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Blogspot | 19Sep2012 | blackrod

Heritage Minister Moore talks of CMHR compromise --- and mismanagment

Infuriating tales of board mismanagement and government malfeasance that cost taxpayers more than $70 million peppered a recent update on the jinxed Canadian Museum for Human Rights by Heritage Minister James Moore.

Only a tiny audience of 16 showed up to hear Moore at the Winnipeg Free Press News Cafe, and it's hard to say how many could separate the eye-opening inside stories from the pure falsehoods being peddled to justify the federal government's blank cheque to save the failed project from insolvency.

One person who certainly needs to listen to the interview with Moore
is Canada's auditor general who should be curious about questionable, if not fraudulent, government spending on the CMHR.

Moore started by floating the idea that there were two main reasons why the budget for the museum has ballooned from $265 million in 2009 to $351 million today, enough to derail the project without an emergency government financial transfusion.

First, said Moore, a few years ago the museum's board of trustees decided to be greener-than-thou and to build the museum to a Gold LEED standard. (That stands for Leadership in Energy and Environmental Design.)

"That came with a price tag -- if memory serves -- a $37 million price tag."

That decision was made, he said, "without identifying the source of the funds" needed. The board just assumed
"taxpayers will pay for it". That wasn't "exactly a wise or prudent move," Moore said.

The second reason for the giant cost overruns, claimed Moore, was the unexpected rise in the price of steel.
"When the cost of steel goes up, we can't foresee that," said Moore.

That, to put it bluntly, is a flat-out lie. It was a lie we addressed in The Black Rod more than 3 years ago. Note the title of the piece.

At the time, May, 2009, we pointed out that Arni Thorsteinson, the chairman of the board of the Canadian Museum for Human Rights, had been quoted in the newspaper more than a year earlier -- in January, 2008 -- warning about the skyrocketing cost of construction.

"...soaring construction costs, which, Thorsteinson said, have increased by 40 per cent in the last two years"."

So the cost of steel was a known factor to the museum board BEFORE construction of the museum had even started.
Why is Heritage Minister James Moore trying to justify the museum's cost overruns?

The CMHR revealed last December that the cost of construction had climbed another $41 million. Moore told his audience that the federal government had by then, so little confidence in the museum board, that it went to the auditors Price Waterhouse Coopers to ask for a third party validation of the numbers. The feds wanted their "absolute honest assessment" for the cost to finish the museum.

"We want an absolute number to finish this building in 2014," was the way Moore put it.

The answer came back five months ago -- $351 million with contingency built in, an echo of the figure put forward by the CMHR in December. It's unclear whether Price Waterhouse included the $6.5 million it will cost for a theater and temporary gallery which the CMHR excluded in its $351 million cost.

"And we said 'there's no budging from that'," said Moore, trying to act like a fiscal hardliner.

Remember that when the CMHR comes back for more money.

The CMHR was $61 million short of the money needed to finish the project by the new estimated opening date of 2014 (two years behind schedule). Moore was quite proud of the solution proposed by his office to give the museum another $35 million while pretending the federal government wasn't breaking its pledge to taxpayers not to increase its original commitment of $100 million in funding.

The answer, he told his audience, was to pretend the government was giving the museum an advance on its own money.

Ottawa had promised $21.7 million a year to the CMHR for operating expenses. The government would now cut that in half for the next three years, with half going for operating costs and the other half going towards construction costs. When the museum finally opens, in 2014 if all goes as planned, the full $21.7 million in operating funds will be restored.

But here's the problem.

The museum has never received $21.7 million in operating funds
. Last year it spent $11 million. And it seems it will only get about $11 million a year for the next three years, which is apparently sufficient.

The $21.7 million was only, repeat "only", going to be provided after the museum was officially opened. If the government is saying it was prepared to give the CMHR $21.7 million a year for three years before the museum was open, what were they going to spend the extra $10 million a year on?... Ten million dollars they didn't need for expenses.
The auditor general should be interested in why the Harper government was about to hand over $21.7 million a year to the CMHR to cover $11 million in expenses.

More to the point, there is no extra $10.7 million or $11 million or $12 million a year to go towards construction. That money was never going to go to the CMHR in the first place.

That means the $35 million the government is giving the museum project is NEW money, money that certainly is a new cost to taxpayers.

Oh, and the CMHR still isn't paying its share of property taxes.

And speaking of budgets ... there isn't one, have you noticed?
The CMHR is legally obligated to produce an annual report which includes a budget. There is no annual report for 2011-2012. At least, the federal government doesn't have one and the CMHR doesn't have one posted on its website.
How bad are the numbers they're hiding?
Heritage Minister Moore did have some interesting news on the outstanding controversy eating at the CMHR over its decision to elevate the Holocaust over all the other ethnic genocides in history in the promotion of human rights.

Leaders of ethnic groups across Canada have called on the CMHR to treat the story of all genocides equally, without favouring one over the others. Supporters of the CMHR, including board member Gail Asper, reacted by launching a smear campaign against Canada's Ukrainian community with false allegations of anti-Semitism. The campaign backfired badly, with donations to the CMHR dropping like a stone to barely $3 million last year from $10 million two years earlier.

Moore said the board of the museum made a big mistake back when it was trying to convince the federal government to come up with $100 million to fund the CMHR. To prove it had the support of Canada's ethnic groups, the museum board was auctioning off square footage in the museum to whatever groups came up with the most money, Moore revealed.

The solution since adopted is to devote space only to the five genocides officially recognized by the Canadian Parliament --- the Armenian genocide, the Holodomor, the Holocaust, the Rwanda genocide and Srebrenica.

The compromise is to treat the Holocaust equally with other ethnic genocides in one gallery, ‘Breaking the Silence’, while still giving the Holocaust a separate gallery 'Examining the Holocaust’, complete with artifacts and first-person accounts.

Winnipeg Free Press columnist Dan Lett asked a long, leading and convoluted rhetorical question, something about whether a separate gallery looking at the Holocaust in the context of international human rights law was a fair use of space and not divisive.

Moore replied that anyone who draws that conclusion "is somebody looking for a fight."

But, knowing it or not, it may be Heritage Minister James Moore who could wind up looking for a fight.

Moore said he has told museum president Stuart Murray "many times" that:

"this museum is NOT going to be --- CANNOT be --- a source of division in this country. Because taxpayers are not going to pump in $21 million per year to operate this museum if they see it as a perpetual source of division for the people of Winnipeg, the people of Manitoba and the people of Canada."

He ordered Murray to come up with "a formula" whereby matters that risk becoming divisive are addressed.

Tough talk, but its no different than what was written in letter to the former Liberal Heritage Minister in 2008 where an appointed Advisory Committee on the Canadian Museum for Human Rights pitched the project, including this recommendation:
33.Develop a Protocol to Respond to Criticism
–Develop an explicit policy and procedures for dealing with criticism, which will allow critics to be heard, their views to be considered, and to find win-win alternatives when possible.

But the board of trustees believes it ultimately has full autonomy from government which is reflected in this mission statement


"Directly related to the need for Board autonomy is the fact that there is a public expectation that the CMHR will address controversial issues in a proactive, engaged and balanced manner. This social responsibility will bring with it specific governance challenges which will require distance from government yet engagement with all interested stakeholders."

"The CEO and senior management team of the CMHR will need to have the courage to act with conviction and independence while remaining diplomatic and inclusive. They will require tremendous support in their roles from the Board of Trustees."

It remains to be seen how Moore and the CMHR will fare in a clash of wills.