June 8, 2004
Kamloops Daily News



Eye View

Stephen Harper wants to increase the powers of  the auditor
general, Sheila Fraser.  He'd like to see her budget
increased to $50 million.

Harper is understandably pleased with Fraser's work.  She
has uncovered Liberal government mismanagement in what has
become known as the sponsorship scandal.

I agree -- more power to the auditor general.  Who knows what
else could be uncovered?

One area that Fraser would like to expand investigations is
foundations set up by the government.  These are privately
run, publicly funded foundations such as the Millennium
Scholarship Fund.  As private corporations, they are now out
of reach of the auditor general.

Fraser is concerned that billions of public money is parked
in these foundations.  Years go by without any money being
handed out.  In the meantime, who is using that money and
who is collecting interest on it?

However, in his haste to support the popular auditor
general, Harper contradicts conservative principles. 
Harper's proposed spending increases means bigger
government.  After all, the auditor general's office is a
government department.  If it were the NDP proposing
increased government spending on this and other proposals, 
Harper would be the first to accuse them of reckless use of
tax dollars.  He proposes even more total spending than the
Liberals.

Secondly, Harper supports investigation of the very
organizations that he champions -- privately-run business. 
The Conservative/Alliance party has always said that private
business can do a better job than government.  Does Harper
really want to expose mismanagement in the sort of privately
run foundations that he supports?

If so, then Harper has my support.  In fact,  I would like
the auditor general's powers expanded even further than
Harper suggests to include investigation of publicly traded
Canadian corporations on the stock exchange.  Corporate
fraud is no less a concern to Canadians, especially when
pensions and savings depend on them.

Harper likes to promote business as a model for government. 
Does he mean businesses like Nortel Networks Corporation? 
The leaders of this Canadian giant have recently been
implicated in fraud that sent shock waves across Canada and
around the world.  The scale of corporate fraud easily
compares with the sponsorship scandal.

Nortel CEO Frank Dunn overstated the company's 2003 earnings
by 50% to his personal advantage.  Because Nortel looked
better than it really was, Dunn received millions of dollars
in bonuses and stock options.  Current Canadian laws and
auditing regulations did nothing to prevent this misuse on
public money.

The impact of Dunn's lies on Canada's economy was massive. 
Standard & Poor's to cut Nortel's ratings well below junk
bonds.  Nortel faces probes by securities regulators in
Canada and the United States.

The sponsorship scandal has received a lot of attention but
Nortel also reaches deep into the public pocket.  Last year
the federal Export Development Corporation gave them $1.09
billion.  Nortel may be a private corporation but taxpayers
are heavily invested.

The economic impact of the Nortel scandal was greater than
the sponsorship scandal but you would never know it from
listening to Prime Minister Martin or Stephen Harper.  The
story was under-reported in the media -- most  covered it
as a business story.

Would Harper like government to be run like the U.S. Enron
corporation which squandered assets equaling a small
country?  Money lost by Enron was equivalent the entire
budget of South Africa,  $138 Trillion US.

Nortel and Enron corporate fraud is the tip of the iceberg. 
Misuse of money is kept secret through incomprehensible
reports, deceptive audit practices, and glowing accounts of
performance.

Corporations should be more like government, not the other
way around.  Company books should be scrutinized by a public
auditor.  Company officials should be easily voted out of
office.   Shareholder meetings should be transparent. 
Instead, they are often manipulated by those who have to
most to cover up.
 
Harper wants to get tough on crime committed by the poor but
is strangely silent on corporate crime.  When Harper says
"we believe if you do the crime, you do the time," he's not
talking about criminal CEOs.

Harper's suggestion of increased budget for the auditor
general is a good idea but it doesn't go far enough.  I'm
waiting for him to carry his logic to the next step --
government scrutiny of Canadian corporations.  

But I'm not holding my breath.

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