I've been receiving many inquiries from shareholders and other interested individuals, all wanting to know what's been happening in court this week.
As I had noted previously, this was a very important week for shareholders, since Judge Ken Hanssen was expected to determine the degree to which the shareholders' claim might have to be whittled down before we could proceed to the crucial certification stage.
I have not been able to attend any of the proceedings myself, but I have kept in regular touch with Douglas Lennox, who is one of the lawyers representing shareholders. I have asked Doug to provide us with a summary of the results of this week's proceedings. As soon as he does that, I will update this website.
To date, Doug says that the only definitive ruling by Judge Hanssen was to reject a motion brought by the lawyer for James Umlah, asking that Umlah be removed as a defendant to our lawsuit. (That guy certainly has chutzpah.)
Lawyers for the defendants had been engaged in various stalling tactics. Many of them had asked our lawyers for "particulars" as to the nature of the claims brought against their respective clients. By now, those "particulars" have all been thoroughly brought forward.
In a complicated lawsuit such as this, lawyers for the defendants will do all that they can to confuse the issue.

Election result shows that McFadyen and Gerrard might have scored with Crocus had they been more forceful

I first told Dr. Jon Gerrard that I would be interested in running for the Liberals in the provincial election last September. I told him then that I thought I could make a useful contribution toward putting the Crocus scandal front and centre during an election.
As events transpired, Crocus was a non-issue. The media, especially the Free Press, were totally disinterested in Crocus. Naturally, this served Gary Doer's goal of avoiding talking about Crocus perfectly.
I had been hoping that the Liberals would use me to get at the NDP. After all, the Crocus shareholders had demonstrated that they could be mobilized around this issue, viz. the large turnouts we were able to generate for our meetings, including an astoundingly large turnout at a Brandon meeting on a cold winter day this past February.
Unfortunately, it was made clear to me that Jon Gerrard would be hogging all the limelight when it came to Crocus. When I said that I wanted to try and create some excitement by holding a news conference myself in front of the Crocus building early in the campaign, I was told by Liberal organizers that it wasn't going to happen. Instead Dr. Gerrard held another of his underwhelming newsers on the corner of Memorial and Broadway, calling yet again for a public inquiry into Crocus. Oh, he was supposed to challenge Doer to debate Crocus. Shucks, he forgot to do that.
At that point I realized that it was pretty much hopeless. The media had no interest in Crocus; the party for which I was ostensibly running was coming up with a new announcement every day - none of which did anything to generate the least bit of interest among the electorate; and Hugh McFadyen couldn't figure out what to do with the Crocus issue.
I had wanted to hammer Doer on the issue of insider trading and whether he or any of his cabinet colleagues used their insider knowledge about Crocus's dire situation back in 2000 to protect their own financial interests. Would it have made a difference if I had been allowed to go after the Crocus issue instead of having to hand it off to Gerrard? Probably not, given the media's boredom with the issue. But could I have generated some controversy? I certainly could have done more with the issue than either McFadyen or Gerrard did.

So, what's the lesson from this snoozer of an election? Nowadays, personality is all that matters in politics. Doer is Mr. Popularity, especially with women.
If either the Liberals or PC's want to knock off Doer, they're going to have to find a leader who's able to compete with him. Whom would I suggest to the PC's as a replacement for McFadyen? How about supremely popular CBC news anchor Janet Stewart? It doesn't matter what her political leanings are (or even if she has any at all). She'd certainly turn the  PC's fortunes around overnight.

As boring as this election has been, one of the great mysteries surrounding it  will be why the Free Press decided to remove Crocus as an issue from the campaign.
Beginning with the paper's refusal to report on any of the devastating leaks of documents from sources within government that showed, beginning at least as early as 2000, the full extent to which Doer and his colleagues were warned of Crocus's impending collapse, and continuing with Dan Lett's carefully timed 8-page defence of Sherman Kreiner and his acolytes two weeks ago, the Free Press has been decisive in insuring that Crocus remained a non-issue in this campaign.

Following is a letter that I have sent to the Free Press. No doubt, it will remain unpublished, as have most of the letters that I have sent to that paper at one time or another, pointing out their unmitigated hypocrisy:

'In June, 2005, the Free Press issued a series of editorials that were unrelenting in their criticism of Manitoba's NDP government for its handling of issues related to the Crocus Fund.
Here is an excerpt from an editorial in the June 11, 2005 issue: "But as the bleeding stops, Manitobans deserve to know why the bleeding started in the first place, why the blood trail went unnoticed and why, when it was noticed and brought to the Doer government's attention, it was not stanched. Manitobans deserve to know how it is that over 13 years some $350 million changed hands to produce a fund that was last evaluated as having a value of just $96 million.
The Doer government has shown that it is incapable of providing credible answers to the nagging questions. Its response to the collapse and a devastating report by Auditor General Jon Singleton has been to deny the need to probe more deeply and to declare only that it is sorry for failing to heed "red flags" that Mr. Singleton pointedly said should have prompted it to take action years ago. The government is not likely to shine light on its own mistakes, to explain, just for example, why it amended legislation in 2002 that had the effect of making Crocus investments in excess of its authority OK overnight."
Again and again, in June, 2005, the Free Press issued repeated calls for a public inquiry into Crocus. In the June 15, 2005 issue another editorial blasted the Doer government for failing to heed the warnings that Singleton noted were so clearly given: "Mr. Singleton notes numerous unanswered questions leading straight to the government's doorsteps: Why, for example, did the Doer administration ignore the now infamous "red flags" raised by civil servants in the Finance and Industry departments, as early as 2001. The Industry department's employees essentially acted as Crocus employees, preparing annual reports the fund was supposed to submit to the department. Did civil servants step beyond their bounds? Or were they directed, or overruled, politically?"

What has happened, since then, that would have led the Free Press to go absolutely silent over the NDP government's refusal to call a public inquiry?
The Free Press has played a decisive role, first in marshalling criticism of the government's role in the Crocus scandal, then in quelling that same criticism. Would anyone at the Free Press care to explain what has happened that would lead to a complete and utter silence over the need for a public inquiry into Crocus? Does the Free Press still believe that there is a need for a public inquiry, or is the issue so completely dead in the minds of everyone at the Free Press that it does not even deserve even perfunctory attention?'

Anyone who would take the time to review the Free Press's unrelenting attack on the government back in 2005 would be completely shocked by the same newspaper's complete and utter abandonment of Crocus as in issue this election.
Can it be only as a result of a Probe Research poll in March that showed that very few Manitobans considered Crocus to be an important issue for them? Since when did the Free Press decide that running a story will be a direct function of how many people think that story is important?
As for the other media in town, let's be honest: There are very few media that have the resources or the inclination to pursue Crocus as a story. It was far too complex a story for most reporters to understand, and the very few who did understand it were undoubtedly scared off by that Probe poll into delving any deeper into it.
Thus, it was left to the blogs to try and keep the story alive. The Black Rod has been brilliant in his/her(?) constant analysis of what was really happening with Crocus. Realistically, however, thoughtful blogs such as the Black Rod's are unlikely to have any impact on the vast majority of Manitobans.

I have asked both Jon Gerrard and Hugh McFadyen to put this one question to Doer: "Does he own any shares in Crocus?" No doubt Doer would have refused to answer, since he has never given a direct answer about anything to do with Crocus.
The reason that I wanted the question asked is that it goes to the heart of what stunk most badly about the NDP government's close links to Crocus: Doer and his cabinet knew that Crocus was crap as far back as November, 2000. They were given privileged information by officials from within Finance that told them, in effect, that Crocus was nothing more than a pyramid scheme. Would anyone, in their right mind, have gone out and bought Crocus shares with that knowledge in mind? Of course not. Thus, Doer, his cabinet colleagues, and anyone else with whom they were willing to share the information from that crucial submission to cabinet, were dealing in insider information - information that had it been available to the thousands of Crocus shareholders who were suckered into buying shares from 2001 onward, would undoubtedly have convinced them to do anything but invest in Crocus.

By now it's too late to do anything that will affect the election. The Free Press has made sure of that. But let's not let the other media off the hook either. Vic Grant launched a withering attack on the NDP's handling of the Crocus issue a couple of weeks ago, but did Richard Cloutier follow suit? Not at all. Cloutier's boredom with Crocus was another great disappointment to anyone who thinks that he is capable of serious reporting.

So now we turn our attention to the court hearings that are slated to begin this Tuesday - election day. The likelihood is that Judge Ken Hanssen is going to find in favour of Crocus shareholders and allow most of our claim against the government and the other Crocus defendants to stand without being struck.
By the end of the week, our lawsuit will likely be moving full steam ahead toward certification in the fall.
If our lawyers do prove successful this week, and the claim against the government (and the others)  is allowed to move forward, do you think that might have had an effect had the election been called for May 28, rather than May 22 - not if the media would still refuse to report it. I'm curious to see whether the Free Press even bothers to send a reporter to cover the absolutely crucial hearings that are about to occur. After all, Crocus is now a non-issue for the Free Press, so why even bother to report on anything to do with it at all?

