The Hand-over

by Elaine Dewar

  The executive, Ken Thomson, has a LinkedIn Bio.

  See: “Stewart House in Bankruptcy,” by Judith Rosen, Publishers Weekly, February 10, 2003. The previous year, an Ontario court issued a judgement regarding a financial dispute between Stewart House and a game company that it acted as the distributor for. This ended in a large monetary award against Stewart House.

  See: Minutes of the Governing Council, University of Toronto, June 29, 2000.

  See: Minutes of the Business Board, University of Toronto, October 2, 2000.

  See: “Internationally renowned leader to head Foundation,” January 16, 2012 at www.sunnybrook.ca/foundaton/media/item.

  See: “Investing in the Future of Canadian Books: Review of the Revised Foreign Investment Policy in Book Publishing and Distribution,” Department of Canadian Heritage, July 2010.

  See: email from Catherine Montgomery, Program Officer, Canada Council for the Arts, October 1,2015.

  See: “Disclosure of Grants Contributions an Awards over $25,000 at www.pch.gc.ca/pc-ch/dp-pd/list-eng.cfm?s.

  Decisions October-November-December 2011. Canadian Heritage website at: pcb-gc.ca/eng/1359562637714/1359562712317.

  See: Investment Canada Act, section 28(4).

  Emails of Derek Mellon, Media Relations Industry Canada, August 26, 2015.

  Another example is the story of Sino-Forest Corporation, trading on the Toronto Stock Exchange, offices in Hong Kong and Mississauga, Ontario, though its forests were in mainland China. These forests were not as publicly described, which was discovered by Muddy Waters Research. This led to a cease trade order by the Ontario Securities Commission and an order that the executives step down immediately. The order had to be rescinded immediately because the OSC has no power to make such an order. See: “Sino-Forest Halted as Regulator Rescinds order on Executives” by Christopher Donville, in www. Bloomberg.com/news/articles/2011-08-26/sino-forest-executives-ordered-to-resign. The company went into receivership and as it did so issued a libel suit against Muddy Waters in Ontario. The company is defunct.

  See: In the Mater of the Securities Act RSO 1990, c.s.5, As Amended, and YBM Magnex International and Harry W Antes, Jacob B. Bogatin, Kenneth E. Davies, Igor Fisherman, Daniel E. Gatti, Frank S. Greenwald, R. Owen Mitchell, David R. Peterson, Michael D. Schmidt, Lawrence Wilder, Griffith McBurney & Partners, National Bank Finance Corp. at: www.osc,gov.on/en. See also Wiki on Semion Mogilevich, Don of Russian mafiyah dons.

  See: Josef Sigalov’s gifts through his companies to Paul Martin’s re-election campaign, as well as to the campaigns of other Liberal candidates in 1993, as well as to the federal Liberal Party and the federal Progressive Conservative Party. Sigalov was the Canadian associate of the leader of the Russian Mafiya in New York, and their business discussions involving extortion, etc. had been wiretapped by the FBI. These matters were published in “Democracy Inc.” Elaine Dewar, Toronto Life, in 1997. (The story can be read online at: http://groupsgoogle.com/forum/#1topic/soc.culture.urainian/1wfvNSODXxE). A lawyer working for the Liberal Party called this reporter to ask how they could return these contributions made to candidates. I had to explain that Sigalov had also made contributions to the Liberal Party of Canada, but as to how to find him, good luck, he was reported to have died of a brain tumour in Moscow and been buried in a cemetery in Toronto, though no one was able to tell me that they had actually seen the body.

  See: “Toronto Journal; Russians Are Coming, but for Money,” Clyde H. Farnsworth, New York Times, October 2, 1993 and “Where Fools Russia; from the Kremlin to Toronto’s posh Bridle Path; smooth-talking Dmitri Yakubovsky rode the collapse of the Soviet Union,” Saturday Night Magazine, December, 1995.

  See: Confidential Private Offering Memorandum Onex Capital Corporation and Oncap Holdings Corporation offering approximately $75,000,000 in New Units. February 3, 1986.

  See: “The Collapse of Drexel Burnham Lambert,” New York Times, Business Day, February 14, 1990.

  Ibid. Cloak of Green, Dewar, p. 289.

  See: Titans, Peter C. Newman, p. 177–179.

  I am indebted to my friend Marci McDonald who dug this out and wrote about it beautifully in Yankee Doodle Dandy: Brian Mulroney and the American Agenda.

  Ibid., Marci McDonald, pp. 271–273.

