Putting patient food in the hands of corporations reveals the trouble with normal

It’s amazing what we gradually accept as normal — even admirable — in how we treat each other in Canada. Practices that were once seen as a repugnant surrender to government indifference, like food banks, are now virtually celebrated as a high point of citizen engagement and promoted as such by our public broadcaster once a year. And other practices, like hospitals and seniors’ care homes that once had their own kitchens and cooking staff, are seemingly a thing of the past, a “luxury” that we have no hope of ever getting back.

As Bruce Cockburn’s song suggests, the trouble with normal, is it always gets worse.

The latter example demands of us that we somehow accept the notion that the food we eat is unrelated to our health or our healing. And I don’t mean just the calculation of the technical nutritional value of the meals — but their taste, their presentation, the choice amongst menu items; in other words, the sense that you have some power to choose what you eat. Before you guffaw, remember this was the old normal, and still is in a few hospitals and care homes across the country.

But the “rethermalized” slop that passes for food prepared by giant multinationals like the French multinational Sedexo ($6 billion in yearly revenue, 10,000 Canadian employees) should be against the law. I experienced this unfood some years back when I was hospitalized in Powell River. I should point out that in every other aspect the care was exemplary but my partner diligently brought me real food at mealtimes. I decided, however, that I would try the hospital soup. Less than a minute after the first spoonful I vomited it up.

I was reminded of my disgusting experience when I read a front-page story in our local paper, the Powell River Peak, headlined “Powell River seniors take stand on meals.” It was a grim account of what the elderly put up with in two seniors’ residences operating under the Vancouver Coastal Health Authority (VCHA) with food services also provided by Sodexo. Of course the appalling quality of the food was not really news. According to Elaine Steiger, secretary of the residents’ council at the Evergreen home: “For the last couple of years, most of our meetings have been taken up with the topic of food. Usually it’s the quality, but lately it’s been shortages.”

Steiger told the Peak that for the past few months there had been many instances of actual shortages, bad enough that she felt the food shortages “[b]order on elder abuse. … One day six residents went without a dinner and were given Boost…”

According to the Peak, the situation at the Willingdon Creek seniors’ facility was scarcely better.

Complaints about “food shortages, meals of poor quality, meals not served on time and small portion sizes” are commonplace: “Joy and Richard Hibberd … said the food is barely edible at times and not enough fresh food is served. ‘We haven’t been getting fresh fruit. We see a third of a banana maybe once in three weeks.'” Fruit juice is actually watered down flavour crystals.

And how did the Vancouver Coastal Health Authority respond to this gross corporate irresponsibility? Gavin Wilson, the VCHA’s public affairs director, acknowledged the Boost incident. But it turns out he knew about food shortages last June when complaints first arose: “In the following weeks we expressed our concerns [to Sodexo] based on feedback we were receiving that there were shortages of first-choice menu items.” That’s it? He expressed “concerns”? And he blithely accepted Sedexo’s “assurances” it was taking steps to improve food quality and quantity. He did not say what residents probably wanted to hear: “This is totally unacceptable and if it happens again we will cancel Sodexo’s contract!”

But Sodexo took care of such severe public criticism when it signed the contract back in 2004. According to Colleen Kimmett in a three-part Tyee series written in 2012, the contract “[s]tipulates that VCHA and Sodexo would coordinate their messaging around patient food services and agree on ‘standardized and uniform responses to questions from the media…'” So Mr. Wilson and the VCHA become contracted PR flaks for a giant French multinational.

But the VCHA’s protection of Sedexo goes beyond mealy-mouthed responses to the corporation’s outrageous behaviour. It is virtually impossible to find out what is in the food they prepare, where it comes from or to compare it — and its actual cost — to real food that is a prepared on site in other facilities. According to Kimmett’s investigative piece: “Both parties cited contractual confidentiality for what they couldn’t share about what’s being provided to the sick, injured and elderly in Vancouver’s hospitals.” It’s proprietary information, (Sodexo’s verbal claim that 21.6 per cent of the food came from B.C. suppliers is unverifiable.)

Wilson indicated that its contract with Sodexo did not even require that the company provide purchasing information. In other words, the VCHA, appointed by the provincial Liberal government, voluntarily ties its own hands when it comes to enforcing any real accountability by its corporate partner. This kind of secrecy is hardly new but its voluntary enforcement by a government board in an area as critical as health care is particularly offensive. A body appointed to ensure the best possible health outcomes of citizens chooses loyalty to a foreign corporation over caring for citizens.

How is it possible that we have arrived at this appalling situation? Of course the simple answer is that right-wing governments take care of their friends through privatization. But the rationale is found in the ideology of neoliberalism — in this case, in the words of political scientist Janice Gross Stein, the culprit is the “cult of efficiency.” The role of ideology is to give meaning to power — in other words to provide a persuasive rationale for doing something that is prima facie just profoundly wrong.

