The economic development grift, Cape Breton edition

News

1. Health Authority

“For the first time since the McNeil government dismantled nine regional health authorities and created one provincial agency to run hospitals four and a half years ago, the Nova Scotia Health Authority opened a portion of one of its Board meetings to the public,” reports Jennifer Henderson:

Yesterday’s meeting took place in the town of Liverpool. Doors opened at 8:25am. Only 10 citizens and three journalists showed up.

“We are committed to engagement and transparency,” announced Frank van Schaayk, the chair of the Nova Scotia Health Authority Board of Directors. Well, a very limited amount of transparency as it turned out.

While citizens and journalists may now observe the public portion of four of the Authority’s six meetings a year (thank you, that’s a significant change that was broached in the Legislature by NDP leader Gary Burrill more than a year ago), journalists are not permitted to record the proceedings.

“It’s too disruptive,” explained Van Schaayk,“and we have a lot of business to get through”.

I’ll accept the second part of that statement but not the first, especially   when you consider journalists are permitted to use tape recorders or cellphones to record the proceedings during murder trials in courtrooms as well as most at most other public meetings. Recording helps with accuracy.

So too would having a copy of the report prepared and distributed to Board members by the Health Authority’s CEO, Janet Knox. Considering the CEO’s report provides a regular update on the operations and annual spending of $2.1 billion of public money, transparency could be greatly improved (as well as the reporting on the discussion of that undisclosed document) if the Board shared the CEO’s report, if even at the start of the meeting, with reporters and citizens who cared enough to attend.

Here’s Frank van Schaayk’s response to that idea:

We won’t make materials public beforehand. We will publish the minutes. I can say we will consider it but I certainly wouldn’t promise it. You’ve got the ability to make notes while you are here and that’s the way we will be doing it for the next little while.

Let’s not give up. The door is open a crack.

Henderson goes on to report on what actually happened at the meeting, including discussion of efforts to increase physician recruitment and the corresponding increase in some wait times for surgery.

Click here to read “Health Authority opens the door a crack.”

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2. Mummy

El Jones writes about her mother; it’s such a sweet piece that I don’t want to detract from it by excerpting it, so read the whole thing.

3. Prison assault allegations

“Three women who say they were sexually assaulted by a prison guard have launched a lawsuit against the federal correctional service,” report Kristy Kirkup and Michael MacDonald for the Canadian Press:

The alleged assaults are said to have happened at the Nova Institution for Women, a multi-level facility in Truro, N.S. — one of six federal corrections facilities for women across Canada.

Halifax lawyer Mike Dull said Wednesday that two of the three women are still serving time, adding that police were called in within the last two months and a criminal investigation is underway.

Dull said two of the women filed complaints with the prison more recently, triggering an internal investigation and the guard’s resignation.

4. The economic development grift, Cape Breton edition

Last week, I described the economic development grift:

I’ve been on the “economic development” beat since I was in the crib. I’ve always recognized that the term “economic development” is used primarily to stop all critical thought before it can begin. Not only is “economic development” not clearly defined in the first place, there are no metrics by which to measure the success (or failure) of those paid to promote it, or to compare the success (or failures) of one agency with the success (or failures) of another agency. And there’s no way to assess one person’s performance over time — is Stephen Lund doing better or worse as the manager of economic development in New Brunswick than he did as the manager of economic development in Nova Scotia?

Moreover, the connections between economic development agencies and the real world are questionable, to put it mildly — there’s no way to test what would happen if the economic development agency never existed. Maybe the world would look exactly the same, with businesses starting and failing at the same rate. Maybe the no-agency world would be better. Who knows?

It’s the very murkiness of the economic development field that attracts people who excel at bullshitting. And since no politician wants to go on record as being opposed to economic development, the bullshitters have great success. Every business that opens is the bullshitter’s doing — just ask them. And every business that closes demonstrates that the bullshitters need more funding.

Usually, the economic developers are just silly people who are a drain on the public treasury. The money tossed into economic development could’ve instead been used to do actual good things in the world, like increasing the social assistance payout or hiring some more nurses or putting a new see-saw in the local park, which is why I think we’d actually have a better world if we didn’t have “economic development” at all. But what starts with silliness often slips into nepotism and the old boys’ networks, and then before you know it, we’re into full-time grifting.

I wrote that to illustrate the “redemption of Frank Anderson,” the former manager of the South West Shore Development Authority who was convicted of defrauding ACOA and yet has landed a job with a company that relies heavily on ACOA grants and loans. But the same principle applies generally, all over the place.

