The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Monday, September 29, 2008

Tying together Lesley Hughes and her wacko conspiracy friends

The Winnipeg Sun headline reads "Dion Dumps 9/11 Nut."

Ouch. That's gotta hurt.

Lesley Hughes' world came crashing down in less than 24 hours.

One morning she's proudly representing the Liberal Party of Canada, rubbing shoulders with leader Stephane Dion, and sharing the stage at a major election event with her fellow candidates, and the next she's incommunicado, dodging allegations of anti-semitism and reading her career obituary---9/11 nut.

After being exposed as a 9/11 Truther, she got one chance from Dion to save her political hide. Convince the Canadian Jewish Congress you're okay, and you stay. Instead, Hughes issued an official statement through the Liberal Party of Manitoba in which she said:

"I am a lifelong friend and supporter of the Jewish community in Winnipeg and I am deeply distressed by any suggestion to the contrary. I find any interpretation of my journalism as anti-Semitic personally offensive and I heartily apologize for that perception."

What did that gobbleldygook mean? Well, as best we can tell she said SHE'S offended if you're offended by what she wrote and she's apologizing to herself on your behalf. Or something like that.

The CJC wasn't buying it either. And a half hour before high noon on Friday, she was walking the plank before she even knew there was a plank.

All that for writing that Israeli businesses got tipped off by Israel's intelligence service a week in advance that the World Trade Towers were going to be hit by a terrorist attack, giving the businesses time to break their leases and move, on the QT. The Israeli's didn't tell a soul, allowing thousands of innocents to be murdered on Sept. 11, 2001. And for sending readers to websites where they can read how the attacks were an inside job by the CIA and George Bush to set up an excuse to invade Afghanistan and Iran and seize their oil.

""It is an utterly unjust decision", said Hughes on Friday, ever the victim.

The continuing firestorm over Lesley Hughes has produced three emotions.

The Lesley Hughes brouhaha has been illuminating. It has been amusing. And it is disturbing.


It's been something to see the 9/11 Truthers come crawling out of the woodwork. Newspaper and blog comments threads are packed with them.

The Truthers can't decide whether the Liberals, the NDP or the Greens are the Truthiest.

Peacekeeper 29 wrote on
at 1:18 PM ETMr.Canada wrote:Posted 2008/09/26 at 12:49 AM ET

I have been a long time Liberal supporter, ardent defender of Stephane Dion and advocate for defeating Harper to ensure Canadian security, soverignty and integrity. I went so far as to join the party, volunteer, do what I can on a grass roots level to help promote change, however I am sorry Mr. Dion, it saddens me now to second guess supporting you in favour of the NDP now. this moment I even have one of those large Liberal signs on my front lawn and it may have to come down for this.

I am not going to support any leader or party who shuns from accepting the truth as is the case with Ms. Hughes. The facts are not in dispute about the warnings that the Mossad gave the company. If you were to do your research sir, I think you would find that there is more to what happened on 911 than meets than what the official story line is. A real leader would have said "although I don't condone what she said, I am not going to punish her for her rights to express her opinion and her beliefs as my government supports such expression.". What this says to me is that you are a lacky, weakling and a disgrace to the integrity of truth.


A major Liberal supporter in Vancouver Center.

Canadainmyheart wrote:

I read your post and I fully understand your feelings. There are too many things coming to light about 9/11 and it goes way beyond what Michael Moore had to say about it. That case is certainly worth re-opening and a new investigation SHOULD take place.

It is a shame if politicians feel fear to question 9/11. It is worse when politicians take the official lines as the utter truth. Worse than that, however, is politicians losing their jobs for speaking their opinions on 9/11. But I am not surprised.

By the way, I'm a Vancouver resident and I think the NDP are a very decent choice.

John Ishmael from Brampton ON, Canada wrote on Babble, the message board for the far, far left:

Did Leslie Hughes quote the known facts or fabricate them?
IF she did not fabricate them, why did that coward Dion fire her - and not even have the ovaries to tell her in advance.
Vote NDP or Green. The Liberals deserve to receive the Con shaft right up their ....

The Truthers break down into two arguments:

* Hughes wrote about Israeli businesses moving. She didn't mention Jews. Any perception of anti-semitism is therefore wrong.

* Hughes is right. There was a conspiracy regarding 9/11 and she’s being punished to keep her from talking about it.

A poster on the Globe and Mail site wrote: one on this board finds it at all odd that Israel--and that's all this is about, not Jews but the policies of the nation of Israel--has crept into a Canadian election?

Not believing the official line regarding 9/11--which is full of holes, missing evidence, cover ups, and contradictions--does not make one a wacko or nut job, but a critical thinker.

Sebastian Ronin from Canada wrote on the same webpage:
Greetings from the other side of the Rubicon. What Ms. Hughes wrote are not 'allegations.' The pre-knowledge of the attacks is documented. Her dismissal goes much deeper than the knee-jerk claims of anti-Semitism.

The lesson here is that the Liberal Party has moved so far to the left of centre that its now fighting with the hard-left parties for voters on the political fringe. In that rarified atmosphere, the moonbat conspiracy theory seems normal.


It's been amusing to see the local news media twist and turn the story to protect former CBC radio host Lesley Hughes.

Reporting for CBC television news, Marissa Dragani painted Hughes as innocent victim. Dragani literally bumped into Hughes on the street near the CBC building and was the first to inform the Liberal candidate that she was now the former candidate. Didn't anyone tell you, you poor dear? wept Dragani. Noticeably missing was any attempt to ask Hughes about her odious 9/11 conspiracy beliefs. Or even to explain them in the story she filed for the 6 o'clock news.

That same morning CJOB radio host Richard Cloutier called Hughes one of the Liberal Party's star candidates. He said it was unfair, unfair damn it, to use someone's old writings to discredit her. Like Dragani, he never spent a second to explain the 9/11 conspiracy theories or to point out that Hughes not only didn't disavow her 2002beliefs, she encouraged people to read them today.

Equally funny was seeing the extent to which the Winnipeg Free Press went to avoid mentioning The Black Rod. Reporter Bruce Owen attributed the Hughes information to "a local blogger", while columnist Dan Lett said it came from "a Manitoba blog." Bwahahahaha.


On Cloutier’s radio show, as a guest, was Liberal Party campaign co-chair Sharon Carstairs. Hearing her trying to split the thinnest of thin hairs was disturbing indeed.

“Let me make the distinction between anti-semitism and conspiracy theories,” said Carstairs. “No one, including the Canadian Jewish Congress, has accused Lesley Hughes of anti-semitism. What they have indicated and what we supported was that her blog seemed to indicate that there was conspiracy theories that were supported, and that is totally unacceptable.”

And what exactly were those supported conspiracy theories, Sharon?

Only that the Israeli government tipped off their co-religionists who sneakily moved without warning those who don’t share their religion and letting them die in a terrorist attack.

Yeah, no anti-semitism there, not if you look at it with one eye closed and squint with the other while turning in circles till you get dizzy. We can’t wait to hear Sharon Carstairs make her wacko explanation to the voters of River Heights.

And for the record, here's what Bernie Farber, chief executive officer of the Canadian Jewish Congress, actually told CBC regarding Lesley Hughes:

"In an interview with following the announcement, Bernie Farber, chief executive officer of the Canadian Jewish Congress, said Dion did the right thing by demanding Hughes withdraw from the race.

"He did exactly what had to be done," Farber said. "Lesley Hughes crossed a line which just simply cannot be crossed under any circumstances. There is no room in Canada or anywhere for these modern-age twists on the age-old anti-Semitic calumnies with these odious and dangerous conspiracy theories.""

But that’s not all.

Lesley Hughes is an editor at the hard left magazine Canadian Dimension where she writes regularly and where she meets the nicest people.

Here’s a notice for a podcast discussion with 9/11 Truther #1 Barrie Zwicker who, it appears, is a member of the Canadian Dimension “collective.”

rabble podcast network - new voices in your head
Canadian Dimension collective members Barrie Zwicker, Ed Janzen and Brenda Austin-Smith head up the discussion hosted by Lesley Hughes.

And who else does Lesley Hughe rub shoulders with? There's James Petras, whose views on Israel sparked a lively debate in Canadian Dimension in 2002, right around the time Hughes was writing about "the truth" of the 9/11 conspiracy. Here's a snippet of comments left on the CD website regarding that healthy debate from Google:

When does criticism of Israel become anti-semitic? (CDebates).
Canadian Dimension
, July, 2002

Follow up to the debate begun in Canadian Dimension vol.36 #3 (May/June, 2002) on the U.S. Israeli lobby and Middle East foreign policy
As Abbie Bakan points out in her rejoinder to Petras and Herman, it is shocking to read "Jewish conspiracy" arguments in a left-wing magazine. "Shocking" is an apt term.
Petras and Herman talk about "Jewish money," "affluent Jews" and "powerful Jewish organizations." Petras says, "There is no power in the U.S. that can counter the money and influence of the ...
Canadian New Democratic Party Leader embraces the lunatic fringe by Brian Henry
Added by David Zarnett on September 15, 2008 03:30:10 AM.