Stein writes in her book of the same name: “In our avowedly secular age, the paramount sin is now inefficiency. Dishonesty, unfairness, and injustice — the sins of times past — pale in comparison with the cardinal transgression of inefficiency.” She goes on to argue that “Efficiency, or cost-effectiveness, has become an end itself…” It is a “value” lifted from the private sector’s profit imperative and applied to the provision of virtually all public services, precisely where it should play a secondary role.

There are signs that this pernicious neoliberal edifice — tax cuts for the rich, privatization, cuts to services, deregulation, “free trade,” and austerity — is being challenged worldwide and even by its traditional defenders. But it won’t die on its own. What better iconic struggle to kill it off than demanding real food for seniors and hospital patients.

‘The world must jettison neoliberal ideology’: A globalization wake-up call

If recent mainstream economic reports are to be taken seriously, some of the big brains managing global capitalism these days are starting to lose faith in their neoliberal ideology. Some come close to sounding like virtual heretics — like Jonathan Ostry, the IMF’s deputy director of research and lead author of an article (“Neoliberalism: Oversold?”) in the IMF’s official publication. He stated, with a childlike innocence: “[s]ome aspects of the neoliberal agenda probably need a rethink. The [2008] crisis said: ‘The way we’ve been thinking can’t be right.'” No point, I suppose, in dwelling on the past — that is, the millions of lives made miserable by decades of IMF structural adjustment programs.

The lack of mea culpas notwithstanding, the IMF bravely identifies two aspects of neoliberal policy for scrutiny: the elimination of capital controls (allowing for capital flight to be used as a political weapon against poor countries) and fiscal austerity. While “cheering” aspects of the “neoliberal agenda,” according to the Financial Times, he also acknowledged some “‘disquieting conclusions” including that they resulted in “increased inequality that undermined economic growth.”

That report came out in May but just last week the annual report of the UN Conference on Trade and Development (UNCTAD) has leapt ahead of any cautious “rethinking” and calls for a virtual reversal of the whole neoliberal “edifice.” The report contains some of the most alarming warnings UNCTAD has ever issued. And that warning relates, in part, to the near-zero interest rates developed countries are using to try to restart their economies.

There are unintended consequence of low interest rates, says the report: “Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out.” And later:

“The benefits of a rushed integration into international financial markets post-2008 are fast evaporating. If policymakers fail to mitigate the negative impacts of unchecked global market forces …a significant share of developing-country debt incurred since 2008 could become unpayable and exert considerable pressure on the financial system.”

UNCTAD’s analysis also attacks Western governments’ obsession with austerity which has starved global demand but it more broadly blames “[t]he entire edifice of liberal market finance…” As far as the UN is concerned, this development is the “third leg” of the global financial crisis — the first two being the U.S. housing bubble and the second the EU meltdown. Its solution sounds almost revolutionary, according to the London Telegraph:

“The world must jettison neoliberal ideology, and launch a ‘global new deal’ with a blitz of investment on strategic sectors. …a return of the ‘developmental state,’ commanding a potent industrial policy, and backed by severe controls on capital flows.”

The report also highlights the fact that global corporations — which designed the neoliberal Washington Consensus explicitly to reverse the old social contract and the “development state” — have failed utterly to deliver on the quid pro quo: their promise of growth and prosperity. The global corporate sector is characterized by management captured by “activist funds” which focus almost exclusively on shareholder value, the maximum extraction of profit and mergers and acquisitions rather than the reinvestment of their profits “[i]nto production capacity, jobs, or self-sustaining growth.”

This latter criticism describes the Canadian corporate sector in spades. Instead of investing its record profits — and its tax break windfall in the billions — it is sitting on over $600 billion idle cash. But the situation with Canadian corporations is actually much worse than in most OECD countries, particularly compared to their main competitors in the U.S. In previous columns I have quoted past studies done by Harvard Business School’s Michael E. Porter. He concluded: “The U.S. is just much more entrepreneurial (than Canada)… Research uncovered key weaknesses in the sophistication of (Canadian) company operations and strategy.” He went on to describe Canadian business as cautious and risk-averse, unwilling to spend money on research and development, and addicted to exporting almost exclusively to the U.S.

Just this past week Deloitte Canada published a report which took Porter’s academic studies a step further by interviewing 1,200 Canadian CEOs regarding their willingness to takes risks and invest in the future of their companies. The results of the study — entitled The Future Belongs to the Bold — paint a pathetic picture. The poll concluded: “At a time when Canada needs its businesses to be bolder and more courageous than ever before, almost 90 per cent aren’t up to the task.” The companies fell into one of several categories: 15 per cent of CEOs were “fearful,” 43 per cent were “hesitant,” 30 per cent were “evolving,” and 11 per cent were “courageous.”

The result? “Investments aren’t made. New ideas aren’t explored. And Canadian companies slowly fall further and further behind.” Companies have actually reduced spending on training by 40 per cent since the mid-1990s. As Porter earlier observed, where Canadian companies are successful it is mostly due to access to cheap labour and natural resources.