There have been other notable examples right here in Nova Scotia; consider, for example, Rhonda Charmaine Kelly, the former head of the Cumberland Regional Development Authority, who pleaded guilty to forgery related to her responsibilities. In the wake of the criminality at the South West Shore Development Authority and the Cumberland Regional Development Authority, the province did away with the regional development authorities, except for Halifax’s, perhaps with the idea that Halifax is somehow exempt from such corruption — a notion I find wanting.

Here are a few other recent examples of fraud and/or corruption committed through “economic development” agencies:

• Joseph Gerardi, a former top aide to New York state Gov. Andrew Cuomo, was convicted of defrauding a New York state economic development program. “Gerardi was a top executive at COR Development in the Syracuse area who helped secure a $100 million deal to build a factory and film studio in Syracuse as part of the state’s Buffalo Billion project to bring jobs to upstate New York,” reported the Associated Press. “He was convicted at trial earlier this year of conspiracy, wire fraud and making false statements to federal officers.”

• Byung Il Bang, a/k/a Peter Bang, pleaded guilty to wire fraud and making false statements on his tax returns. “Bang was the Chief Operating Officer (COO) of the Department of Economic Development for Montgomery County, Maryland (MC-DED),” explained the U.S. Attorney’s Office in Maryland:

The MC-DED established business incubator and/or innovation centers throughout the County with different areas of focus, such as computer technology, biological technology, and small minority — and women-owned businesses, to help small businesses by giving them below-market rent, placing them in an environment with other small businesses, and providing education on how to run a business.  As MC-DED COO, Bang oversaw budgets for these incubators and was authorized to request disbursement of County funds to the incubators.  Bang’s position also enabled him to authorize and direct the disbursement of money from County partners, including the Maryland Economic Development Corporation (MEDCO), and the Maryland Conference & Visitors Bureau, without any significant oversight or approval.

In 2010, Montgomery County and the Chungcheongbuk-Do province of South Korea entered into an agreement to develop an incubator fund.  On July 20, 2010, Bang caused a company called Chungbuk Incubator Fund LLC to be incorporated in the State of Maryland and opened four bank accounts in the name of the company, listing his home address as the address of the LLC. Bang used this entity and the bank accounts to facilitate his fraud.

Bang admitted that between 2010 and 2016, he fraudulently authorized the disbursement of $6,705,669.37 from the Montgomery County government to the bank accounts of the fraudulent entities that Bang created and controlled. 

• The US Securities and Exchange Commission filed charges against Wells Fargo bank and the Rhode Island Economic Development Corporation (RIEDC), claiming that a scheme to provide funding for 38 Studios, a video game company started up by former Boston Red Sox pitcher Curt Schilling, was fraudulent. Specifically, reported The Hill:

According to the SEC, the entities sold $75 billion in bonds to investors and loaned $50 million of those proceeds to 38 Studios to help finance its first video game. The remaining $25 million went to cover bond offering expenses and set up reserve and interest funds.

But the problem came when the entities failed to inform investors that 38 Studios believed it needed $75 million to complete its game and would need to come up with additional financing elsewhere. When that money did not come through, the company could not finish the game and ultimately went bankrupt.

Subsequently, “Schilling and others have agreed to pay $2.5 million to settle their part of a lawsuit brought over Rhode Island’s disastrous $75 million deal with 38 Studios, his failed video game company,” reported the Associated Press.

• Along with a bunch of other alleged crimes, St. Louis County (Missouri) County Executive Steve Stenger, was indicted last month for illegally giving a lobbying contract to a company via the St. Louis Economic Development Partnership in exchange for campaign contributions.

• The Raleigh, North Carolina News & Observer did a deep dive into the Raleigh Business and Technology Center, an economic development “incubator,” and found all sorts of alleged malfeasance.

I could spend the entire day listing examples of corruption at economic development agencies, but you get the point.

I’ve personally reported on so many of these economic development grifters that I’m seriously thinking about putting together a “how-to” PowerPoint presentation for wannabe grifters, a tongue-in-cheek explainer to help policy makers, politicians, and the public read through the bullshit.

If I ever do put together that PowerPoint presentation, one of the slides will be devoted to Albert Barbusci, the supposed “port developer” for the Port of Sydney.

On Friday, Mary Campbell of the Cape Breton Spectator reminded us that in and of itself the port project is a meta-misrepresentation:

Speaking to Tom Ayers of the CBC, Barbusci claimed the Chinese had backed out of financing Novaporte and Novazone — Barbusci’s names for a planned Ultra-Large Container Vessel (ULCV) terminal and logistics park in Sydney — because of “Aecon and Huawei issues last year.” (Huawei CEO Meng Wanzhou was arrested at Vancouver airport on 1 December 2018, which is last year — but just barely.)

