federal Industry Minister Tony Clement under the Investment Canada Act to evaluate the transaction's net benefit to Canada.] Athabasca Oil Sands said the state-owned firm, one of the world’s most valuable oil and gas companies, will acquire a 60 per cent working interest in the MacKay River and Dover oilsands projects. “This deal shows that the biggest energy company in the world has chosen Athabasca as their partner,” chief executive and president Sveinung Svarte said in a conference call Monday. ” They clearly told us that’s because they like our assets the best and, obviously, they (the oilsands) are the crude oil story.” The two in-situ projects sit on approximately five billion barrels of bitumen that have yet to be developed, and are part of Athabasca’s almost 10 billion barrels of bitumen reserves. The play is one of the largest in the Athabasca region:about 121,400 hectares. “The reason we chose PetroChina over other some of the other bids was, obviously, their financial strength,” chairman Bill Gallacher said. “But also their technological capabilities related to heavy oil and(steam assisted gravity drainage), which we believe will benefit our project both efficiency-wise and production-wise (O’Meara 2009-09-01.”

Who’s Who

Bill Gallacher is Chair of the privately-owned Calgary-based Athabasca Oil Sands Corp which made a blockbuster deal with state-owned PetroChina International Investment Co. Ltd. -one of the world’s most valuable oil and gas companies- who will acquire a 60 per cent working interest for $1.9 billion in the MacKay River and Dover oilsands projects which Athabasca Oil Sands Corp will continue to operate, marking the largest venture by China in the Canadian oilsands to date. company said the projects, which it will continue to operate, will cost between $15 billion and $20 billion to develop. It has filed for provincial approval for both projects and intends to file an application for the first 35,000-barrel-per-day phase of MacKay River at the end of the year [. . .] Athabasca Oil Sands said it had notified federal and provincial officials on the proposed Chinese investment, which would make the foreign entity a majority stakeholder in the oilsands projects. Gallacher did not anticipate any issues to arise from the Competition Bureau on the deal. (O’Meara 2009-09-01.”

Canadian Council of Chief Executives (CCCE), the mission marks the first purely private sector visit to China by a broadly based group of chief executives from among Canada’s largest enterprises. The (CCCE) founded in 1976, has been Canada’s private sector leader in the promotion of international trade and investment liberalization. The members of the CCCE include the chief executive officers of 150 leading Canadian corporations. These companies collectively administer close to $3.0 trillion in assets, have annual revenues of more than $650 billion and account for a significant majority of Canada’s private sector investment, exports, training and research and development. Among other initiatives, the CCCE organized and hosted the first-ever APEC (Asia- Pacific Economic Cooperation) CEO Summit in 1997, during which it received His Excellency Jiang Zemin, then-President of China. “Many of our members have friendships and commercial relationships in China stretching back years and in some cases decades,” said CCCE Chief Executive and President Thomas d’Aquino.

Thomas d’Aquino is “President and Chief Executive of the Canadian Council of Chief Executives. He has been described by Peter C. Newman as “the most powerful influence on public policy formation in Canadian history”, and listed by historian Jack Granatstein as one of the 100 most influential Canadians of the twentieth century. A prolific writer and speaker, he has worked as special assistant to the Prime Minister, special counsel on international trade law and international advisor on strategic business problems (Northern Edge).”

David Stewart-Patterson is the “CCCE’s Executive Vice President. He is also the author of Post Mortem: Why Canada’s Mail Won’t Move, described by the Financial Post as “rather like reading a less gentle version of one of Studs Terkel’s oral histories”. A former journalist, he has worked as parliamentary correspondent for The Globe and Mail‘s Report on Business and as business editor for CTV’s Canada AM (Northern Edge).”

Northern Gateway project The multi-billion dollar proposed Enbridge Northern Gateway Project to transport 400,000 barrels of oil sand production involving a new twin pipeline system running from the oilsands in Alberta, to a new marine terminal in Kitimat, British Columbia to export petroleum and import condensate. In 2005-04-14 Enbridge CEO Patrick D. Daniel announced that Enbridge had entered into a memorandum of understanding with PetroChina International Company Limited to cooperate on the development of the Gateway Pipeline and supply of crude oil from Canada to China. Daniel noted that the agreement with PetroChina was built on the favourable environment for trade between Canada and China which was cultivated by [former] Prime Minister Paul Martin, and the efforts of [former] Alberta Premier Ralph Klein to stimulate Chinese interest in the oil sands.” The project was shelved in 2006 when the market cooled. By 2009 as China’s thirst for energy and need to secure supply has increased perhaps the Northern Gateway Project might be reconsidered ( (O’Meara 2009-09-01).”

Enbridge Enbridge Inc. is involved in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world’s longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada’s largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,000 people, primarily in Canada, the U.S. and South America. Enbridge’s common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the U.S. under the symbol ENB. Information about Enbridge is available on the Company’s web site at www.enbridge.com. Enbridge proposed the Northern Gateway Project and is involved in internal pipeline inspection and invests heavily in innovative leak detection technology. Enbridge has a computer system that can electronically monitor pipelines 24/7 from the Enbridge operations control centre. They also promise to put in safety control valves and leak detection systems to provide a strong safeguard for the environment.”

Andrew Nikiforuk published Tar Sands: Dirty Oil and the Future of a Continent with Vancouver-based David Suzuki Foundation-Greystone Books in 2008 in which he argues that, “Canadian taxpayers, who made $150 million [Canadian] in royalties from mining activities between 1966 and 2002, have spent more than $4 billion tidying up scores of contaminated sites…” (2008:100)..

Webliography and Bibliography

D’Alessandro, Dominic. 2007. “How can we preserve Canadian ownership?” Perspectives: 8.

d’Aquino, Thomas and David Stewart-Patterson. Northern Edge: How Canadians Can Triumph in the Global Economy.

Gelsi, Steve. 2009-09-01. “Energy stocks fall hard as broad market weighs.” MarketWatch. Issue:

O’Meara, Dina. 2009. “China’s $1.9B Alberta oilsands deal: PetroChina partners with Athabasca Oil Sands.” Calgary Herald.

RTTNews. 2009. “PetroChina To Acquire 60% Stake In Two Athabasca Oil-Sands Projects For US$1.7 Bln – Update.”

Nikiforuk, Andrew. 2008. Tar Sands: Dirty Oil and the Future of a Continent. Vancouver: David Suzuki Foundation-Greystone Books.

Unprecedented economic and financial crisis reshapes thoughts on trust and integrity

Governing Board of the European Baha’i Business Forum (EBBF). 2009-06. “An Ethical Perspective on Today’s Economic Crisis: A statement from the European Baha’i Business Forum.”

“The world is passing through an economic and financial crisis unprecedented in modern times. Its global scope transcends the cyclical adjustments of national economies and the corrective instruments usually used by business and national governments. The general malaise and loss of confidence point to deeper issues and more fundamental flaws in the economic system, extending to a crisis of leadership and values. This unprecedented crisis, together with its accompanying social breakdown, reflects a profound error of conception about human nature itself. We are being shown that, unless the development of society finds a purpose beyond the mere amelioration of material conditions, it will fail to attain even this goal. That purpose must be sought in spiritual dimensions of life and motivation that transcend a constantly changing economic landscape and an artificially imposed division of human societies into “developed” and “developing”. The European Baha’i Business Forum recognizes in this situation an opportunity to reshape the fundamental concepts and structures that will not only lift us from this crisis but set us on a road towards a new set of institutions and behaviours which will enable humankind to prosper. As the present crisis is fundamentally one of trust and integrity, and therefore ethical in its foundation, its solution cannot be a mere institutional reorganization or some additional regulatory measures. It needs an ethical response at all levels: the individual, the corporation and the government and regulatory entities. There is no quick fix to this situation. Several principles must be considered while reshaping our thinking on institutions and the individuals that compose them. We need to replace the concept of self-centred materialism with that of service to humanity, competition with cooperation, corruption with ethical behaviour, sexism with gender balance, more authoritarian legislation with personal ethics, national regulation with international supervision, protectionism with world unity, and injustice with justice. EBBF promotes and welcomes engagement with the widest possible community to develop together the new framework. Given the importance of the business community in the world, we should draw on its special capabilities and resources, in collaboration with governments, international organizations and NGOs, to design the institutional framework and the guiding principles of the new economic system. We call on peoples from all businesses, countries, and walks of life to work together to build a new economic system based upon equity and justice (EBBF 2009-06).”

Who’s Who

“EBBF is a network of over 400 women and men, a community of people passionate about bringing ethical values, personal virtues and moral leadership into their workplaces. Its membership is diverse and crosses generations, borders, sectors and beliefs. It began in 1990 and is now present in over 60 countries. EBBF’s vision is to enhance the well-being and prosperity of humankind. It believes that positively influencing the world of business, starting from the inspiration of action by each of its members, is an important step in this direction (EBBF 2009-06).”

Notes

“EBBF promotes seven core values that it feels are of strategic importance in enhancing business performance: Business Ethics, Corporate Social Responsibility (CSR), Sustainable Development, Partnership of Women and Men, A New Paradigm of Work, Consultation in Decision-Making, Values-Based Leadership (EBBF 2009-06).”

Webliography

Governing Board of the European Baha’i Business Forum (EBBF). 2009-06. “An Ethical Perspective on Today’s Economic Crisis: A statement from the European Baha’i Business Forum.” Chambery, France.

Grisham’s Social Issues Wrapped around a Novel

Will John Grisham’s legal drama The Appeal (2008) join other literary works like Upton Sinclair’s political fiction novel The Jungle (1906) and Rachel Carson’s literary broadside Silent Spring (1962) [1] in influencing changes in real world legislation? In his PhD dissertation Gordon (2008) argued that literary works such as those by Harriet Beecher Stowe, Karl Marx, Ralph Nader, Jonathan Swift, Upton and Carson, serve as legislative flash points and have had a demonstrable impact on the law.

Grisham’s writing is clearly popular fiction and he has enjoyed writing books with no redeeming social value like The Broker, but he now wants to tackle social issues (Grossman 2006.) He has fierce political convictions and admitted that, “Everything I’m thinking about writing now is about politics or social issues wrapped around a novel.” He admires the work of Truman Capote, John le Carré and John Steinbeck whom he would like to emulate. So is The Appeal also an appeal to reason [2]? 

John Grisham’s legal drama/legal thriller/crime novels deal with the power and influence of major US corporations in America and their potential for abusing the American legal system. Previous novels concluded with the victims being vindicated and giant corporations paying huge rewards for damages to personal health and to the environment. But in 2006 there was already a shift when he published his first book of nonfiction, a true-crime story entitled The Innocent Man.

The Appeal (2008) is the most openly political book he has written in which he probed the world of US judicial elections, a burning issue in the US (AF-P 2008). The debate over the best way for states to select judges is more than 160 years old. According to Wall Street Journal’s Levy, within days of the release of The Appeal, “critics of judicial elections began to connect it to examples of real-life corruption. Mr. Grisham himself says his story has “already happened” in West Virginia. Others have tried to link the book’s intrigue to next month’s Supreme Court election in Wisconsin, where a controversial judge is facing a strong challenge for re-election, helped in part by business groups. Mr. Grisham has plenty of allies in his crusade among liberal interest groups, who insist that judicial elections somehow represent a blight on the rule of law  (Levy 2008-03-20).”

In The Appeal fictional Wall Street financier Carl Trudeau, launched his appeal against plaintiffs from cancer county where his company had dumped toxins for years, to the Mississippi Supreme Court. Then he stacked the Court by funding an unknown to run against incumbent Court Justice Sheila McCarthy. Trudeau flooded media with ads designed to vilify Justice McCarthy as an extremely liberal judge who would protect criminals not citizens and would restrict gun ownership. Trudeau’s campaign allowed Fisk to win the election. Grisham in the telling of this fiction, practically laid out a formula for CEOs, corporate lawyers and politicians to overpower and ruin ordinary citizens while enjoying financial huge gains. The characters are highly stereotyped with lawyers and CEOs who are clearly the bad guys in this story. 