And this week the Conference Board of Canada published an op-ed in The Globe and Mail decrying the lack of investment in manufacturing innovation, observing:

“[r]esearch and development spending in the sector is generally very low. Indeed, investment has been so weak for a number of years that many manufacturing segments have actually become less capital intensive. The result is an erosion in the global competitiveness of Canadian manufacturing.”

Once again we see the folly of placing our economic future in the hands of “fearful” and risk-averse CEOs while giving them every possible advantage from suppressed wages, huge tax cuts and privatization, to deregulation and endless idiotic “trade” deals. Corporate Canada signed a contract and broke it. It should be forced be back to the negotiating table. And this time it should focus on the domestic economy.

The Liberal preoccupation with trade deals looks increasingly ill considered. In yet another warning about the state of global trade, Roberto Azevêdo, the World Trade Organization’s director-general, declared: “The dramatic slowing of trade growth is serious and should serve as a wake-up call.” The question for the Trudeau Liberals is what to do if they do wake up. Instead of more oil and gas infrastructure in a world already awash in both, it should itself be “courageous” and use bold fiscal policy to launch a serious transition away from fossil fuels and at the same time actually take the Paris climate accord seriously. But that would require “rethinking” another neoliberal policy: the reckless tax cuts for the wealthy and corporations which rob federal government coffers of $50 billion every year.


Trade deals’ investor-state provisions: A sub-criminal conspiracy?

There is a glaring disconnect in the world between economic growth, and trade and investment agreements.

At the same time that Canada and other countries are pushing hard for huge multi-national deals — the TPP, CETA and the U.S.-EU deal, the TTIP — all the evidence suggests that global trade is on a long-term downward trend. Nothing in the near or middle term future suggests that it will recover to anything like its China-driven peak.

Financial Times analyst Martin Wolf recently argued bluntly that globalization no longer drives the world economy.

He points out that “…ratios of world trade to output have been flat since 2008, making this the longest period of such stagnation since the second world war. According to Global Trade Alert, even the volume of world trade stagnated between January 2015 and March 2016…”

In addition, says Wolf, “The stock of cross-border financial assets peaked at 57 per cent of global output in 2007, falling to 36 per cent by 2015.” Foreign direct investment has also declined.

So if global trade isn’t going to pull the world economy out of its persistent doldrums, why are countries putting so much political energy into signing these agreements? They do little or nothing to enhance growth in global trade — trade is driven by global demand — also flat. Amongst the countries primed to sign these agreements trade is already virtually tariff free.

Even the government’s Global Affairs department’s recent analysis estimates the Pacific Rim deal, the TPP, would increase GDP by a minuscule .127 per cent ($4.3 billion in a $2 trillion economy) — but not until 2040! In short, we will gain virtually nothing.

If these deals don’t enhance trade or growth what do they do? Investment agreements like CETA, TTIP and the TPP are all aimed at making international investment by multinationals as risk free as possible. Corporations always try to externalize costs — but these deals and their ISDS clauses allow then to externalize risk — and it’s taxpayers who take the risk.

In a global economy that has virtually no prospect of recovering in the foreseeable future, one road to continued profitability lies in treaties that protect a company’s “projected future profits” against any government action in the public interest.

But it gets far worse. Over the past 10 years ISDS provisions in literally thousands of agreements have become tools for criminals, greedy law firms, and “investors” in ISDS cases.

In an excellent four-part series, Pulitzer Prize-winning investigative journalist Chris Hamby reveals that: “Companies and executives accused or even convicted of crimes have escaped punishment by turning to this special forum.”

Hamby cites several cases: “… an Egyptian court had declared a foreign company’s purchase of a factory corrupt and nullified the deal, court records show. But after the company filed an ISDS claim, the government agreed to pay $54 million in a settlement…”

In another, two financiers had been convicted of embezzling $300 million from an Indonesian bank but used an ISDS finding to force Interpol to back off, protect their investment, and “…effectively nullify their punishment.”

Hamby found more than 35 cases where “…the company or executive seeking protection in ISDS was accused of criminal activity, including money laundering, embezzlement, stock manipulation, bribery, war profiteering, and fraud.” One ISDS lawyer admitted privately: “You have a lot of scuzzy sort-of thieves for whom this is a way to hit the jackpot.”

If it’s it not criminals escaping justice, it’s corporations gaming the system, perverting it so that the profit comes not from a planned or existing investment but from the increasingly enormous settlements demanded of governments if they win an ISDS arbitration.

A Canadian example is the U.S. quarry company, Bilcon, whose application to build a quarry in Nova Scotia was rejected by federal and provincial environmental review panels. It sued and a NAFTA arbitration panel ruled in its favour. Bilcon is seeking $300 million (an appeal is pending) for lost future profits — many times the potential profit on an actual investment that it will never make.

But it goes beyond just large companies seeking out-sized awards.

