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The solution to CMHR spending orgy is Gail Asper's worst nightmare

Who writes The Black Rod? Kreskin?

With the facade of the Canadian Museum for Human Rights crumbling around the ears of its backers, we found ourselves recalling the warnings we issued in months and even years past.

"Remember, THEY HAVE NO MONEY. The scam is to get enough to keep construction going until later this year, say during the provincial election, when they will admit they're skint, and throw themselves on the mercy of the politicians."

We wrote that about the Canadian Museum for Human Rights last April---eight months ago.

http://blackrod.blogspot.com/2011/04/your-taxes-go-up-as-mayor-waives-taxes.html

Not impressed? Look at what we wrote in July, 2009:
"In fact, we estimate that without huge infusions of new cash almost immediately, they will run out of money in the spring of 2011."
http://blackrod.blogspot.com/2009/07/jeff-browaty-civic-weasel-number-one.html

It looks now that on both counts we were spot on.
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By the Spring of 2011 the trustees of the CMHR were staring into a financial abyss. The government money taps would be turned off in another year. Those vaunted millions in private donations had turned out to be a steamer trunk full of IOU's. They were collecting dimes on the dollar on their pledges and very soon the cash flow would barely cover CEO Stu Murray's trips around the country.

With a $20 million hole in the budget on top of the cash shortage, their options were limited. To their surprise, the federal government was serious about cutting spending to trim the deficit. The province was facing an election in the fall and not willing to cozy up to Gail Asper who was spearheading a smear campaign against Canada's Ukrainian community. That left only Winnipeg Mayor Sam Katz, safely re-elected and controlling millions of taxpayer dollars.

In hindsight, we can now see the origin of the frantic manoeuvering last March by Katz to get city council to approve a kickback of $3.6 million in future property tax revenue to the CMHR. This wasn't an above-board "gesture" of support to a wildly out-of-control infrastructure project.

Instead, it has every appearance of a politician doing the bidding of a millionaire friend over the best interests of the citizens of Winnipeg.

And we can tell you today that the largesse of City Hall didn't end there.

As reported exclusively in The Black Rod, the Canadian Museum for Human Rights hasn't paid its full property taxes for two years running. If next June 30 they failed to pay their 2012 taxes, the CMHR would go up for tax sale unless the trustees paid the entire outstanding bill at one swoop.

But, then, Christmas came early for Gail Asper and the museum.

On July 21st, 2011, somebody at City Hall quietly wrote off $118,000 of the museum's tax bill.

The outstanding bill was a shade over $443,000 plus penalties of almost $36,000 for non-payment in 2010. The city charges 1.25 percent per month on unpaid tax bills.

Somehow, prime riverfront property independently assessed at $7 million, at least, lost value.

Without a word to the public, somebody cut $118,000 off the CMHR's unpaid tax bill.

The same day as receiving the writeoff, the museum made a payment of $98,538. The effect was to buy time. They can now default on their 2012 taxes without fear of going on the list of tax sale properties.

As we wrote just this past July:

"You can see why the millionaires backing the CMHR can't be bothered paying their city taxes."
"They're counting on Sam Katz and Justin Swandel to turn a blind eye for their buddies while insisting the little people have to pay more taxes."

http://blackrod.blogspot.com/2011/07/who-didnt-pay-their-taxes-again.html
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The Trustees of the CMHR managed to keep a lid on their financial woes from Spring to Fall. The first crack in the official story came in November in a puff piece on Gail Asper in the Toronto Star. For the first time ever there was a mention that the museum wouldn't open until perhaps 2014. There was no attribution for the date, so we dismissed it as speculation.

But a month later, the museum held its first ever public meeting, and the cracks became chasms.

They confirmed the museum opening had been postponed for a year from April, 2013, to sometime in 2014. Even that turned out to be a moving target, as later statements from communications director Angela Cassie said they were hoping it would open in 2014, but a later date was possible.

The reason for the one year postponement?

Well, that, too, varied with the day, if not the hour.

At first Cassie said it was to give the museum time to train its staff to deal with emotional visitors. But eventually, the truth sneaked out----they were soon to be broke. They didn't have the money to fit up the museum.

Hell, they could hardly count on enough money to finish building it--- exactly as predicted in The Black Rod.

Even the Winnipeg Free Press, the propaganda arm of the Canadian Museum for Human Rights, reluctantly conceded the facts in their Saturday editorial:

"Large gifts, moreover, are usually awarded over a limited time period,say $1 million over 10 years. As a result, the museum's capital campaign is not only behind by $20 million, there are millions of other dollars that can't be spent or banked because they haven't started to flow."