You can read how James Petras believes the Mossad was behind the Muhammed cartoons in Denmark here:

and how Canadian Dimension collective member Ed Janzen supports the boycott of Israel here:

Turning up the heat an Israel. From: Canadian Dimension Date: September 1, 2006 Author: Janzen, Ed COPYRIGHT 2006 Canadian Dimension Publication, Ltd.
The DBS (divestment, boycott and sanctions) campaign against Israel comprises a diverse group of organizations. Their actions range from boycotting Israeli products to divesting from Israeli companies to boycotting Israeli academic institutions.

Lesley Hughes wrote her column about the 9/11 conspiracy for Winnipeg's community newspapers such as the North End Times and the Lance, and NOT in a blog.

The column was so well received by the Justice, Economy, and the Integrity of the Earth, a committee of Winnipeg Presbytery (301G Weston Street, Winnipeg) that they put it on their website Eyeopener where reporters are finding it.

The United Church's Eyeopener is so in love with the 9/11 canard that they reprinted it in 2003.

EyeOpener March 2003page 2

The Silence by Ear-and-Eyeopener
Why did the massive international intelligence (from Israel, Pakistan, Germany and elsewhere) about a coming attack on America about September 11 not issue in preventive measures in the US?
Why did it take almost 2 hours for the US Air Force to act on September 11, when they had standing orders to scramble instantly in such hijacking situations? Were there countermanding "stand down" orders given to the US pilots on September 11 to allow a plot only vaguely known to go ahead and happen? For what reason? Why have the derelict airforce officers not been disciplined?
Why did Israeli businesses, which had offices in the World Trade Center Towers, vacate their offices a week before the September 11 attacks, breaking their leases to do so? What did they know?
It was immediately apparent after September 11 that the official line of explanation had many holes in it.

The United Church, you may remember, is one of the proud leaders of the Boycott Israel/ Israel Apartheid movement.

And there's more.

Lesley Hughes, it appears, teaches some sort of journalism course at the University of Winnipeg. The president of the U of W is none other than former Liberal foreign affairs minister Lloyd Axworthy who is no stranger to conspiracy theories himself.

Way back in July, 2006, the Winnipeg Free Press published an interview with Axworthy on the Israel-Hezbollah-Lebanon crisis. The story by their then-Ottawa reporter Paul Samyn concluded this way:

"Axworthy also took a shot at Winnipeg's Asper family, saying they are using their media empire to advocate staunchly right-wing positions when it comes to defending Israel.
"The Aspers are increasingly playing a far more important role in shaping Canadian foreign policy."

To some, this looked like a reference to the Israel Lobby, another favourite topic of Canadian Dimension magazine and the far left.

But within days, a second and very different version of the interview was published. In this version, Axworthy had actually been talking about disaspora, not the Aspers. Samyn, in this version, botched it royally.

At the time, The Black Rod came to Samyn's defence. We noted that there was a tape recording of the interview. Why not put it online so confused readers can listen to it themselves and decide which version of the interview was correct? Ha ha. You know where that suggestion went.

But now that we see how warmly Lesley Hughes is held by Axworthy and Co., we can guess which version of the disputed interview comes closest to --you guessed it -- the truth.

But we're not finished.

This debacle only raises more questions which the mainstream press has so far failed to answer.

Remember, Stephane Dion flew into Winnipeg in his flying air-pollution-mobile to help Liberal candidate Anita Neville.

Ever since Liberal leadership candidate Michael Ignatieff declared Israel was guilty of war crimes in Lebanon in 2006, Neville has been trying to mollify the Jewish voters in her riding. So in a week where he was making billion dollar promises every day, Dion flew into Winnipeg to announce a promise to spend a measly $75 million to protect Jewish (and other religious) institutions from racists.

What does that tell you?

That Neville's campaign is in deep trouble. That she has to call on the least-liked leader in the election campaign to come to her aid. The mainstream media may be as surprised at the outcome in River Heights as they were when Reg Alcock bit the dust in '04.

And we're not done with Lesley Hughes. While Dion got a lot of press for bumping her off the Liberal ticket, no reporters asked the right question.

The Liberals are dead broke. They can't pay their debts from the last leadership campaign. They're running the current election campaign on borrowed money, money supported by the collateral of used Lesley Hughes campaign signs, unsold copies of the Protocols of Dion, and the $1.75 the Liberals expect to collect from taxpayers for each vote cast for a Liberal on the ballot.

Lesley Hughes is still on the ballot as a Liberal candidate. It's was too late to take her name off. So will the money for votes case for her go to the Liberal Party anyway? If she got as many votes as the Liberal candidate got in Kildonan-St. Paul in 2004, that's almost $24,000. Or will Hughes get to keep the money as an Independent?

The Liberals pretend they're hurt by her dismissal. But the National Post wrote Saturday that party insiders have conceded the election and are now considering ways to save money to run the next time. One of the ways was to stop spending on local candidates. Lets see, scrap the Hughes campaign which she wasn't going to win anyway, save some bucks, and collect the cash from votes cast for her anyway.

A win-win for the Party. But is it a conspiracy? Somebody call the Israeli embassy.

And FINALLY, a rejoinder to the 9/11 nutbars who jumped to the defence of Lesley Hughes, like this one.

Globe and Mail
gary elliott from Canada writes: That 'whack job' Israeli newspaper Haaretz reported that instant messages were sent to Israeli employees of Odigo, with offices in the WTC, before the demolitions happened.\

Smug ignorance never wins out over evidence.
· Posted 26/09/08 at 12:48 PM EDT

The leade on the original Haaretz story (we can't find the original publication date) reads:
Odigo, the instant messaging service, says that two of its workers received messages two hours before the Twin Towers attack on September 11 predicting the attack would happen, and the company has been cooperating with Israeli and American law enforcement, including the FBI, in trying to find the original sender of the message predicting the attack.

An interview with Odigo Vice President of Sales and Marketing Alex Diamandis published on Sept. 28, 2001, carried more information.

Two employees of Odigo got popup messages two hours before the New York attacks which "did not mention the World Trade Center specifically, or any other targets."

"Without going into details, the message was most noteworthy due to the timing, not due to the substance of the 'warning.' It could easily be coincidence," Diamandis said. Citing the ongoing investigations, Diamandis declined to provide specifics of the actual messages or the identity or location of the sender.

Odigo's New York office was not in the World Trade Towers. It was four blocks away. And the warning may not even have come there.

The only apparent update on the story that we could find was this: -Agents Following Suspects' Lengthy Electronic Trail
The story is no longer available on the web, but there's this excerpt on another website:

The Washington Post briefly reported about the evidence of Israeli prior knowledge on October 4, 2001 on page A-24:

"Another possible hint of the plot came two hours before planes crashed into the World Trade Center, when two employees of Odigo Inc. in Herzliya, Israel, received electronic instant messages declaring that some sort of attack was about to take place. The notes ended with an anti-Semitic slur.

"The messages said something big was going to happen in a certain amount of time, and it did -- almost to the minute," said Alex Diamandis, vice president of sales for the high-tech company, which also has offices in Lower Manhattan. He said the employees did not know the person who sent the message, but they traced it to a computer address and have given that information to the FBI.

This story says the warning came to employees of Odigo in Israel. And they ended with an anti-semitic slur.

We do the research, so you don't have to.

Friday, September 26, 2008

"The MVP blogger of the election so far? The Black Rod"

"The MVP blogger of the election so far? The Black Rod
Posted: September 26, 2008, 12:26 PM by Jonathan Kay
Jonathan Kay

At 11:57am EST, Stéphane Dion did the right thing — and the blogger who set it all in motion is apparently The Black Rod:

From: ""
Date: Fri, 26 Sep 2008 11:57:44 -0400

Statement from Liberal Leader Stéphane Dion

The Liberal Party's commitment to tolerance and multiculturalism is paramount. I have reviewed the past comments of Lesley Hughes and it is clear they do not meet this standard. While I appreciate her apology, I cannot condone those sentiments in any way. I have therefore asked Ms. Hughes to step down as the Liberal Party candidate in Kildonan-St. Paul. "

Thank you.

Wednesday, September 24, 2008

Manitoba reporters miss biggest Federal election news - cause it comes from the Legislature

Memo to future historians and chroniclers of elections: Yes. News coverage in Manitoba of the federal election of 2008 is the worst in history.

There oughta be a contest to find the words that best describe how pathetic the reporting has been to date.

The absolute nadir, so far (and we have to qualify this because the election campaign is only half over), came early this week.

In the Manitoba Legislature (note to readers: that's the place Manitoba politicians meet daily but which local reporters have abandoned to concentrate on not providing information about the federal election), the Opposition Justice critic Kelvin Goertzen (PC-Steinbach) revealed some absolutely jaw-dropping information. But then, the NDP government's response was even more stunning.

It was, simply, the biggest election news locally in the campaign so far.