  Ibid. Cloak of Green, Dewar, p. 286–287.

  Connacher and his people drank hard, played harder, and made a lot of money very fast. One of his former associates bought a great big house in a privately owned park and let the family dogs poop on its ballroom floor rather than fence the great big lawn. There were great big parties on the great big lawn, but in the end, the house was seized by the bank as the owner left the country under a cloud. (The precise nature of that cloud is not known to me.)

  See: Barbarians at the Gate: The Fall of RJR Nabisco, by Bryan Burroughs, HarperCollins, 1991.

  See: On the Take: Crime, Corruption and Greed in the Mulroney Years, by Stevie Cameron, pp. 390–413.

  See: The Perilous Trade, Roy MacSkimming, p. 162.

  There was quite a fuss when it was reported that Paul Martin Sr. (then government leader in the Senate), Jack Austin (then principal secretary to Prime Minister Pierre Trudeau), Bill Teron (then head of the government’s housing agency, the CMHC), and Maurice Strong (the founding chairman of Petro-Canada plus various other government appointed roles), owned chunks of this company while they held public office. Jack Austin in particular was accused of conflicts of interest, and the fuss led to new rules about what public officers had to do to keep their skirts clean.

  See: “Takeover Part I” and “Takeover Part II,” by Elaine Dewar, Canadian Business, 1985, November and December respectively.

  See: “Canada’s Richest People,” Staff, Canadian Business, December, 24, 2015.

  Ibid, Dewar, “Takeover Part II.”

  Ibid, Dewar, “Takeover Part II.”

  “They’re all Jews together,” one WASP Bay Streeter hissed at me when I came to interview him about the takeover, not realizing that I’m Jewish. He was deceived by my last name. “Tell me something, sir,” I said to him trying to hold my rage in check. “Is it the fact that Mann is Jewish that you object to, or his business practices?”

  “The business practices of course,” he’d said, smugly.

  Like the M&S deal, official institutions only appeared to be in control of events. The OEB gave its imprimatur to a deal that had already been made and could not legally be stopped only after Unicorp made several public undertakings. It was supposed to hold onto control of Union Enterprises, and therefore Union Gas, for many years. Nevertheless, in 1992, Unicorp, in trouble, sold control of Union to Westcoast Energy, which was later sold to US based Duke Energy, which spun Union into a US company called Spectra out of Houston. That’s how one of the largest natural gas utilities in eastern Canada ended up in the hands of a foreign owner—until Spectra was resold this year to Canadian-based Enbridge in a $37 billion deal. See: “Enbridge to buy Spectra Energy in $37 billion deal” by Kelly Cryderman, Globe and Mail September 6, 2016.

  See: The Perilous Trade, by Roy MacSkimming, pp. 303–308.

  O&Y and the Reichmann family were represented by Nigel Wright’s firm, Davies Ward & Beck, and Trevor Eyton’s former law firm, Tory, Tory DesLauriers and Binnington.

  The Reichmanns: Family, Faith, Fortune and the Empire of Olympia & York, by Anthony Bianco, pp. 226, 312–320.

  See: Titans, Peter C. Newman, pp 204–205.

  Ibid, MacSkimming, pp. 65–67 and 319.

  Ibid, MacSkimming, p. 66.

  Ibid, MacSkimming, p. 321.

  See: Douglasgibsonbooks.com.

  See: Avie Bennett’s Companion citation, Order of Canada website.

  “Sondra Gotlieb’s Slap Flap” by Elizabeth Kastor and Washington Post Staff, The Washington Post, March 21, 1986.

 
Later, I thought we must have spoken about the electronic rights class action law suits. They began after journalist and author Heather Robertson and I attended a public meeting at the Ryerson School of Journalism in the mid 1990s. It was organized by our former Maclean’s colleague and the School’s Director, Don Obe. The Internet as a publishing platform was still mainly science fiction, but electronic publishing on CD-ROMs and in full text databases had become a shiny new business. Some newspapers and magazines were putting their articles into full text databases and selling subscriptions to them, or, were trying to sell single articles as downloads. The Globe and Mail, owned by the Thomson Corporation, had gone into digital publishing long before anybody else and had apparently included freelancers’ stories in its databases without asking for permission or negotiating payments. While most freelancers hadn’t noticed, someone at the Globe must have worried that this practice might infringe copyright. Under copyright law, freelancers retain all rights to their stories except those they sell or give away by written agreement. At that time there were no written agreements between freelancers and newspaper editors, just brusque orders about the number of words wanted and the deadline and the fee. The understanding in the business then was that newspapers and magazines bought the rights to print a freelance story in one day’s versions of the newspaper, or in one issue of a magazine. These rights were for sale in Canada, only, but the Internet was beginning to destroy publishing territories.