The mysterious, expensive consultant Barry Rinehart works quietly in the background using financing from from industries like energy, insurance, pharmaceuticals, chemicals, timber, all types of manufacturing as well as doctors, hospitals, nursing homes and banks, to target supreme court justices whose values differ from these special interest groups. He engineers the fixing of elections so the unfriendly judges lose to their own groomed judicial candidate. (31 states elect their appellate and supreme court judges while the remaining states appoint their courts.)  ”To Grisham, that is the sad truth: No one’s justice will be served. While chilling, Grisham’s tale of modern legal machinations is also, unfortunately, timeless (Patrick 2008-01).”

 ”Literature—even persuasively powerful literature—does not operate in a void: conditions must be ripe if it is to draw energy from the social milieu and thereby attain a kinetic force capable of influencing the law. This [...] requires an alignment of narratives: the literary narrative with the larger cultural narrative within which it subsists (Gordon 2008:41).”

Tagging

law and literature movement, dedicated interest groups, big-money politics, Amicus-Curia, Plaintiff’ Paradise, judicial hell holes, consumer-friendly, Cancer County, cancer cluster, pulpit for reform, real world politics, US legal system, vexatious corporate litigation, senior academic lawyers, appelate benches of the Federal Appeal Circuit and the Supreme Court, M$ anti-trust investigations, Anti-Trust suit compliance issue, proven complicity, meritless SCO litigation, Patent and Copyright systems, East Texas fiasco, legal corruption, amicus-curia briefs, Commerce and Justice, Economic Crisis, US corporate malfeasance, US corporate greed, US corporate lack of transparency, tort, Rylands rule, Fletcher v. Rylands, Johnstown Flood, 

Timeline of related events

1860 One of the wealthiest industrialists in England, John Rylands, a textile manufacturer, hired a contractor to dig a large ditch and create a reservoir to add water power for one of his mills. The reservoir collapsed into an abandoned coal-mining shaft which connected to Thomas Fletcher’s neighboring coal mines. The reservoir flood destroyed those mines. (Wiki, Shugerman 2008)

1865 Fletcher v. Rylands, 159 Eng. Rep. 737, 740. The dispute in Rylands concerned escape of water onto neighbouring land. Later cases in which the Rylands test was applied involved the escape of all manner of wastes and materials, extending outwards to a broad range of inherently dangerous activities considered essential to modern life. The Court found in favour of Fletcher and ordered Rylands to pay for all the property damage to the mine. The Court agreed that Rylands had a duty in maintaining the reservoir and of being liable for all harm caused by it with broad scope of liability. This case was a major development in modern law and has influenced many subsequent rulings. The changes in negligence law as a field of torts has in some jurisdictions incorporated the Rylands rule. (Wiki, Shugerman 2008)

1889-05-31 In the mountains east of Pittsburg, a dam holding back a 450-acre artificial recreational lake, one of the largest reservoirs in the world, collapsed unleashing 20 million tons of water into the valley below, completely destroying Johnstown and killing two thousand people. The elite members of the South Fork Fishing and Hunting Club, titans-of-industry including Andrew Carnegie, Andrew Mellon, and Henry Clay Frick (also called the Bosses Club) ignored the dam’s crumbling foundation, warnings of structural problems and leakage. It was one of the most deadly disasters in American history. The public focused its anger on the South Fork Club and its wealthy members, and the media called on the club members to compensate the Johnstown victims. Before the Flood, the court emphasized the “great public interest” of industry’s unfettered development, and dismissed the “mere personal [and] trifling inconveniences” that were caused by industrial damage, and which must “give way to the necessities of a great community.” (Shugerman 2008.)

1890s There was a rise of populists as critics of industry’s excess in the 1890s and ruling leaned towards Fletcher against Rylands (Shugerman 2008.)

1980s- US Supreme Court Judicial elections became increasingly nasty, noisy, and costly (Pozen 2008:265).

1981 John Grisham (born 1955) graduated from law school.

1988 The Willie Horton ad from the 1988 presidential race was considered to be offensive and race-bating.

1981-1991 John Grisham practiced law for nearly in Southaven, specializing in criminal defense and personal injury litigation.

1983-1990 John Grisham served in the state House of Representatives.

1984-1987 Grisham wrote his first novel A Time to Kill (1987) in his spare time exploring the theme of what would have happened if the girl’s father in a real trial had actually murdered her assailants. “After four years of practicing I got this idea for what I thought was a very compelling courtroom drama – small town, the South, a racial conflict – all seen through the eyes of an attorney who was basically me. A guy who wanted to be a big trial lawyer. That was my dream. I wanted people to call me – people who could pay me for the big case (Grisham in Slater 2009-01-27).”

1991 John Grisham’s novel, The Firm, was one of the biggest hits of 1991, spending 47 weeks on the New York Times bestseller list. Grisham gave up law and concentrated on writing. All his books have been bestsellers and six have been made into movies. Grisham lives with his wife and two children in Mississippi and Virginia.

1993 “Investor and philanthropist George Soros in 1993 created OSI as a private operating and grantmaking foundation to support his foundations in Central and Eastern Europe and the former Soviet Union. Those foundations were established, starting in 1984, to help countries make the transition from communism. OSI has expanded the activities of the Soros foundations network to encompass the United States and more than 60 countries in Europe, Asia, Africa, and Latin America. Each Soros foundation relies on the expertise of boards composed of eminent citizens who determine individual agendas based on local priorities (OSI).”

1999  Tabarrok and Helland investigated “the forces that explain why trial awards differ across the United States. In 23 states judges are elected and in 10 they are elected via partisan elections. Elections have two important effects. First, defendants are often out‐of‐state nonvoters while plaintiffs are typically in‐state voters. [They] predicted, therefore, that elected judges will redistribute wealth from out‐of‐state businesses to in‐state plaintiffs. Second, the realities of campaign financing require judges to seek and accept campaign funding from trial lawyers, who uniformly are interested in larger awards. [They]  hypothesized that these two forces cause awards to be larger in states where the judiciary is elected rather than appointed. [They]  also hypothesized that the demand for redistribution will increase as poverty increases and, thus, that awards will be larger in states with greater poverty. Using a sample of over 7,000 cases across 48 of the 50 states, [they]  found significant evidence in support of these hypotheses ( Tabarrok and Helland 1999-04).”

1994-2000 “By most measures, Grisham was the most successful novelist of the 1990s, when he sold over 60 million books. For seven straight years, 1994-2000, he had the best-selling novel in the country (Grossman 2006 ).”

2004 Swift boating refers to smear tactics used during the US Presidential campaign against candidate John Kerry. Vietnam veterans who served on the US Navy’s swift boats mounted a smear campaign to oppose Kerry who was a swift boat commander in Vietnam but was later allegedly involved in antiwar activities. 

2005-02-18 President Bush signed the Class Action Fairness Act of 2005. This pushed for by business and Republican leaders since President Bush took office in 2001. It targeted consumer-friendly “Plaintiff’ Paradise” courts also termed “judicial hell holes” by corporations being libeled in mutiple-state class action suits (like those in Madison and St. Clare in Illinois and Jefferson County, Texas accused of being pro-consumer). Texas. Those “judicial hell holes,” and others in Alabama and Mississippi, are the favorite venues for some in the plaintiffs’ bar because of consumer-friendly juries and elected judges who routinely certified national classes and apply their state law and/or the laws of other states. Such cases after 2005 ended up in federal court, where corporate defendants tend to do better (O’Brien 2005).

2007 US Supreme Court Justice Annette Ziegler was publicly reprimanded for a conflict-of-interest violation.

2007 Harvard Law School’s Shugerman’s paper entitled “The Twist of Long Terms: Disasters, Elected Judges, and American Tort Law” was selected for the Yale-Stanford Junior Faculty Forum and the Conference on Empirical Legal Studies, New York University. “The received wisdom is that American judges rejected strict liability through the nineteenth and early twentieth century. To the contrary, a majority of state courts adopted Rylands v. Fletcher and strict liability for hazardous or unnatural activities after a series of flooding tragedies in the late nineteenth century. Federal judges and appointed state judges generally ignored or rejected Rylands, while elected state judges overwhelmingly adopted Rylands or a similar strict liability rule. In moving from fault to strict liability, these judges were essentially responding to increased public fears of industrial or man-made hazards. Elected courts were more populist: They were more likely to adopt strict liability than appointed courts. But surprisingly, state courts elected to longer terms were the most populist. Many of these judges never expected to face another election, but even without direct political pressure, they were the most responsive group of judges in adopting Rylands after the floods. This historical episode illuminates the differences between types of political influence on judges. Judicial elections generally may produce judges more sympathetic to public opinion and more responsive to recent events. Longer terms, shielding judges from opposing political pressure from industry favoring the fault rule, then allowed judges to follow those sympathies or new perceptions of public interest in favor of strict liability. The historical record suggests that judicial elections plus long terms shaped a more responsive bench. A shorthand for these effects are: filtering, role fidelity, and fear and favor. First, these elections created a populist filter: Elections seemed to have filtered out some elite jurists from major urban centers and filtered in more local lawyer-politicians, who would be more connected to public opinion. Second, borrowing from the language used by nineteenth-century advocates of judicial elections and by modern historians, I suggest that the elected judges’ “fidelity” to the people led them to perceive public opinion as an important factor in their decisions. Even with filtering and role fidelity, judges elected to short terms would still face the reality of “fear and favor,” due to special interests and partisan renomination politics. Elected judges with more job security could be more faithful to their role (hence, “role fidelity”) and could follow their own perception of public interest or public opinion, rather than industrial interests. The Article concludes with some priorities for judicial reform based upon this historical episode.”

2008-01 Grisham noted that there was a lot of truth in The Appeal. ”As long as private money is allowed in judicial elections we will see competing interests fight for seats on the bench.” The Appeal was published in the midst of the presidential primaries making it all the more compelling (Memmott 2008).

2008 “In John Grisham’s new novel, Mississippi judges are bought, marketed and sold.  In a crowded courtroom, a jury delivers a multi-million-dollar verdict against a chemical company accused of tainting a town’s water supply with waste. The chemical company retaliates with an appeal, but in order to win, it rig the state Supreme Court. As judicial elections loom, the company hand picks an unsuspecting judge and manipulates him for the job. In The Appeal, Grisham provides a cautionary tale about judicial elections and political campaigns in general. Like the so-called “swift-boating” of political candidates in the last presidential election, Grisham’s characters resort to harsh smear tactics to defeat their opponents. Jacki Lyden spoke with Grisham about his novel, judicial politics and his personal political engagement. In a crowded courtroom in Mississippi, a jury returns a shocking verdict against a chemical company accused of dumping toxic waste into a small town’s water supply, causing the worst “cancer cluster” in history. The company appeals to the Mississippi Supreme Court, whose nine justices will one day either approve the verdict or reverse it ( All Things Considered).”

2008-03-18 Citizen Action of Wisconsin, a progressive citizen advocacy group dedicated to bringing transparency to the electoral system, filed a compliant against Michael Gableman with the Wisconsin Judicial Commission claiming the little-known county judge from Burnett County in northwestern Wisconsin used attack ads that were “highly offensive and deliberately misleading” against Incumbent Justice Louis Butler claiming he found a “loophole” to free a convicted sex offender.” The ad placed a picture of a convicted rapist and Supreme Court Justice Louis Butler on the screen at the same time. Both are black. Butler handled the man’s appeal of his rape conviction when he worked as a public defender.

