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Blogspot | 14Oct2012 | blackrod
The CMHR annual report
fuels the need for a forensic audit
We couldn't figure it out at first
Why did they stall so long before submitting the latest annual report
of the Canadian Museum for Human Rights when everything in it was known
ten months ago? What were they hiding?
We had to dig deep --- 30 pages into the 58 page report before we
spotted it --- there in a summary of the funding collected for the
from the Province of Manitoba ($38.8 million) and the City of Winnipeg
($16 million) have been received, as well as the private sector
installments from The Friends of CMHR ($87.8 million)."
Problem was, by March 31, 2012, the fiscal year end, the Friends of
CMHR were crowing they had raised $130 million.
It turns out that
the CMHR was sitting on $42 million in IOU's at the same time it was
about to shut down construction because it had no money.
The museum fundraisers had collected only two-thirds of the
donations they claimed to have raised. When the CMHR was
telling people it had a 60 million dollar shortfall,
it was actually
$102 million shy of what was needed to finish the project.
The Canadian Museum for Human Rights was misleading the public ---
That comes as no surprise to readers of The Black Rod where for years
we have been chronicling the steady stream of lies and deception
flowing from the pet project of the Asper family. Here are just a few
of those stories:
And the more we looked, the more variations of the truth we found in
the 2011 annual report.
"The Museum’s physical structure and associated building systems have
been designed to achieve a Leadership in Energy and Environmental
Design (LEED) Silver designation." CMHR Annual Report 2011-2012
"There were two big items that cost... the building to go up in cost.
One, was the board at the time, a few years ago, made a decision that
the building had to be a Gold LEED standard building...That came with a
price tag---if memory serves---about $37 million price tag." Heritage
Minister James Moore, speaking at the Winnipeg Free Press News Cafe,
Sept. 13, 2012.
"Hiring was limited to ‘critical positions’. For example, while we
projected hiring 35 employees in 2011-2012, only 13 new positions were hired."
CMHR Annual report 2011-2012
"Instead of the projected 35 new hires, as of today (December 6, 2011) the Museum has hired just 17
positions. Cost savings related to staffing are
approximately $2.5 million." CMHR CEO Stu Murray speech, Dec. 2011
"Angela Cassie, director of communications for the CMHR, said the
museum sought and received permission to direct the savings into its
capital budget. That means the amount owing on a $45-million advance
provided by the federal government over the summer is down to $35
million." Winnipeg Free Press, Oct. 12, 2012
"Amid all this, the museum was reaching out to Ottawa and the
provincial government for a bailout. That finally came in the form of the $45-million advance payment
from Ottawa and a $35-million loan guarantee by the provincial
government..." Winnipeg Free Press, Oct. 12, 2012
"$35 million...." James Moore,
News Cafe, Sept. 13, 2012
The museum says it got a $45 million advance from the federal
government and the federal government says it was $35 million. What's
Is all this confusion a result of incompetence? Or is it
Winnipeg citizens are asking that very question about another
scandal --- the firehall boondoggle which involves some of the very
people in the CMHR fiasco, namely Mayor Sam Katz who has been
channelling millions into this pet project of his friend Gail Asper.
Two audits have now been ordered to try and make sense out of the
firehall debacle and to sort out the roles of Katz, his friend Phil
Sheegl and his other friend Sandy Shindleman.
The CMHR fiasco is 25
times bigger than the firehall deal and just as murky and shady.
Lying to the Senate, auctioning off space to ethnic groups, a secret
loan for millions of dollars, allegations of a breach of provincial law
on sweetheart financial deals, non-payment of taxes in deliberate
breach of federal regulation, a litany of lies to justify never-ending
money shortages. And
because of government collusion at all levels everyone turns a blind
The CMHR will argue that its annual reports contain financial data
that's reviewed by internal and external auditors. And the reports do
contain an Independent Auditors Report signed by the assistant auditor
general of Canada. It's a boilerplate insert and declares "the
transactions of the Canadian Museum for Human Rights that have come to
my attention" have been in accordance with the relevant laws, rules and
But a closer reading of the Independent Auditors Report leads to an
It's not an endorsement of the CMHR financial information. It's a
The independent auditor declares that before designing his audit
procedures he assessed whether the CMHR had relevant internal controls
(such as an audit committee, etc) that produced the financial
statements "but not for
the purpose of expressing an opinion on the effectiveness of the
entity's internal control."
In plain English that means he refuses to vouch that the
financial statements are reliable and in compliance with the law.
He will only go so far as to say the financial data was provided to him
and by what looks like a legitimate process.
Wow. Now we see how Enron could run a criminal enterprise and Crocus
could be a Ponzi scheme and still get their auditors to approve the
That's just not good enough for an enterprise that's swallowing
hundreds of millions of taxpayer dollars under the guise of provable
lies and false statements, a constantly moving bottom line and no end
The situation screams for
a forensic audit of the project from the day
they lied to the Senate about who would be responsible for cost
overruns to the future opening date which is already two years later
This would include the mythical projections of tourists to be attracted
by the museum and the secret business plan that's never been submitted
to any of the funders.
All we know today, courtesy of a single television newscast, is that
the CMHR intends to charge admission that's "more than a movie ticket
and less than a theatre seat."
And we need this forensic audit fast, because, if our Spidey Sense is
right, the biggest scam is around the corner.
Angela Cassie told the Free Press the CMHR got a $45 million advance of
which $10 million has been repaid through some legerdemain by which the
$10 million of annual funding that wasn't spent last year was
redirected to redeem the part of the advance.
James Moore told the News Cafe audience that the $35 million advance he
was making would be repaid with annual installments from the $21.7
million in annual funding the federal government will give the CMHR.
The problem is that neither statement makes sense. The 2011-2012 annual
report states that the savings in the annual funding was being
"reprofiled." We didn't know what that meant either. We looked it up
and reprofiled means rescheduled. They're going to spend this year
(2012) the money they didn't spend last year (2011). That
means the amount of annual operating funds left to pay back the, ahem,
"advance", is zero.
As for coming years? Well, that will be zero too. The CMHR has already
said it needs more annual funding, not less.
From the 2010-2011 annual report:
"The Museum will be seeking the government's approval to
augment the operating funds already committed by an amount sufficient
to cover the required property tax (PILT) payments and to address
ongoing pressures of inflation in operating, maintenance and capital
How much more? Start with
an estimated $5 milliion to $9 million in property taxes, add the cost
of utilities which they forgot to include, and work up.
In short, there's no hope the "advance" is being paid back.
But, what about that $42 million in IOU's? Couldn't they collect those
pledges over the years and use it to pay the government back?
They could, but we're betting they won't. They have a better use for
that money. And if they
stiff the government, what are the feds going to do? Shut them down?
No, that $42 million would be better served to make up the $35 million
to $50 million endowment fund that's always been an
integral part of the museum project. The endowment fund is intended to
finance bringing tens of thousands, if not hundreds of thousands of
children to the CMHR.
Here's how the Friends of the CMHR stated it on their website:
A Unique Student Travel Program
Inspired by the impact of The Asper Foundation Human Rights and
Holocaust Studies Program, one of the cornerstones of the Canadian
Museum for Human Rights is a funded national student travel program
that will bring up to tens of thousands of students to the Museum each
year, and interact with thousands more via the Internet and traveling
exhibits. No other national museum offers such a program.
It had to be shuffled off to Phase Two of the project when costs of
construction went into the stratosphere. But here's all that money just
sitting there in a registered charity, waiting to be put to use and no
reason not to.