Lawyers taking these cases can make millions on a single case. The fat rewards has led to ISDS lawyers creating ISDS business by linking companies with potential cases, but limited resources (cases can cost as much as $8 million to litigate), to investors willing to finance the case for a big cut of any award.

Burford, a U.S. financier increased its profits nine fold in 2011 as a result; Juridica, its British competitor, managed an increase of 578 per cent, based on ISDS business. A 400 per cent return on investment is typical.

Selvyn Seidel, a New York attorney heads up a firm exclusively devoted to promoting ISDS cases. He told Hamby: “Some lawyers monitor governments around the world in search of proposed laws and regulations that might spark objections from foreign companies.”

Then they identify potential client companies and offer to head up a challenge. Litigation lawyers handling ISDS cases for corporate clients also regularly end up on arbitration panels where it is in their interest to find for the complainant — to encourage other companies to try their hand at an ISDS windfall. This glaring conflict of interest has prevailed for over 20 years.

This sleazy perversion of the ISDS provisions (originally intended to stop rogue governments from actually seizing assets) is blithely ignored by the Canadian government, by provincial premiers, mainstream economists, business writers, legal scholars, and just about anyone else with any influence over public policy.

It is, quite frankly, a disgusting abrogation of responsibility in all these quarters. Whether it is rooted in sheer laziness, willful ignorance, deliberate obfuscation, opportunism or intellectual dishonesty hardly matters, the results are the same: our government is determined to sign agreements that will expose public policy making to aggressive assaults by the most powerful corporations on the planet.

This sorry state of affairs is in stark contrast with Europe where there is growing public opposition to ISDS provisions in CETA and the TTIP — and extensive, detailed media coverage of the debate.

Government ministers in Germany and France have denounced ISDS and basically declared CETA and TTIP dead in the water because of it. Australia in 2011 stopped signing agreements with ISDS clauses in bilateral deals, and many other nations — such as South Africa, Indonesia, Brazil and India — have done the same or are planning to.

But Canada? No, we continue to be eager patsies, willing victims of corporate greed and blasé about our sovereignty and our democracy.


Canadian media is failing citizens with its reporting on corporate rights deals

The Trudeau government is hell-bent on ratifying two massive investment agreements — the Comprehensive Economic and Trade Agreement (CETA) and Trans-Pacific Partnership (TPP) — that will radically undermine Canadian democracy. Yet very few Canadians are informed about these deals because our mainstream media has been so irresponsible in reporting on their impacts. The first-order irresponsibility is the media’s absolute determination to cast these deals as “trade deals” when even a casual reading reveals that they are corporate rights agreements which, because they are treaties, trump our courts and constitution. They are, in large part, investment protection agreements — protecting the largest corporations in the world from citizens who have the temerity to desire laws and regulations protecting their health, environment and quality of life.

For 25 years, the media has steadfastly refused to come anywhere near the truth of these deals and the recent Brexit crisis has fostered another round of media groupthink. The new favourite media frame to dismiss people opposed to these agreements? Isolationism.

Three prominent Canadian media personalities serve as typical examples of journalists eager to dispense their wisdom while demonstrating an abysmal ignorance of the actual nature of these agreements — and the fact more and more people (in Britain, the U.S. and especially in the EU) are learning about them and rejecting them.

First up is Chris Hall, the usually thoughtful and careful host of the CBC’s The House. Interviewing federal trade minister Chrystia Freeland about the summit of the three NAFTA leaders, he asked: “Were the three amigos tying to send a message to the world about isolationism?” That was a softball for Freeland who opined about “[a]nti-globalization sentiment … [which] is in some places [expressed] as vociferously anti-trade sentiment.” This, of course, is utter nonsense: critics of CETA and the TPP never express “anti-trade” sentiment. Why? Because both critics and advocates of these agreements know that they go far beyond simply reducing tariffs on imports. The targets in the latest round of agreements are things that governments do “behind the border” — government regulation, government subsidies, government purchasing from local companies, publicly owned corporations. Hall would know this if he bothered to read any of the think-tank pieces that provide the corporate rationale for the latest wave of agreements.

Then there’s Doug Saunders of The Globe and Mail in a column entitled “Isolationism and the fear of the foreign.” Saunders muses about the irrational, popular response when “[i]nequality rises and life becomes harder” — which is “to put up walls, blame foreigners and try to isolate yourself from the world.”  He uses the term isolationism or isolate seven times and then declares: “Arguments in favour of cutting off trade and political relations have almost always been, at root, election bids based on fear of the foreign.” Again, the classic straw man — phantom millions calling for an end to trade and the severing of diplomatic relations.

And lastly, there is The Globe and Mail’s John Ibbitson, in an otherwise excellent article about Canada’s admirable openness, slipping easily into the anti-trade groupthink: “Arguments about the need to close borders in order to husband jobs do less well here because so many Canadians know their own job depends on access to foreign markets.” For the record, nearly 80 per cent of Canada’s economy is domestic and despite such agreements, in May we recorded a near-record trade deficit of $3.2 billion.