That was one doozy of a story in today's Free Press - 8, count 'em 8 pages devoted to the last days of Crocus. Intrigue galore...although I'd heard those stories of Laurie Goldberg and John Pelton conspiring to get rid of Kreiner and Umlah a long time ago.
One of the problems with Dan Lett's writng on Crocus has been his refusal to ask certain pointed questions that relate to things that went on at Crocus years before its collapse.
The essential question that remains to be answered is what valuations were being given to specific companies from the get-go. Yes, yes, we've heard all those arguments about how difficult it is to provide accurate valuations for privately-held companies. Martin Cash gave that defence of Crocus on more than one occasion. Yet, that still tells us nothing about whether Crocus's share price ever bore any relation to reality at any time.
When you've got a portfolio that's holding a huge proportion of non-performing companies, and the share price goes down only slightly, as was the case with Crocus for so many years prior to its collapse, the reason is that Crocus was a sham. Can Dan Lett tell me, for instance, what the valuation of Westsun Sound and Light ever was - a company in which Crocus invested a staggering $21 million?
Of course not. Crocus would never divulge what its valuations were. What about Crocus's investment in the Manitoba Moose, in which Crocus was required to underwrite 49% of the team's losses? What value did Crocus ever place on the Moose? How about Winnport, SLMsoft, OpTex, EZmedia, and the rest of the dogs that made up the bulk of Crocus's portfolio?
The list goes on and on.
There are still so many questions about what was really going on at Crocus. Why is it that Crocus insiders will talk readily to Dan Lett and no one else? Until we get a public inquiry, if ever, are we forced to wait for Dan Lett's next chapter in which he gets firsthand access to the major players in Crocus's collapse?
Look, it's now apparent that the guys in the Department of Finance were on to Crocus years ago. Look at all those leaked e-mails and documents that the Free Press has still failed ever to write one word about. (Read on if you don't know what those leaks had to say.) Again, if individuals such as John Loewen and I could figure out that Crocus was coming apart years ago, without access to minutes from directors' meetings, why does Lett continue to defend Sherman Kreiner so determinedly?
Finally, one has to wonder about the timing of this latest article by Lett. Crocus hasn't come up as an issue this election...yet. That's about to change. But, by minimizing the NDP government's role as a protector of Crocus shareholders' interests, once again Lett is providing Doer with yet more excuses for not doing one thing to safeguard the investments of 34,000 Manitobans in Crocus.
All those bright minds working at Crocus and serving on the board...Lett is effusive in his praise of their abilities. It rminds me so much of David Halberstam's classic on the Vietnam War: "The Best and the Brightest". 
Once you get it into your mind that you  really are special, as was the case with so many of the people at Crocus, then who gives a rat's ass about the millions that you're conning out of unsuspecting investors? And,when the most powerful media institution in the province refuses to report on stories that show firsthand how Crocus was being exposed as a sham by competent individuals in Finance who were just as smart as the guys running Crocus, you just know how hard it's going to be to get at the real truth behind Crocus's masterful con game.
Let's see if the coming 2 weeks can do something to force some of Crocus's defenders to answer some real questions. Gary, come out, come out, whereever you are...oh, sorry, I forgot - your lawyers have warned you not to answer any questions about Crocus.

Tuesday, May 22 - Manitoba election. Tuesday, May 22 - first day of pivotal hearings that will likely determine future of Crocus shareholders' lawsuit.
Coincidence - probably? But is it possible that Crocus may emerge as the sleeper issue in the coming campaign? That will depend on a number of factors.
First and foremost is how much attention the media will pay to Crocus. As we've seen, the Free Press has decided that Crocus is no longer an issue. (Looking back over past Free Press files on the subject, especially in 2005 following the release of the auditor general's report, it's hard to believe that it's the same newspaper. Instead of Paul Egan and Gerald Flood riding hard after the NDP cover-up, we now have Dan Lett serving as a mouthpiece for Sherman Kreiner and Mia Rabson poking fun at Crocus shareholders for being unimportant.)
The Sun will pay some attention, but now that it's essentially a branch of the Toronto Sun, it remains to be seen how much attention it will even pay to provincial politics.
CJOB can play a crucial role. As much as Richard Cloutier's political forums can turn into real snorefests, there might even be the occasional reference to Crocus on his show. And if Cloutier decides that maybe, after all, Crocus is an issue that deserves some attention, he can be a tenacious interviewer.
The CBC is unpredictable. NDP supporters tune into CBC assiduously. We know that many NDP supporters are deeply troubled by their party's involvement in the betrayal of 34,000 Crocus shareholders. The CBC, also, has reporters who know how complicit the government was in Crocus's collapse. Those reporters can blow this thing wide open, if their bosses don't restrain them.
So, if some of us can stir things up, who knows?  Maybe some in the media will wake up and realize Crocus can be an exciting, even a sexy issue to cover. It's got all the trademarks of a dynamite scandal: money; greed; power; secret deals; principal players refusing to talk; and politicians at the highest level compromised, yet denying they ever had anything to do with it.
But, as with almost every scandal of a similar nature, what we have are media that are reluctant to ask tough questions.
Maybe the voters can ask some of those questions themselves.
If you get the chance, ask an NDP candidate one of these questions:
1. We now know that the NDP cabinet was aware as far back as 2000 that Crocus was in terrible difficulty. (See the submission to cabinet, posted earlier on this site.)
Why didn't the government do anything to protect Crocus shareholders back then?
(Yes, yes, we know Selinger's patently phoney protestations that the government brought in amendments that actually protected shareholders. As Churchill said, with reference to Hitlers' threat that he was going to wring England's neck: "Some chicken - some neck."  - Some amendements, Greg, some protection.)
2. When Crocus borrowed $10 million from the Solidarité Fund in 2001 to keep itself alive (which it characterized as an "investment" - you know, the way the Mafia "invests" in certain businesses, at Shylock rates), the government knew that Crocus was finished. Why did Gary Doer subsequently attack John Loewen for criticizing Crocus when Doer and his advisers would already have known that Crocus was living on borrowed time?
3. Why did the NDP government allow Crocus to operate a pyramid scheme, using new shareholders' money to pay out older shareholders? Is this a lynchpin of the NDP's economic strategy? Perhaps we can set up one enormous pyramid scheme for the entire province where the first ones in will make a killing. Doer can hire Sherman Kreiner to run it. Maybe we can call it the "Spirited Energy Scheme", by which Doer can "spirit" money away from unsuspecting dupes to pay off his friends.
There are loads of other questions I'd like to ask, but here's the final one you may want to ask any NDP candidate:
Bernie Bellan is about to become a candidate in this election (running in Assiniboia against former Crocus minister Jim Rondeau). He is challenging anyone in the NDP to openly debate him on Crocus. (He'll even allow Sherman Kreiner to stand next to any NDP candidate, whispering answers in his or her ear.) Will anyone from the NDP accept the challenge to an open debate?
If not, then perhaps even NDP supporters might want to think about either supporting another party this time around, or just staying home. Remember, if only 3,000 voters vote differently, we can have a new government and a public inquiry into the Crocus scandal.

(Sorry for being late with this story, but I've been busy attending to other matters.)

Eight days ago another crucially important document was leaked to the same four individuals who were on the receiving end of the submission to cabinet that began the series of leaks detailing the government's close involvement with Crocus: Jon Gerrard, Kevin Lamoureux, John Loewen, and Bernie Bellan.
This latest revelation received almost no coverage in the media. Other bloggers have noted the absence of coverage. It is now clear that, of the important media outlets in this province, the following has happened: The Free Press has decided not to report on Crocus if its reporting would embarrass Sherman Kreiner: The Winnipeg Sun and CJOB will only pay attention if they are able to scoop the competition; CBC reacts to stories that are broken in other media; all the others aren't sure how to treat the Crocus story.
So, what was the latest revelation about? In January 2002 Crocus had come up with another scheme intended to circumvent the legislative restrictions that were imposed upon it. In this particular case Crocus (read Sherman Kreiner) wanted to inject $1.5 million into a University of Manitoba project known as "Smartpark". Crocus wanted to treat this transaction as an investment for its reserve fund, but was unable to do so under the terms of the Crocus Fund Act.
What does Crocus do? It sends a request to MaryAnn Mihychyuk, then Minister of Industry, Trade & Mines, to allow the investment to be "eligible for Crocus' reserve fund". The letter is signed by James Umlah, Crocus's Chief Financial Officer (and an individual whose name appears with some frequency on this blog.)
What happens from that point is that the request is forwarded to Eugene Kostyra, Doer's right hand man, who, in turn, forwards it to David Woodbury in Finance. (As a footnote, the PC's have fingered Woodbury as a key operative in the NDP's relationship with Crocus.)
Soon thereafter, Umlah's request for goverment approval of the Smartpark transaction is agreed to by Minister Mihychuk.
Now, what exactly happened to scuttle this scheme is not clear, but according to the individual who sent the leaked documents, "in this instance, we were able to hose down Kostrya, Umlah and Woodbury and this transaction never occurred. However, this gives you just one example of the whacky ideas that they came up with and that we were forced to contemplate. While we were warning Greg (Selinger) of liquidity problems, Doer's lieutenants were having us contemplate a scheme to invest some of Crocus' scarce liquid reserves in a non-liquid investment.
This also puts the lie to any notion that the lieutenants cared about the shareholders or that they were not involved in Crocus' day-to-day investment activities."