And it will probably comes as news to you. Because NONE of the mainstream media reporters covering the federal election recognized the importance of what was said.

The Opposition looked back two years to 2006 to gauge the impact of the NDP's touted anti-crime initiatives. Here's the Page One news you DIDN'T read:

According to the Manitoba Department of Justice, of the criminal youths convicted between April and June 2006....

* 100 percent of those who went to jail committed new crimes within 2 years;

* 90 percent of those sentenced to "open custody" (the cutesy term that means they live in groups homes or other residential facilities while they're supposed to go to school (ha ha ha) and receive treatment) committed new crimes within 2 years; and

* 80 percent of those sentenced to probation (as in the term you read daily-- "charged with breach of probation") committed new crimes within 2 years.

Goertzen asked:
Mr. Speaker, between April and June of 2006, every young person who was released from prison had re-offended within two years. This is a justice system that isn't working. Every young person. You could do absolutely nothing and have the same results, and that's what this government is doing - nothing. Doesn't he just admit it, that every program they put in place is a failure?

Justice Minister Dave "Six Months" Chomiak had three answers. The first two don't count:

#1. You only found out because we changed the freedom of information laws.
#2. Our jails are full. Do you want to let some criminals out?

It was #3 that made our heads spin.

Mr. Chomiak: "One of the reasons that those people are in prison and one of the reasons that the rate of auto theft is down 50 percent, Mr. Speaker, is because we're putting those children back in prison, and if members would support us in our revision to the Young Offenders Act, we could get them in there on the first offence and keep them off the street."

We had barely recovered our equilibrium, when he said this:

Mr. Chomiak: Mr. Speaker, under the federal legislation, under the federal Young Offenders Act, you can't keep people in jail in most cases longer than two years. So, when the member supports our change to Ottawa to make sentences longer, we'll be happy.

(Okay, Hansard doesn't make sense. We're guessing he said "our challenge to Ottawa.")

We couldn't believe our ears, so we waited until the next day so we could read it right there in black and writing, as the immortal city councillor Slaw Rebchuk used to say.

- The NDP in Manitoba has declared crime is down because they're "putting those children back in prison".

- And they could do a better job if the Young Offenders Act was changed so young criminals could be sent to jail for their first offence.

- And, pass the smelling salts, the NDP wants Ottawa to "make sentences longer."

Then....even more.

On Tuesday, buried deep, deep in the column of Winnipeg Sun writer Tom Brodbeck was this:

"Manitoba's NDP Justice Minister Dave Chomiak said he supports the federal Tory plan, especially the proposal to put deterrence and denunciation into youth laws as sentencing principles.
"We agree with that," he said. "We have recommended that for some time."
Chomiak said he even disagrees with his federal NDP cousins -- who are opposed to making deterrence a sentencing principle in the YCJA -- on the issue."

Get that?

THE ONLY ELECTED NDP GOVERNMENT IN CANADA is 100 percent AGAINST Jack Layton's justice platform. The federal NDP is still campaigning AGAINST putting deterrence and denunciation in the laws on youth crime.

More than one year ago, The Black Rod reported how NDP justice critic was bragging how he kept deterrence out of the Youth Justice Act.

Dying on the NDP's altar of political correctness, Friday, July 27, 2007
He's campaigning even today on keeping deterrence out of the Youth Justice Act.

The only NDP government in the country that has had actual experience dealing with uncontrolled street gangs, an epidemic of car theft, an unparallelled number of youth involved in murders and attempted murders -- says the federal Conservatives have it right when it comes to crime.

Folks: That's called NEWS.
Front page news.
Above-the-fold news.
Banner news.

Let's see...The Winnipeg election reporters have covered the Puffin-pooping-on-Dion internet animation, which affected...ummm....let's count...uh....NOBODY.

And let's not forget polls. Lots of polls.

And, of course, the average voter's lament that our politicians lack glamour.

How has the Winnipeg Free Press, CBC, CJOB, CTV, Global, and even The Winnipeg Sun reported on the open break between the Manitoba NDP and Jack Layton's NDP?


Remember the Gary Doer dog-and-pony show to Ottawa last September? When he lead a delegation to demand stronger laws against car thieves, an end to house arrest, and whatever else. When nobody from the delegation bothered to confront Jack Layton or Stephane Dion about their obstructionist tactics they were using to weaken the laws proposed by the government? When not a single local or national reporter (hello Mia Rabson) confronted the Opposition leaders with Manitoba's stand on youth crime laws?

The election call was their chance.

Jack Layton has been in Winnipeg. The number of questions he's been asked about the split with the Manitoba NDP? Zero.

Stephane Dion has been in town, including Wednesday's surprise visit when he actually discussed Stephen Harper's proposals to toughen the laws (he's against them, surprise, surprise). The number of questions put to Dion about the Manitoba NDP's demand for tougher laws? Zero.

What about local coverage?

Has a single reporter questioned Judy Wasylycia-Leis about the split? About how she can run on the federal platform against the wishes of her Manitoba constituency?

What about Pat Martin? They chase him whenever he burps about killing the penny and relocating Winnipeg's railyards, but he's invisible when it comes to answering how he can support Jack Layton's position on gangs, car theft, and sentencing.


Why are the local media refusing to cover the real news? Incompetence? Or protecting favoured candidates?

And speaking of unreported stories---what about that coverup of the 911 bombings of the World Trade Centre and the Pentagon.

Now that's an unreported story -- according to a well-known Liberal candidate.

Lesley Hughes, step right up.
Yes. Former CBC radio host Lesley Hughes.
Now running against Conservative Joy Smith in Kildonan-St.Paul.
She's a 9-11 Truther.

She was upfront about her views in a 2002 column headlined Get The Truth. You know, the one where she wrote how the Jews with offices in the World Trade Towers got advance warning of the terrorists attacks. Yeah, that one.

Here's just a sample of her truther writings from that column which you can find posted here

"Truth may have been the casualty of war in former ages, but this war is different. While major media busy themselves waving flags, a global network of independent journalists, who have no interests to protect, no secrets to hide, are tracking and documenting its development on a daily basis.

Among the best: the Web site The Emperor's New Clothes ( and Mike Ruppert, editor and publisher of From the Wilderness newsletter out of California (

Using and sharing only published and sourced news stories from world media, and official documents of various governments either leaked or available under freedom of information acts, these journalists have assembled a disturbing picture, which suggests CIA foreknowledge and complicity of highly placed officials in the U.S. government around the attacks on the World Trade Center Sept. 11.

Many official sources are claiming to have warned the American intelligence community, which spends $30 billion a year gathering information, about the attacks on the twin towers on that heartbreaking day.

German Intelligence (BND) claims to have warned the U.S. last June, the Israeli Mossad and Russian Intelligence in August. Israeli businesses, which had offices in the Towers, vacated the premises a week before the attacks, breaking their lease to do it. About 3000 Americans working there were not so lucky."

Another bold candidate representing the Liberal Party of Canada.

Another one for the election historians.

Monday, September 22, 2008

When criminals are treated like "family", we're all in trouble


Come closer.

We have to whisper.

It's what you have to do when you want to talk about the thing that nobody wants to talk about.

This past week we saw how a cold-blooded killer was hidden from police for almost three weeks, first in The Pas and then in Winnipeg, before being recaptured. His arrest came a week after two other violent prison escapees were caught hiding in Winnipeg with friends and relatives.

People might have been shocked at how easily it was for them to find support in the city. And how, in the case of Indian Posse co-founder Daniel Wolfe, the woman caught driving him around bragged of how proud she was to help him and how she would do it again for him and for any member of the street gang he started.

But nobody is talking about an even more frightening aspect of that street-level support for criminals--- how it has infected the aboriginal population at large, spreading into the so-called native leadership, the media, and filtering through right up into the inner cabinet of Manitoba's NDP government.

Unless this poison is addressed quickly and decisively, it will continue to corrode the body politic and determine just how violent the coming clash of cultures is going to be.

Captured fugitive 32-year-old Daniel Wolfe has not yet been convicted of murder. But the briefest glance at his rap sheet shows he's well capable of the kinds of actions described in the two counts he's facing.

What's important is not his status before the courts, but the fact his friends in Manitoba didn't care if he was guilty or not. They welcomed him as a double murderer. It only enhanced his status in the community.

(For an understanding of the gang lifestyle that's overwhelming Manitoba's criminal underworld see The Black Rod's exclusive, groundbreaking report Crips and Bloodz true cultural anchors of Winnipeg's aboriginal gangs
published last October.)

For all the ink and airtime spent on Danny Wolfe, little has been said locally about why he was in jail awaiting trial.

We'll rectify that now.

Last September, 10 people were socializing in a tiny home in Fort Qu'Appelle, Saskatchewan when two armed males stormed in and opened fire. By the time they left two men aged 51 and 24 were dead and three others seriously wounded.
61-year-old Christina Cook was one of the survivors. She was trying to phone the police when she heard someone yell "Shoot the old lady."

Her 51-year-old husband threw himself on top of her and took the gunblast meant to kill her.

