WEM Lawsuit Settled in Secret
Lab Rat
Elzinga have got to be the slimiest. Taking bribes and dealing in new
hights of in-yer-face corruption ever, yet they have been able to
direct the investigation and settlement of the WEM loan of public
money to suit themselves. They should be in Jail along with the
Ghermezians, Elmer Leahy, Jack Agrios, Rick LeLacheur, Peter
Valentine, etc. We will never know how far and how deep Klein has gone
to conceal this issue. C'mon people of Canada! Demand answers,
wheather you live in Alberta or not. If this can happen in Ottawa or
Alberta, it WILL happen anywhere else.
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http://www.canada.com/edmonton/edmontonjournal/story.asp?id=5442BEAC-D
803-4910-A760-D088D247377D
WEM lawsuit settled in secret
No details about deal sealed in quick court hearing: 'MOST CYNICAL OF
POLITICS'
Jac MacDonald, Journal Staff Writer
The Edmonton Journal
Saturday, December 21, 2002
CREDIT: Minneapolis Star-Tribune
The controversial lawsuit between Alberta's provincial
government-owned bank, ATB Financial, and the world's largest shopping
centre, West Edmonton Mall, has been quietly put to bed.
With the major parties refusing to disclose any terms of settlement,
Alberta opposition leaders are calling it one of the most intolerable
moves by the Klein government in shutting down public debate on the
last Friday before the holiday season.
Opposition leaders Ken Nicol of the Liberals and Raj Pannu of the New
Democrats called for a public inquiry into allegations of bribery and
political involvement in the mall's refinancing, none of which were
discussed in Friday's announcements.
"This is an outrage," Pannu said Friday. "This is the most cynical of
politics, the absolute worst."
The provincial government, which was a defendant in a counter-claim,
had little comment.
"I am pleased that ATB Financial and West Edmonton Mall have resolved
all of their outstanding issues," Finance Minister Pat Nelson said in
a written news release.
Nelson also said the province had recovered its legal costs in the
affair from West Edmonton Mall. But she did not say how much the
government received. Two sources have told The Journal ATB legal costs
are more than $20 million.
ATB, which had earlier estimated its losses in a controversial 1994
refinancing of the mall at $115 million, not including $45 million
recorded in loan loss provisions against existing loans, would not say
how much if anything had been recovered in the settlement.
ATB noted it has lifted its provisions for possible loan loss, which
will boost its net income by $45 million.
No comment was made on any changes to the existing financing package
it has in place with West Edmonton Mall.
ATB president Bob Normand said it would not be correct to say there
were no losses as a result of the bank's dealings with the mall. But
he would not elaborate further, citing a confidentiality agreement.
The settlement is favourable for ATB in that it allows it to wrap up a
long-running dispute and avoid paying more in legal bills. It also
removes a major obstacle to the possible privatization of the bank, a
move that has had some support in government.
Normand declined to confirm ATB legal costs.
Mall general manager Gary Hanson said he was not familiar with the
terms of the deal. But he said the settlement will help the mall to
raise financing for its latest expansion plans.
"It's great news. We can march forward," Hanson said, adding that as
far as he knows, ATB is still involved in the mall's financing.
ATB's former acting superintendant Elmer Leahy, whom the Alberta
government-owned financial institution had alleged took bribes to
arrange the $420-million financial transaction, is also now absolved
of any civil legal action.
It also means Leahy's allegations that the deal was politically
directed from the highest levels will die a quiet death. Leahy claimed
he was told to do the deal by Premier Ralph Klein, former economic
development minister (and now Legislature Speaker) Ken Kowalski, and
former treasurer Jim Dinning. Klein's political strategists Rod Love
and Peter Elzinga were also involved, he alleged.
The settlement was sealed in less than 20 minutes by Court of Queen's
Bench Justice Al Wachowich in an Edmonton courtroom Friday morning.
The deal ensured only the barest of details were provided on the
public record.
"It's disgraceful that the government would do that today. If they
were going to be accountable, they would have done it at a time when
they could be questioned," Nicol said.
He noted that even former auditor general Peter Valentine was unable
to get to the bottom of the affair because he did not have the power
to compel key witnesses to come forward and testify.
Pannu noted the government has always ducked the issue by arguing
silence was required because the case was before the courts but that
Albertans would finally get the truth when the courts had dealt with
the matter.
"The door has been shut in their face," Pannu said.
The deal also sees Leahy retain funds ATB previously alleged might be
the fruits of improper actions which had been frozen by court order.
That includes a $100,000 US cheque he made out to Universal Corp., a
company whose ownership has never been confirmed, and money from the
sale of a luxury home in the city's west end formerly occupied by his
daughter.
Leahy's lawyer John Weir would not say if there was any other money
involved, either going to or from his client.
"Everybody in the thing will be very circumspect about what they say,"
Weir said.
An RCMP investigation into the bribery allegations will continue
against Leahy, Staff Sgt. Joe Mamela said.
Any civil suit will not have any effect on police decisions as to
whether to lay charges some time in the future.
But Weir said the RCMP investigation means nothing.
"I don't think there will be any criminal charges. There are so many
breaches of the Charter of Rights and Freedoms, I don't think there is
any basis for it. I also don't think there is any evidence," he said.
"He can investigate until the cows come home, that doesn't mean there
is anything concerning Mr. Leahy."
The deal appears to continue financial dealings between the mall and
the government-owned bank.
In the joint news release, West Edmonton Mall Property Inc. chief
executive officer Eskander Ghermezian refers to strengthened dealings
with ATB.
"We are satisfied that this matter has been resolved and welcome the
continued financial support of ATB," Ghermezian said.
jmacd...@thejournal.southam.ca
With files from Kelly Cryderman
ATB FINANCIAL VS WEST EDMONTON MALL: WHAT THEY WANTED AND WHAT THEY
GOT
ATB Financial, formerly known as Alberta Treasury Branches:
- Sought to set aside the 1994 refinancing on the grounds it was
commercially unreasonable and obtained by paying bribes. Sought
repayment of $420 million in mortgages, or possession of the mall,
$450 million in damages, and recovery of legal expenses.
- Received an end to more than four years of legal battles, and an end
to legal bills estimated to reach more than $20 million by December
2002. Other considerations unknown.
- Sought recovery of any and all profits from all defendants as a
result of the alleged bribes and refinancing.
- Not known if any funds paid by the defendants, including the four
Ghermezian brothers, some of their key executives, some of their
private companies, and Elmer Leahy and his private companies.
Ghermezian family, West Edmonton Mall, and Elmer Leahy:
- Countersued ATB Financial for almost $500 million.
- Received access to more than $50 million of excess mall cash-flow
set aside in a trust account pending resolution of the litigation.
Saved on legal bills estimated to reach $10 million. Other
considerations unknown.
- Leahy receives funds frozen from the sale of a luxury home he owned
in Edmonton's west end, as well as a $100,000 US cheque he made out to
a company called Universal Corp., whose ownership has never been
confirmed.
Willie Exelby, trustee in bankruptcy for the former Triple Five Corp.,
the former holding company of West Edmonton Mall:
- Sought more than $112 million in unpaid bills owed to unsecured
creditors shut out of the 1994 mall refinancing. The biggest unsecured
creditor was ATB, which sought $101 million but relinquished that as
part of Friday's settlement.
- Received $7 million.
jmacd...@thejournal.southam.ca
Ran with fact box "ATB Financial Vs West Edmonton Mall: What They
Wanted and What They Got", which has been appended to this story.
© Copyright 2002 Edmonton Journal