2008-04 “Challenger Michael Gableman defeated incumbent Justice Louis Butler to win a seat on the Wisconsin Supreme Court in Tuesday’s election. The results mean that a sitting Supreme Court justice won’t return to the bench for the first time in 40 years. The interest in the race by special interests is troubling to some, including the unseated justice, WISC-TV reported. Third-party TV ads were a centerpiece of one of the most negative Supreme Court races in state history (Channel 3000).”

2008-10 “The Wisconsin Judicial Commission alleges Supreme Court Justice Michael Gableman violated the code of judicial conduct, which prevents judicial candidates from knowingly misrepresenting facts about their opponent. Gableman’s campaign ran an ad in the Milwaukee area before the April election against Incumbent Justice Louis Butler claiming he found a “loophole” to free a convicted sex offender.” Gableman defeated incumbent Justice Louis Butler in the April election. At the time, Gableman was a little-known county judge from northwestern Wisconsin. Citizen Action of Wisconsin, a progressive citizen advocacy group dedicated to bringing transparency to the electoral system, filed the compliant with the Wisconsin Judicial Commission on March 18. One local government watchdog group said fallout from recent Supreme Court campaigns is cause for concern.Channel3000

2008 Soros’ Open Society Institute made donations to dozens of groups seeking to sway the judicial selection process in states from Illinois to North Carolina, as well as funding national groups like Justice at Stake. According to Levy of the right-wing Wall Street Journal Soros and Grisham prefer “merit selection” where in order to keep politics out of judicial appointments, an appellate judicial commission selects a slate of judges from which the governor must choose. Right-wing critics argue that judicial commissions can also become agents of politicization leaning towards to left. Levy cited a 2007 “Harvard study” supporting his own views on an elected judiciary. The 2007 Harvard study mentioned by Levy was actually a paper presented at a Junior Faculty Forum based entirely on a historical analysis of how judges in the 19th century responded to Rylands (1865-). Given the complexity of the 21st century surely there are better sources for evaluating the strengths and weaknesses of merit selection versus elected judiciary. Grisham is merely drawing attention to potential areas of corruption and the lack of information available to civil society by using popular culture.

 

2008-12-08  US Federal authorities in New York arrested Marc S. Dreier in a $100 million fraud scheme, portraying his recent undertakings as a massive hedge fund fraud. The Yale graduate who 1996 founded the Dreier L.L.P. 250-lawyer firm in 2006 allegedly took advantage of the current financial crisis by selling phony debt to hungry hedge funds looking for deals. (Rashbaum and Kowan 2008-12-08). 

2009-01 In a 2008 statewide survey entitled ”Public Attitudes Regarding the Selection of Judges in the State of Washington“ funded in part by Open Society Institute Professors Brody and Lovrich reported that,

“A little over 26% of respondents rated Washington’s current, non-partisan election method of judicial selection as good or very good, while 35% rated it bad or very bad; The largest areas of concern about the current method of selecting judges involved the lack of contested elections, the prominence of judges being appointed to the bench, and the lack of information available to voters to use in judicial elections; A little over 60% of respondents rated a commission system (merit system) of judicial selection to be good or very good, while roughly 16% rated such a selection system as bad or very bad; The aspects of the commission system viewed most positively were: (1) the use of a nominating commission as part of the appointment process; (2) the fact that retention elections provide voters with the opportunity to vote for or against all judges at regular intervals; (3) the fact that all judges may be held accountable by voters without the need for a person to run against a judge in a contested election; and (4) that judges always appear on election ballots at regular intervals; When asked to choose between the current system or a commission system of judicial selection, over 60% indicated a preference for adopting a commission system while about 23% preferred staying with the current system; Over 90% of respondents would support the development of a judicial performance evaluation program in Washington to provide information to voters about candidates in local and statewide judicial elections.”

2009-01-27 Wall Street Journal’s Dan Slater interviewed John Grisham to talk about his 22nd book. Grisham revealed that his favorite story was that of  Marc Dreier. “[I]t’s incredible. Pretending to be someone else? Taking over a conference room? I knew something was wrong when I read about his 120-foot yacht. When you’ve got a yacht that big you’re living like a billionaire. And you can’t do that as a New York lawyer. I don’t care how big your firm is.” Grisham explained that even as a writer of fiction that he could not improve on the real life stories of Dreier and Madoff. They have already been covered too much by the media. “The sushi restaurant (Dreier) owned? All the cars? The secretaries making $200,000 a year? It’s too much. When I see stuff like that my imagination just goes into overdrive (Grisham interviewed by Slater 2009-01-27).”

Notes
1. Randy Gordon’s PhD dissertation (2008) examined the impact of literary works on rehumanizing law and democracy. Gordon reiterated the argument that there “is a direct and demonstrable connection between publication of The Jungle and adoption” of the 1906 Meat Inspection Act and the Pure Food and Drugs Act (Gordon 2008:41). Historian James Harvey Young (1981) observed that two key political figures, James R. Garfield and Senator Alfred J. Beveridge presented President Theodore Roosevelt with Sinclair’s novel. Gordon also added that other landmark legislation in the meat packing industry book decades to be adopted. President, John F. Kennedy asked his Scientific Advisory Committee to investigate Carson’s claims and they largely vindicated Carson’s work (1963-05) particularly in the report’s condemnation of indiscriminate pesticide use and call for additional research into potential health (Gordon 2008:52).

2. Author and journalist Upton Sinclair’s influential novel entitled The Jungle (1906) about the corruption of the American meatpacking industry is an example of how fiction portrayed social reality and is an early example of is one of the finest examples of the “muckraking” tradition begun by journalists. In this novel Sinclair contrasted the lives of the “have-nots” and “haves” and deplored American “wage slavery”. Sinclair’s novel was first published in the left-wing newspaper The Appeal to Reason.

3. “Law is institutional normative order (MacCormick 2007).”

4. “The rhetoric of scientific objectivity, pressed too hard and taken too seriously, has led us to people like B.F. Skinner on the one hand and like Althusser on the other—two equally pointless fantasies, both produced by the attempt to be ‘scientific’ about our moral and political lives (Rorty 1996:573, 585).”

5. In his influential article on law’s autonomy by Judge Posner (1987) argued that law had been treated historically in practice and as a matter of training as if it were an autonomous discipline (Posner 1987:761 in Gordon 2008:17). 

6. The concept of “Narrative” as developed by Gordon’s in his literature review has a common thread of a “story,” a relational and temporal ordering of human events that culminates in “closure.” His sources include definitions of narrative as: “a story of events arranged in time sequence and offering some sort of meaning (Papke and McManus 1999:449)”; “the organization of material in a chronologically sequential order and the focusing of the content into a single coherent story . . . its arrangement is descriptive rather than analytical and . . . its central focus is on man not circumstances (Stone 1979:3)”; “first a ‘selective appropriation of past events and characters;’ second, a temporal ordering that presents these events with a beginning, a middle and an end; and third, an overarching structure that contextualizes these events as part of an opposition or struggle (97)”; “a recognizable discourse or operation . . . that . . . can be abstracted from [its] medium [of expression] . . . as in the plot summary (Clawson 1998)”; a story (99); “a metacode, a human universal on the basis of which transcultural messages about the nature of a shared reality can be transmitted (100).”

 

Webliography and Bibliography

2008-01-27. “Grisham’s ‘Appeal’ Tackles Down-and-Dirty Politics. “ All Things Considered. 

Agence France-Presse. 2008-01-09 “Author John Grisham has no shortage of book ideas.” Madrid. 

Asimow, Michael. “Analyse This! John Grisham’s Lawyers from a Megafirm.” Picturing Justice. University of San Francisco. 

Brody, David; Lovrich, Nicholas. 2009-01. “Public Attitudes Regarding the Selection of Judges in the State of Washington: Results of a Statewide Survey 2008.” American Judicatur Society and Washington State Judicial Selection Coalition. 

98 Brooks, supra note 91, at 1.

Clawson, Mark A. 1998. “Telling Stories: Romance and Dissonance in Progressive Legal Narratives.” 22 Legal Studies F. 353, 364 (citing and partially quoting Ewick, Patricia; Silbey, Susan S. 1995. “Subversive Stories and Hegemonic Tales: Towards a Sociology of Narrative.” 29 Literature and Sociology Review. 197, 200.

Gordon, Randy. 2008. “Rehumanizing Law: a Narrative Theory of Law and Democracy.” Ph.D., Law. The University of Edinburgh. 2008.

Grossman, Lev. 2006-10-09. “Grisham’s New Pitch.” Time.

Levy, Collin. 2008-03-20. “Grisham’s Judicial Appeal.” Wall Street Journal. 

Hamilton, Kevin J. 2008-01-29. “New side to John Grisham: storytelling of substance.”  The Seattle Times. (Hamilton 2008)

MacCormick, Neil. 2007. Institutions of Law: an Essay in Legal Theory.

Memmott, Carl.  2008-01-28. “Grisham’s ‘Appeal’ rules harshly on bought election.” USA Today. 

O’Brien, Tim. 2005-03-21. “New Jersey No ‘Judicial Hell Hole’: State judiciary’s restraints may spare it full impact of Class Action Fairness Act.” New Jersey Law Journal. CLXXIX:12. 

Papke, David Ray; McManus, Kathleen H. 1999. “Narrative and the Appellate Opinion.” 23 Legal Studies. F. 449, 449.

Patrick, Bethanne. 2008-01. “Justice Denied.” Washington Post. 

Posner, Richard A. 1987. “The Decline of Law and an Autonomous Discipline: 1962-1987.” 100 Harvard Law Review. 761. 

Pozen, David. 2008. “The Irony of Judicial Elections.” 108 Columbia Law Review.

Rashbaum, William K; Cowan, Alison Leigh. 2008-12-08. “Lawyer Is Accused in Massive Hedge Fund Fraud.” New York Times. 

Rorty, Richard. 1996. “Solidarity or Objectivity.” in Cahoone, Lawrence. Ed. 1996. From Modernism to Postmodernism. 573, 585.

Slater, Dan. 2009-01-27 A Law Blog Q&A With John Grisham. Wall Street Journal. 

Stone, Lawrence. 1979. “The Revival of Narrative: Reflections on a New Old History.” 85 Past and Present. 3, 3.

Shugerman, Jed H. 2008. “The Twist of Long Terms: Disasters, Elected Judges, and American Tort Law.” Harvard Law School.

 

Tabarrok, Alexander; Helland, Eric. 1999-04. ”Court Politics: The Political Economy of Tort Awards.” The Journal of Law and Economics. The University of Chicago. Vol. 42. 

 

99 Van Dunne, supra note 92, at 463.

100 White, supra note 90, at 6.

Young, James Harvey. 1981-06.“The Long Struggle for the 1906 Law.” FDA Consumer.

Virtual Money? $14 trillion lost from world stocks in 2008

The credit crisis erased $14 trillion (McKeef 2008-12-31) from world stock markets in 2008. Where does $14 trillion in world stock markets go? How can that much capital disappear from the market? The infamous year 2008 will be known in the future as the year that fundamental concepts in the moral mathematics of the market were forever changed. This credit crisis was the worst since the Great Depression of the 1930s but its ramifications may be even deeper.

                                                                                                                                                                          
How can we visualize a billion dollars? How much more difficult is it to imagine a trillion dollars?

The most recent wiki entry (2009-01-01) describes how any attempt to visualize numbers higher than a million is complicated because there are too systems of numeric names and the difference between the two scales grows as numbers get larger. Million is the same in both scales, but the long-scale billion is a thousand times larger than the short-scale billion, the long-scale trillion is a million times larger than the short-scale trillion. The short scale system is used in the US and a long scale system is used in the UK. The short scale system of numeric names means every new term greater than million is 1,000 times the previous term: “billion” means “a thousand millions” (10⁹), “trillion” means “a thousand billions” (10¹²), and so on. Long scale refers to a system of numeric names in which every new term greater than million is 1,000,000 times the previous term: “billion” means “a million millions” (10¹²), “trillion” means “a million billions” (10¹⁸). (wiki).”