Of course, not one of these A-list journalists can identify a single article or opinion piece by critics of these deals arguing either that we should close our borders to trade or “cut off” political relations. It raises the question — have any of them actually examined these agreements? They cannot, surely, have missed the fact that most critics have focussed on the investor-state dispute settlement (ISDS) provisions that allow corporations to sue governments for passing laws or regulations that affect their profits.

 When it comes to signing new investment agreements, Canada is like a barroom brawler who repeatedly goes back to the same bar regardless of how often he gets beaten to a pulp. Canada already has a humiliating record of getting sued by corporations exploiting the ISDS provisions of investment agreements. Out of 129 countries who have signed these agreements, Canada ranks sixth regarding the number of investor-state suits taken against it and has been sued far more often than the U.S. Canadian taxpayers have had to cough up tens of millions of dollars either because tribunals awarded damages against Canada or because our government has given in and paid off companies that have launched investor-state suits.

Yet with CETA, the Canada-EU deal, we are inviting an exponential increase in these lawsuits from the corporations of the 28 EU member states. European corporations love to litigate through investment treaties and are responsible for roughly half of all the cases worldwide, three times the number taken up by U.S. corporations. Seven out of the top 10 countries that are the home base of companies suing under investment treaties are European Union members.

What corporate CEO would sign a contract knowing that it would dramatically increase the odds of their company getting sued? But that’s what successive Canadian prime ministers have been eager to do. It would be wrong to think that this is done out of stupidity. If you shift your perspective, and think of government trade officials as negotiating not for us but for corporations, then the behaviour seems quite rational.

Transnational corporations are not content with their existing ability through investor-state suits to force governments to pay if they choose to regulate. Provisions inserted into CETA will help corporations strangle regulations in their cribs.

Among CETA’s many affronts to democracy is how it dictates foreign involvement in domestic decision-making about new regulations, even when these regulations would not treat foreign companies any differently than domestic ones. CETA actually guarantees foreign corporations (“persons” in trade lingo) the right to participate in public consultations about proposed regulations on terms no less favourable than provided to Canadian citizens.

Picture a post-CETA Canadian hearing on bottled water standards and imagine seats at the table automatically reserved for European corporations like Evian. If you find it hard to believe that trade officials would forever erode Canadian democracy in this way, read the wording for yourself in the actual CETA text posted by the government: p. 19, Article 4.6.1.

Seriously, you need to read this.

Canadians are being portrayed by our media as good little globalizers, supportive of these agreements in contrast with the badly behaved Brexiters and Trump and Sanders supporters. But a recent Angus Reid poll revealed that just one in four Canadians think NAFTA has been good for the country and that we should keep the deal as-is. Forty per cent think it has been bad for workers and 60 per cent think it has mostly benefitted corporations. Just eight per cent think Canada got the best deal of the three NAFTA countries.

But if the elite journalists can’t bear to listen to the unwashed, angry masses, perhaps they would listen to someone with impeccable elite credentials: Lawrence Summers, a former U.S. Treasury secretary and former chief economist with the World Bank. In a July 6 article in the Financial Times, Summers executed one of the most dramatic turn-arounds in support for these agreements. Summers stated that if we replaced “reflex internationalism” with “responsible nationalism” then “international agreements would be judged not by how much is harmonized or by how many barriers are torn down but whether citizens are empowered.” By that standard, the new agreements that Trudeau and the media cheerleaders are pushing are a disaster. Until Hall, Saunders and Ibbitson do some serious study of these agreements, maybe they should quit writing about them.

Murray Dobbin has been a journalist, broadcaster, author and social activist for 40 years. He writes rabble’s State of the Nation column.


As NATO war-mongering against Russia intensifies, Canada faces a difficult choice

No area of public policy is so shrouded in secrecy, obfuscation and outright deception than foreign policy. Most of the time it doesn’t seem to matter much to the majority of voters who have more pressing things to worry about. But when Canadians read a headline that says “Russia mobilizing for war” one would hope they would take notice. A more absurd declaration is hard to imagine but there it was — coming out of the offices of CSIS, the Canadian Security and Intelligence Service. It was just the latest alarmist rhetoric in a steady stream of anti-Russian propaganda that coincided with the largest NATO military exercise — dubbed Anaconda — since the end of the Cold War.

As with almost every aspect of foreign policy, context is everything and this particular gem only begins to make sense if you go back to a February 1990 meeting between Soviet President Mikhail Gorbachev and the U.S. Secretary of State, James Baker. That meeting saw a deal concluded (regrettably only with a handshake) whereby Gorbachev agreed to dismantle the Soviet Union and the Warsaw Pact (the NATO equivalent), in exchange for Baker’s promise that

NATO has steadily expanded since that time, absorbing many former Soviet republics — including Poland, Hungary, Bulgaria, Lithuania, Latvia, Estonia and Romania. It is scarcely surprising that Russia would perceive this expansion as a gross violation of trust in the West and a potential military threat given that the only reason for NATO’s existence was as a bulwark against Soviet communism. By that mandate, NATO should have been disbanded in 1990.

