Wednesday, January 19, 2011

Harper and Flaherty Now Legalizing Corporate Fraud

In Gulliver's Travels, Jonathan Swift says of the Lilliputians, that they “look upon fraud as a greater crime than theft ...for they allege; that care and vigilance, with a very common understanding, may preserve a man’s goods from thieves, but honesty hath no fence against superior cunning

That is hardly a Utopian concept, but one based on indisputable fact.

And yet the Harper government has introduced a set of crime bills, aimed at severely punishing society's most vulnerable, while endorsing measures that will allow those of "superior cunning" to legally commit fraud.

International Financial Reporting Standards

Al Rosen, a forensic accountant who, for 15 years acted as a technical advisor to three Auditor's General of Canada, has been sounding the alarm about the IFRS, which in a nutshell, allows corporations to legally misrepresent their financial picture, to lure unsuspecting investors. (video below)

This change in the way that Canada does business, has gone largely unnoticed by the press, though by 2008, some in the corporate sector knew that they were about to win the lottery, courtesy of Stephen Harper and Jim Flaherty.
A recent survey revealed that just 42% of Canadian portfolio managers know that Canada is preparing to switch to International Financial Reporting Standards starting in 2011. It’s a good bet that even fewer retail investors are aware of the change, despite the significant impact it will have on investment values. The transition to IFRS represents the biggest upheaval in financial reporting the country has ever seen ....
Some might believe that it's a victimless crime, in that on the surface it looks like the wealthy conning the wealthy. But we are also talking about mutual funds, where your RRSPs, company pensions, and even Canada Pension, are now being put at greater risk.

This scheme has the potential to create millions of middle class victims. Most of the truly wealthy are too clever to invest in companies that are potential financial disasters. And they may be privy to inside information that would not be shared with the rest of us. But if they do fail, they can count on our government to bail them out, so it's a win-win for them.

One more step toward a Canadian Corporatocracy.

Another Enron in the Making

After a friend brought this to my attention, I have done a bit of digging, and I think it's reprehensible that the media is giving Harper and Flaherty a free ride on this. Most missed the boat on the sub-prime mortgage disaster, that still has the Canadian taxpayer hanging off a cliff. But this has the potential to be far worse and more far reaching.

We all remember the Enron scandal. In Ontario it became a topic of discussion, not only because it was one of the biggest corporate scandals in history (at that time), but because John Baird was up to his neck in it, when he tried to privatize our social services. Not with Enron, but with the firm of Arthur Anderson's, one of the key players in the mess.

I'm going into this in more depth, but for now we need to go after our government, demanding an explanation, and our media for not doing their job. Call up your local TV station and newspaper office, and demand that they give this their attention.

Canadians have a right to know, that while the Harper government is portraying themselves as being tough on crime, they are allowing the wealthy, a "legal" means to commit fraud against an unsuspecting public. If they think you're a crank, who cares? You might just find one who remembers why they went to journalism school.

I'm going into this in a lot more depth because there are so many stories here, that will paint a broader picture of just what the Harper government has gotten us into.


1. 'Enron John', Diamond Jim and Lying Steve

2. Harper and Bush Share Rhetoric on White Collar Crime

3. Corporations Line Up to be the First to Tap Into New Legal Cheating


  1. Re this line: And they may be privy to inside information that would not be shared with the rest of us.

    MAY BE PRIVY? MAY BE PRIVY? Sorry, rolling around laughing my head off at that line.

    To them it's as normal as buying coffee in the morning:

    e.g. The criminal probe of Martha Stewart's controversial sale of her ImClone stock recorded its first conviction today (10/2) when a young stockbroker's assistant pleaded guilty to accepting a gratuity to cover up the alleged insider trading plot.

    Douglas Faneuil, 27, copped to a misdemeanor for accepting gifts in exchange for misleading investigators probing Stewart's sale of her ImClone stock on December 27, 2001--the day before the announcement of an adverse Food and Drug Administration ruling sent the stock into a tailspin.

    According to Faneuil, Peter Bacanovic, his boss at Merrill Lynch and Stewart's broker, pressured him to help concoct a story about a supposedly pre-arranged stop loss order to sell Stewart's 4000 ImClone shares when the stock dipped below $60.

    While Stewart's name does not appear in this criminal information filed against Faneuil--who has agreed to cooperate with prosecutors--there can be little doubt as to the identity of the "tippee" who allegedly received "confidential, material, non-public information" from Merrill Lynch's Bacanovic.

    (note, many people do what Martha did, interestingly to me, most of them are men yet they didn't go to jail like Martha did, even more interesting to me is why the elite decided to throw Martha under the bus, it was for previous "crimes"? too uppity I guess, like when they didn't want her to do t.v. and she went around them and did it anyway)).

    snip snip: Byron keeps the mudslinging in check by also chronicling her amazing business success as "one of the most potent and effective brands in the history of American marketing."

    He details her relationships with Kmart, Group W, and Time-Warner, noting that her maneuvering to buy her company back from Time-Warner was "easily the greatest financial coup in the history of American publishing."