So forget the trips to China, the Chinese sister city, the Chinese construction company, the Chinese financial backers, the Chinese shippers and the possibility that the Port of Sydney will become part of China’s Belt & Road Initiative (especially forget that, it never made any sense anyway). All that, it turns out, was just Plan A and we’ve moved on to Plan B — AVAIO Capital.

Yesterday, Campbell published a detailed account of Barbusci’s ongoing personal misrepresentations. (Importantly, Campbell notes that at every step along the way, Barbusci has been abetted by credulous media.)

The list of misrepresentations is too long to recount in full here, but I especially like this part:

The SEC bio continues:

In 1994, he [Barbusci] became a partner of the Atlanta Consulting Group, a successful U.S. business, consulting to Fortune 1000 companies…

In another online bio, he lists the Atlanta Consulting Group as one of the firms he has “led.”

If you Google “Atlanta Consulting Group” there is one company that dominates the search returns, so I am going to go out on a limb and assume Barbusci meant this Atlanta Consulting Group.

But in 2016, I contacted that Atlanta Consulting Group and spoke to Terri Sponseller, VP, who has been with the company since 1991 and who “is responsible for operations, administrative issues, human resources and client service.” She told me she had never heard of Albert Barbusci and said they had no “partners” in Canada.

The bio continues:

…in 1998, he partnered with Grey Healthcare Group, one of the largest Pharmaceutical Marketing and Advertising agencies in the world for the purpose of establishing Phase V Communications in Canada.

In 2016, in response to an email asking about the partnership between Albert Barbusci and Grey Healthcare Group, Dan Relton, the group’s director of human resources worldwide, told me in an email:

We don’t know this person. Phase V Canada isn’t affiliated with us.

“For the record,” comments Campbell, “I asked Barbusci to clarify his roles with the Grey Healthcare Group and the Atlanta Consulting Group back in 2016 and he suggested that we ‘carve out a few minutes to meet in person’ when he was next in Sydney so he could tell me all about his past and present business ventures. We were going to have breakfast. Then he canceled.”

Barbusci’s actions in Cape Breton have every indication of a planned grift:

1. Find a remote area with a struggling economy where the people and politicians will jump at any opportunity for “economic development”;
2. Appeal to the locals’ pride in the supposedly distinctive qualities of the region that should be the basis of greatness!;
3. Misrepresent your qualifications so as to suggest that you bring special expertise to the situation;
4. Hob-knob on the local boosterism circuit, glad-handing the newspaper publishers, chamber of commerce types, government managers, and the politicians;
5. Obscure the fact that you are bringing no actual benefits to the locality by insisting that secrecy is needed for “competitive” reasons and anyone who wants some sort of accountability is a naysayer and self-loathing local.
6. Play this out as long as you can, collecting consulting fees all along the way.

Click here to read “When Reporting Becomes Enabling.”

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5. Develop NS and wages

I was out of town over the long weekend, attending to personal business that took most of my time. I did, however, have a few moments here and there, and while I was looking for something else entirely Saturday, I happened upon a job ad from Develop Nova Scotia (formerly Waterfront Development), and tweeted about it. Suzanne Rent linked to my tweet Tuesday as part of her very good overview of the poor wage prospects workers face in Nova Scotia.

My Twitter thread:

The tweets generated a lot of discussion, and in response to some comments from Michelle Malette I gave the issue a bit more thought and added:

To Develop Nova Scotia’s credit, on Tuesday afternoon the organization responded to Rent and me:

That’s good. But I hope it leads to something more than a review of qualifications and compensation for the job — that is, I hope it leads to a review of how such shit pay was offered in the first place. There are unacknowledged class biases at work here.

$12.50/hour at 35 hours/week is about $22,000/year. No one can live decently on that wage, college degree or not. I’ve long argued that government agencies should adopt a living wage policy; in Halifax, that means pay of about $20/hour. A living wage would increase the pay for the waterfront custodian to about $35,000/year. That’s the difference between abject poverty and the ability to walk through life with dignity, if not comfort.

And it would cost Develop Nova Scotia something like an additional $15,000/year. That’s a rounding error in Develop NS’ accounts. Consider, for example, that the cost of remediating the Queen’s Marque site increased by a million dollars and no one blinked. Develop Nova Scotia has money pouring out of its corporate ears, and yet it thought it was a great idea to hire someone at poverty wages.

I don’t think businesses should pay shit wages, either, but even though I find it reprehensible, I kind of understand the instinct to keep all costs low, even if that means shitting on your “valued associates,” or whatever the latest HR phraseology is. But government agencies? Come on: you folks have been padding the expense accounts with all sorts of nonsense forever; at least pay the help decently.