You don't say? Or should we say, you never before said.

The newspaper's confession means, simply, that all those photos of a grinning Gail Asper announcing some huge, ahem, donation without once pointing out that the, ahem, donation was a tenth of the stated value per year were bogus.

False.

Propaganda, not news.

Thankfully, those photo ops have dwindled to almost zero, just like the museum's bank account.

But the Free Press had a solution to the museum's financial woes --- the federal government should just give the CMHR a blank cheque.

See how simple it is, when it comes to the pet projects of millionaires ?

We, too, have a solution and it, too, involves the federal government.

We're not the only ones to reach the same conclusion.

Put the Canadian Museum for Human Rights under third party management.

Prime Minister Stephen Harper ordered the Attawapiskat Indian Reserve put under third party management because conditions were unacceptable given the $90 million plus Ottawa has spent on the reserve since 2007.

Well, that's exactly what the federal government has spent on the CMHR since 2007 and the results are just as unacceptable.

Why are the white boys (and girl) being treated more favourably than the natives?

Nobody knows how much the museum is going to cost -- if it's ever finished. They've already spent more than $200 million on construction and nobody can even guess at what the final cost will be. Hell, they can't even tell you what year it will open.

As of today, the rough plan is to finish building the structure in 2012, then let it sit empty for a year or two, or more, until they figure out how to pay for the state-of-the-art bells and whistles that will make up the exhibits. Once you've crossed out 'government', nobody knows where the money will come from.

Nobody really knows how much money the Friends of the Museum have raised either.
Nobody knows what caveats are attached to the alleged donations.
Nobody knows how the pledges are structured---over how many years, for example. Nobody knows what number of pledges have defaulted in the current tough economic climate.

A third party manager should dismiss the museum's board of directors and conduct a full, forensic audit to reveal exactly how the CMHR has spent the money its received.

Apart from concrete, steel and glass, let's see ... there's sending museum CEO Stu Murray on a junket to China, giving out bursaries to the University of Winnipeg's Adventures in Global Citizenship Institute for a three-week course they created, partnering in putting on a documentary film festival in Montreal and, oh, co-sponsoring with Amnesty International the screening in Ottawa of a documentary about gay rights in Cameroon.

Yes, that's right, gay rights in Cameroon.

Given that the Friends of the Museum hands out charitable tax credits for donations, a third party manager should demand full access to the donors' list and publish any restrictions attached to any donations. That's called transparency.

The Canadian Museum for Human Rights was built on lies and it's time for the federal government to step in and clean house.

The board of trustees cannot be trusted any further.

The museum backers are playing their two last cards to duck the blame for the fiasco while keeping their hands on the taxpayers' wallets.

It's a national museum, and as such, the federal government has a responsibility to pay whatever it costs to build and maintain it, they say.

And nobody could have guessed the final bill. All previous figures provided to the public were only estimates.

Lies, both.

Before the Senate gave approval for the federal government to take over the construction of the CMHR after it proved too expensive as Izzy Asper's private project, one Senator asked the right questions of the witnesses called in support of the move, including Patrick O'Reilly, Director, Implementation Strategy, Canadian Museum for Human Rights, and Rina Pantalony, Legal Counsel, Canadian Heritage.

As reported exclusively in The Black Rod:

(transcript slightly amended here for brevity)

Senator Jim Munson (Acting Chair) in the chair:

The primary purpose of Bill C-42 is to create a new national museum for human rights. It is to be called the Canadian Museum for Human Rights. As provided by clause 1 through clause 4 of the bill, it will be established as an independent Crown corporation through amendments to the Museums Act.

Senator Cowan:
(Addressing Lyn Elliot Sherwood, Executive Director, Heritage Group, Canadian Heritage )
On the page of your presentation entitled ``Background,'' it talks about $165 million having come from various sources other than the federal government and $100 million coming from the federal government. On the next page you say that the budget to build and fit up the museum, including exhibition development, would be capped at $265 million.

These projects have a tendency to run over the expected costs. Who will pick up the tab if the costs exceed $265 million?

Ms. Sherwood: It is the responsibility of the board to develop an approach to the building plan that includes a generous contingency provision designed to stay within the budget. A number of steps can be taken in planning for a construction project with detailed design, development and costing prior to the letting of construction contracts that enable a board to accurately assess whether the project can come in on budget.

Senator Cowan: Does the $265 million include a contingency provision?
Ms. Sherwood: Yes, it does.

Senator Cowan: This is not one of those projects where the federal government is left to pick up anything over and above the $165 million that is contributed by other parties, is it?