At least some individuals, especially in Finance, appear to have been working to protect the interests of Crocus shareholders from the predatory designs of Kreiner, Umlah, Doer and Kostyra who, it is now apparent, wanted to use Crocus for their own particular interests.
Of course, Gary Doer's response to these latest revelations was his typical drivel that everything was dealt with in the auditor-general's report.
Other bloggers, especially the Black Rod, have done a stellar job connecting the dots between the government and Crocus, especially with regard to the hugely important Solidarité Fund loan. What I'd like to see from the individual(s?) in Finance who have been leaking us information is something about that particular transaction.
The lawyers representing shareholders in the class-action lawsuit are absolutely amazed at the type of evidence that has surfaced in the past two months that shows the depth of involvement between senior NDPers, including the most popular premier in the universe, and the brilliant minds at Crocus who were constantly thinking of new ways to keep their pyramid scheme going.
Even if the Free Press's higher ups have now given out clear orders not to report anything else that might sully Kreiner's reputation any further, these stories do eventually get out, especially now that the internet is proving to be the main source of information about what was really going on at Crocus.
One word of advice to our friend(s) in Finance, however: Send the next leaked document directly to Cloutier. He won't even consider reporting on anything to do with Crocus unless he's given a scoop.
If we're going to expose the true nature of the NDP government's hand-in-glove cooperation with Crocus, we need Cloutier's help. When he's involved in a story, he can be tenacious.
Unfortunately, individuals like Gerrard and me just can't generate the kind of coverage these leaks deserve.
Of course, they're giving Doer's very high paid lawyers fits, but what the hell...those lawyers have known all along that if Doer and his henchmen are ever called upon to testify, either in a public inquiry or the lawsuit, the jig is up.

From time to time we receive letters and documents from unknown sources, such as the submission to cabinet that provided the first direct link showing the NDP cabinet was fully aware of Crocus's problems as far back as 2001.
Today we received a letter that contains explosive charges relating to certain activities in which  former Crocus Fund chief investment officer James Umlah is alleged to have participated.
Umlah's role in Crocus's collapse has long been surrounded in controversy. There have been suggestions that certain  Crocus investee companies had side deals with Umlah, under which he was granted specific consideration in return for helping to funnel investment dollars into those companies.
Of particular interest is the huge $21 million investment that Crocus made in just one company - Westsun Sound and Light, whose principal owner was an individual by the name of Marc Raymond. Crocus also had a substantial investment in another company owned by Raymond - the Prairie Production Centre. Needless to say, both those investments were complete write-offs for Crocus.
According to the letter received today, even as Crocus was writing down its original investment in Westsun, it was pouring more money into it in 2000. (Crocus's collosally huge investment in Westsun was what led me to undertake a series of letters and e-mails that I began sending to officials in Crocus, the Manitoba government, the Manitoba Securities Commission, along with a number of reporters, back in 2001 and 2002.)
Amidst all the furor over the NDP's complicity in propping up Crocus, there has not been enough attention paid to the activities of key figures at Crocus, especially Umlah. Aside from the very questionable investments in which Umlah played a key role, Umlah's relationship with Charlie Spiring of Wellington West needs to be examined. Was there a kickback arrangement involving Spiring, Umlah, Umlah's girl friend, and Cardinal Capital Management, for instance?
Is it true that Sherman Kreiner became aware of this arrangement and put a stop to it, which is what is alleged in the letter received today? Why didn't Kreiner fire Umlah on the spot and end Crocus's relationship with Wellington West immediately?
In previous postings, I've mentioned Umlah's role in OpTx and Maple Leaf Distillers. Again, it is alleged that he received specific favours in return for channeling money those companies' way.

Returning to the Marc Raymond - James Umlah relationship, questions have also been circulating about the role that long-time Conservative fundraiser Arni Thorsteinson played in the Prairie Production Centre debacle. As reported on this website in April,  2005, Crocus had poured $567,000 into the PPC soundstage, and the property on Pacific Avenue was eventually acquired by Thorsteinson.
In April/05 the NDP government bought the soundstage from Thorsteinson for a staggering $1.8 million. At the time, Culture Affairs Minister Eric Robinson was asked why, since no one else had expressed an interest in buying the soundstage, the government had paid so much for it. Robinson's response was "that was a good question".
This one episode epitomizes the murk in which Crocus operated: Investments made into companies owned by friends of Umlah; investments totally fail: the NDP government rides into the picture with even more money for those investments.
There was so much money being skimmed by individuals who had connections to Crocus that we may never get the total picture.
One thing is certain, however: With an election about to be called any day, the stench surrounding Crocus is not going to lessen any. What is truly ironic is that Crocus was used by both the NDP and the PC's for their own paticular purposes. In the NDP's case, it was to promote Sherman Kreiner's fanciful schemes of employee ownership and social investment, while in the PC's case, it was to line the pockets of certain well-connected individuals.
This writer intends to use the election as an opportunity to hold everyone who was responsible for the Crocus fiasco to account. No doubt Doer and Selinger will absolutely refuse to debate me. That's why I'm going to take dead aim at NDP cabinet minister Jim Rondeau, who was the minister responsible for Crocus at one time. The residents of the provincial riding of Assiniboia are about to be treated to a very interesting campaign.

Tom Brodbeck must have access to memos, e-mails, briefing notes...maybe tapes and videos, as well, that he continues to roll out at a regular clip. He's doing the kind of job that any investigative journalist worth his or her salt would be proud of. Along with the "Black Rod", Brodbeck is doing more to keep the heat on than anyone else in this city insofar as the Crocus file is concerned.
(I know it must sound like I'm flogging a dead horse, but what has happened to the Free Press on this story? Not a peep from that paper about the continued revelations surrounding the NDP government's overt complicity in keeping L'affaire Crocus hidden for years. I've said it before and I'll say it again: Along with the credit unions, no one bears more responsibility for promoting Crocus over the years than the Free Press. Why they've reverted to their old form of refusing to speak negatively about Crocus after having confessed that they completely missed the boat on Crocus for years is troubling, especially when we know there are solid journalists there who must be frustrated beyond belief at how they've gone back to serving as Kreiner's podium.)
By now, the evidence that has surfaced in the past few weeks showing the level of protection that Doer, Selinger and other members of the NDP politburo were giving Kreiner is so damning that Gary Doer must be asking Kreiner's protector Lloyd Axworthy whether there are any job openings for Doer such as the ones Axworthy has now given to  Kreiner and the latest addition to the U of W faculty: Bill Blaikie. (I wonder how other faculty members at the U of W feel about Blaikie's being springroaded into a fancy new position as a professor of theology and political economy?)
 I know that former PC and Liberal politicos look forward to plush appointments to boards of directors, but don't you think that Wellington West might find a place for the most popular premier in the country to sit alongside his old pal, Gary Filmon, on their board? After all, it's now clear from the evidence that's surfaced in the past few weeks that Doer did more to keep Wellington West in gravy earning those fat fees as Crocus's underwriters, than anyone else.
Turning to what Brodbeck had to say today, the gist of his article was that officials in government were concerned how to respond to the steady stream of e-mails that yours truly was sending them, going back to 2002. In those e-mails, I was asking the government to take a look at what was going on at Crocus. (I was especially concerned about Crocus's $21 million investment in just one company: Westsun Sound and Light. I'd still like to know more about Crocus's investments in Mark Raymond's companies. Crocus had a favoured few who always seemed to know how to extract oodles of money from its chief investment officer, who could always glare anyone down who dared to challenge his authority.)
In the second part of his article, Brodbeck refers to yet another briefing note - this one from an official in the Department of Industry, Trade and Mines by the name of Katherine Johnson, recommending as far back as December, 2001 that Crocus's problems be 'dealt with at a "higher level", including the involvement of Selinger or then-Industry minister Mary Ann Mihychuk.
(Interestingly, I've written before than Mihychuk could prove to be a crucial witness for Crocus shareholders, since she was hung out to dry by her NDP cohorts when she started to come clean two years ago about how much the government of which she was a part actually knew about Crocus's problems. She's been quiet since then, but if push comes to shove, there's no love lost between her and Doer's sycophants.)
Anyway, if you want to read Brodbeck's entire column, go to:
 http://www.winnipegsun.com/News/Columnists/Brodbeck_Tom/2007/03/28/3852753.html
Also, the Sun is conducting a poll asking people whether they "are convinced the NDP government knew the Crocus Fund was in dire straits before it collapsed".  To register a yes vote, phone 632-2661. If you think otherwise (and you believe the Free Press has it right when they say that only conspiracy theorists are critical of Crocus), then you should phone 632-2662.) There, Dan Lett, isn't that balance?
It was reported yesterday that Sherman Kreiner was given clearance by a Court of Queen's Bench judge to proceed with his motion to have the report by the auditor general about Crocus quashed.According to  Kreiner's lawyer, Ken Dolinsky, if successful, Kreiner will be able to have the auditor general's report "discredited...and no longer used as a point of reference by the media, the public, in civil litigation or in law-enforcement investigations."
A contributor to the message board on this site made the fascinating observation that, if Kreiner proves successful, Gary Doer and Greg Selinger will no longer be able to keep referring to the a-g's report, to wit: that the NDP government has complied with every one of the a-g's recommendations.
Wouldn't it be ironic if Sherman Kreiner knocks out the only peg that Doer has been hanging on to for dear life, i.e. Doer's preposterous claim that the a-g's report exonerates him and his government. (An outrageous claim, in any event, for anyone who has actually read the report.)