The one important country remaining on NATO’s wish list is Ukraine, which shares a 1,400-mile border with Russia. It is here that Russia drew the line. When the U.S.-sponsored coup (aided by explicitly neo-Nazi collaborators) deposed the pro-Russian Ukrainian president Viktor Yanukovych in 2014, the NATO writing was on the wall for Vladimir Putin. The illegal seizure of Crimea and the militarization of eastern Ukraine followed.

Given events since then it is likely that this was exactly what the U.S. wanted: it needs a Russian “threat” to justify the continued existence of NATO. The U.S., which totally dominates NATO, has used the annexation of Crimea to promote the notion of Russian “aggression” towards its former Warsaw Pact allies. Yet despite the rhetoric, there is no evidence to suggest that Russia is suddenly going to invade Latvia, Lithuania, Estonia or Poland and then bear the huge burden of occupying them.

Nonetheless, eastern European NATO members have dutifully jumped on the Russian “aggression” bandwagon. Poland is key in this dangerous charade, with its president, Andrzej Duda, recently visiting Ottawa and asking Prime Minister Trudeau for military support. According to the CBC, Duda said: “[i]t is ‘beyond any doubt’ that Russia has an ‘expansionist, imperial policy,’ and he would like to see Canada increase its military personnel and equipment in Poland.”

It’s not just compliant eastern European governments that are promoting this madness. American think-tank Rand Corporation helpfully suggests “[t]he Baltic states — Latvia, Estonia and Lithuania — could conceivably be overrun within 60 hours unless the West was willing to station several, heavily armoured brigades in the tiny nations.” Well, yes, and the U.S. could overrun Southern Ontario in 24 hours. But will they? Jane’s Defence Weekly, a supposedly objective journal on global military developments recently featured the headline: “Canadian frigate encountered ‘heavy Russian presence’ in Black Sea.” Really? Russians in the Black Sea! The Black Sea has essentially been a Russian lake for centuries and that status is even enshrined in a 1936 treaty limiting the presence of foreign naval ships.

A quick reality check on which country — the U.S. or Russia — is expansionist and imperialist seems appropriate. It is the U.S. that has military bases in over 80 countries —  and military personnel in 80 more. The U.S. accounts for 95 per cent of all foreign bases in the world and has a quarter of a million troops stationed outside the U.S. Russia has eight foreign bases, all in former Soviet republics with which it shares borders. And it is the U.S. which is establishing an anti-ballistic missile system in Romania, severely destabilizing the nuclear strategic balance that has prevented a nuclear holocaust for over 60 years. The U.S. is also moderninizing its nuclear weapons to make their use more likely. The B61-12 is a mini-bomb, and according to author John Pilger, “General James Cartwright, a former Vice Chairman of the Joint Chiefs of Staff, has said, ‘Going smaller [makes using this nuclear]weapon more thinkable.'”

That’s the context for recent developments. Earlier this month in Poland, NATO launched its largest “exercise” since the end of the Cold War. Dubbed “Operation Anaconda” it lasted 10 days and involved over 30,000 troops (including 200 Canadians), 3,000 vehicles, 105 aircraft and 12 ships. There was nothing ambiguous about the purpose of this massive military demonstration. The president of Poland declared: “The goal of the exercise is clear. We are preparing for an attack.” NATO Secretary General Jens Stoltenberg said nothing to contradict him.

Now the U.S. and NATO are suddenly seeking full Canadian membership in the madness. NATO (read: the U.S.) is requesting that we join the U.S., Britain and Germany and commit up to 1,000 troops to a new, 4,000-troop contingent that would be permanently stationed in Latvia, Estonia, Lithuania and Poland. Though the number is small, this permanent NATO presence in countries bordering Russia is arguably even more provocative than the recent military exercise.

Prime Minister Trudeau faces an exceptionally difficult choice between now and the NATO summit on July 8-9. But if he makes the courageous one, and sides with those calling for more dialogue and diplomacy (which is, after all, Trudeau’s stated objective with Russia) he will in the long run be on the side of the angels. Stoking Russian nationalism at a time when many Western and eastern European countries are witnessing the rise of right-wing nationalist sentiment themselves is a recipe for disaster.

Trudeau does seem to have one ally, but an unusual one — German Foreign Minister Frank-Walter Steinmeier. Calling for more “dialogue and co-operation” with Russia, Steinmeier stated: “What we shouldn’t do now is inflame the situation further through sabre-rattling and war-mongering.”

Let’s all hope Trudeau takes his advice.


Israel’s Silent Allies Are Its Worst Enemy

By now anyone even vaguely aware of the Israeli-Palestinian conflict has heard the phrase ”the new anti-Semitism.” It is a clever propaganda piece aimed at anyone who dares criticize Israel for its illegal occupation of the West Bank and its continued brutalization of Palestinians in Gaza.