Ms. Sherwood: The total budget is $265 million. You are putting your finger on a very real risk in the current environment, which is the impact of inflation on construction budgets. That has been factored into planning and is one of the reasons for the urgency of this bill because at the moment the purchasing power of that $265 million is being eroded at the rate of between $800,000 and $1.5 million per month.

Senator Cowan: I am not being critical of this project.
However, someone has to hold it at the end of the day.

Ms. Sherwood: The board of trustees will be accountable for bringing this project in on budget and making decisions with respect to the building design and the contingency fund set aside that allow it to bring the project in on budget.
http://blackrod.blogspot.com/2009/05/cmhr-to-politicians-we-lied-so-whatcha.html

The answers provided the Senate were concise and clear.

The budget would be capped at $265 million. Steps would be taken to "assess whether the project can come in on budget." Construction inflation had been factored into the planning as was a "generous" contingency. And, most importantly, "the board of trustees WILL BE accountable for bringing this project in on budget."

There was no talk of an "estimated" budget that could balloon out of control and which the federal government would have to pay.

After we detected in 2009 that the CMHR was grossly over budget, we called for them to produce a "drop dead" figure---a construction cost that would be final and fixed. It took a while, but they finally coughed it up. Here's what we wrote at the time:

http://blackrod.blogspot.com/2009/08/cmhr-wont-be-able-to-revise-this.html

Friday, August 14, 2009
CMHR won't be able to revise this history

He ducked. He dodged. He weaved. But in the end, he coughed up.

A drop-dead number. On the record. In stone.
CJOB radio host Geoff Currier sparred Thursday morning with Arni Thorsteinson, chairman of the board of trustees for the Canadian Museum for Human Rights, and with Gail Asper, chairman of the fundraising campaign by the Friends of the museum.

It was carefully choreographed with scripted questions and absolutely no fielding of calls from the public. But in an uncharacteristic display of journalism, Currier wouldn't let Thorsteinson get away without answering if the museum project had a "ceiling," a cost that wouldn't be exceeded no matter what.

"We're at that point now," Thorsteinson finally said. "We've got our final budget. We're highly confident that we will complete the project at that cost."
That cost: $310 million. Write it down. Print it out. Paint it on the wall. Because Thorsteinson and Gail Asper must be held to account to that number. No excuses. No more moving finish line.

Well, guess what.
Two years later they're trying to rewrite history.

$310 million was only another estimate, they say.
Projects like this are complex and nobody can guess what they'll cost in the end, they protest.
Especially not the taxpayer footing the bill.

Oh, and Arni Thorsteinson mysteriously resigned last week. He's not around anymore to discuss the firm assurance he gave the public that the cost of the CMHR was "final."

The argument that the federal government is responsible for funding the CMHR whatever the cost because the museum is a national facility is a joke, right?

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The CMHR was always, and is still, the Asper Family's pet project. It was intended to be a private museum centred on the Holocaust until costs grew out of control. There was never any desire from the public for a human rights museum. Ever. It was imposed on the public and everyone knows it.

Today, we can compare what the public truly wants, with what is being rammed down their throats by Gail Asper and her political pals.

The Jets are back.

* The CMHR trustees claim that 6600 people have donated to the museum.
The Winnipeg Jets sell out 15,000 seats every game.

* The CMHR claims its raised $130 million, although we now see that's a bogus figure. A huge proportion of that number is pledges of money in the future. To date, they may actually have collected half, if that.

The Jets, by comparison, would rake in $22 million a year if you're using only the lowest season ticket price, and double that, $44 million, at an average season price. And they're sold out for the next three years, with 15,000 more people ready and willing to snap up tickets if they go on sale.

* One is something people want---and will gladly pay for. The other is a pet project of elitist millionaires, something that people don't want and which they have to be forced to pay for.

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The Winnipeg Free Press has floated a figure for the latest cost overrun -- $45 million but its attributed only to unnamed "sources". The Friends of the CMHR already can't raise the $20 million outstanding on the last overrun. Add $45 million to that and you've entered the Twilight Zone.

The feds have said they're not upping their contribution. Period. The province is looking at a billion dollar deficit and is not likely to slip in another $40-50-60 million. And the city doesn't have that kind of money.

If all this sounds vaguely familiar, it should.

We've witnessed this sequence of events before -- the sudden collapse of a careful coverup, politicians in the know running for cover, a rash of resignations of senior executives, a Ponzi-like scam to use bogus figures to trick new investors into signing cheques to bail out previous investors, a small cabal of elitists out to change the world and stick the taxpayer with the bill...

Crocus, anyone?

Labels: boondoggle, budget deficit, CMHR, Crocus, Gail Asper, Justin Swandel, Sam Katz