6 zeros = 1 million, a thousand thousands or (10⁶)1, 000, 000
8 zeros = a hundred million (10⁸) 100, 000, 000 this image
9 zeros = 1 billion in the short scale system used in the US = a thousand millions or (10⁹) or 1,000,000,000
12 zeros = 1 trillion in the short scale system used in the US = “a thousand billions (10¹²) or 1,000,000,000,000
12 zeros = 1 billion in the long scale system used in the UK: 1,000,000,000,000
18 zeros = 1 trillion in the long scale system used in the UK is a million billions (10¹⁸) or 1,000,000,000,000,000,00

1,000,000 6 zeros = 1 million, a thousand thousands or (10⁶)1, 000, 000

This Adobe Photoshop image posted in my ocean.flynn Flickr account was my attempt to visualize 100,000,000 dollars

 ”World stock markets ended on an uptick for the year on Wednesday, after some bourses registered their worst annual losses in history. Global stocks as measured by the MSCI world index ended up 0.76 percent for the day and posted their first monthly gain in seven months, but lost 43.36 percent for the year. About $14 trillion (9.6 trillion pounds) in market capitalisation was erased from world stock markets in 2008 in the wake of the worst credit crisis since the Great Depression of the 1930s. “It has been a shocking year, hardly anything was spared in the carnage,” said Michael Heffernan, strategist at Austock Group in Australia. U.S. stocks edged up on Wednesday and saw their first monthly gain in five months, but the year has been the worst for Wall Street stocks since the Great Depression (McKeef 2008-12-31).”

read more | digg story

McKeef, Clive. 2008-12-31. “World stocks end up after historic losses.” Business News. Reuters.

Economics 101: Rewriting the Textbooks

Deborah Yedlin (2008-12-30) of the Calgary Herald’s Business section succinctly summarized the economic nightmare of 2008 in which the investment banking industry collapsed, Chicago school economics theories were debunked and their heroes dethroned, trusted risk management managers were vilified, and the axis of financial power shifted from the West to the East.

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Citations

“The consequences of the lack of regulation in the shadowy subprime housing market, and the ability of banks to get loans off their balance sheets and have investment banks repackage them as rated securities, allowed for the spreading risk. It was a practice that was supposed to ensure if something went bad, the damage would be contained because the exposure would be spread out. It was an axiom that was lent an even greater reliability because U. S. Federal Reserve chairman Alan Greens-pan was a believer in it. As many are now painfully aware, the dominos began to fall when two hedge funds at Bear Stearns collapsed in late 2007. This started the clock ticking on the 84-year-old investment bank, which proceeded to lose the confidence of investors and counterparties and was sold post-haste to JP Morgan Chase in March for $10 a share with the “help” of the U. S. Federal Reserve and its investment banking veteran, Hank Paulson (Yedlin 2008-12-30).”

“Nobel Prize-winning economist Paul Krugman, in opining on the multi-billion fraud perpetrated by Bernard Madoff, suggested one of the reasons he was not discovered was because of society’s worship of the wealthy. Too many, he said, have drawn the conclusion that people who have made huge sums of money must be very smart and to question these individuals would be to insult them (Yedlin 2008-12-30).”

Webliography and Bibliography

Yedlin, Deborah. 2008-12-30. “Storybook year ends in economic nightmare.” Calgary Herald.

NYU sues GMAC’s chair Merkin re:Madoff tie: US bailout GMAC

US Circumlocution Offices [1]: Federal Reserve approved General Motors (GMAC) Financial Services’ application to become a bank-holding company which will let them benefit from government bailout dollars. New York University sued Merkin GMAC chairman for feeding money to Madoff and concealing involvement from investors like NYU.

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Notes

1. Charles Dickens invented the term Circumlocution Offices to describe governmental and bureaucratic indolence and incompetence. By passing work through many hands of the Circumlocution Offices, it is easy to avoid doing anything. Dickens’ character in Little Dorrit, Mr. Merdle, who embarked on a fraudulent scheme is now being compared to Madoff and institutions such as the U.S. Securities and Exchange Commission (SEC), etc are being compared to Circumlocution Offices.

“The U.S. Federal Reserve on Wednesday approved GMAC Financial Services’ application to become a bank-holding company, a status that would give the auto-financing arm of General Motors Corp. access to government bailout dollars and the Fed’s discount window. The move complements a $17.4 billion emergency loan package the government extended to GM and (Wall Street Journal 2008-12-24)…

“Merkin, who is chairman of GMAC LLC, is named in the lawsuit brought by NYU, along with his Gabriel Capital LP fund and Ariel Fund Ltd. GMAC is the finance business owned by General Motors Corp and private equity firm Cerberus Capital Management LP. The Funds ‘feeding’ money to Madoff, including Ariel, made a conscious effort to conceal Madoff’s involvement from their own investors,” the NYU lawsuit said. “This concealment was a requirement dictated by Madoff, which was agreed to by Merkin and other ‘feeder’ funds (McCool Reuters 2008-12-24).”

Mapping Bernie Madoff Making Off with Money

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It reads more like fiction than mainstream news.

“But, at about the time of High ‘Change, Pressure began to wane, and appalling whispers to circulate, east, west, north, and south. At first they were faint, and went no further than a doubt whether Mr Merdle’s wealth would be found to be as vast as had been supposed; whether there might not be a temporary difficulty in ‘realising’ it; whether there might not even be a temporary suspension (say a month or so), on the part of the wonderful Bank. As the whispers became louder, which they did from that time every minute, they became more threatening. He had sprung from nothing, by no natural growth or process that any one could account for; he had been, after all, a low, ignorant fellow; he had been a down-looking man, and no one had ever been able to catch his eye; he had been taken up by all sorts of people in quite an unaccountable manner; he had never had any money of his own, his ventures had been utterly reckless, and his expenditure had been most enormous. In steady progression, as the day declined, the talk rose in sound and purpose. He had left a letter at the Baths addressed to his physician, and his physician had got the letter, and the letter would be produced at the Inquest on the morrow, and it would fall like a thunderbolt upon the multitude he had deluded. Numbers of men in every profession and trade would be blighted by his insolvency; old people who had been in easy
circumstances all their lives would have no place of repentance for their trust in him but the workhouse; legions of women and children would have their whole future desolated by the hand of this mighty scoundrel. Every partaker of his magnificent feasts would be seen to have been a sharer in the plunder of innumerable homes; every servile worshipper of riches who had helped to set him on his pedestal, would have done better to worship the Devil point-blank. So, the talk, lashed louder and higher by confirmation on confirmation, and by edition after edition of the evening papers, swelled into such a roar when night came, as might have brought one to believe that a solitary watcher on the gallery above the Dome of St Paul’s would have perceived the night air
to be laden with a heavy muttering of the name of Merdle, coupled with every form of execration (Dickens 1857).

Using Google Maps we can actually follow in space and time, the story of this giant Ponzi scheme. This post is a draft and a work in progress . . .

Items on this Google Map have not been fully edited.

Items in the bibliography have not been properly edited yet . . .

to be continued . . .

I want to watch Midsomer Murders now . . .

Notes

Circumlocution Office is Dickens’ (1857) term to ridicule governmental offices that delayed business by passing through the hands of different officials. “That brilliant invention the Circumlocution Office was made up at a time when examinations were introduced for the Civil Service. Dickens felt that bureaucratic indolence and incompetence were responsible for the sufferings of British soldiers in the Crimean war. “This glorious establishment had been early in the field, when the one sublime principle involving the difficult art of governing a country, was first distinctly revealed to statesmen … Whatever was required to be done, the Circumlocution Office was beforehand with all the public departments in the art of perceiving – HOW NOT TO DO IT.” (Meaning, in Dickens’s time, how to avoid doing anything.) ( Byatt 2008-11-1.”

The Circumlocution Office is inhabited by a family of Tite Barnacles and relations.

General Motors (GMAC) The U.S. Federal Reserve on Wednesday approved GMAC Financial Services’ application to become a bank-holding company, a status that would give the auto-financing arm of General Motors Corp. access to government bailout dollars and the Fed’s discount window. The move complements a $17.4 billion emergency loan package the government extended to GM and (Wall Street Journal 2008-12-24)… “Merkin, who is chairman of GMAC LLC, is named in the lawsuit brought by NYU, along with his Gabriel Capital LP fund and Ariel Fund Ltd. GMAC is the finance business owned by General Motors Corp and private equity firm Cerberus Capital Management LP. The Funds ‘feeding’ money to Madoff, including Ariel, made a conscious effort to conceal Madoff’s involvement from their own investors,” the NYU lawsuit said. “This concealment was a requirement dictated by Madoff, which was agreed to by Merkin and other ‘feeder’ funds (McCool Reuters 2008-12-24).”

Electronic Communications Networks (ECNs) trading model

Who’s Who

National Market System (NMS) Bernie Madoff presented his arguments at SEC hearings (2004-04-21 SEC) on the redesigning of “the existing national market system (“NMS”) rules to maximize profits and efficiency.

U.S. Securities and Exchange Commission (SEC) Washington, DC.

Selected Timeline

1823 Charles Dickens’ father, John Dickens, was imprisoned in the infamous debtors’ prison in Borough High Street, the Marshalsea. At twelve-years of age the future novelist was sent sent to work in a boot-blacking factory. John Dickens was the model for both Mr. Dorrit in Little Dorrit and Mr. Micawber in David Copperfield. Charles Dickens is in effect, Little Dorrit. In a prescient move, the BBC broadcast its adaptation of Dickens’ (1857) Little Dorrit, a month before Bernie Madoff’s arrest in his luxury Upper East Manhattan apartment. The similarities between the two stories are uncanny. See Byatt, A. S. 2008-11-15. “Little Dorrit: Within the walls of the Marshalsea.” The Guardian.

1857 In Charles Dickens’ introduction of his 1857 novel Little Dorrit he apologized for any similarity between factual events in Britain and Ireland and the context and character of his fictional banker, Mr. Merdle, who embarked on a fraudulent scheme now being compared to Madoff’s.

“If I might offer any apology for so exaggerated a fiction as the Barnacles and the Circumlocution Office, I would seek it in the common experience of an Englishman, without presuming to mention the unimportant fact of my having done that violence to good manners, in the days of a Russian war, and of a Court of Inquiry at Chelsea. If I might make so bold as to defend that extravagant conception, Mr Merdle, I would hint that it originated after the Railroad-share epoch, in the times of a certain Irish bank, and of one or two other equally laudable enterprises. If I were to plead anything in mitigation of the preposterous fancy that a bad design will sometimes claim to be a good and an expressly religious design, it would be the curious coincidence that it has been brought to its climax in these pages, in the days of the public examination of late Directors of a Royal British Bank. But, I submit myself to suffer judgment to go by default on all these counts, if need be, and to accept the assurance (on good authority) that nothing like them was ever known in this land (Dickens 1857).”

Thanks to these sources for making the Madoff-Merdle link: Paul Krugman, The New York Times Op-Ed columnist, in his 2008-12-19 blog post entitled “Madoff/Merdle“; McCann, Vincent. 2008-12-20. “Separating fact from fiction in financial fraud case.” Scotsman.com News.

1920s Financial frauds of the 1920s. See Galbraith, John Kenneth. 1954. The Great Crash: 1929. Boston: Houghton Mifflin.

1960 Bernie Madoff started his firm Bernard L. Madoff Investment Securities with $5,000. Bernard L. Madoff Investment Securities LLC.

1938 Bernard L. Madoff was born?

1970s The creation of the consolidated system for disseminating market information generated enormous benefits for investors (SEC 2004-02-27).”

1980s The incorporation of The Nasdaq Stock Market, Inc. (“Nasdaq”) securities into the NMS generated enormous benefits for investors (SEC 2004-02-27).”