Her daughter Joan Cook later confirmed that the killers yelled
"that will teach you to mess with the IP.''

RCMP believe the home invasion was prompted by an exchange of insults at another location in Fort Qu'Appelle.

Four months later, in January, a 16-year-old boy surrendered to police in The Pas and was charged with the multiple shootings. It took longer for them to catch up to Daniel Wolfe, also from the Pas.

News reporters in Winnipeg have erroneously said that Wolfe was responsible for the manifesto-like article that ran in the Winnipeg Free Press 14 years ago in a series on youth gangs. The article glorified the Indian Posse, the gang started by four teenaged youths in Wolfe's mother's basement. But while Wolfe was in jail in Regina awaiting trial, his momma called the Regina Leader Post to set things straight.

Daniel Richard Wolfe didn't write the article; his brother Richard Daniel Wolfe did. Two brothers born 11 months apart to the same mother and carrying the same name but reversed. Go figure.

Richard Daniel Wolfe has asked his mom to call the news media so the credit for the article could go to the right brother.

Richard couldn't do it himself, because he's in prison doing 19 ½ years for another infamous crime, the 1995 shotgun shooting of a 44-year-old Winnipeg pizza delivery man, a crime which electrified the city in its day for setting a new low in criminal depravity.

Momma must be so proud of her babies.

Only a year before trying to commit murder, Richard Wolfe was swept up in the mood of the times---Indian Pride, including the empowerment of street gangs. He wrote:

"When you see Red, you see a proud Indian stand tall for what he or she believes in...We all have to remember we're all in it together & will die together & sometime down the road we will be remember[ed] as proud Indians" (30 September 1994 Winnipeg Free Press).

"If a brother or sister dies, it's not because he or she was in a gang, it's because they had pride for themself & wanted to prove to everyone else they were worriors (sic),"

Violence, he said, is a necessary part of life and nothing to apologize for.
"But if we have to kill (an)other brother or sister, then let it be, we will survive the war path in the future. We will join the great Spirit in the sky and we don't mean to disrespect are (sic, our) people but we all have something to prove for one other and it will be done if there is no other way to do it,"
he wrote.

Native leaders at the time embraced the spirit of the manifesto and the reality of street gangs, as we'll see in a minute, even as the Wolfe brothers fell by the wayside.

The day after the delivery man was shot, two witnesses were threatened at gunpoint by a pair of young men, one of which was Daniel Wolfe. According to National Parole Board Daniel was sentenced in September 1995 to three years in prison for use of a firearm and obstructing justice

He was out of jail two years later on automatic statutory release but back in within a month for breaching his release conditions by being in the company of gang members who had just fled from a home invasion. The parole board revoked his release; he got out again; and had his parole yanked a second time forcing him to serve his full sentence.

In 1999, Wolfe was sentenced to eight years and two months for, guess what, an armed home invasion. The parole board said the crime involved threatening to kill victims with a sawed-off shotgun. A psychological report for the parole board suggested Wolfe's involvement showed evidence of "sadistic behaviour/torture."

Of course you didn't hear a word of any of this in the video love letter to Danny Wolfe on CBC television the day after his capture -- where aboriginal reporter Sheila North Wilson granted him air time to explain he was just a poor misunderstood victim of the residential school system.

North Wilson, by the way, is married to rapper Fresh I.E., who honours the gang lifestyle by dressing like them to show he's, like, down with it, homie.

The CBC even included a comment from Assembly of Manitoba Chiefs very own Phil Fontaine, who muttered something about the evil of residential schools.

Due to a lack of institutional memory, the CBC forgot to mention how enthusiastically Phil Fontaine embraced the Indian Posse and the other major street gang the Manitoba Warriors in 1997, just about the time Daniel Wolfe was breaching parole the first time.

It was in January, 1997 when Fontaine announced that the AMC had hired Brian Contois, a high-ranking member of the Manitoba Warriors, on a term position to be a special advisor on---wait for it---deterring aboriginal youths from joining gangs.

The bold plan to involve gangs to keep youths from joining gangs fell apart when it was revealed that the Manitoba Warriors had a plan of their own - to get the AMC to buy the YMHA building in downtown Winnipeg and turn it into a private club for street gang members.

A confidential report prepared for Stony Mountain penitentiary officials revealed that prison informants discosed a plan to "set up a government-funded organization to work with gang members to get them off the street. Weapons will be bought with funds secured as this organization will front for a proposed union of the Manitoba Warriors and the Indian Posse."

The ultimate goal of the plan's proponents was to have "up to 3000 gang members working together in Winnipeg unified against the white man" according to the report.

Fontaine seemed oblivious when speaking to the press about the YMHA deal. As reported in the Winnipeg Sun at the time:

"We're pleased to put a process in place to come to grips with a serious matter," Grand Chief Phil Fontaine said at a press conference…with Contois and an Indian Posse representative at his side.

"We're not legitimizing gangs or criminal activity. That's the last thing we want to do. You (the media) bitch about the gangs, and then you question our motives," he said."

Well, since the only thing gangs have to offer is unrestricted violence and illegitimate sources of large amounts of money, you have to wonder what the AMC had to gain from its alliance with the Indian Posse and the Manitoba Warriors.

But that was then, and now is worse.

Now, the AMC, with Fontaine at the helm again, and other aboriginal organizations still mouth the words about not legitimizing gangs or criminal activity, but their words ring hollow.

The leaders now embrace criminals as the poster boys of the aboriginal community, whether it's Matthew Dumas (car thief, in violation of his probation, physically attacking one police officer and prepared to stab another) or Michael Langan ( B&E artist, pot smoking panhandling drop-out, refused to drop a knife before being tasered by police) or Craig McDougall (convicted child/pregnant-woman beater, shot by police as they attended a call about a stabbing and attempted break-in on Simcoe).
There are dozens of young aboriginal youths living decent lives, going to school, getting good grades, working hard to build honest futures for themselves and their families.

But they have to watch themselves be tarred by their leaders who hold up criminals as the true representatives of the native community.

So why do they do it? Because it appears that we've passed a tipping point with the influx of natives off the reserve into Winnipeg.

There's now a critical mass in the city where a criminal record is nothing to be ashamed of, where everyone in the family has been convicted of a crime, is involved in crime or knows someone who is.

How often do we hear the family of some dead lowlife youth declare, in complete ignorance of what they're saying, that little Elvis was a good boy who broke into garages like all teenagers, a good boy who sold crack because that's what kids his age do, a good boy who carried a gun or a knife because that's so normal why would anyone think otherwise.

Why? Because it's not normal in the real world.

That perverse mindset is fueling a clash of cultures that's only just going to grow.

If the aboriginal "leaders" spent half as much money fighting street gangs as they do vilifying police and glorifying their criminal poster boys, their own communities would be safer and held in greater respect.

The support given to Daniel Wolfe and his fellow escapees is the tip of the iceberg. It's not an aberration. It's the natural outcome of a community that's decided that criminals are part of the family who should be supported and protected against "them."

"Them" will soon start to fight back in self-defence. And then it will get ugly.

It's not too late for true leaders to step forward to reverse the slow slide into degeneracy as normality. That is if there are any leaders?

The provincial NDP have been loudly trumpeting their gang-fighting credentials since 1999.

There are more street gangs today than ever before.

The NDP has ignored the growth of aboriginal gangs in Manitoba. The last major assault on native gangs was against the Manitoba Warriors almost a decade ago.

Among the almost three dozen men who went to prison for gang activities was Isadore Vermette sentenced to seven years, four months in July, 2000.

Izzy Vermette happens to be the half-brother of NDP cabinet minister Eric Robinson.



Thursday, September 11, 2008

Manitoba Hydro Series Part 3: Subsidizing American buyers

Faced with reading 415 pages of nearly impenetrable bureaucratic jargon, the human mind begins to shut down in self-preservation.

Maybe that's why it took so long to plow through the Public Utilities Board's latest explanation for why electricity rates have been hiked higher than requested by Manitoba Hydro.

And why we almost missed the biggest shocker in the report.

It was only when reviewing our notes that we realized what the PUB identified as the driving force behind Hydro's plans to spend more than $1 billion a year for the next 15 years on new hydro developments.

Do you think it's to provide a reliable supply of electricity to Manitobans at a reasonable cost?


It's to assure power to Hydro's American customers AT ANY COST.

Manitoba premier Gary Doer has said on numerous occasions he wants to turn Manitoba's hydroelectric power into the equivalent of Alberta's oil, a source of wealth from exporting a natural resource.

The PUB says Doer has already gambled---and lost.

For the past three years, thanks to the run-up in the value of the Canadian dollar, we've been selling power to the U.S. cheaper than to ourselves. In other words we're subsidizing Americans to buy our power.

"... in the last three years, MH has over estimated the average CDN $ export price," the PUB states.

Fiscal Year IFF-2nd Year Price Forecast Actual Results
2006 6.2¢/kW.h 5.2¢/kW.h
2007 7.5¢/kW.h 5.1¢/kW.h
2008 7.1¢/kW.h1 5.0¢/ kW.h (est.)