It would be instructive, at this point, to cite some of the arguments that lawyers for Crocus shareholders are making to show that Sherman Kreiner is hugely responsible for the misrepresentations that were common in prospectuses issued by Crocus for years. Also, it is important to cite arguments that have been made that show that Kreiner bears some responsibility for the phoney valuations that were such an important aspect of Crocus's sham operation.
Here are some excerpts from our lawyers' brief (which will be argued before Judge Hanssen May 22-25):

"Section 141(1) of the Securities Act provides a statutory cause of action against the
directors and certain officers of a reporting issuer for prospectus misrepresentation:...

101. The arguments made as to the claims against the Directors are repeated with respect
to the claims against the Officers.

E.1 Kreiner and Hawkins
102. Kreiner and Hawkins argue that the Prospectus does not contain the
Representation. This is simply wrong. As set out in Part II C, the Prospectus promised
that the Crocus Act, the valuation policies, and generally accepted accounting principles
and auditing standards would be complied with in the valuation of the shares, and that such
valuations would be done in a timely manner. These standards were not complied with.
The Prospectus and financial statements understated the Fund’s losses and overstated its
assets to provide a materially misleading portrait of the company. These breaches and
misstatements are actionable claims under the Securities Act, the Corporations Act and the
Competition Act.

103. Kreiner and Hawkins further argue that, as officers, and not directors, they had no
legal responsibility to value shares. This is a specious argument. Their legal duty was to
ensure the accuracy of the Prospectus, and to ensure that full disclosure of all material facts
concerning the Fund was made to class members. That the shares were not being properly
valued, and that the Fund was overstating its assets and under-reporting its losses are
material facts to investors. Kreiner and Hawkins had a legal duty to make all necessary
inquiries about the Fund’s operations, whether or not they were directly involved in such operations, before signing the Prospectus. Ignorance is not a defence to the statutory
claims asserted against them. They personally signed the Prospectus with full knowledge
of the legal consequence that entails. The whole purpose of attaching personal liability to
officers is to require that such persons do everything in their power to ensure the accuracy
of the information provided to shareholders. An officer cannot avoid liability by saying
that untruths contained in a prospectus were somebody else’s operational responsibility." (emphasis mine)

In this entire sordid affair, we have yet to hear one individual accept one iota of responsibility for anything that went wrong with Crocus. Instead we are supposed to believe that reputations have been unfairly tarnished. If we can't have a public inquiry, how about the lawyers for the defendants agreeing to let our lawsuit proceed without their interminable procedural delays? Then, maybe Gary Doer and Sherman Kreiner will be totally vindicated in a court of law.
Then again...perhaps the opposite might occur. The challenge goes out to the our duplicitous premier, therefore: If you won't call an inquiry (for obvious reasons - you don't want to commit political suicide), then how about declaring that you are instructing your very expensive lawyers to stop throwing roadblocks in the way of of our lawsuit? After all, weren't you so worried about the expense of an inquiry? Why not divulge how much your government has spent on legal fees (and is prepared to spend in the future) as your lawyers pull out any stops to protect your hide?

Once again, we learn that polls can produce different results for the people ordering the polls, depending upon which questions are asked.
Last Saturday the Free Press reported that only 2% of Manitobans said that Crocus was an important issue for them.
Respondents were asked to name the most important issue leading into the next election. Not surprisingly, health care and education topped the list. According to the Free Press, the "good news for Gary Doer's New Democrats is that the controversy over the Crocus Investment Fund has barely registered with voters. It appears they either don't believe it's a scandal, or don't care."
Along comes the CBC, last night, however, with completely different results. When Manitobans were asked whether they wanted to see a public inquiry held into Crocus, 54% said they would.
(Fascinatingly, 48% of respondents who identified themselves as NDPers were in favour of holding a public inquiry.)
Granted, most of those polled said they were not paying close attention to the Crocus story. (We've known that all along.) What was significant in the poll was that 28% of respondents said the issue may play some role in their voting deliberations.
Remember, it wasn't too long ago that this blog quoted NDP apparatchik Paul Moist as saying that "Crocus was a dead issue."
Now, if you factor in the low voter turnout that Manitoba elections have been generating of late, the likelihood is that  people for whom Crocus is an  important issue or a somewhat important issue will be motivated to get out and vote.
Again and again, I've been reminding anyone reading this blog that the next election can be decided by just a relative handful of voters in twelve key "swing" ridings.
Gary Doer knows this only too well and, while the Free Press appears to be doing everything it can to minimize the impact that Crocus has had, Doer is too smart to think that Crocus couldn't become the fulcrum issue in the next election.

I hadn't thought much of what Doer said in Saturday's Free Press until someone who is very involved with our lawsuit asked me: "What do you think Doer meant by that comment?"
My response was that it meant nothing - that Doer has never been concerned about Crocus shareholders except to the extent that we are a potent political force.
Nonetheless, let's try and pin him down as to what he meant. Mia Rabson, how about asking our premier exactly what he meant in that cryptic remark? Selinger has already gone on record as saying that the best hope for Crocus shareholders lies in our class-action lawsuit. Is Doer confirming that?
What else could he mean?
Any ideas? Post them on the message board. Perhaps we'll start a new contest: Interpret Gary Doer's remark correctly and you will be invited to star in my movie: "Croak-us: The Movie" (See below for more information.)

On another note, the lawyers representing shareholders in the lawsuit have filed a brief giving their responses to all the motions filed on behalf of the many defendants named in our suit. As I wrote two days ago, we are looking forward to a crucial three-day period in May when Judge Hanssen will decide how much of our case will be allowed to proceed toward the crucial stage of certification.

To see the brief prepared by our legal team, click on Plaintiff's submissions.pdf

It is more than a little ironic that another NDP win at the polls might prove better news for Crocus shareholders than a PC victory. A just-released Probe Research poll shows the NDP returning to power, if an election were to be held today.
With the recent devastating revelations about how closely the NDP cabinet was involved in propping up Crocus going back as far as 2000, however, the class-action lawsuit has taken on additional strength as it moves inexorably forward.
While it was alleged that the government had been tied to Crocus in so many ways all along, it had been the case that it would have been up to the plaintiffs (Crocus shareholders) to have to go searching for the kinds of evidence that have now surfaced in the form of cabinet documents and e-mails among high-ranking civil servants.
 A crucial court hearing in the lawsuit is scheduled for May 22-25. At that time, Judge Ken Hanssen will determine how much of the claim that we have filed against the myriad of defendants (including the government) will be allowed to be heard in September during the crucial arguments over whether our lawsuit can be certified.
The case against the government has been strengthened immeasurably by all the recent revelations. In the likelihood that our lawsuit will, indeed, be certified, in September, you can expect most of the defendants to move quickly to settle the suit. Foremost among the defendants that will want to settle will be the government. As I've said before: Will Gary Doer,  Greg Selinger, and Eugene Kostyra really want to take the witness stand and have to admit under oath, that Doer, especially, has been lying to the public for years about how much his government actively worked to keep Crocus alive past the point that it should have been terminated?
No, Doer is going to want to keep that information hidden at all costs. Thus, the government's lawyers will be instructed to do whatever it takes to keep Doer, especially, from being subpoenaed to testify.
If, however, the PC's were somehow to win the election, McFadyen has promised to call an inquiry into Crocus and compensate shareholders if the government is found to have been liable for a portion of our loss. That process, however, will take years to unfold. Further, if the PC's were to be elected, they would not want to move to settle the lawsuit. Rather, they would want to see Doer et all dragged into court to explain the clear and deliberate steps  they took to conceal Crocus's precarious situation from the public.