1990s The adoption of the Order Handling Rules in the 1990s generated enormous benefits for investors (SEC 2004-02-27).”

2004-02-27 SEC published Regulation NMS for public comment. “In addition to redesignating the existing national market system (“NMS”) rules adopted under Section 11A of the Securities Exchange Act of 1934 (“Exchange Act”), Regulation NMS would incorporate four substantive proposals that are designed to enhance and modernize the regulatory structure of the U.S. equity markets (SEC 2004-02-27).”

2004-04-21 Bernie Madoff presented his arguments at SEC hearings (2004-04-21 SEC) on the redesigning of “the existing national market system (“NMS”) rules held at the InterContinental The Barclay.

“The central objective of this review is to determine how the regulations governing the U.S. equity markets should be modernized. Our markets are continually evolving because of such factors as innovative trading technologies, new market entrants, and changing investment patterns. We believe that one of our most important responsibilities is to monitor these changes and to ensure that the U.S. regulatory structure remains up to date. In this way, we can help our markets retain their position as the deepest and most efficient in the world – markets that offer a fair deal to all types of investors, large and small.”

2004 Bernie Madoff presented his arguments at hearings on the redesigning of “the existing national market system (“NMS”) rules adopted under Section 11A of the Securities Exchange Act of 1934 (“Exchange Act”), Regulation NMS would incorporate four substantive proposals that are designed to enhance and modernize the regulatory structure of the U.S. equity markets.

Discussion: “Is access to markets through the members of an SRO and through the customers or subscribers of ECNs or market makers sufficient to assure fair and efficient access to their displayed quotes? Are there barriers to access that must be removed for this indirect access to be feasible?”

Participants: Ivan K. Freeman (Morgan Stanley), John C. Giesea (Security Traders Association), Robert Greifeld (Nasdaq Stock Market), Larry Leibowitz (Schwab Capital Markets), Bernard L. Madoff (Madoff Investment Securities) and Thomas Peterffy (Interactive Brokers Group)

2008-01 Bernard L. Madoff Investment Securities claimed their investment advisory business managed $17.1 billion for 11 to 25 clients and boasted of an “unblemished record of value, fair-dealing and high ethical standards (Zambito and Smith 2008).”

2008-11-15 In a prescient move, the BBC broadcast its adaptation of Dickens’ (1857) Little Dorrit, a month before Madoff’s arrest in his luxury Upper East Manhattan apartment. The similarities between the two stories are uncanny. See Byatt, A. S. 2008-11-15. “Little Dorrit: Within the walls of the Marshalsea.” The Guardian.

2008-12-10 Andrew Madoff and Mark Madoff, Bernie’s sons and his employees claimed to be innocent victims of a fraud that they knew nothing about. They called the Securities and Exchange Commission, which told the FBI (Zambito and Smith 2008).”

2008-12-10 Special FBI Agent Theodore Cacioppi and a colleague questioned Madoff at his $9M East Manhattan luxury apartment on Thursday morning to investigate the possibility of any “innocent explanation.” “There is no innocent explanation,” Madoff replied. Within hours, investors who had trusted the 70-year-old Madoff for years – including the owner of the New York Mets – were reeling at charges that one of the most trusted names on Wall Street was a full-time fraud (Zambito and Smith 2008).”

2008-12-12 “[A]ngry investors crowded a Manhattan federal courtroom hoping to find out if the SEC would come to their rescue. Manhattan Federal Judge Louis Stanton issued an order freezing Madoff’s assets, as well as those of his firm, and named lawyer Lee Richard to oversee the business. The hearing was canceled, leaving investors bewildered (Zambito and Smith 2008).”

2008-12-23 “[H]edge fund executive Thierry Magon de la Villehuchet, 65, was found dead in his office in an apparent suicide, reportedly distraught over being duped by Madoff. New York City Police Commissioner Raymond Kelly said Villehuchet had cuts on his wrists from a box cutter and pills nearby. The Frenchman’s Access International had an exposure of $1.5 billion, officials said (McCool 2008-12-24).”

2008-12-24 Washington: “The U.S. Federal Reserve on Wednesday approved GMAC Financial Services’ application to become a bank-holding company, a status that would give the auto-financing arm of General Motors Corp. access to government bailout dollars and the Fed’s discount window. The move complements a $17.4 billion emergency loan package the government extended to GM and …” Wall Street Journal McCool, Grant. 2008-12-24. “(McCool 2008-12-24) New York University sued fund executive over Madoff
2008-12-24. “Fed Grants GMAC’s Request to Become Bank-Holding Company.” Wall Street Journal.

Webliography and Bibliography

Byatt, A. S. 2008-11-15. “Little Dorrit: Within the walls of the Marshalsea.” The Guardian.

McCool, Grant. 2008-12-24. “New York University sues fund executive over Madoff.” Reuters.

Quinn, James. 2008-12-16. “An American Tragedy.” Financial Sense.

Zambito, Thomas; Smith, Greg B. 2008-12-13. “Feds say Bernard Madoff’s $50 billion Ponzi scheme was worst ever.” New York Crime. Daily News.  

2008-12-22. “Jewish leaders bracing for Madoff fallout.” The Boston Globe.

Unlikely Player Pulled Into Madoff Swirl.”NYTimes.com

A.G. takes himself out of Madoff probe | Deseret News (Salt Lake City) | Find Articles at BNET

Fund Fraud Hits Big Names – WSJ.com 

2008-12-14.Bodyblow to Wall Street at The Brian Sullivan Blog

Business News – AOL Money Canada 

U.S. Congress to probe SEC role in Madoff affair

edmontonsun.com – World – $50B fraud plot thickens

Madoff Mess manoeuvres 

Judge orders Madoff to tally his assets

Don’t Be Scammed by Madoff Investor Sob Stories – Seeking Alpha

Madoff investors unlikely to regain money

Madoff bad omen for fund of hedge funds industry – AOL Money Canada

Run by investors, for investors – North American Markets end lower, Madoff scandal raises concerns over financials – North American Market Summary

More banks reveal exposure to Madoff scandal – Yahoo! Canada News

Bernard Madoff scandal draws publishers 

IOC has nearly $5 million tied to Madoff – AOL Sports Canada

Some Madoff investors may have to give back gains – Dec. 19, 2008

Madoff’s auditor Friehling and Horowitz doesn’t audit? – Dec. 17, 2008 

Did Bernard Madoff act alone? – Dec. 18, 2008

Answers to 6 Madoff questions – Dec. 18, 2008

A stock exchange caught in the Madoff mess – Dec. 18, 2008

‘A Giant Ponzi Scheme’ 

reportonbusiness.com: Madoff debacle reveals stunning failure of due diligence

Midas Letter -  Health, Wealth and Prosperity

Meet the real Ponzi behind the ‘scheme’ - Dec. 15, 2008

TheStar.com | Business | Banks, funds among clients who lost billions

Charities hit hard as Madoff fraud losses mount 

Madoff: ‘Bloodbath’ for Twin Cities investors

Pigeon King owes $23 million | Farm andDairy – The Auction Guide and Rural Marketplace

globeandmail.com: Farmers should have been warned about pigeon venture: critics

The Canadian Press: Royal Bank says clients have $50M in exposure to alleged Madoff fraud

Ponzi schemes strike in U.S., Russia and Colombia | Worldfocus

Bloomberg.com: Worldwide

The Madoff Fraud: How Culpable Were the Auditors? – TIME

Madoff Victims Look for Ways to Recover Their Money – TIME

Wall Street’s Latest Downfall: Madoff Charged with Fraud – TIME

How I Got Screwed by Bernie Madoff - TIME

Bernie Madoff’s man to see – The Boston Globe 

Bull Market 

Top Trader Is Accused of Defrauding Clients - NYTimes.com

Bernard L. Madoff News – The New York Times

The New York Times > Books > Sunday Book Review > His Last Name Is Scheme

A Scheme With No Off Button – NYTimes.com 

Ponzi Schemes – News – The New York Times

Even Winners May Lose With Madoff.” NYTimes.com

Madoff Agrees to Security ‘to Prevent Harm or Flight’ -NYTimes.com

“Talking Business – Avoiding a Financial Collapse, Indian-Style.” – NYTimes.com

“Madoff Scheme Kept Rippling Outward, Across Borders.” NYTimes.com

“Madoff Ponzi Scheme Lawsuit: Attorneys for Defrauded Investors.”

Madoff Scheme Kept Rippling Outward, Across Borders.” NYTimes.com

“Top Trader Is Accused of Defrauding Clients.” NYTimes.com

Op-Ed Columnist – The Brightest Are Not Always the Best -NYTimes.com

Wall Street fallout shakes economy

 

National Gallery intrigue better than fiction

This could be the beginning of a new Robertson Davies’ novel.

“The director of the National Gallery of Canada fired his deputy director for “just cause” — twice — in June and then found himself in Federal Court accused of being “medically” unfit to perform his job, according to previously secret court documents released yesterday (Gessell 2008-07-26).“

It is important that the Affadavit which Gallery upper management attempted to conceal, has not only been unsealed but is now available online at Affadavit of David Franklin and National Gallery of Canada and Pierre Theberge, Ottawa, ON. It is evident from the tone of the affadavit and even minute editing oversights and grammatical errors (unlike editing errors in this blog resulting from my desire to go outside and play), that David Franklin was distraught when he wrote it in collaboration with his legal council.

It may prove to be a destroyer of careers and reputations.

But the National Gallery of Canada is not a private organization. The 40, 000 plus works in the permanent collection belong to the public. It is a Crown Corporation.

The Affadavit reveals far more than the possibility that an old man has outworn his usefulness, it reveals a culture of silence in the Gallery that has been a part the Gallery since at least 1997. Earning, achieving and maintaining an international reputation is crucial to this cultural institution. Thanks to the hard work of previous directors and current and previous curators, etc the National Gallery has achieved a great deal of credibility in ICOM particularly in regards to expertise in curating, conservation and restoration.

David Franklin’s concerns about Theberge’s management style should be taken very seriously and investigated in-depth. Questions should be raised about the loss of curatorial expertise and productivity as valued, experienced curators were forced to retire early, castrated by the administration while remaining in the institution or leaving out of frustration because they lost favour with Pierre Theberge since 1997, not just recently under the guise of illness. Let’s not blame the disease for a style of governance that created havoc in the granite and glass building.

Arts journalist noted in his blog that “Official advertisements seeking a replacement for the retiring Pierre Theberge have started appearing in newspapers. Far more emphasis is placed in the ad on management abilities than on knowledge of art. Maybe one of the government’s friends in the Calgary oil patch could take the job, assuming he or she was bilingual (Gessell 2008-05-21).”