  In January, 1996, Obe called a meeting of the writing community because the Globe had begun to insist that all its freelancers must sign contracts giving the Globe non-exclusive worldwide electronic rights to their stories forever and for nothing. The more we heard, the more it sounded as if freelancers were getting hosed. Yet the Writers’ Union lawyer who attended that meeting said little could be done because no freelance writer could afford to sue the Globe. The same lawyer dismissed it as ridiculous that freelance journalists might consider suing as a class.

  After the meeting, I spoke to a lawyer friend who thought a class-action was worth investigating. He advised us to go see Michael McGowan who had set up a class action practice. Along with journalist/activist June Callwood and freelancer/union organizer Michael O’Reilly, Heather Robertson and I asked McGowan to consider taking the case. He asked us to find out which of our works, if any, were being offered on Globe databases. We found plenty, but most usefully, we found an excerpt of Heather’s book, Driving Force, published by McClelland & Stewart in 1995, which had appeared in the paper version of the Globe. Ha, said McGowan, McClelland & Stewart will have had a contract with the Globe selling the right to use that excerpt. Let’s see if that contract transferred electronic rights. So Heather checked with the rights manager at M&S, Jennifer Shepherd. The contract did not convey electronic rights.

  Shepherd wrote a letter to the Globe asking that the electronic version of the excerpt be paid for or be removed from the database. The Globe’s in-house lawyer responded with a piss-off-and-die note saying, in essence, that Heather Robertson should be grateful to be published by the Globe at all.

  So we asked Jennifer to ask Avie Bennett if he wanted to sue the Globe.

  Did we have a conversation with Bennett? Or did Jen Shepherd convey his answer to us? However we communicated, his reply was: why would I sue the Globe and Mail? At first, I was outraged. But then I saw that by not suing, he protected M&S from the huge legal fees it would have incurred to recover a tiny sum by going after a company as big as Thomson, owner of the Globe and Mail. And his answer turned out to be the right answer for freelancers too. Michael McGowan launched two class actions with the aid of copyright and patent expert Ron Dimock and his colleague Sangeetha Punniyamoorthiy. Both actions were later led by class action litigators Kirk Baert and Celeste Poltak of Koskie Minsky. The actions became known as Robertson 1 and Robertson II. Robertson II sued the other publishers in the country who had copied what the Globe was doing. More than ten years after Obe called that meeting, the Supreme Court of Canada found in a 5-4 decision that by removing freelancers’ articles from their context—the original newspaper—and offering them individually for sale, the Globe’s copyright on the physical arrangement of the newspaper ceased to apply. In other words: we won on the crucial issue. The remaining issues in both actions were settled out of court. Millions of dollars were paid out to Canada’s freelancers. None of that would have happened if Avie Bennett had sued the Globe.

  See: “Anatomy of a Merger,” by Mark Medley, Globe and Mail, Arts, June 27, 2015.

  See: “Doubleday Canada and McClelland & Stewart merge into new publishing group,” Mark Medley, the National Post, June 20, 2012.

  Penguin Random House produced 20% of Bertelsmann’s earnings, and was third on the list. See Bertelsmann 2014 annual report.

  See: Bertelsmann Report, 2013.

  See: p. 89, Bertelsmann Report, 2014.

  Oddly, on Martin’s LinkedIn Page I spied a fragment of a financial statement, untitled, undated and without any zeros to show whether the numbers listed represent millions, thousands or just hundreds.

  See: “Fundamentals of Reviewable Matters Under the Competition Act,” by John F. Clifford, McMillan Binch, paper for Canadian Bar Association Annual Conference on Competition Law, Fall, 2002. “Market share above 35%… will normally prompt further examination.”

  See: Schedule A, Unanimous Shareholder Agreement, July 1, 2000.

  See: “A primer on Competition Investigations in Canada,” Andrew D. Little, February 9, 2016, Bennettjones.com/publications/updates/a_primer_on_competition_investigations_in_Canada. See also Section 29(1) Competition Act at www.competitionbureau.gc.ca.