So, no matter what happens - the submission to cabinet and those e-mails are going to be deadly to Doer and his cohorts.
It doesn't really matter whether most of the public doesn't give a rat's ass about Crocus. Most of the public doesn't have a clue what this is all about, and Gary Doer is a master at keeping the vast majority totally confused as to what the government's role in this entire scandal truly was.
One more point though: Voter turnout in Manitoba has been on a steady decline in recent elections. The turnout in 2003 was only a shade better than 50% of eligible voters. Don't you think, however, that the 34,000 Crocus shareholders are going to be just a little more motivated than the rest of the population to vote?

Doer and his minions are well aware of this. No matter what happens, Crocus shareholders are in a win-win situation, thanks to the explosive revelations of the past two weeks.

In an interview today with CJOB's Larry Updike, our esteemed premier continued his campaign of outright lying about what he and his cabinet knew about Crocus's problems in 2000.
Here are excerpts from that interview:
Updike: "Based on some e-mails between government employees about problems at Crocus that surfaced recently, did you know that high-ranking civil servants in your government in 2000 had concerns about this fund's performance?"
Doer: "I knew that the auditor general's report on liquidity was accurate. We knew there was issues (sic) of liquidity the auditor general had raised, although at the end of the day liquidity did not play any part in the decision of the board of Crocus to stop the trading of shares... The e-mails that go back and forth between civil servants on any topic - I don't read. There's thousands of them... And you know what: That's not a cabinet submission."
Updike: "So you knew nothing about performance in 2002?"
Doer: "We knew about liqudity. We did not second-guess the underwriter, Wellington West, on - the underwriter has an obligation to the Securities Commission to attest to the valuation of shares. The government doesn't have that responsibility. We didn't second-guess the underwriter."
Updike: "Okay, so you knew nothing about performance in 2000?"
Doer: "We knew about liquidity, but we knew that the auditor general's report says on liquidity, performance, valuation. It's all in the auditor general's report. I think that that's very clear."

Can you just imagine how Doer will fare under the kind of whitering cross-examination that he's going to face when our class-action lawsuit is certified (likely in September)?
He's going to be torn to shreds, as he's asked to answer whether he and his cabinet were aware of performance problems at Crocus. The difference will be that, on a witness stand, he won't be able to dish out his usual non-answers.

In the e-mails that were going back and forth among various officials in Finance who were clearly deeply worried about Crocus, there is one especially important reference to Crocus's  "performance" in an e-mail dated November 30, 2000 from Finance official Ewald Boschman to fellow Finance official Stephen Watson. The context for these recently revealed e-mails was Sherman Kreiner's having gone to Cabinet requesting a series of legislative changes designed to give Crocus some breathing room, as it found itself unable to comply with various statutory requirements.
Faced with the direction from Cabinet to give Kreiner what he was asking for, the Finance officials were wrestling with the dire consequences that they knew would result from granting Crocus the changes Kreiner so desperately wanted. As the officials discuss how to "soften up" the letter they're about to send Kreiner, they give a clear indication how unhappy they are with the instructions they've been given by the "higher authority", as the auditor-general referred to whoever it was within government who was evidently protecting Crocus.
Here is a crucial section of one of those e-mails:
"Stephen, in my view this will be viewed by Crocus as a "very good news indeed" letter (given that they're doubtless aware that we have some serious concerns with their performance.)" (emphasis mine)
The e-mail goes on to say that Crocus will see that Finance officials have "caved", and will be acceding to most of Kreiner's requests for legislative changes,  as a result of pressure from what we now know to be the NDP cabinet as a whole.
Now, Gary Doer may claim that he doesn't read e-mails from among civil servants. Of course, he doesn't need to. When it's he and his cabinet cohorts who are giving instructions to those same civil servants to protect Crocus, why does he need to see the grumblings of discontent emanating from his officials?
Look, the jig is up for Doer. He may continue his ever-so-smug refusal to answer any question about Crocus in a direct and truthful manner, and he may very well go on to win yet another term in office. (In some ways, I'm hoping that Doer does win. Won't it be something to see a sitting premier of a province torn to pieces on a witness stand, followed by an eventual enormous monetary judgement rendered against the province in the lawsuit?)
Doer may have the brightest, most expensive legal counsel available in the form of Bill Olson and Vivian Rachlis, but whatever hope he may harbour that he will leave office eventually with his reputation intact is about to evaporate. Perhaps he might want to avoid talking about Crocus any more - much as Selinger has decided to do. Remember, Mr. Premier, everything you say might  be used against you in cross-examination some day. If you thought Gary Filmon was humiliated during the vote-rigging inquiry, that was a stroll in the park compared to what you're going to be facing.

By now it is clear that the Winnipeg Sun is going to milk the story of leaked documents for everything that it's worth. As I've said before: Kudos to the Sun for leading with the story and giving it continued coverage. No doubt,  lot of reporters at  the Free Press must be embarrassed beyond belief that it's the Sun that keeps breaking this story.
Before journalists like Tom Brodbeck start thinking of national newspaper awards, however, let's not forget that Brodbeck was as dismissive of the Crocus story when I told him that it was a story that needed looking at five years ago as every other journalist with whom I spoke back then. (See earlier postings on this blog.)
Now that a lynch mob is forming around Selinger, Doer et al, you can expect that pack journalism will be the order of the day. Unfortunately, when one media outlet is granted exclusive access to leaked documents, professional jealously prevents other media from paying anything more than cursory attention to a story. That's too bad, because we need our local TV news reporters to be reporting on this story, as well as the Sun (and Richard Cloutier, to a lesser extent.)
Still, it might come as a surprise to read that I'm not unsympathetic to Greg Selinger as he finds himself between a rock and a hard place over these latest leaks. I've said it before and I'll say it again: My impression of Selinger is that he's a man of integrity, caught in an untenable position. I'm not at all surprised that he's gone silent these past few days. Again, he's a decent man who's seen events spiral out of his control. Unfortunately, haven't we seen all this too many times before when governments try to keep a lid on scandals?
Certainly Selinger hasn't been entirely truthful talking about what the government knew about Crocus's problems. Anyone who has been following this scandal closely would have realized that Selinger was covering for what his government had done
At the same time, however, I still maintain that Selinger, Doer and Kostyra  were simply naive in believing the spin that they were being fed by Sherman Kreiner, i.e. everything was going to be okay with Crocus if the government would just give Crocus a little more breathing room.
Even Sherman believed that he could pull it all off in the end, witness his plaintive plea for understanding via Dan Lett in the Free Press two weeks ago.
I've said it before and I'll say it again: I like Sherman Kreiner. I think he's got a brilliant mind and his intentions were always to do something positive for Manitoba. Unfortunately, Sherman's forte was not venture capitalism and he aligned himself, whether wittingly or unwittingly, with some disreputable characters who were simply out to line their pockets on the backs of Crocus shareholders.
The problem for Sherman Kreiner and now for Greg Selinger, as well, is that they're seeing their reputations dragged through the mud. These are proud men - further, there's never been a hint of a suggestion that either of them were out to profit personally by propping up Crocus for years after it was in trouble.
The dilemma for all of us, though, is now that we've become so much more aware how deeply involved Selinger, especially, was in working to hide how precarious Crocus's  financial situation truly was for years prior to the halt of the sale of shares, there's almost no wiggle room for this NDP government any more.
Yet, there are things that the government can do for shareholders outside of calling a public inquiry or offering direct compensation to us, either of which would be tantamount to an admission of liability, at least in part, for what went wrong.
If only someone from within the NDP circle of power would try and establish a line of communication with us. Greg, you hinted last Thursday at Public Accounts that you are not indifferent to the shareholders' plight. There are things that we could do for each other.

Every day now when I wake up I'm wondering: What bombshells am I going to find out about Crocus and the NDP  this morning?
Today we learn, once again via the Winnipeg Sun, that in a confidential memo to Cabinet, written in September, 2004, Finance officials reconfirmed warnings that, we have now seen, were being given at least as early as 2000, that Crocus didn't have any cash to pay off investors who would be redeeming their shares.
(For the full story, once again, go to http://www.winnipegsun.com/News/home.html)
At this point, anyone observing what's been unfolding has to ask: What more do we need to know about what happened in order to determine that Crocus was a fraud, the NDP government knew it was a fraud, any yet no one was ready to come forward to protect the thousands of unsuspecting Manitobans who had either bought Crocus shares or were still buying them, even as the house of cards was collapsing?
Clearly the class-action lawsuit has been handed enough devastating evidence in the past two weeks to make a sizeable judgement all but inevitable. What is truly surprising, however, is the degree to which the Manitoba government is bound to be held liable for a good portion of that judgement.
Again, a question that has been raised before needs to be asked again: With all the new revelations, is the RCMP considering the possibility of laying criminal charges against any of the principals who were involved in this massive fraud? (We know that the RCMP is investigating two companies in which Crocus had huge investments. These two companies are believed to be Maple Leaf Distillers and OpTx Corporation.)
Of course, some diehard NDPers are still tripping over themselves trying to figure out a way to defend the deceit in which some of their leading figures were engaged. (You can read some of the typical partisan NDP arguments on the message board on this site.)
I happened to overhear two fellows at work - both staunch NDPers, having a typical exchange that we used to hear when this scandal first broke along the lines that "shareholders have only themselves to blame. They knew it was a high-risk investment, and it was the Conservatives that started Crocus anyway."
Finally, are we going to see or hear one word of these latest revelations from any of the other media in Manitoba? It's great that the Sun has an exclusive, and they may be holding on to even more documents as they attempt to milk the story for all its worth, but is journalistic jealously now going to prevent any other news source from reporting on what has been an incredible weekend of new, leaked information?