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Excerpts from 2008- Affadavit of David Franklin and National Gallery of Canada and Pierre Theberge, Ottawa, ON.
27. [David Franklin is] concerned that [he is] now the target of Mr. Theberge’s most recent effort to push someone out. [Pierre Theberge's] motivation to remove [David Franklin's] candidature for consideration as Director of the Gallery by blackening [his] professional reputation and terminating [his] employment for “just cause” unless [he] agrees to resign (Affadavit p.10)”

4. “Mr. Theberge’s Medical Position: “

“Pierre Theberge suffers from Parkinson’s Disease. This fact has been known for several years by the Board, the senior management team and publicly. [David Franklin claimed that based on his own daily observations ] that Mr. Theberge’s medical condition has deteriorated rapidly over the past year [2007-2008] (Affadavit p.8)” “[ . . . David Franklin claimed that Pierre Theberge] “is no longer capable of performing the full duties that his position demands with the vigour or the proficiency that is required for the Director of a major Crown Corporation. Some of the symptoms that I have observed first hand are falling asleep during meetings, including one-on-one meetings; losing his temper with staff; acting erratically and reacting emotionally out of context; loss of memory; increasing nostalgia; short working days; inability to write his signature; difficulty concentrating and focusing on complex issues; lack of leadership qualities; contempt towards senior management; vindictiveness; violent mood swings; insulting and intimidating behaviour; appearing to be heavily medicated; requiring staff accompaniment at all times; requiring staff to prepare his meals at work; and occasional refusal to meet with major donors or be interviewed publicly due to deterioration in his public speaking abilities (Affadavit p.9)”

Pierre Theberge management style:

26. David Franklin “noticed a pattern whereby Mr. Theberge orchestrates the departure of curators from the Gallery. Mr. Theberge often seems to revere a given curator for a short while but then grows disenchanted with them to the point [where] he determines that they must be dismissed. Mr. Theberge regularly solicits negative gossip about Gallery employees and uses it against them when it suits his purposes. Unfortunately, Mr. Theberge seldom actually “fires” the people himself. Instead, he directs that the person is no longer to be supported in their work. In the past, I have seen him decide that he no longer values someone’s contributions and then start refusing approval for, canceling, blocking or reducing their exhibitions, acquisitions and even travel. This prevents the curator from being able to function in their job in any meaningful way and the person ends of leaving out of frustration. Mr. Theberge has also asked me to accelerate the early departure of curators near retirement whom he had taken a dislike to. I can think of at least three (Affadavit p.10)”

Random notes:

National Gallery of Canada is a Crown Corporation pursuant to the Museums Act, 1990, c. 3.

National Gallery of Canada is also governed by the Financial Administration Act, RS, 1985, c. F-11.

Pierre Théberge came to the NGC at the same time as outdated top-down business models already under scrutiny in more progressive sectors of the private sector were being embraced by those in positions of governance in the public sector. He did not invent his top-down parachute-in management style.

The arms-length policies intended to protect Crown corporations like the National Gallery of Canada from unwarranted state intervention, are particularly vulnerable to abuse by upper management should certain types of management styles prevail.

She was young, blond, trim, athletic, focused and fierce. She was hired by Bell to fire hundreds of employees in the 1990s and that was her opening remark in her first meeting with us along with, “If you don’t like it you can leave.” The aftermath of her arrival could only be described as tense. Everyone was tense all the time. I was so relieved I was not there anymore. She wasn’t a high-noon face-off girl. She was more like an execution squad facing powerless blind-folded victims. Those who were fired lost all rights to tell their stories openly. And there are so many stories to be told. Even today the image of security escorting friends trembling with shock carrying cardboard boxes sends shivers . . .

But perhaps the greater sadness came as we watched valued and experienced curators and administrators leave of their own volition unable to accept a dictatorial management style that was so unlike the two predecessors. So many exhibitions canceled and with them years of research seemingly lost . . .

Pierre Théberge’s arrival at the NGC in 1997 coincided with the formation of the National Gallery of Canada Foundation and with it fund-raising at the gallery reached new levels.

Philanthropic foundations like the National Gallery of Canada Foundation created in 1997 are part of the golden age of philanthropy which is a global phenomenon. These new philanthropists are legal categorizations of nonprofit organizations that are highly specialized and concerned with measurable impact. Their work is strategic, market-conscious, knowledge-based, high-engagement and always involves maximizing leverage of the foundation’s assets.

Pierre Théberge’s arrival at the NGC in 1997 also coincided with changes in the capital-gains tax which led to a sharp increase in donations. “Until 1997, the full normal capital- gains tax was due; reducing the “inclusion rate” to 50 per cent in 1997 led to a sharp increase in such donations. The federal finance department told Angus’s committee each foregone dollar in tax revenue was linked to $13 in extra giving. (Angus 2005-01-30).”

Selected (subjective) timeline of events

1970s Pierre Théberge worked at the National Gallery rising to the position of curator of contemporary Canadian art.

1979 Pierre Théberge joined the Montreal Museum of Fine Arts as chief curator and later became director. He was nicknamed “Mr. Blockbuster” which can be considered as a derogatory term.

1987-1997 Shirley Thomson, C.C. 2008 Laureate was born and raised in St. Mary’s, Ontario, she left a teaching job for Montreal and, ultimately, Paris, where she worked as an editor for NATO. She returned to Canada to become assistant secretary-general of World University Service of Canada (WUSC), and later assistant secretary-general of the Canadian Commission for UNESCO, working in the UN agency’s fields of education, science and culture. A decade later she was back in Montreal, enrolled at McGill as a Ph.D. student in art history, exploring the hunt theme in 18th-century palace decoration in France. Her McGill experience launched her career as a cultural administrator. As director of the McCord Museum (1982-1985), she turned a small university museum into a public research and teaching museum dedicated to the preservation, study and appreciation of Canadian history. After serving as secretary-general of the Canadian Commission for UNESCO, she was appointed director of the National Gallery of Canada in 1987. Dr. Thomson and her professional team developed, over the decade of her tenure, a strong program that helped raise the Gallery’s profile. She served as director of the Canada Council for the Arts from 1998 to 2002, and as chair of the Canadian Cultural Property Export Review Board from 2003 to 2007.” www.citizenvoices.gg.ca/_pdf/ReportArtMattersVisualMediaArts2008.pdf

Colin Bailey was named as the National Gallery of Canada’s chief curator replacing Shirley Thomson.

1995 David Franklin won the 1995 Eric Mitchell Prize for Rosso in Italy: The Italian Career of Rosso Fiorentino (published by Yale University Press, 1994)

1995 David Franklin won the Governors’ Award for Yale University Press for best press book by an author under the age of forty.

1997 The exhibition Renoir’s Portraits: Impressions of an Age, organized by the National Gallery of Canada in 1997, set a Gallery attendance record of 340,000 visitors.

1997 The exhibition entitled Baroque to Neo-Classical: Sculpture in Quebec was held at the National Gallery of Canada from February through May, Vancouver Art Gallery from July to October and the Mendel Art Gallery in Saskatoon from October to January 1998. It was ten years in the making. Gallery director Shirley Thomson had charged Rene Villeneuve , Assistant Curator of Early Canadian Art with the task of mounting the exhibition in 1988 which was to cover Quebec sculpture from the 17th, 18th and 19th centuries. Villeneuve also wrote the research-intense 201 page exhibition catalogue by the same name. Twenty important works were restored for the exhibition. Charlie Hill provided Villeneuve with constant encouragement during the preparation of the exhibition which Thomson described as having “masterfully convey[ed] an important, rich, and indeed fundamental aspect of our culture, inherited from France (Thomson 1997:7).” With the arrival of Pierre Theberge, Villeneuve’s research and unique curatorial skills were no longer promoted with any enthusiasm.

1997 Pierre Théberge, risk-taker in charge at Gallery: Pierre Theberge succeeds Thomson (Gessell 1997). Dr. Shirley Thomson was a popular director who treated everyone in her employ with respect.

1997 Until 1997, the full normal capital- gains tax was due; reducing the “inclusion rate” to 50 per cent in 1997 led to a sharp increase in such donations. The federal finance department told Angus’s committee each foregone dollar in tax revenue was linked to $13 in extra giving. Angus believes the multiplier would be even greater if the capital-gains tax were dropped altogether (Angus 2005-01-30).”

“The tax treatment of donations of shares is more favourable in the US than in Canada, and it was argued that the remaining capital gains tax on gifted securities in Canada should be eliminated. Since the 50% reduction in the capital gains tax for such gifts was eliminated in 1997, there has been a dramatic increase in donations. Eliminating the remaining 50% would stimulate even more. A member of the Council for Business and the Arts in Canada stated that, “the single most important step which the government can take to assist our arts organizations and every charitable sector, including health care, education and social services, to raise additional money, is to eliminate the remaining capital gains tax on gifts of listed securities.” (NACF 2002:6)

1997 The NGC Foundation was created. Donald and Beth Sobey gave generously oftheir time and financial support through the Foundation.

1997 The Audain Foundation was established. Michael Audain, Chairman of the Vancouver-based Polygon Homes Ltd., and his wife, Yoshiko Karasawa, are active supporters of the arts since the 1980s. Michael Audain served on the Vancouver Art Gallery board for many years, including in the role of president. Michael is now Chair of their Foundation. In 2004, Business for the Arts honoured Michael with the Edmund C. Bovey Award for leadership in the arts. He was appointed to the National Gallery of Canada Board of Trustees in 2005 and to the Order of British Columbia in 2007.

1997-2009 Pierre Théberge served as director of the National Gallery of Canada, the second-longest term for a National Gallery director.

1998 David Franklin joined the National Gallery as Curator of Prints and Drawings.

NGC. 2000-04-03. “National Gallery of Canada Comes to Amicable Agreement with Educator Guides.” Press Release. NGC:Ottawa. http://www.national.gallery.ca/english/558_890.htm

2000 Kitty Scott began working at the NGC in contemporary art where she found that the NGC collection did not include many works by highly sought after artists from Western Canada who were working in a complex way across film, photography, video and installation. There were no works by Janet Cardiff and George Bures Miller, or by the younger artists Brian Jungen, Geoffrey Farmer or Althea Thauberger at the time. She began to acquire more works by Jeff Wall and Rodney Graham as well as a film and a photographic series by Stan Douglas. http://www.canadianart.ca/art/features/2007/06/01/serpentine/

2001-02-21 Pierre Théberge National Gallery of Canada Director and Curator Appointed to the Order of Canada

2001-05-10 On May 10, 2001 200 technicians, installers and administrative staff at the National Gallery of Canada and the Canadian Museum of Contemporary Photography embarked went on the first general strike in the history of these institutions. It is noteworthy that David Franklin brought strikers doughnuts on the strike line (Geddes 2008-07-09). Relations between gallery staff and Pierre Theberge remained rocky ever since this strike.

The strike was timed to coincide with an $1.8 million exhibition of the works of Austrian artist Gustav Klimt which opened on June 15. Strikers won the support of the public as well as prominent Canadian artists such as Michael Snow. And the strike seems to have attracted visitors since there were 500 more visitors than the projection figure of 18,000 for June! One of the areas of concern was the need for a corporate anti-harassment policy. Gallery administration spent lavishly to hire lawyers and security officers instead of tabling a fair offer. The red shoes displayed on the Gallery plaza have become the symbol of their strike. Red shoes became a symbol of solidarity as strikers “placed hundreds of pairs of donated footwear — painted a brilliant, scarlet hue — outside the museum (on Rideau Street) and gallery (on Sussex Drive) every day. [...] The whimsical appearance of the red shoes inspired workers to create songs, poetry, T-shirts and posters, delighted passers-by, and garnered more frequent media attention than any conventional, non-violent protest action could ever have done (Bemben 2002).”

“Art can be a form of action, and our picket lines can be seen as a work of performance art. In order to reinforce that concept, we, as a group, will create a collective work of art. Walking on the picket line is a burden on our feet, and our shoes become part of our plight. We are literally wearing out our shoes! [...] By placing our old shoes next to us on the picket line, we are visually representing the many, many miles that we have walked, and the labour that goes into walking the line. We are labouring on behalf of labour. Our shoes also embody our individuality — they are personal artifacts. By painting our old shoes all the same shade of red, we are symbolizing our passion and solidarity as a group. [...] Lately, our feet have been taking us in a different direction, but we hope to soon have a fair contract and be walking back inside our beloved institutions (Strike posters cited by Bemben 2002).”

The NGC was forced to “postpone indefinitely an exhibition of work by Montreal photographer Pierre Boogaerts at the Canadian Museum of Contemporary Photography (part of the National Gallery). “Attendance to our permanent collections has been down,” admits Joanne Charette, the National Gallery’s public-affairs director. “We’ve had to cancel educational tours for students, which usually adds to our figures in May and June.” The strike was in full force when the museum’s Gustav Klimt exhibition opened on June 15. Charette says that attendance for the show, at 18,500 visitors in June, is actually above the projected figure of 18,000. The show cost Can. $1.8 million and required three years to organize. To compensate for the postponement of the Boogaerts show, the current exhibitions of work by Larry Towell and Diana Thorneycroft have been extended until September 3 (Jana 2001).”