But in the space of two days, new critics emerged from within the highest positions of Israel state power. Moshe Ya’alon — until recently the Israeli Defence Minister — and Major General Yair Golan, the Israeli army’s deputy chief of staff, confirmed what many of Israel’s most vociferous (and vilified) critics have been saying for years: that Israel is heading down the road of extremism and racism.

Golan issued a warning that linked attitudes and actions in pre-war Germany with trends in Israel today. ”It’s scary to see horrifying developments that took place in Europe begin to unfold here,” he said.

Moshe Ya’alon, then the defence minister, defended Golan. Within three weeks, he was pushed from the defence post and resigned rather than accept another role. Ya’alon too offered a warning about ”phenomena of extremism, violence, and racism in Israeli society that threaten its fortitude.”

But even such dire public warnings from members of the Israeli governing and military elite are having no discernible impact on the West’s carte blanche support for the Netanyahu government. It raises the question: Is there any development in Israel that would cause Western nations to intervene in the longer-term interests of Israel and say enough is enough? Just yesterday, Uri Ariel, the Israeli minister of agriculture made a proposal to annex a huge chunk of the West Bank and expel 300,000 Palestinians. Does that cross a red line? Does the West even acknowledge a red line?

Israeli political commentator Michael Brizon, who writes under the pseudonym B. Michael, concluded the failure of Western governments to criticize what is happening in Israel is itself a new form of anti-Semitism. Writing in a Haaretz op-ed titled ”Yet Again the Jewish People Face Great Danger and the World Is Silent,” Brizon lamented the fact that the greatest danger to Israel is now from within, not from its traditional enemies. ”With our very own hands, we anointed the Huns who rule over us.”

The irony for Michael is palpable: Israel’s promise has been lost, he wrote, and ”all that remains is a big mouth, brandished fist, and endless hidden hatred, militarism, paganism, and self-righteousness. And the world is silent.”

That silence is what terrifies Michael: ”…if you persist in your silence, you indifferent world, that will be categorical proof that you really are anti-Semitic, exactly as we’ve always been told.”

As if to prove the point, just days after this piece was published, New York Governor Andrew Cuomo signed an executive order intended to punish companies and groups that join the BDS campaign — the Boycott, Divest, Sanction campaign to peacefully pressure Israel to comply with international law and recognize Palestinian rights.

”If you boycott Israel, New York will boycott you,” Cuomo said. Officials have been directed to compile a list of companies and groups that have signed on to the BDS campaign.

Did Cuomo read Golan’s comments?

”The Holocaust should bring us to ponder our public lives and, furthermore, it must lead anyone who is capable of taking public responsibility to do so,” he said in his speech. ”Because if there is one thing that is scary in remembering the Holocaust, it is noticing horrific processes which developed in Europe — particularly in Germany — 70, 80, and 90 years ago, and finding remnants of that here among us in the year 2016.”

Does Cuomo know the history and character of the new defence minister, Avigdor Lieberman, an ultra-right nationalist who has said Arabs living in Israel who are ”disloyal” should be killed?

”Those who are with us deserve everything,” Lieberman said in a 2015 campaign speech. ”Those against us, it cannot be helped, we must lift up an axe and behead them — otherwise we will not survive here.” Lieberman has also threatened to have former Palestinian prime minister and Hamas leader Ismail Haniya killed.

Did Cuomo’s staff inform him that as a result of Lieberman’s appointment, former prime minister Ahud Barak declared that Netanyahu’s government ”is exhibiting signs of fascism?”

Of course Cuomo knew all these things. But they were not enough to persuade him, or other supporters, to intervene with real consequences for their ”friend and ally.”

Prime Minister Justin Trudeau showed the same blindness with his abject surrender to the Israel lobby in supporting a Conservative motion ”to condemn any and all attempts by Canadian organizations, groups or individuals to promote the BDS movement.” This McCarthyite assault on freedom of expression should have been widely condemned but barely caused a ripple.

In the midst of these disturbing developments and high-level confessions there is a new peace initiative led by France, which is suggesting ”rigid deadlines for every stage” of negotiation.

Yet it is an exercise in futility. Everyone involved knows that Netanyahu will never agree to a two-state solution and continues to expand settlements to make it all but impossible. The alternative is both hideous and unsustainable — a continuation of the current apartheid state.

Just uttering the word apartheid in relation to Israel makes me guilty of the ”new anti-Semitism.” But the political elites of the West had better soon come to grips with the far more dangerous anti-Semitism — their persistent silence and studied indifference to the future of Israel. Because if Israel is to survive and flourish as the democratic nation it claims to be, the status quo cannot continue.

Response to Tax Dodging by Rich Will Show Trudeau’s True Colours

Note to Prime Minister Justin Trudeau:

We will not be distracted forever by your explanation of quantum computers and yoga poses. Or even by the admittedly impressive list of low-hanging fruit (most recently, the return of the long-form census) you have picked thanks to Stephen Harper.