6. Donkin mine

“The province has issued a stop-work order in one of two underground sections at the coal mine in Donkin, N.S., after a methane fire,” reports Tom Ayers for the CBC:

Harold Carroll, executive director of occupational health and safety with the Department of Labour, said investigators were sent to the mine on Wednesday after being alerted to the fire.

He said it’s not clear yet how the methane ignited, but he said the fire was extinguished quickly and no one was injured.

…

The fire occurred in a small section of the mine that has been in production since the end of January.

Another small section was opened to production earlier this month, but most of the mine is closed to coal-cutting after a roof collapse at the end of December.

Government

City

Thursday

Appeals Standing Committee (Thursday, 10am, City Hall) — taxi driver Douglas James Brine, convicted of assault with a weapon and various related charges in 2015, and of obstructing/resisting police in 2018, says he is working hard to reform himself and so therefore should be allowed to drive a cab again.

Transportation Standing Committee (Thursday, 1pm, City Hall) — here’s the agenda.

Public Information Meeting – Case 21394 (Thursday, 6:30pm, Dartmouth Seniors Service Centre, 45 Ochterloney Street, Dartmouth) — Application by Teal Architects and Planners, on behalf of the property owner, to rezone the property from R-2/C-2 to GC (General Commercial) and enter into a development agreement to permit a 12 storey mixed-use building at 153 and 155 Wyse Road, Dartmouth. More info here.

Friday

No public meetings.

Province

No public meetings Thursday or Friday.

On campus

Dalhousie

Thursday

Beyond GDP: International Experiences, Canada’s Options (Thursday, 9am, Room 104, Weldon Law Building) — see Tuesday’s events listing. More info and registration here.

Microbial-host codevelopment in cnidarian holobionts from jellyfish to corals (Thursday, 11:30am, Biology 5^th floor lounge, Life Sciences Centre) — Monica Medina from Pennsylvania State University will talk.

Dirty Cities and Smoky Skies: Chemistry and Photochemistry at the Surface of Tomorrow’s Urban Particulate Matter (Thursday, 1:30pm, Room 226, Chemistry Building) — Sarah Styler from the University of Alberta will talk.

Friday

Beyond GDP: International Experiences, Canada’s Options (Friday, 9am, University Hall)— see Tuesday’s Events listing. More info and registration here.

Saint Mary’s

Thursday

China Business Summit: Paving the Way for Nova Scotia (Thursday, May 30, in the building named after a grocery store) — registration open now. The listing says “Join local business people and experts for a free, hands-on, business-focused event with workshops on e-commerce, finance, negotiation and human resources.” Sponsors include the totally responsible and non-controversial Confucius Institute, Canada China Business Council, and NSBI; workshops include “Using China’s Payment Platforms in Canada, keys to a successful head start” with Riven Zhang of MotionPay, and a panel discussion on “Financing Trends in E-Commerce” with speakers from RBC and Export Development Canada.

More info and registration here.

Friday

No public events.

Mount Saint Vincent

Thursday

American Refugees: Turning to Canada for Freedom (Thursday, 4pm, McCain 105-106) — book launch and author talk with former Nancy’s Chair in Women’s Studies, Rita Shelton Deverell. Check here to see if there are seats still available.

King’s

Thursday

Honorary Doctorates (Thursday, 2:30pm, Rebecca Cohn Auditorium) — at the 230^th Encaenia (convocation) ceremony, Dale Godsoe and Lawrence Hill will each receive an honorary Doctor of Civil Law, and Bruce Gordon will receive an honorary Doctor of Canon law.

In the harbour

06:00: RHL Agilitas, container ship, arrives at Pier 41 from New York
06:30: Skogafoss, container ship, arrives at Pier 42 from Argentia, Newfoundland
07:00: Zaandam, cruise ship with up to 1,718 passengers, arrives at Pier 22 from Sydney, on a seven-day cruise from Montreal to Boston
11:30: Skogafoss sails for Portland
15:00: Brighton, container ship, sails from Fairview Cove for Dubai
15:45: Zaandam sails for Bar Harbor
17:00: Augusta Mars, cargo ship, arrives at Pier 31 from Moa, Cuba
17:30: Undine, car carrier, arrives at Autoport from Southampton, England
20:30: Undine sails for sea
21:30: RHL Agilitas sails for Kingston, Jamaica

Footnotes

Thanks to Philip Moscovitch, Suzanne Rent, and Erica Butler for filling in for me the last few days.

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