2003 NGC. 2003-09-23. “Board of Trustess Supports National Gallery of Canada Director. Press Release. NGC: Ottawa. http://www.national.gallery.ca/english/552_1072.htm

2003 Attendance at the National Gallery of Canada 455,000, down 13 percent from 2002. http://www.national.gallery.ca/english/550_988.htm

2003 Donald Sobey, entrepreneur and collector of Canadian art from Stellarton, Nova Scotia, donated $1 million gift through the “Donald and Beth Sobey Chief Curator’s Research Endowment. Under the guidance of the Gallery’s Chief Curator, Dr. David Franklin, this fund gives the National Gallery the opportunity to conduct and publish scholarly research of national and international scope (NGC. 2007-01-11).”

2003-2004 “The Government increased the Gallery’s acquisitions budget in 2003-2004 to restore some of its lost purchasing power and allow it to continue building the national collection for future generations. The budget, supplemented by the generous support of the National Gallery of Canada Foundation, made possible several important purchases, including Quebec painter Ozias Leduc’s Portrait of Gertrude Leduc, Jacopo Pontormo’s Renaissance drawing Reclining Male Nude, and Douglas Gordon’s contemporary video work Play Dead: Real Time. The Gallery increased its holdings of First Nations and Inuit art with works including Norval Morisseau’s Observations of the Astral World and Brian Jungen’s whale skeleton sculpture Vienna.” http://www.national.gallery.ca/english/550_988.htm

2004 David Franklin’s book entitled Treasures of the National Gallery of Canada

2005-04-06 The appointment of Diana Nemiroff as the new Director of the Carleton University Art Gallery (CUAG) effective July 4 was announced. “Diana Nemiroff has garnered an international reputation in the contemporary art world. She has been a senior curator at the National Gallery of Canada since 1990 and has held assistant and associate curator positions with the Gallery since 1983 dealing mainly with contemporary and 20th-century art. She has organized many successful exhibitions including her favourite Crossings, a highly acclaimed 1998 exhibition of works in various media that examined the situation of people migrating from one country to another. The exhibition Land, Spirit, Power: First Nations at the National Gallery of Canada, which she organized with Charlotte Townsend-Gault and Robert Houle, broke new ground in the recognition of First Nations artists in Canada, and won the Janet Braide Memorial Award for its contributions to Canadian art history. Two of her exhibitions, 3 x 3: Flavin, Andre, Judd and Protean Picasso: Drawings and Prints from the Collection of the National Gallery of Canada [toured Canada in 2005]. She also planned and installed the collection of contemporary art for the opening of the National Gallery’s new building in 1988.” http://www.carleton.ca/duc/News/news04060501.html

“Diana Nemiroff has been the director of the Carleton University Art Gallery since 2005. Before joining the staff of Carleton University, she worked for over 20 years at the National Gallery of Canada, where she developed a national reputation as a curator of contemporary art. She has numerous exhibitions to her credit, including recent monographic displays by Damian Moppett (2006), Lyne Lapointe (2007) and Pascal Grandmaison (2008). As a curator at the National Gallery, she has been recognized for her work on group exhibitions such as The Canadian Biennial of Contemporary Art / La biennale d’art contemporain canadien (1989); Land, Spirit, Power: First Nations at the National Gallery of Canada / Terre, esprit, pouvoir: les premières nations au Musée des beaux-arts du Canada (1992); Crossings / Traversées (1998); and Elusive Paradise: The Millennium Prize / Paradis insaisissables : le prix du millénaire (2001). These shows surveyed the national and international contemporary art scene, identifying issues around the presentation of Aboriginal art, globalization, and the environment, and how it has affected the art world in recent years.
Diana Nemiroff was born in London, England, and was raised and educated in Montreal, where she studied at the École des beaux-arts, before earning both a bachelor’s degree in fine arts and a master’s degree at Concordia University. She is a board member of the Canadian Museums Association and is vice president of the University and College Art Galleries Association of Canada. In addition to her museum experience, she has a background as a critic and writer, and continues to write on contemporary and modern art for a variety of independent projects.” www.citizenvoices.gg.ca/_pdf/ReportArtMattersVisualMediaArts2008.pdf

2005-05-28. The National Gallery of Canada Foundation held its first national fundraising event, the Renaissance Ball which generated one million dollars. Thomas d’Aquino, Chairman of the Foundation’s Board of Directors thanked Marie Claire Morin, President and CEO of the Foundation and her team and she in turn thanked thanked Thomas d’Aquino, saying, “Through his leadership, vision and commitment, Thomas d’Aquino accomplished an incredible feat by bringing together such a prestigious group of art patrons and philanthropists. Without him, the Renaissance Ball would simply not have been possible.”(NGC. 2005-06-03).

2005 David Franklin’s “first big splash as chief curator was the exhibition Leonardo da Vinci, Michelangelo and the Renaissance in Florence. It was the Florence show that caught the eye of curators at Los Angeles’s J. Paul Getty Museum, leading them to partner with the National Gallery on a Bernini sculpture show, slated to open in [July of 2008] at the prestigious Getty, before moving to Ottawa for a fall and winter run (Geddes 2008).”

2006 “Kitty Scott left her post as National Gallery curator of contemporary art [in 2006], in part, because of her frustration in getting gallery management to mount contemporary art exhibitions (Gessell 2008-06-10).” In a interview with Canadian Art she described changes that the NGC should consider, “In terms of contemporary art there needs to be more of it, both national and international. This means more exhibitions, acquisitions, publications, conferences and talks with artists, writers and theorists. The best institutions work closely with their curators, the experts, to bring these programs to fruition. And these programs must be seriously marketed—nationally and internationally—and use the Web in innovative ways. As well, I think the NGC would benefit from being more closely aligned with artists. Many museums have artists on their boards. I also believe that the NGC should play a more formative role in teaching students of museology, art history, conservation, museum management, design history, art and curating across Canada. I am sure universities would welcome this. And I think there could be stronger ties with the major collectors and dealers across the country. These people should be regarded as family and they should be made to feel more welcome. It would also be great if the National Gallery of Canada could develop relationships with other Canadian institutions so that the collection of contemporary art could be seen more widely. While the idea of summer exhibitions in Shawinigan is interesting, I wonder about it, practically speaking. Ottawa is already remote, as the number of people visiting the institution shows, so why explore even more remote territory? What is the logic? Why not open a small space in the heart of Montreal, or St. John’s for that matter?” http://www.canadianart.ca/art/features/2007/06/01/serpentine

2006 The National Gallery of Canada Foundation is extremely proud to announce an extraordinary gift of $2 million dollars for the creation of The Audain Endowment for Contemporary Canadian Art. The Audain Foundation, a British Columbia-based family trust, generously made this donation, the largest in the history of the National Gallery of Canada Foundation. “This fund will ensure that the National Gallery of Canada will have the ability to acquire Canadian contemporary art, and to focus on the unique talents of artists from Canada with an emphasis on British Columbia” says Pierre Théberge, Director of the National Gallery of Canada. “We wish to thank the Audain Foundation, and in particular Michael Audain and Yoshiko Karasawa, or their generous gift to the National Gallery and the visual arts commmunity.” “Canada from coast to coast has many important contemporary artists who deserve to be in the National Gallery’s collection, so our foundation is pleased to be able to give help in this regard,” said Michael Audain. “We are deeply grateful for this endowment, the single largest leadership gift to benefit living artists right across the country,” says Marie Claire Morin, President and CEO of the National Gallery of Canada Foundation. Established in 1997, The Audain Foundation has made grants to 25 organizations for projects related to the visual arts. Mr. Audain, Chairman of the Vancouver-based Polygon Homes Ltd., and his wife, Ms. Karasawa, have been active supporters of the arts for over 25 years. Serving on the Vancouver Art Gallery board from 1992 to 1998, including the role of president, Mr. Audain is now Chair of their Foundation. In 2004, the Council for Business and Arts honoured Mr. Audain with Canada’s Edmund C. Bovey Award for leadership in the arts. He was appointed to the National Gallery of Canada Board of Trustees in 2005. The National Gallery of Canada Foundation is dedicated to supporting the National Gallery and its affiliate, the Canadian Museum of Contemporary Photography, in fulfilling their mandates. By fostering strong partnerships, the Foundation provides the Gallery with the additional financial support required to lead Canada’s visual arts community locally, nationally and internationally. The blend of public support and private philanthropy enables the National Gallery of Canada to preserve and interpret Canada’s visual arts heritage.”

2007 “Publication National Gallery of Canada Review V gets the support of the renowned Donald and Beth Sobey Chief Curator’s Research Endowment.” Mr. Sobey was Chairman of the NGC’s Board of Trustees and a member of the NGC Foundation’s Board of Directors. Donald Sobey was Chairman of the Board of Trustees, National Gallery of Canada; Director, Board of Directors, National Gallery of Canada Foundation; Member of the Founding Partner’s Circle of the National Gallery of Canada Foundation; Chairman Emeritus, Empire Company Limited; Director: Sobey Inc., Alliance Atlantis Communications Inc., Atlantic Shopping Centres Limited, High Liner Foods Incorporated and President of the Sobey Art Foundation (NGC. 2007-01-11).

2007-12 Michael Audain, Chairman of the Vancouver-based Polygon Homes and his wife donated another $2 million to the NGC towards the creation of the Audain Curator of Indigenous Art Endowment. Combined gifts from the Audain Foundation have created a new threshold of $4 million for gifts by a single donor.

2008-01? Pierre Theberge imminent retirement:

“In early 2008 the Gallery took steps in relation to starting a search for a new Director to replace Mr. Theberge. The firm of Janet Wright and Associates Inc was hired to assist with the recruitment and selection process. It is well known within the Gallery and its Boards from comments made to me by Mr. Theberge that Mr. Theberge does not want to leave his position as Director of the Gallery. He is extremely distraught at the thought of leaving the Gallery and that a search is underway for a new Director to replace him. [David Franklin . . . ] believes that Mr, Theberge has and will continue to take whatever steps are within his power to delay the date on which he will ultimately be replaced and also to control who that person might eventually be for his own personal gain (Affadavit p.7).”

2008-05 Arts journalist noted in his blog that “Official advertisements seeking a replacement for the retiring Pierre Theberge have started appearing in newspapers. Far more emphasis is placed in the ad on management abilities than on knowledge of art. Maybe one of the government’s friends in the Calgary oil patch could take the job, assuming he or she was bilingual (Gessell 2008-05-21).”

2008-04-03 Pierre Theberge announced 10 job cuts, including five layoffs including highly regarded Anne Maheux, a senior paper conservator with more than 25 years of service. Among those laid off are three members of the Public Service Alliance of Canada (PSAC) and one member of the Professional Institute of Public Service of Canada (PIPSC).