And like any gambler, Doer knows what to do next---bet double or nothing. Only he's betting with your money.

The government has been fooling regulatory bodies like the Clean Environment Commission by claiming huge potential profits from power sales, profits the PUB finds impossible to bank on.

"While MH forecasts the Canadian dollar falling back about 15 cents
from its current level, the Board is not confident with that forecast, and if near parity remains MH's export price forecasts are in jeopardy."

Manitoba Hydro's house of cards is built on the premise that the exchange rate will drop to 86 cents U.S., that a carbon tax in the U.S. prices coal out of the market, and interest rates stay the same for the next decade or so. Not one of these factors --- All of them have to come true for Hydro to make any money.

The PUB has also shown that Manitoba Hydro has no idea what the new power developments will cost.

"Construction cost inflation over the past five years has been dramatic,in some years 10 times or more the rate of general inflation for some construction cost elements, particularly commodities (steel, cement, etc. - ed.)."

Every billion dollars in cost means less profit, more risk and ultimately, higher rates for Manitobans.

The government has set the PUB up to take the blame for the increased costs to Manitoba customers. The PUB can't stop Hydro from building unprofitable hydrolectric projects, yet it has to prop up the financial stability of Hydro, through higher revenue from local customers if necessary.

And it will be necessary.

The PUB has pointed out that instead of using higher profits from exports in recent high-water years to improve its finances, Manitoba Hydro spent all the money with nothing to show for it, and is coming cap in hand for ever higher rates.

To prop up Manitoba Hydro, the NDP have identified new public enemies---the poor and middle class who try to keep their heating costs down by using space heaters, and big businesses that use a lot of cheap electricity. If the government can squeeze these groups out of the market for electricity, it can buy some time during which it can provide power it has already sold to the U.S. without having the increased supply needed.

"There is a risk that If natural gas customers move in any significant way to electricity as the sole or supplementary space-heating source for their residences, (a growing risk given recent natural gas commodity price increases and volatility), MH will have less energy to export and may have to import power in some years to meet its commitments."

This explains the real reason the government is treating the poor and middle class like criminals. People who are trying to stay warm in winter by using space heaters instead of turning up the gas are doing it because they can't afford another few hundred dollars in heating bills.

So the government, in its perverted wisdom, wants them to spend a few thousand dollars to buy new furnaces, and to go deeper into debt to do it.
This makes complete sense -- to bureaucrats and ideologues.

And those companies that get power at reduced rates, and hire Manitobans? -- are unwanted, too. The government says they get a free ride and don't provide enough jobs. So the NDP wants to drive them out of Manitoba, and take the jobs they provide with them, so that Manitoba Hydro can sell the power to the U.S. which will provide no jobs for it.

For the first time ever, the Public Utilities Board has provided numbers to Manitobans to see what they're paying and what the NDP is dreaming.

Here's how the PUB put it:

"With respect to MH, while the costs of generation, transmission and
distribution assets acquired decades ago have allowed for residential rates of 6 cents per and 3.2 cents for major industry, the new generating stations and transmission facilities will demand much higher rates simply to break even, let alone produce the net income required to allow MH to move forward supported by a reasonable capital structure."


"In 2007/08, a dramatic shift in the Canadian/U.S. exchange rate contributed to average export prices moving below 4¢/kW.h for opportunity energy sales, and below 5.5¢/kW.h for firm (dependable) energy contract sales."


"MH's exchange rate forecast fails to fully recognize the significant appreciation of the CDN dollar versus the U.S. dollar, and the underlying reasons for the appreciation that suggest the change may persist. This has had the effect of MH overstating both the value of U.S. export sales and finance expense."


"It can be realistically speculated if the costs of Bipole III, Keeyask G.S., and Conawapa G.S. (generating statied) were fully allocated against export revenues, average export sales prices would have to be 11¢ CDN per KWh to break even.

Manitoba Hydro has absolutely no wiggle room, says the PUB.

"MH currently has executed agreements and/or term sheets for about 3,500 GW.h (900 MW) per year of firm energy for both 2008/09 and 2009/10. These volumes essentially utilize all of MH's dependable energy resources available for export."

"The 500 MW commitment to Wisconsin Public Service (WPS), to commence in 2019, will increase MH's firm export requirements to 3,600 GW.h, and this is substantially above forecast dependable energy resources in place at that time. MH will require the Keeyask Generating Station to be in place or, alternatively, will have to employ natural gas turbines to provide the energy. MH will need to proceed with its new generation and transmission plans in a very timely fashion to avoid the high costs that would accompany being obliged to generate power though natural gas, import the power or buy the commitments out."
"When the 250 MW contract with Minnesota Power takes affect in 2020, MH will then be committed to supplying 5,000 GW.h of firm energy into the U.S. If Conawapa is not in-service by then, natural gas turbine generation and more wind generation (or imports) will be required to offset a shortfall that could approximate 2,000 GW.h. in 2020."

In a nutshell, Manitoba Hydro has no idea what the new hydroelectric developments will cost, but the government has given them a blank cheque because deals have been signed and we have to deliver power to the U.S.even if the price is less than the cost of production.

The PUB knows its being set up and its fighting back, as only bureaucrats can.

The board has ordered Manitoba Hydro to go public with its assessment of how high rates to Manitoba users will go because of the new projects.

"The Board will direct MH to propose to the Board by January 15, 2009 terms of reference for a regulatory review of the impact that MH's planned Capital program may have on consumer rates. The Board will also direct MH to quantify its risks in an effort to determine the appropriateness of the current financial stability targets."

The PUB may ultimately have to take the fall.

But they've signalled they'll take Hydro, and the government, with them if they go.

Wednesday, September 10, 2008

Dion's Green Taxes. Don't ask. Don't tell.

We beg your pardon but we're going to interrupt our Hydro Series temporarily to turn our attention to the federal election. When the election comes to your doorstep, as it did with Prime Minister Stephen Harper's visit to Winnipeg on Tuesday, you can't ignore it.

In the last election, The Black Rod took the Peter Kent Challenge to monitor the mainstream media coverage for anti-Conservative bias and we could hardly keep up. This time, with no challenge on offer, we'll concentrate on the general quality of election reporting, starting with the Harper visit. Sadly, we can't say we're impressed.

The story:
Harper announced that if elected he intends to cut the tax on diesel fuel in half, from 4 cents a litre to two cents.

The coverage:

CBC Winnipeg
Donna Carriero went to truckers for reaction. Good idea.

Trucker #1 was lukewarm. A tax cut was better than a poke in the eye with a sharp stick. But saving $1400 a year wasn't enough to keep him for going broke, he said.

Trucker #2 was enthusiastic. He welcomed the tax cut without reservations.

Guess who Carreiro used to highlight her story? The story she wanted to tell was that the Conservative tax cut was no big deal and would have little impact on truck drivers or on prices for consumers. The story she didn't want to tell was that the Liberals under Stephane Dion intend to RAISE DIESEL TAXES 7 cents a litre.

The CBC included a blathering comment from Dion about putting a price on carbon, but Carreiro failed to report the simple fact that raising diesel taxes seven cents a litre is almost doubling what they are today.

How do you think the truckers would have reacted if she had put it to them this way: Stephen Harper wants to cut your diesel taxes in half and Stephane Dion wants to almost double them. Who has your vote?

Global News
Meera Bahadoosingh went for comment to Larry McIntosh owner of Peak of the Market where Harper held his news conference. He said a cut in transportation costs would put more money in his pocket and let him expand his business. It would, he said, also be passed on in lower prices to his customers. She also went to other beneficiaries of a cut in diesel fuel taxes, such as Winnipeg Transit which stands to save $306,000 a year. She did mention in plain terms that Dion intends to raise taxes on diesel fuel but didn't ask Transit how much that would cost them.

CTV Winnipeg
Joe Olafson thought the best person to talk to about diesel taxes was a University of Winnipeg economist, who, as you could have predicted, gave a boring academic answer. Wrong guess there, Joe. University professors are experts in universities, not real life. The prof wasn't asked how Dion's tax increase on fuel will impact food prices. Olafson did speak to one grocery story customer who, predictably again, added nothing to the story. She thought people should buy products closer to home. We're going to rush out and buy Manitoba grown bananas and salmon right after we're finished writing.

Three reports. Three different approaches, with Global taking the blue ribbon for the most informative. But none of them reported the story the way it should have been reported.

It's simple. The Conservatives promise to cut diesel taxes in half and the Liberals promise to almost double them. The Conservatives say their plan will help businesses directly and consumers indirectly. But if that's the case, what impact will the Liberal tax increase have? How much more will businesses and consumers pay for the Liberal Party's Green Shift? Do voters want to pay the price for the Liberal plan?

None of the television reporters wanted to touch that story or even to hint at it. It's not a question of bias. It's the exact opposite. They knew where asking that question would lead them. So, they decided that the way to be "fair" was to avoid the question and give the Liberals a pass.