This is now becoming unbelievable: Another day - another revelation about how our sanctimonious NDP government covered up more warnings that Crocus was about to implode.
Today's Winnipeg Sun features an amazing story by Tom Brodbeck detailing e-mails that were sent among three senior officials in the Department of Finance in 2000, trying to figure out how to keep Crocus from "falling further into money problems", writes Brodbeck.
(For the full story, go to http://www.winnipegsun.com/News/home.html
See "Monkey on their back   E-mails reveal plea to prop up Crocus".)
Aside from the fact that this latest revelation only goes to show how widespread was the knowledge among senior government officials that Crocus was in terrible trouble, at least as far back as 2000, if not earlier, it is interesting that is the Winnipeg Sun that got a hold of this story, and no one else.
As reported on this blog two weeks ago, when the "Submission to Cabinet" document that got this entire round of damning revelations about NDP cabinet cover-up going was leaked, it was the Winnipeg Sun that had the leaked document two days ahead of everyone else. Unfortunately, the people in the news room who had seen the document didn't realize how explosive it was, and they simply sat on it until I phoned them to ask whether they had seen it.
What does that tell us? For starters, it means that whoever is leaking these documents is using the Winnipeg Sun to get them to the public. That's a very astute move, since it is certain that the Sun will go public with any revelation about NDP perfidy (that is, if the people in the newsroom are capable of understanding when they've been handed something hugely important).
It's now evident that the Free Press has decided to go into full damage control over the leaks that appear to be coming from within Finance. (See earlier entries for the reasons why the Free Press is no longer interested in going after the truth about Crocus.)
At other times, one might have expected the leaks to be going to Richard Cloutier but, as I've noted repeatedly, Cloutier's on-again, off-again interest in the Crocus story makes him an unreliable reporter when it comes to exposing the full story about the NDP cover-up.
As for the CBC, I'm getting tired of repeating this, but their reporters' hands are tied when it comes to exposing Crocus. There is one reporter there, in particular, who is as capable as anyone in this city of doing a full expose on Crocus, but he's been muzzled.
So, hats off to Brodbeck and the Sun.
At the same time, I would also be remiss in not pointing out the great job that radio talk-show host Marty Gold has been doing in going after the Crocus story in his 4:00 pm slot on KICK FM (92.9). This guy is absolutely fearless in going after powerful figures. I also didn't realize what a large following he's developed among the rush-hour crowd until I was on his show myself earlier this week, and began hearing from people who said they'd heard me.

Poor Greg Selinger. Unlike Gary Doer, who's really nothing more than a street-fighter in the mold of a Jean Chretien, and who will say anything to deflect criticism, no matter how disconnected it may be from reality, Selinger really seems to be a decent guy.
He chooses his words carefully, searching for nuance, in an attempt to navigate the rocky shoals of the mess in which he now finds himself.
Of course the NDP have painted themselves into a corner: They can't back down from their refusal to call an inquiry into Crocus and they can't begin to admit that they were deeply involved in covering up Crocus's troubles. Yet Selinger is clearly disturbed by the constant aspersions being cast upon his character. (I even received an e-mail from a Crocus shareholder asking me to lay off criticizing Selinger. She said that she had worked with him for 15 years and he's really a decent guy. I responded that I believed her. Unfortunately, I said, Selinger was caught up in events that spun out of control because he just couldn't believe the warnings his own officials were giving him that Crocus was about to come undone.)
Thus, it doesn't come as a complete surprise to read that Selinger seemed to be offering support for our $200 million class-action lawsuit during a meeting of the Public Accounts Committee last night.
Here is how the CBC described part of what happened:

"The opposition Liberals and Conservatives have strenuously called for a public inquiry into the Crocus affair. McFadyen said there are still too many unanswered questions.

"We highlighted the fact that the NDP doesn't want to go under oath and respond to questions on Crocus and we know why: they don't want Manitobans to know the truth," McFadyen said.

The NDP government has been equally strenuous in its denial of the need for such an inquiry. Selinger argued that a public inquiry wouldn't bring compensation for the Manitobans who lost money in the fund's collapse.

But the class-action lawsuit that has been filed, he said, might. (emphasis ours)The Crocus Investors Association filed a $200-million class-action lawsuit in July 2005 against Crocus, the fund's officers and directors, two brokerage houses and the Manitoba government.

That left McFadyen shaking his head. "I mean, it's perverse NDP logic to argue that a $200-million class-action lawsuit is good news for Manitobans," he said. "The fact that Greg Selinger would make that argument, I just find it really amazing."

This is really quite extraordinary, when you think about it. One of the defendants to our lawsuit is tacitly admitting that it (the lawsuit) is the best hope Crocus shareholders have of seeing some sort of compensation for the loss we've suffered.

Well Greg, if you've come to the conclusion that you can't call a public inquiry, based upon what you said last night, would you at least be willing to come forward and admit that our lawsuit should be allowed to move ahead toward certification without any more roadblocks being thrown in its way by your lawyers?
I know that Doer may not be too happy with what you said. (No doubt if he had been facing McFadyen in committee instead of you, he would have made some vicious remark about McFadyen's friends in big business or some other such gratuitous insult.)
But, I get the feeling Greg, that you're honestly pained by a lot of what's happened. As I've said before, no doubt you must feel that  you were suckered by Sherman Kreiner's yarn-spinning that Crocus would be able to get out from under its troubles. All that we're asking is that we be allowed to find out the truth of what happened so that Crocus shareholders can obtain some compensation for the huge loss suffered. If you now believe the class-action lawsuit is the best way to achieve that result, then you can take some positive steps to help our lawsuit move along expeditiously.

Just as I predicted yesterday, the Free Press had a few letters about Crocus in today's paper, including a really good one from John Loewen. My own letter was not among them. (You can hardly expect the Free Press to print a letter that exposes their long-standing complicity in offering support for Crocus. See below for the full text of the letter that the Free Press would be just a little embarrassed to print.)
As well, just as I also predicted, Frances Russell came up with yet another defence of the  NDP government for letting Crocus off the hook, saying that it was just too darn hard to keep tabs on what was going on at Crocus. Hey, Frances, if I was able to figure out back in 2001 that Crocus was engaged in a massive fraud over its valuations, then couldn't others who were in a much better position to assess the situation have seen the same thing?
Since no one, other than individuals who work in the letters section at the Free Press, know how many letters are received on any subject, it is impossible to know whether the letters that are published are representative of the ones received. But, when a paper as small as the Brandon Sun, for instance, prints far more letters from readers about Crocus, you might think that the Free Press has made a deliberate decision to keep the discussion to a bare minimum.
Why am I going on and on about the Free Press, you may ask? For one, it's the only important media outlet in Winnipeg. The Winnipeg Sun, which has never been taken all that seriously, has now reduced its local coverage to such a degree that you wonder whether the people calling the shots in Toronto have even heard of the Crocus scandal.
The CBC has reporters who are capable of doing a full roll-out of the Crocus story, but they've been held back by higher-ups. CJOB's interest in Crocus ebbs and flows with what excites Richard Cloutier at any given moment. Last week he was all worked up over Crocus, and he did a good job going after the story for one day. Until we get another leak such as the one we had two weeks ago, however, you can expect that the Winnipeg media will go back to sleep over the story.

As a result, a story that should have reporters tripping over each other in an attempt to get the next scoop, goes quiet for months at a time, until another bombshell lands.
Why, for instance, has no one bothered to take a careful look at the companies in which Crocus invested? That's the heart of the story. So many of them were absolutely terrible investments, especially the ones related to the entertainment industry. Look at Westsun, Blye Brothers, Prairie Production Centre, Minds Eye Entertainment, Buffalo Gal Pictures, Mezzo Nightclub, the Manitoba Moose, True North (Did Crocus ever put money into the True North arena? Who knows?) Never mind SLMSoft, Winnport, EZ Media, OpTx, and the piece de resistance: Maple Leaf Distillers. Look at the foray into high tech and the dismal results. Look at the connections among so many of the companies in which Crocus invested - the same names keep popping up over and over again. What were the favours being granted from investee companies to executives at Crocus? How many investments were made at the NDP government's behest?