2008-04-16 The The Canadian Association of Emerging Conservators (CAEC-ACRE) argued that the removal of [Anne Maheux who has been constantly active in the conservation field, supervising paper conservation interns on a regular basis and contributing to conservation associations, research and publications] is ill advised. “Furthermore, the remaining senior paper conservator at the NGC, who is due to retire in a short period of time, has not for many years maintained a practice of taking on curriculum interns. The CAEC is concerned that after this gap in practice, the remaining senior paper conservator may not be willing and/or fully able to take over Ms. Maheux’s role as supervisor to future students in the NGC paper laboratory. In addition, the elimination of this position also brings forward the issue of succession planning, or lack thereof, a question which is central to the CAEC’s activities. With this loss in mind, one has to wonder what the state of the paper conservation department at the NGC will be in a few years.” http://caecacre.wordpress.com/2008/04/16/special-announcement/

2008-04 “Dear Mr. Theberge, The membership of the Canadian Association for Conservation of Cultural Property wish to convey our shock and extreme disappointment over the National Gallery of Canada’s recent decision to eliminate a full time position in the Conservation/Restoration Laboratory. Works of art on paper are among the most fragile and unforgiving of the Gallery’s collections, and are readily subject to irreparable damage if handled inexpertly. The CAC finds it unthinkable that the Gallery would dismiss a Conservator as highly regarded nationally and internationally as Anne Maheux, and assure you that we believe that neither the Gallery’s impressive collections of works of art on paper nor its professional reputation will be well served by this short sighted decision. The letter of explanation delivered to Gallery staff notes that the aim of the cuts was a 5% reduction in the “least performing programs”. By what measure, we ask, is Ms. Maheux’s work considered to be “underperforming”? Ms. Maheux is widely regarded as one of the preeminent leaders in the field of conservation of works of art on paper worldwide. As well as a graduate of both Queens and Harvard Universities’ conservation programs, she is a fellow of the American Academy in Rome, an accredited member of the Canadian Association of Professional Conservators, a former President of this organization and member of our Board of Directors for many years. Her enormous commitment to her profession is self-evident. Among her many internationally significant accomplishments are her seminal research into the works of Degas, her contributions on development of mounting systems for oversized works, her work with contemporary works of art, and her efforts toward establishment of a federal Museums Policy. Colleagues with whom I have spoken are unanimous in describing her work as exemplary. The CAC urges you to reconsider the elimination of this position and the employment of Ms. Maheux personally. Not to do so will cause the Gallery’s reputation irreparable harm in the eyes of the Canadian conservation community. Sincerely, Dee A. Stubbs-Lee, President, CAC/ACCR CC: Mr. Donald R. Sobey – Chairperson of the Board of Trustees, National Gallery; Mr. David Franklin – Deputy Director and Chief Curator, National Gallery; Mr. Stephen Gritt – Chief, Restoration Conservation Laboratory, National Gallery; Ms. Lise Labine – Director, Human Resources, National Gallery.” http://www.cac-accr.ca/pdf/Ministerletter.pdf

2007-07 to 2008-04 Mr. Baxter and the Strategic Review Committee undertook to reach a 5% budget reduction by “identifying the “lowest performing” programs, including staff in each part of the Gallery. As a result of the review process eight positions at the Gallery including the position of Assistant Curator of European and American Art occupied by Erika Dolphin who is part of the PIPSC union) were abolished (Affadavit p.11)” According to [David Franklin] Erika Dolphin’s layoff was justified because of “overlaps of expertise (Affadavit p.12)” and that “the business case for abolishing the position was sound, even though it resulted in more pressure to perform on those remaining in the department (Affadavit p.12).” The decision to abolish the position was “a business decision (Affadavit p.12).”

According to [David Franklin] senior management discussed these layoffs very little but “the general feeling [. . .] was that people had not wanted to engage in layoffs, that there had been pressure from the Strategic Review Committee to cut the required 5%, and that the Strategic Review had been a very difficult process which resulted in decreased morale for Gallery senior management (Affadavit p.11)”

2008-04-29 The PIPSC filed two grievances on behalf of Erika Dolphin.

2008-05-08 PSAC. 2008-05-08. “Federal Program Reviews Mean Layoffs and Downgraded Services at the National Gallery of Canada.” Ottawa. “Jobs will be lost and corners will be cut at the National Gallery of Canada as a result of the federal government’s revolving “strategic review” of program spending in targeted departments and agencies across the federal government. Selected to undergo a review in 2007 along with 16 other departments and agencies, the National Gallery was directed to cut its budget by five per cent. Where the recent federal budget released in February referred to “better use of internal resources and administrative efficiencies” in the museums sector, the plain truth was announced by the Director of the National Gallery on April 3 when he announced 10 job cuts, including five layoffs – one of those to a senior paper conservator with more than 25 years of service. Among those laid off are three members of the Public Service Alliance of Canada (PSAC) and one member of the Professional Institute of Public Service of Canada (PIPSC). Director Pierre Thèberge also said the five per cent cut dictated by the strategic review process will necessitate other cuts that will have an impact on the Gallery’s publishing and marketing capacity. Events and exhibitions will have to be scaled back and training will also have to be curtailed, according to Thèberge. Reaction to the cuts, and in particular to the position of the senior paper conservator, has been swift. Numerous letters to Thèberge from senior gallery staff, trustees and conservators say the cuts call into question the gallery’s commitment and its ability to fulfill its mandate to expand and conserve its extensive collections. PSAC is currently considering a range of actions in response to the employer’s actions. Ed Cashman, PSAC Regional Executive Vice-President for the National Capital Region, argued that, “These cuts will not only hinder the Gallery’s ability to carry out its mandate, they will also have a significant impact on smaller museums across the country that rely on the gallery’s collections to draw visitors into their facilities.” http://www.newswire.ca/en/releases/archive/May2008/08/c6375.html?view=print

2008 “The gallery’s contemporary art shows [1998-2008] have been largely limited to retrospectives of aging artists who generally did their best work half a century ago when Pierre Theberge was curator of contemporary Canadian art at the very institution he now heads. Examples in recent years: Alex Colville, Norval Morrisseau, Gathie Falk, Bette Goodwin (Gessell 2008-06-10).”

2008 National Gallery promotes its blockbuster (June-September 200 called “The 1930s: The `New Man’” – which promises to be one of the most intriguing art shows of the year. Featuring more than 200 works by artists including Wassily Kandinsky, Max Ernst, Pablo Picasso, Salvador Dali, Alberto Giacometti, Joan Miro, Diego Rivera and many others, it looks at an era when Marxist and Fascist regimes in Russia, Germany and Italy were trying to create a “superman” without human weaknesses (Knelman 2008). This is a strange choice by a man known for his dictatorial management style. The 1930s has been the subject of major thematic exhibitions in Berlin, Vienna, Madrid, and Paris. The NGC version examines the connection between art and biology. “In the 1930s, biology became a force for change, often destructive, notably in its racist and eugenicist forms that sought to “improve” the human species. During this decade, the opposed concepts of the “degenerate” – or “mentally ill” – artist, as described by the Nazi ideology of the Third Reich, and the “superman” or “new man” became widespread. These ideologies were to have a profound influence on forms of art and representation.” The works presented in this exhibition come from private and public collections in Austria, Canada, the Czech Republic, Germany, Holland, Israel, Mexico, Russia, Spain, Switzerland, the United Kingdom, and the United States grouped under nine themes: Genesis, Convulsive Beauty, “The Will to Power”, The Making of “The New Man”, Mother Earth, The Appeal of Classicism, “Faces of our Time”, “Crowds and Power”, and The Charnel House. The organizing committee is chaired by the director of the National Gallery of Canada, Pierre Théberge. Its members comprise the following curators: Jean Clair, retired director of the Musée Picasso in Paris; Didier Ottinger, of the Centre Georges Pompidou; Constance Naubert-Riser, professor emeritus, Université de Montréal; Ann Thomas, the NGC’s Curator of Photography and the NGC’s director of National Outreach and International Relations, Mayo Graham, who acts as the committee’s coordinator. excerpts from http://national.gallery.ca/english/540_2091.htm

2008-07-03 National Gallery director Pierre Théberge sent an email to gallery staff “dedicated one nondescript sentence to announcing deputy director David Franklin’s leave and two extensive paragraphs detailing the career achievements of his “interim” replacement, Mayo Graham, who worked closely with Mr. Théberge at the Montreal Museum of Fine Arts before following him to the gallery a decade ago. Some have even described Ms. Graham, who was serving as director of national outreach and international relations, as Mr. Théberge’s protégé. Sources close to the gallery said the current tensions are rumoured to have come out of a dispute between Mr. Franklin and Mr. Théberge over the planned dismissal of another employee, which then escalated into a rift between them and made Mr. Franklin feel unwelcome (Alphonso and Bradshaw 2008-07-18).” Although David Franklin often replaced Pierre Théberge in public relations they were not close colleagues. Mr. Blockbuster, Pierre Theberge promotes activities that are part of a movement within museums globally in the 1990s that are criticized by some as being categorize are part of the dumbing-down of museums. David Franklin is a scholar.

It was widely believed that the two men were not close colleagues.

2008-07-26 Sealed documents were released revealing that David Franklin expressed grave concerns about the mental competency of Pierre Theberge who he argued should be immediately relieved of his duties as director of one of Canada’s most important cultural institutions (Gessell 2008-07-26). “(Gessell 2008-07-26).“

Webliography and Bibliography

Alphonso, Caroline; Bradshaw, James. 2008-07-18. “Gallery’s dirty laundry receives private airing
Federal Court seals file on application for judicial review of case involving dispute between top administrators at National Gallery.” Globe and Mail

Angus, W. David. 2005-01-30. “A gift for givers.” Montreal Gazette.

Bemben, Linda. 2002. “Poetry: Striking Red Shoes, An Introduction” Our Times.

Geddes, John. 2008-07-09. “Intrigue at the National Gallery: An out-of-the-blue announcement that the chief curator is on leave has people talking.” Macleans.

Gessell, Paul. 2008-07-26. “National Gallery feud revealed: Unsealed documents detail deep rancour at highest level.” The Ottawa Citizen.

Gessell, Paul. 2008-05-21. “But can he discuss art?” Art and the City.

Gessell, Paul. 1997. “Risk-taker in charge at Gallery: Pierre Theberge succeeds Thomson.” The Ottawa Citizen.

Gessell, Paul. 2008-06-10. “Let’s have a biennial” Art and the City.

2008-07-03. “National Gallery curator takes an indefinite leave.” The Ottawa Citizen.

Gessell, Paul. 2008-07-17. “National gallery heads faceoff in court: Judge dismisses mystery case involving directors.” The Ottawa Citizen.

Jana, Reena. 2001. “Staff Strike at the National Gallery of Canada.” Artforum International Magazine, New York, NY.

Knelman, Martin. 2008-03-19. “Not coming to a gallery near you.” The Star.

McCooey, Paula. 2008-07-18. “Day after secret court hearing, national gallery says all’s well.” The Ottawa Citizen. with files from Paul Gessell.

NACF. 2002-09-18. “National Arts Centre Foundation. Roundtable on Philanthropy in the Performing Arts.” September 18, 2002. Public Policy Forum.

NGC. 2000-04-03. “National Gallery of Canada Comes to Amicable Agreement with Educator Guides.” Press Release. NGC:Ottawa.

NGC. 2001-02-21, “National Gallery of Canada Director and Curator Appointed to the Order of Canada.” Press Release. NGC:Ottawa.

NGC. 2001-06-04. National Gallery of Canada and Canadian Museum of Contemporary Photography sign new agreement with the Professional Institute of Public Service of Canada.

NGC. 2001-07-11. “Tentative agreement reached for PSAC members at the National Gallery of Canada.” Press Release. NGC: Ottawa

CBC News. 2003-09-23. Gallery director under fire for $600,000 expense tab.”

NGC. 2003-09-23. “Board of Trustees Supports National Gallery of Canada Director. Press Release. NGC: Ottawa.

NGC. 2005-06-03. “One million dollars for the Renaissance Ball.” Press Release. NGC: Ottawa.

NGC. 2006-06-20. “The National Gallery of Canada Foundation receives the most important financial gift of its history.” NGC: Ottawa.

NGC. 2007-01-11. “Publication National Gallery of Canada Review V gets the support of the renowned Donald and Beth Sobey Chief Curator’s Research Endowment.” Press Release. NGC: Ottawa.

Picard, André. 1997-11-22. “A Call to Alms: the New Face of Canada.” The Toronto Star.

Starn, Randolph. 2005. “A Historian’s Brief Guide to New Museum Studies.” The American Historical Review. 110:1. Last accessed 2008-07-20.

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