  On the east side of University Avenue, on the south end of Toronto General Hospital, large letters spelled out Peter Munk Cardiac Care Centre. Munk’s name is also attached to the Munk School of Global Affairs, a building northwest of Queen’s Park Circle on the University of Toronto campus. Munk is said to have put up $35 million for naming rights for which he got a $16 million tax credit, which caused a campus ruckus. Barrick Gold’s mining operations are not beloved by environmentalists and social activists, and yet Munk is said to have gotten some say in the School’s academic decision-making, which is usually not tolerated by finer institutions of higher learning. The President of University of Toronto at the time of that gift was David Naylor: he was also the President when U of T’s M&S shares were offloaded to Random House for $1. Naylor was appointed to the board of Barrick Gold as an independent, but soon left. Rob Prichard was appointed to Barrick’s board in 2015.The Munk Debates are funded by Munk’s Aurea Foundation upon whose board Nigel Wright sat—yes, that Nigel Wright—until he went to work for Prime Minister Harper in 2011. Wright eventually re-joined Aurea after he was “fired” by the Prime Minister for writing a cheque to Senator Mike Duffy so as to give the public the impression that Senator Mike Duffy was paying back the Senate for expenses he’d claimed. (It turned out that he was entitled to claim them, or at least that claiming them was no criminal offense.) Wright volunteered at a homeless shelter in Ottawa while the RCMP sniffed at his $90,000 payment to Duffy to determine whether or not it was a bribe. They alleged that it was a bribe when Duffy received it, but not when Wright gave it. When no charges were laid against him, Wright returned to Aurea and went back to work for Onex out of its London office. Duffy, after an arduous trial, was found not guilty of accepting a bribe.

  Wright’s story bleeds into the stories of the others named here who have reshaped Canada’s book publishing policy—reshaped Canada, really. Wright was active in politics from his first year at University of Toronto. As a student Progressive Conservative, he worked to dump Joe Clark and elect Brian Mulroney as leader of the Party. Wright entered University of Toronto Law School when Robert Prichard was its Dean. Prichard seems to have marked him as one of the brightest students in his year, although Wright had only graduated from U of T’s Trinity magna cum laude, not summa.

 
Wright was a good friend of several political operatives who would go on to drive the Common Sense revolution in Ontario, helping bring Mike Harris to power in 1995. In 1997, after providing legal advice to Onex on an important deal, Wright was recommended as a prospective manager to Gerry Schwartz by Anthony Munk, the son of Peter Munk (of Barrick Gold) and one of the early members of the Onex team. Schwartz hired Wright away from Davies Ward & Beck where he had articled and become a partner in record time. He has been at Onex ever since. Wright is godfather to Anthony Munk’s son.

  Wright apparently spotted Stephen Harper as a person who could unite the fractious right. According to John Ibbitson, who wrote a recent biography of Harper, Wright helped talk Harper into running for the leadership of the Canadian Alliance Party to replace Stockwell Day after the November, 2000 election. Again according to Ibbitson, Wright helped raise money for Harper’s successful race. Wright also helped execute the Alliance merger with the Progressive Conservative Party. Along with Irving Gerstein (later Senator Gerstein), Wright founded and directed the Conservative Fund which raises and distributes the Party’s money. All sorts of political candidates have been, are, and will be, beholden to that Fund for support at election time.

  Robert Prichard also serves on the Aurea board. Aurea gives money to think tanks that are generally considered to be on the right politically, though perhaps libertarian is a fairer characterization, and libertarian is neither right nor left, it’s more along the lines of shrink the State back to bare bones and let liberty ring. Some argue that the Munk Debates are aimed at injecting such views into the global marketplace of ideas.

  Avie Bennett gave away control of M&S just as Heather Reisman and her husband won control of Chapters and stepped forward to push ideas into the world in another way. Reisman became a program organizer for the Bilderberg group in 2000. Bilderberg is a place where very successful people go to hear each other talk. Like the Rockefeller Foundation, and the Trilateral Commission, it is an organization that provides constant fodder for conspiracy theorists. Some think the Rockefellers want to control everything and it is certainly true that the Rockefellers have spent blood, sweat, and many millions of dollars trying to shape the marketplace of ideas, but they don’t control everything. Bilderberg was founded in 1954 with the aid of Prince Bernhard of the Netherlands (forced to quit the organization when he was accused of funny business on behalf of Lockheed) plus a little help from the head of the CIA and a grant from the Ford Foundation (which used to aid the CIA in many ways, as did Rockefeller Foundation). Bilderberg’s initial purpose was to foster good relations between Europe and the US under a rubric known as Atlanticism as the Cold War reached a peak. Its participants have long been interested in world governance of one variety or another, and in the spread of capitalism: in other words, in the globalization process.