Wrong. That's just bad reporting.


"Tories tops" "...except with women" read the headlines in the Winnipeg Free Press election roundup on Tuesday. The FP quoted an Ipsos Reid poll for Canwest News Service on the party preferences be gender.

"Harper has more difficulty connecting with female voters than male---32 per cent of women would vote Liberal, compared with 29 per cent Tory." read the story.


We actually bothered to dig up the poll and to the question 'Which party would you vote for?' the results for women were:

Liberals: 32 percent
Conservatives: 29 percent
NDP: 17 percent
Greens: 11 percent

But...the margin of error is 1.6 percent. In other words, the results could be Liberals, 30.4 and Conservatives 30.6, a statistical dead heat.

Why would the FP choose to give the nod to the Liberals? The Canwest story was more neutral to the poll saying "...the Conservatives are not far back from the Liberals when it comes to female voter preferences..."

Is the newspaper trying to promote a narrative that the Conservatives have a hard time winning over women voters when the poll shows they're just as popular with women as the Liberals? Note also that the poll was finished before the election was called, so the effect of the Harper-as-cuddly-family-man ads hasn't been measured yet.

The Free Press reported that the Ipsos Reid poll found that the Liberals had the support of university educated voters 36 to 30 percent over the Conservatives. The newspaper failed to mention that Canwest reported the Conservatives "do better among those with a college education or other non-university post-secondary schooling, besting the Liberals by 35 per cent to 28 per cent."

Was the FP demonstrating a subtle class distinction in its choice of what education was considered worth mentioning and which was not? Just asking.

Tuesday, September 09, 2008

Manitoba Hydro Series Part Two: Wuskwatim boondoggle

The Wuskwatim power project is such a boondoggle that the Manitoba Public Utilities Board is begging the government not to use it as a model for its future hydro developments.

The PUB dissected the Wuskwatim project in July in its formal explanation as to why its raising electricity rates higher than Manitoba Hydro requested.

The utilities board started by noting that everything Manitoba Hydro told the Clean Environment Commission to get approval for Wuskwatim has turned out to be wrong.

* They said the project would cost about $900 million. It's currently estimated to cost $1.6 billion. (And it's already a year behind schedule because Hydro can't find a general contractor to take on the job...ed.)

* They said it was needed "to serve export markets" for nine years before its power was needed for Manitobans. Manitoba Hydro now says it needs Wuskwatim built by 2012 "to meet domestic needs and firm export contracts."

* They said the profits from Wuskwatim would help keep the cost of electricity to Manitobans low. The project will break even--- in the best case scenario --- and will otherwise lose money from the get-go.
And that's the good news.

When you see how the project is structured, your hair will stand on end.

The closest comparison is to a little-known outfit called ENRON.

So pour yourself a big, stiff drink and be ready to hurl.

Hey, we said a BIG drink. And keep the bottle handy.

The Manitoba NDP pledged never to privatize the utility known as Manitoba Hydro. Instead, they're selling off Hydro's resources--its new dams, transmission lines and power-- at firesale prices.

The Wuskwatim project, the first new hydroelectric development in Manitoba in 20 years, is being built in "partnership" with Nisichawayasihk Cree Nation (aka NCN, aka the Nelson House Indian Reserve). You'll soon see why the quotation marks are deserved. Now hold onto your hats because this is a bumpy ride.

- The Wuskwatim project is estimated to cost $1.6 billion dollars
- Transmission lines make up $320 million
- Leaving construction costs of $1.28 billion.

The dam will be built through a limited partnership that is to provide 25 percent of the cost of construction. The partners are:
- Manitoba Hydro at 0.01 percent,
- Manitoba Hydro again at 65.99 percent, and
- NCN at 33 percent.

This mumbo jumbo means the limited partnership is supposed to put up 25 percent of the cost of building Wuskwatim, and NCN is supposed to put in 33 percent of the partnership's share of the cost.

Manitoba Hydro will be loaning the partnership the other 75 percent of the cost ($979 million, "based on Manitoba Hydro's current estimated cost"). Yes, it will essentially be borrowing money to lend itself to build its own project.

The Nelson House reserve is partnering through its own holding company, Taskinigahp Power Corporation (TPC). "Based on the current construction cost estimate for the generating station, TPC’s cost for the partnership units would be $102 million. According to the agreements, TPC will invest up to $34 million of its own capital and borrow up to $68 million from MH to fund the balance," wrote the Public Utilities Board.

Here's the first problem---arithmetic

"MH assumes TPC will subscribe for 33% of the ownership interest, i.e. 33% of the 25% equity component." said the PUB.

Well, if the equity component is $1.28 billion ($1.6 billion minus $320 million), then 25 percent is $320 million and TPC's share is $105.6 million, $3.2 million MORE than the PUB says.
Not that it really matters.

"And, an NCN holding company will hold NCN's partnership interest in the project. With the holding company inserted between it and the partnership, and with almost all of its investment funded through a loan from MH, without any mark-up, its risks are negligible." declares the PUB.

Yes, that's right, the Nelson House reserve is getting half-ownership of the $1.6 billion Wuskwatim project at virtually no risk and money borrowed at no cost from the people who are building the dam and transmission lines.

That's New Democonomics at its purest.

FYI, about 2500 members of the Nisichawayasihk Cree Nation (NCN) live in Nelson House and another 1700 off reserve.

And it only gets better.

Manitoba Hydro is going to charge itself (and its junior partner) for marketing and transmission costs "and risks borne by the Corporation", i.e. itself. It's going to borrow money at an estimated 7 percent interest to lend itself (and its junior partner) at no interest, effectively subsidizing the junior partner.

The $320 million that Hydro will have to borrow for the necessary transmission line won't be included in the partnership's debt.

"The standard formula for determining MH's debt to equity ratio has been amended," the PUB said ever so politely. "This arrangement, having the transmission asset held “off-balance sheet”, and by MH directly, will allow for profit-sharing to occur much earlier than would be the case if the standard 75:25 ratio test was applied employing the standard debt and equity components."

Debts held "off-balance sheet" to speed up "profit-sharing." Sound familiar?

Enron, anyone?

Oh, and Manitoba Hydro is giving its "partner" another break. It has cut its overhead costs to the partnership by more than 25 percent. The PUB says "... the Wuskwatim Project Development Agreement allocates MH’s overhead costs at a rate of 21% as opposed to the “normal” 29%, this reduction allowing for the exclusion of a share of costs related to Winnipeg facilities and computer systems not expected to be utilized by the project."

The partnership is expected to maintain a 75:25 debt to equity ratio. Except for the first 10 years of operation because Wuskwatim is expected to lose money for at least six years, from 2012 to 2017. But that's not a worry for one of the partners.

"The agreement between Hydro and NCN also allows for advances on dividends to NCN, even during loss years and/or when the equity threshold test has not been met." revealed the PUB.

"MH indicated that dividend advances are to be limited to 5% of the
actual cash invested by NCN, and are to be repaid by NCN out of forecast future distributions."

In other words, no matter how much they put in, they'll get half of it back by the time Wuskwatim is supposed to be making money.

And, yes, folks, it gets better still.

While NCN is expected to put in $34 million of its own money (and borrow the rest of its share from Manitoba Hydro), the PUB notes that "until the project is finished, NCN is required to invest only $1 million."

"The First Nation carries no direct risk with respect to the $1.6 billion project. It has an option to take up to a 33% ownership position, but it need not do so, it can evaluate the situation upon the project’s completion." added the utilities board.

After examining the intricacies of the partnership agreement, the PUB dove into the economics of the project.

Reach for that drink now.

"In justifying the Wuskwatim project to the CEC, MH advanced many
assumptions. Based on the then-projected construction costs of the project the levelized cost of the energy was to be 6.6¢ per kW.h (costs forecasted before the CEC). Given the escalated cost of the project, the Corporation’s revised estimated cost of energy has increased to 7.2¢ per kW.h. "

"Before the CEC, and in forecasting export prices to be realized by Wuskwatim, MH utilized a USD/CDN exchange rate of 1.35. Based on its most current forecast in 2007, the exchange rate utilized in the Corporation’s forecasts as for when Wuskwatim comes in-service in 2012 was 1.14...

"At the CEC Hearing, and in the Corporation’s justification of the project, MH calculated that the Internal Rate of Return (IRR) would be 10.3%, based on generation being sold as exports. As a result of the escalation in the cost of the project and employing the same type of financial analysis as was presented to the CEC, the IRR has reduced to 7.8 %, excluding sunk costs, and to 6.5% including sunk costs. And, even this revised IRR would be further materially reduced if the Canadian dollar remains at par."

Manitoba Hydro is borrowing money at 7 percent for a project that might make a return of 6.5 percent---if the value of the Canadian dollar drops another 10 cents American.