Are we to believe that there were no good Manitoba companies in which to invest all those years that Crocus was pouring money down the toilet and hiding the results? Crocus has become such a huge embarrassment to this province that it's adding to the cellective feelings of inferiority that we already had in Manitoba. Until we begin to examine in minute detail what  Kreiner and Umlah were doing, we'll likely continue to doubt Manitobans' abilities to create successful businesses on a large scale.

In the United States we see a determined and fearless prosecutor like Patrick Fitzgerald go after the mightiest of the mighty, whether they're in government or business. Much of the press there is also tenacious in seeking to expose corruption. Here, in little old Manitoba, we're left to read between the lines of major media such as the Free Press, and communicate on-line, in order to figure out what really happened. Why are Canadians so timid when it comes to going after financial shenanigans?  

Not since the days of Nick Hirst's editorship of the Free Press has that paper done such a blatant whitewash of Crocus's sordid history of fleecing Manitoba investors. I had a hard time figuring out what was behind Dan Lett's surprising defence of Crocus in last Saturday's paper until I read the Black Rod's latest posting on Crocus. http://www.blackrod.blogspot.com/.
Suddenly, it was all clear. This is such a small town in so many ways that all that it takes to get a reputation cleared are a few phone calls to the right people. If nothing else, Sherman certainly knows how to tap into some powerful movers and shakers when he wants to get his side of the story out. As the Black Rod says, a senior Liberal source figured prominently in Lett's story. And who was that source? According to the Black Rod, it was Lloyd Axworthy, currently Kreiner's boss as the two of them set about redesigning downtown Winnipeg. (I hope this doesn't turn out to be yet another rerun of the Core Area Initiative.)
And who is Axworthy extremely tight with? None other than Bob Silver, co-owner of the Free Press. It's too bad we don't have Paul Walsh on our legal team any more because Paul's cousin, Ron Stern, is the other co-owner of the Free Press. Apparently, back in 2004, when the shit really hit the fan about how close Nick Hirst and the Free Press had been with Crocus, Stern was none too pleased. We don't know exactly what the sequence of events was, but Hirst was gone shortly after I wrote a piece in my own newspaper criticizing the Free Press for its overt support of Crocus to that point.
For a while it looked like the Free Press was going to go after the Crocus story hard. First they put ace investigative reporter Paul Egan on to the story and he was relentless in pursuing it. Then, when the auditor general released his scathing report in May 2005, there was a flood of Crocus coverage in the Free Press, including a mea culpa from Gordon Sinclair, who asked how the Free Press could have missed the Crocus story so badly in the past, along with a major piece by Gerald Flood examining the Crocus scandal in minute detail.
Now, all those past mistakes of having shilled for Crocus for year seem to have been forgotten, yet again. The Free Press's coverage of the cabinet document that practically screamed at the NDP government in 2000 to do something about Crocus was so underplayed that you'd have to think there's been a 180 degree change of heart.
Finally, Lett's piece confirms it. There wasn't much wrong with Crocus at all, according to Lett. If only Sherman had been allowed to carry on, things would have turned out okay. As for Doer, Selinger et al - they're all innocent of any wrongdoing. It's only conspiracy theorists like me who can see the threads tying the NDP to Crocus (also to Workers' Compensation and the Teachers' Retirement Fund) as part of Sherman Kreiner's master plan of economic revitalization for Manitoba, using unsuspecting shareholders', employers' and teachers' money.

The fact that the entire NDP cabinet was made clearly aware that Crocus was in terrible trouble as far back as 2000 has led to Jon Gerrard's posing an interesting question: Were there any NDP cabinet members who had Crocus shares who ever redeemed those shares? If they did, wouldn't the advance knowledge that they would have gleaned from the cabinet document allowed them to engage in what would have been, in effect, insider trading?
Good luck to Gerrard in ever getting past first base trying to find that one out. Since early 2005 we've been trying to obtain a list of Crocus shareholders (something that any shareholder of a Manitoba corporation is allowed to see, by law), but no matter who's been in charge of Crocus - whether it was NDP hack Alfred Black or more lately receiver Russ Holmes, the answer has always been the same: Go to Hell.
But, it's still worth a try. What I'd really like to see is whether any Crocus employees themselves had Crocus shares that they cashed in. Frankly, even if some cabinet ministers held Crocus shares, my guess is they weren't really bright enough to figure out that the submission to cabinet was telling them, in no uncertain terms: Crocus is a scam!
I'm beginning to think that even Selinger himself didn't understand the warnings.  Economic management has never been  the NDP's forte.

I receive many e-mails from shareholders. Lately most of them have been expressing deep anger with our NDP government. That doesn't come as any surprise.
What does come as a surprise, however, are the e-mails from rank and file NDPers themselves. Let's not forget that Crocus was sold relentlessly on shop floors by union stewards who had been given brief one-day training sessions and turned into legitimate financial representatives (with the Manitoba Securities Commission's blessing). A lot of the Crocus shareholders, it should come as no surprise, therefore, are either party members or long-time supporters of the NDP.
Here are excerpts from one such individual:

Here's another e-mail from a shareholder who was angry at Sherman Kreiner's, er Dan Lett's tired old argument that, if you take into account the tax credits that shareholders received upon the purchase of their Crocus shares, no one will have really suffered all that much.

"I was a little surprised by the article in the Free Press and the misrepresentation of the investment loss to folks who have had their money locked in and thus has missed out on potential earnings during a bull market.
In reality, if the funds had been released many could have covered their lossesthrough capital appreciation rather than having it frozen in the Crocus Fund."

It's now four days since Lett's apology for Crocus appeared in the Free Press. I'm willing to be that, if they bother to print any letters about that embarrassment, they'll put them all on one page and balance every letter blasting the Free Press with one praising it for "setting the record straight". (That way it will appear that there are two equally valid points of view on Crocus...just as there were two points of view as to whether Enron was really a scam, as well.)
Next, we'll probably see Frances Russell also rush to Crocus's defence, as Kreiner and the NDP continue to  use the pages of the Free Press to mount their counterattack. This game is being played for very high stakes.

I could hardly wait to read  Dan Lett's defence of Crocus in today's Free Press. Rather than offer up a point-by-point rebuttal of what  Sherman Kreiner has to say  in defence of his much-maligned reputation, following is  a copy of  a letter to the editor of the Free Press that I just sent.
Now, for anyone who's had experience sending letters to the Free Press, you have to know that they edit them by a huge amount, especially if you have less than flattering things to say about the Free Press itself.  For those of you who follow this blog, it will be interesting to compare the version of the following letter with the one that will appear in the Free Press (if it does, at all).  You can  predict with ease which sections the Free Press will edit out.  
The Free Press must long for the days when  the Crocus Fund was one of its major advertisers, and the Free Press could carry slick twelve-page supplements written by and for the Crocus Fund, but labeled "special to the Free Press" so as to mislead readers.  I wonder whether, if an inquiry were ever  to be held into Crocus,  we might be able to examine Crocus's very cozy relationship with the Free Press over the years. But then again, I'm  just a conspiracy theorist, aren't I, Dan?

Here's the letter:
"Dan Lett's analysis of what happened with the Crocus Fund (Crocus - The Truth is out There) in today's (March 3) Free Press should have been more accurately entitled: "Once again Sherman Kreiner uses the pages of the Free Press to get his side of the story out."
For years the Free Press served as the Crocus Fund's most important conduit when it (the fund) wanted to get its message out in as unfiltered a manner as it could. At one time the Crocus Fund website contained a total of 74 articles from the Free Press writing favourable things about the Crocus Fund. In fact, many of those articles were taken verbatim from Crocus Fund press releases.
The most glaring instance occurred when the Crocus Fund, desperate for cash in 2003 so that it could maintain its minimum reserve requirements, went to the Solidarite Fund in Quebec to obtain a $10 million laon. Crocus treated the loan, however, as an investment - something which the auditor general scathingly criticized in his May, 2005 report but, in its reporting of the transaction, the Free Press lifted Crocus's press release almost in its entirety, and offered up not one word questioning Crocus's sham transaction.

So, it came as no surprise for me to read Dan Lett's piece, in which he examines several aspects of the Crocus story and, bit by bit, offers up a solid defence of Sherman Kreiner's actions, without once referring to Kreiner by name.
Lett should have made clear that his major source in writing his story was Sherman Kreiner. Kreiner seems to have ready access to the pages of the Free Press when he wants to get his version of what wrong with Crocus out.