"On an overall economic basis, with construction cost estimates up 60% more and the forecast price per kW.h basically unchanged, Wuskwatim's net present value may not meet the original floor threshold assumed at the CEC hearing. MH now bases its requirement for Wuskwatim on domestic rather than export requirements. Accordingly, MH states it no longer requires Wuskwatim to meet or exceed its threshold economic return, as MH now classifies the construction as being necessary to meet future Manitoba load requirements."

Manitoba Hydro has changed the rules.
It now claims that Wuskwatim is needed for Manitoba customers and therefore it doesn't have to make a profit.

The PUB isn't buying:

"That said, the Board does not agree that Wuskwatim is required for domestic purposes, particularly with its current expected in-service date. Yet, this view is of little consequence, as the Board is not required to give approval to MH's capital plans and projects. As well, Wuskwatim’s plans are well past the “point of no return”."

To its horror, the Public Utilities Board realized that Manitoba Hydro fully understands how phony its "partnership" agreement is, and the reason Hydro will do and say anything to paper over any criticisms---Manitoba Hydro is paying protection money to northern Indian reserves to get new hydroelectric projects built.

In its blandest bureaucratic language, the PUB raised the reddest of red flags:

"MH concurred with the hypothesis that the Wuskwatim/NCN arrangement was driven by factors other than "strict economics", and that the driving factor for the arrangement is MH's operative assumption that without an agreement with NCN Wuskwatim could not proceed. The Board notes that as the generating station and related transmission lines will be located in NCN's traditional trading area, it is not surprising that the First Nation would insist on compensation for its support of the project, and that a lack of support from NCN would have made proceeding unlikely."

But the deal is so flawed, and means that ratepayers will be hosed so badly, that the PUB has gone out on a limb to ask the government to give it final say in future projects.

"From the Board’s review of the WPLP Agreements, it has arrived at significant concerns with the financing arrangements, cost sharing and revenue allocation, and while there may be reasons that go beyond strict “economics” that lie behind the terms of the arrangement, the Board’s concern with the overall structure of the arrangement is such that
the Board cannot, at least without being in receipt of further rationale, recommend that the agreements serve as a template for any future joint ownership opportunity..."

"While the WPLP is not recommended for use as an “automatic” template for further First Nations participation in Generation and Transmission projects, the experience of Wuskwatim, todate, should be used to model possible outcomes of possible future arrangements with respect to Keeyask and Conawapa.

For any future projects where joint ownership is contemplated because of the potential impact on consumer rates, the Board recommends MH seek the Board’s prior review and approval."

In its own impenetrable language, the PUB has issued a warning to all Manitobans:

"Therefore, while the Board does not find all of MH’s actions justifiable on a strictly MH-centric economic rationale, it considers itself obliged to ensure MH has sufficient revenue to allow it to achieve objectives transparently established or approved by government."

We can't stop them.
They can do anything they want.
And they're forcing us to raise your rates much, much higher than they should be.

Monday, September 08, 2008

Who will go broke first, Manitoba Hydro or the Manitoba taxpayer (part 1) ?

Manitoba Hydro is a utility in crisis. It's been so mismanaged---not by its directors, but by its political masters---that Hydro's financial stability is at risk.

And if that goes, it will take the Province with it.

The Manitoba Public Utilities Board tried to raise an alarm in July, only to be ignored. Blame the Olympics. Blame the late start to summer. Blame the bureaucrats who think the way to get your attention is to give a report a sexy title like:


But after wading through 413 pages of jargon-ladened, soul-sucking, mind-numbing gobbledy-gook, we were left with one message:


With virtually no public debate, the NDP plans a series of mega-projects right out of the Sixties playbook, projects that will result in literally 25 years of non-stop construction of power dams and transmission lines. That construction boom will act as the driver of the Manitoba economy for a quarter-century.

The only thing wrong, says the PUB, is that the plan is so loosey-goosey that it raises the question: who will go broke first, Manitoba Hydro or the Manitoba taxpayer?

The PUB's July order isn't a red flag. It's a shipping container of red flags.

Here's just a small sampling of alarm from the PUB (emphasis ours). Feel free to skip the next page if you feel a brain cramp coming on as we'll summarize the details in English immediately after.

* MH has set out planned capital expenditures that are
unprecedented in the Utility’s history.

* MH’s plans for capital expenditures may involve the expenditure of $18 billion or more over the next 15 years, expenditures predicated in part on what may or may not be overly optimistic export prices - this level of capital expenditure will result in
significantly increased debt levels, export commitments and general business risks;

* ... new generation and transmission facilities costing over $6 billion, costs which have not yet been incorporated in the forecasts of the Corporation.

* The Board also expresses concern with the Corporation’s withholding of information related to its export transactions and projections, for stated confidentiality reasons, as that withholding made it difficult if not impossible for the Board to arrive at findings with respect to ...most importantly, the likelihood of profitability with respect to its export commitments and the risk that these commitments will lead to years of either additional imports of power or thermal generation to avoid supply shortfalls.

* ... collectively these projects negatively impact MH’s debt to equity ratio and net income in the initial years, placing increased strain on the financial stability of MH and adding additional risk for existing ratepayers. The Board is concerned that MH has not developed a threshold for capital expenditures and associated debt growth that considers all projects, together with the health and financial stability of the Company.”

The Board reiterates the prior concerns, and notes that
with planned major capital expansion, such concerns are now graver.

* Overall, since the 2004 GRA, MH’s net income has been $847 million higher than that forecast at that time. The increase in net income is due in part to improved water conditions, conditions better than the median results expected, which led to higher than forecast exports. As well, rate increases approved by the Board since the 2004 GRA have contributed approximately $350 million in additional revenue for the fiscal years 2004/05 through 2008/09.

The Board would have expected such additional revenue to have significantly improved the financial strength of the utility, as displayed in its meeting its financial targets, compared with the original forecast. Yet, it didn’t, and the Board is concerned that MH is still not forecasting to achieve its debt:equity target within its forecast period, not by 2011/12 nor throughout the entire 11 year forecast ending in 2017/18.

* It is not as if MH is already at its 75:25 debt:equity target, or that MH has projected to the Board that it expects to reach and maintain that target. In fact, due to the planned acceleration in capital spending, driven primarily by export considerations, the Corporation is not expected to meet its 75: 25 debt to equity ratio target during the current forecast period, which extends to 2017/18, and those
forecasts already assume annual average rate increases of about 3% each year.

* ... it is clear MH’s anticipated capital spending and associated increased debt levels is and will place upward pressure on rates.

In plain English, the PUB is saying that the NDP intends to spend money like the proverbial drunken sailors for the next 15 years, with no limits to how much or how it's going to affect Hydro's credit rating.

Manitoba Hydro hasn't included a third of its planned spending in the forecasts the PUB has to use to set rates. And the utility is hiding vital information which the PUB needs to determine how high to raise rates, namely whether Hydro is likely to make any profits at all from its contracts to sell power to the Americans or whether it will have to buy power, literally for years, to meet its commitments.

Hydro made $847 million more than it expected in the four years from 2004 to the present and pissed it all away. None of these windfall profits were used to meet its financial targets, such as reducing the debt/equity ratio that lenders use to set the utility's borrowing rates. And Manitoba Hydro has no plan to lower its debt/equity ratio over the next ten years, or, for that matter, anytime in the foreseeable future.

Oh, and electricity users in Manitoba will be paying at least 3 percent more each and every year for the next 10 years even before any rate increases caused by the mega-projects' runaway costs.

Is it any wonder that the PUB is worried to death? They know they're being set up to take the heat when rates go sky-high.

The PUB notes repeatedly in its "order" that it doesn't have the power to stop the madness. It can only raise rates to counter the damage being done to the utility, but it recognizes there's a limit to high high rates can go.

"To “starve” MH by suppressing rates in an effort to stymie a project would be to counter government policy, a measure that the Board cannot undertake." declares the agency."

So the PUB is pleading for changes to the law to let it assess the viability of a mega-project before it gets the go-ahead.

The PUB realizes that Manitoba Hydro's forecasts are worse than worthless. They have absolutely no connection to reality. Just look at their three most recent.

* The Manitoba Hydro head office on Portage Avenue was estimated to cost $75 million in 2003. By the time it opens in 2009
the "projected revised cost" is $278 million.

* The capital cost of the Wuskwatim project was presented to the Clean Environment Commission as $900 million. The "updated cost estimate" is now $1.6 billion and Manitoba Hydro still can't find a general contractor to take on the job.

* The constructon cost of Bipole 3 was estimated in 2003 to be under $400 million. The estimated cost has "dramatically increased" to $2.2 billion.

How is the PUB supposed to assess rates when Hydro's costs are doubling, tripling and in the case of its HQ, the only one nearly finished, almost quadrupling before the project is complete?

And that isn't even the worst challenge they face.

Manitoba Hydro's business model goes like this:

- We sign contracts with American buyers for delivery of electicity well in the future and long before we need the power for Manitobans.
- We build the dams and power lines, then sell the electricity to the Yanks at higher than domestic rates which pays off the cost of the dams and power lines.
- By the time we need the power for ourselves, the infrastructure is paid off, and we get to keep our rates low.

Here's the problem.

The price of Manitoba electricity isn't determined by the cost of providing it.

So if costs double, triple or quadruple what they're estimated at, the price doesn't double, triple or quadruple. Manitobans have to swallow the costs and eat a reduced profit---if there is any profit?

For, you see, in order to sell the Hydro mega-projects, Gary Doer has invented the prices that our American customers will pay. Manitoba Hydro's future profits are based on nothing more than a wing and a prayer.

The Public Utility Board reveals for the first time the illusionary basis for the NDP's 25-year spending plans:

"MH’s future export price forecasts are
predicated on imposition of a carbon tax, yet there is no current certainty of such a tax being implemented and having a materially beneficially effect within the immediate horizon of IFF07-1;"

"For MH to compete for base load,
a substantial environmental premium would have to exist for clean energy; that is coal generation would have to be “penalized”.

"The 1.5 to 2.0¢/kW.h increase in the high export price curve forecast circa 2015 appears to coincide with MH’s
anticipation of legislated action on the CO2 front."

"MH’s IFF 07-1 appears to reflect export market conditions as experienced in fiscal 2007/08 to the end of September 2007, but also assumes that the Canadian dollar will return to $1.16 USD/CDN exchange rate by the end of the forecast period (fiscal 2017/18)."

"While MH forecasts the Canadian dollar falling back about 15 cents from its current level, the Board is not confident with that forecast, and
if near parity remains MH’s export price forecasts are in jeopardy."

"MH’s exchange rate forecast fails to fully recognize the significant appreciation of the CDN dollar versus the U.S. dollar, and the underlying reasons for the appreciation that suggest the change may persist.
This has had the effect of MH overstating both the value of U.S. export sales and finance expense."

And that's not all.

"While MH anticipates that interest rates and inflation will continue to be low, history suggests that both factors fluctuate.
Increases in either interest rates or inflation would be problematic to the costs of the proposed capital expansion program."

So IF there's a carbon tax that prices coal out of the market, and IF the value of the Canadian dollar drops to 85 cents U.S, and IF interest rates don't go up for the next ten years, Manitoba Hydro MIGHT make a profit from the billions of dollars it plans to spend.

The NDP is risking the financial future of Manitoba Hydro and of the province by putting ideology over economics. The PUB is terrified of the implications.

So are we.

Much, much more to come -- starting with a look at the Wuskwatim boondoggle that's going to be the template for Manitoba Hydro's expansion over the next 10 years.


Sunday, September 07, 2008

War in Afghanistan 2008 Week 37

Spec-fugging-tacular. (Pardon our French.)

We haven't been this excited since Mullah Dadullah was blasted to Hell early last year.

What was looking like the Taliban's biggest victory of the year turned out to be their biggest defeat. In five days the British accomplished the impossible, with the help of Afghan, American, Canadian, Australian, Dutch and French soldiers and air power.

What we're babbling about is the delivery to the Kajaki hydro station in Helmand province of a 242 ton turbine, plus a 90 ton crane to lift it into place, which will be the tipping point of the Afghan war.

A convoy of 100 vehicles protected by 5000 soldiers brought the giant turbine across 115 miles of mined roads in six days protected by an armada of fighter jets, Apache helicopters, AC-130 gunships, and unmanned drones.
It was the largest route-clearance operation by British forces since World War 2.

Taliban fighters tried to stop the convoy, which stretched 4 kilometres. And more than 200 were killed. The insurgency has managed to delay vital repairs and upgrading of Kajaki Dam for almost two years and, until this past week, it looked like they were going to successfully stop the project from ever going ahead. Instead,
they were exposed as ultimately powerless in the face of NATO and U.S. determination.

British and U.S. special forces swept enemy fighters from the path of the convoy. Both sides of the route were covered by infantry troops from all three battalions of the Parachute Regiment, which leapfrogged ahead of each other in 13 Chinook British and ISAF helicopters

While bomb disposal teams cleared the roads and engineers repaired bomb craters, Afghan National Army soldiers with their mentors from 1st Battalion Royal Irish drove insurgents from villages approaching Kajaki.

The Chinese built giant turbine, which will be the third installed at the dam, was flown to Kandahar airfield on a Russian plane. It was divided into seven sections. The convoy's cargo had to be carried on six British and three Canadian 35-ton heavy equipment transporters designed to carry tanks.
The load was so heavy the HET's blew tires and damaged their hydraulic systems, forcing the convoy to crawl along at 2 miles per hour for much of the trip.

The Royal Regiment of Electrical and Mechanical Engineers did the rolling repairs.

2000 American and Canadian soldiers protected the convoy for the first 50 miles starting late Wednesday, Aug. 27. The Brits took it from there. Two British soldiers were injured, both in accidents. One Afghan soldier was shot (non-fatally) by a sniper and another accidentally wounded himself.

Chinese engineers will install the turbine by June or July of 2009. It will triple the output of the dam. A second turbine still needs to be repaired, and power lines have to be laid. That could take another two years at least.

But when its finished it will transform southern Afghanistan.

- It will deliver power to 1.8 million people and provide irrigation for hundreds of square miles.

- It will let farmers grow two crops a year instead of one, which, given the price of foodstuffs could price opium out of the market.

- A new source of electricity means power for pumps to bring drinking water to millions.

Apart from the military struggle, there are three wars being fought in Afghanistan--the education war, the electricity war and the opium war.

The education war is won. The Afghan people have spoken; they want their children, boys and girls, educated and they will fight any Taliban or Al Qaeda insurgents who threaten the education system. The education war was a turning point.

But the electricity war is the tipping point. Once the power flows, the populace will have something they will fight to protect. And with electricity comes television and radio and the influence of the world the Taliban hates and wants to destroy. They will become pitted against the people, a fatal position for an insurgency.

While the British in Afghanistan were justifiably celebrating a great success against impossible odds, Canadians were suffering more unnecessary casualties. Three Canadian soldiers were killed and five injured in a classic ambush in Kandahar province. A bomb hit a convoy and the Canadians were attacked when they got out to help. According to the account in the Globe and Mail (Inside the Taliban's deadly ambush, Graeme Smith, Sept. 5, 2008) the Canadians counterattacked fiercely.

But its not the bravery of the troops that's in question. Its the leadership provided by the officers.

Only a week ago the Canadians were touting the success of Operation Timis Preem, a strike into the Pashmul district of Kandahar to destroy the Taliban's bomb-making capability. The message couldn't be any clearer. When you're on the offensive, you win. When you give up the initiative, you die.

The ambush that killed the 3 Canadian troopers should have been anticipated. The Taliban are nothing but creatures of habit. Once they won a propaganda victory by killing nine Americans in an attack in July, they simply repeated the process, killing 10 French soldiers in an ambush a few weeks later, and wounding 9 Australian soldiers in another ambush.

You didn't have to be Kreskin to figure out who was next on the list.

Canadian forces spokesman have been bragging that for every roadside bomb that goes off, nine are found. So what? The answer is not to find IED's,
it's to prevent them from being planted in the first place.

We hate to be armchair generals. But if the real generals say nothing, then someone has to fill the void.

* We have night vision goggles, yet the Taliban seem to move at will at night. Why?

* We have a highly praised special forces unit, the mysterious JTF-2, but they seem to be doing nothing to kill the people who place IED's in the road to kill Canadian soldiers. Why?

* We have unmanned drones. But they seem never to be used to protect convoys from abushes. Why?

We'll be pressing for answers to these questions in the months ahead.

The Americans, meanwhile, are not standing still. They're taking the fight into the heart of Taliban sanctuaries in Pakistan's lawless tribal regions which have, up to now, been off limits.

This past Thursday another US drone fired three missiles into a house in North Waziristan on Thursday, killing five Taliban or Al Qaeda fighters and injuring four more. The attack came a day after Afghan and U.S. forces raided a village in Pakistan's South Waziristan region in the first cross-border commando raid of the war.

The Times Online reported ( US accused of attack in Pakistan that kills 20, Philippe Naughton, September 3, 2008)

"Habib Khan Wazir, a local resident said that the incident involved both American and Afghan troops, who attacked houses in a village called Musa Nikow. He said that he heard the sound of helicopters, and then an exchange of fire between the assailants and other residents.

"Later, I saw 15 bodies inside and outside two homes. They had been shot in the head," Mr Wazir told the Associated Press. He said the dead included women and children and that all were civilians.

Other news reports claimed the troops flew in on a CH-47 Chinook transport helicopter about 4:30 a.m. before shooting their way into three houses to kill the men they found inside. Some residents said the troops took some people with them. "

The Taliban ended the week with a series of suicide bombings. The worst was in the Nimroz province in the south, west of Helmand where a suicide bomber disguised as a beggar entered a secure government building and killed at least six people, including the province's intelligence chief.

On Sunday, Sept. 7, two suicide bombers blew themselves up at Kandahar police headquarters killing two and leaving 38 wounded. And a suicide bomber attacked Italian troops in the city of Herat, but only managed to blow himself to pieces.