Let's just examine one aspect of the Free Press story to see how well it stands up in face of the facts: In a sidebar accompanying Lett's piece, Geoff Kirbyson's very first line says: "Crocus wasn't the first entity to see its share value fall down an elevator shaft..."
This assertion, in and of itself, is a gross distortion. The fact is that Crocus's shares never fell precipitously, until the final few months of 2004. They declined, bit by bit, from their peak of $15.39 in July, 2000 to the $10.45 price, at which point sales of Crocus shares were halted. Anyone examining the pattern of decline would notice that the share price fell oh-so-slowly - usually a cent a week, for almost four years. Not really an elevator, Geoff - more like an ordinary staircase.
I daresay that, if Crocus's share price had reflected anything like its true financial situation, which, as we have seen in the auditor general's report and more recently in the submission to cabinet way back in 2000, was awful, Crocus wouldn't have been vacuuming up over $30 million a year in unit purchases, as it was on a regular basis. Manitobans would have stayed away from Crocus as, unfortunately, they have tended to stay away from Ensis, whose share price has never risen above its original price of $10 in 1998.

I began questioning Crocus's valuations way back in 2001, wanting to know why, if Crocus clearly had so many non-performing companies on its books, its share price still remained as high as it was back then (which was still well over $13). Crocus's response was that it would not comment on the  performance of individual companies. Suffice to say, Crocus told me, the overall performance of its investee companies was good. In hindsight, we now know that was inaccurate, to say the least. Did Crocus's managers, especially Kreiner, believe the codswallop they were spewing out? Probably. Sometimes it's difficult to accept the fact that your dream is turning into a nightmare.

In 2002, when I attended Crocus's annual general meeting, I got up to suggest that Crocus was hiding the true state of its affairs and was, in fact, practically moribund, I was interrupted by the chair of the meeting, Rob Hilliard, in mid-question, and told that I would not be allowed to ask any questions. (I should have had a Free Press reporter ask the questions for me. Sherman Kreiner never avoids a Free Press reporter - even when you won't hear a peep from him about Crocus at any other time. Strange, isn't it, that no one else in the media is able to have access to Kreiner?)

Crocus's valuations were alwyas suspect. That is the key piece that is missing in Lett's analysis. Unlike Ensis, which has been truthful in its valuations (much to its own detriment), Crocus was able to lure so many thousands of investors by creating a picture that "it was a solid investment" (the Free Press's words) "in the early years". Was it really a "solid investment"? I suppose that, if you take Sherman Kreiner's word for it, as Lett clearly does, then it was. Others, such as the analyst in Finance who wrote the submission to cabinet, might disagree but, then again, the officials in Finance and Industry "despised" Crocus, according to Lett. Were it only the case that Greg Selinger listened more to his own officials and less to Sherman Kreiner.

But, until we have either a public inquiry or the class-action lawsuit moves into discovery stage, we'll never really know how solid Crocus ever was, will we?
In the meantime, I look forward to reading more of Sherman Kreiner's rationalizations in your paper. Perhaps next time you might want to disclose that he is a major source (perhaps the only source from Crocus itself) when you're offering up such a patent defence of something that was nothing more than a "sham", as Crocus is described in the class-action lawsuit filed on behald of the almost 34,000 Crocus investors.

Bernie Bellan
Secretary,
Crocus Investors Association"

Five days after the news of the cabinet document warning the NDP government first broke (Friday, Feb. 23), various media are scrambling all over themselves trying to make sense of it all. Did the government have a responsibility to act to protect Crocus investors when it was apparent that Crocus was foundering years ago?
There's an interesting defence of the government on a message board on this very website. But, if you want to read a fabulous analysis of what was really going on with Crocus and the NDP government, the best piece that I've seen can be seen on the Black Rod blog http://www.blackrod.blogspot.com/.
Whoever the Black Rod is, and it doesn't really matter, that blog has some great work on the Crocus file and it's important to give credit where credit is due.

A document entitled "Manitoba Finance submission to cabinet", written in November, 2000, puts the lie to many of the claims that Doer, Selinger et al have been making about how closely involved the NDP government was with Crocus.
Copies of the document were sent by an unknown individual to Jon Gerrard, Kevin Lamoureux, John Loewen, and Bernie Bellan on Feb. 23. (Apparently the document was also sent to the Free Press on Feb. 23, but the Winnipeg Sun says it had a copy on Feb. 21. According to the Sun, they didn't realize how significant the document was, so it just sat among a pile of other papers.)
The 2000 submission details the problems that the Crocus Fund was facing, which is all the more infuriating considering that  its share price reached a peak of $15.39 in March of that year. Essentially the problems boiled down to two distinct areas: An impending liquidity crisis and the need to remove the "cooling off" period for investors.

Here, in a nutshell, is what the document discloses that's so damaging to the NDP:
1. Crocus was in a severe liquidity crisis, meaning that it wouldn't have enough money to begin paying redemptions by 2003, when a significant number of shareholders would be able to redeem their shares. (Crocus hadn't really made much of an impact on the market in its first few years of operation, e.g. it sold only $6 million in 1994., but by 1996, Crocus had sold $22 million in shares, and from 1997 to 2000, it sold $30 million annually.)
The problem was that Crocus's portfolio was performing terribly, although to ask Sherman Kreiner or his partner James Umlah, everything was coming up roses.
So, what did Crocus want to do? It wanted to use money coming from new shareholders to pay shareholders who were redeeming their shares. In the real world, we call this a  "Ponzi scheme".
2. Now, Crocus had another real problem on its hands: Under the rules governing its operation, any unitholder wanting to redeem his or her units would have to wait three years before they would be able to reinvest in Crocus and receive the 30% tax credits. This was known as the "cooling off" period.
But, here's the kicker: The submission to cabinet, which was signed by none other than Greg Selinger, recommends against removing that "cooling off" period "pending further review by Finance and Industry, Trade and Mines."
What did the government do? You guessed it: It removed the "cooling off" period, which allowed Crocus to retain thousands of unitholders with the notion that they could reinvest their shares immediately and obtain a further 30% in tax credits. (Hell, I was one of those suckers. If there hadn't been the tax credit incentive to keep my money in Crocus, I would have taken my money out in a hearbeat, as would have the vast majority of other Crocus unitholders.)
Now, at a news conference held today by our oh-so-smooth finance minister, I confronted Selinger directly on this point, asking him why he removed the "cooling-off period" when, in fact, his own document recommended just the opposite.
Selinger's testy response was that all the other provinces were doing it, so he thought he'd follow suit. Gee, Greg, how many of the other provinces were aware that their prize l.s.i.f. was about to go under if you retained that "cooling off" period?
Selinger went on and on about how the report was about nothing more than "liquidity" issues. I suppose that the fact that his own officials in Finance made clear that Crocus was in a terrible mess meant nothing to him. Here is what the report says about Crocus's performance at the time (and remember, if you were a Crocus unitholder looking at the share value, which had gone up from $10 in 1993 to over $15 in 2000, what reason would you have had to think that Crocus was anything but a fabulous success story?):
"The possibility of liquidity problems is very real, but the two requested changes may only push the problems further into the future when they could be even larger. This is because Crocus has not done what its Prospectus says it will do, which is to arrange its investment portfolio so that funds are made available through liquidation of investments to fulfill requests for redemptions.
"In effect, Crocus is requesting the ability to use money from new investors to pay off earlier investors who want to redeem, rather than using profits earned on the investment portfolio. Under one scenario, by 2003, virtually no money will be available for new investments."
So, Greg, by lifting that cooling-off period, and with the full knowledge that Crocus was running a Ponzi scheme, you contributed directly to the defrauding of Manitobans between 2000 and 2004, to the tune of at least $150 million. You did nothing to safeguard the interests of Crocus unitholders, even though it was made apparent to you by your own officials that Crocus was a crock.

Selinger is now saying that, by not lifting the limit of $30 million in sales that Crocus was allowed to have and, which they were requesting  (You have to wonder at the gall of Sherman Kreiner: Not only was he flogging a pile of crap to Manitobans, of which he was fully aware - he wanted to be able to sell more of that crap than he was allowed to.) - he saved Manitoba taxpayers millions of dollars.
But Greg, if you had only listened to your officials in Finance, who advised you not to lift the "cooling-off" period, you would have saved Manitobans millions of dollars more. Simply put, if Crocus investors would have been forced to wait three years before they could have re-invested in Crocus (as was the rule until you changed it in 2001), there would have been two effects:
1. Crocus would have been forced to tap into its investment portfolio to pay out redeemed shares. Since the leaked document makes clear that there was almost nothing in the investment portfolio that could have been used to pay those shareholders, Crocus would have had no money to pay out those redemptions. Even the skillful snake-oil salesmen at Crocus would have had trouble putting lipstick on that pig. (How many expressions has Charles Adler introduced into our vocabulary?)
2. The thousands of investors who began re-investing their matured shares in Crocus, beginning in 2000, reaped immediate tax credits - money that came out of provincial coffers. Again, if Selinger had simply done nothing, that money would have been saved.
The net result is not that Selinger saved Manitoban taxpayers' millions of dollars...he ended up costing them millions by removing the "cooling-off" period.

Just how important was it to the NDP and its equally incompetent cohorts in the Manitoba Federation of Labour to maintain the pretense that everything was just hunky dory with its symbol of economic brilliance? You, Doer and Kostyra were either incompetent or duplicitous... probably a combination of both.