It’s a comforting distraction to think that we might actually have a government that isn’t totally in the thrall of Bay Street billionaires and transnational corporations. But everything we know about your party suggests that nothing fundamental has changed. The litmus test will be how you deal with KPMG over an outrageous tax-avoidance scheme, and with the giant firm’s apologists in the Canada Revenue Agency.

By now most people are familiar with the KPMG tax “sham” uncovered by CBC News. The scheme involved at least 26 wealthy clients (minimum contribution, $5 million) for whom KPMG set up shell companies in the Isle of Man, one of many tax havens for the rich and large corporations.

The Canada Revenue Agency initially said the scheme was “grossly negligent” and “intended to deceive.”


But 15 of the 26 participants would end up getting special treatment. Some of the first ones caught were assessed huge penalties, but later KPMG clients were offered a secret deal. The “amnesty” agreement granted rich KPMG clients immunity from civil and criminal prosecution and freedom from any penalties, fines or interest as long as they paid the taxes they had dodged. Secrecy was written into the agreement: “The taxpayer agrees to ensure the confidentiality of the offer and will not inform any person of the conditions of the offer…”

Dennis Howlett of Canadians for Tax Fairness [disclosure: I am on the board] said KPMG should be charged with facilitating tax evasion. Other tax experts said a criminal investigation is warranted.

Canadian anti-fraud lawyer Martin Kenney thinks Canadian authorities should be prosecuting more often. “If there’s clear tax evasion, you have to put some people in jail to make it clear people should not be playing games with their tax returns.” And Duane Milot, a Toronto tax lawyer with middle-income clients who end up in court agrees: “It’s outrageous. The CRA appears to be saying to Canadians, ‘If you’re rich and wealthy, you get a second chance, but if you’re not, you’re stuck.'”

People do go to jail for tax evasion, but the richer you are and the more tax you evade the more likely it is that you’ll get away with it. The CRA justifies the practice, saying it’s too expensive to take the big fish to court and fight the best lawyers money can buy. “CRA practice also recognizes that the earliest possible resolution of disputes is in the public interest, as lengthy litigation is costly to all parties and the outcome of complex, tax-related litigation processes may be difficult to predict,” CRA media relations officer Philippe Brideau said in a statement.

Better to have the justice department prosecute the small fish and cut deals with the wealthy. But this isn’t justice — it’s expediency. The CRA and the justice department have a moral obligation to the Canadian people to name and prosecute those who have grossly and arrogantly flouted the law.

Right now, the CRA seems uninterested in pursuing these cases. In spite of the renewed focus on tax havens and the unprecedented revelations of the Panama Papers, the stalling and obfuscation on the part of the CRA and KPMG continues.

The revenue agency’s investigation into KPMG’s tax scheme has been stalled for more than three years, and no one will explain why. According the CBC’s investigation, “In February 2013, a federal court judge ordered KPMG to turn over a list of unidentified multimillionaire clients who placed their fortunes in an Isle of Man tax shelter scheme.” KPMG has still not complied and the fact that the CRA has not requested a court date to enforce its court order has been described as “mysterious.” Maybe not.

The practice of making deals and providing amnesty for the biggest offenders seem rooted in the cozy relationship between senior CRA officials and senior management figures from the accounting firms that facilitate the scams. The CBC uncovered five years of expensive receptions hosted by KPMG and other accounting and law firms for senior agency executives — including those involved in overseas compliance.

“Senior enforcement officials from the Canada Revenue Agency were treated to private receptions at an exclusive Ottawa club, hosted by a small group of influential tax accountants that included personnel from KPMG — even as the firm was facing a CRA probe for running a $130-million tax dodge in the Isle of Man,” the CBC reported.

Despite strict rules stating employees must “not accept gifts, hospitality, or other benefits that will, or could, have a real, apparent or potential influence on your objectivity and neutrality in performing your CRA duties,” these unseemly get-togethers became routine. One that took place at the exclusive Rideau Club in June 2014 saw more than 20 “high-ranking CRA executives” wined and dined by accountancy and law firms including KPMG. CRA executives were actually “required” to attend by the agency. The same day they had been treated to a luncheon followed by a session where they were lobbied by KPMG and other firms.

Confronted by this obvious conflict of interest, CRA assistant commissioner Ted Gallivan had the gall to say “We try to have a culture in CRA where executives are trying to be responsive to the citizens that we serve, which includes large accounting firms. I don’t think it’s a problem.” It’s an attitude shared by Gallivan’s boss, CRA commissioner Andrew Treusch, who dismissed any notion of impropriety by saying he had never discussed the KPMG litigation with any representative of the firm. That’s hardly the point. Sharing “scallop ceviche, duck rillettes crostini and herb-roasted rack of lamb” has a moderating impact on prosecutorial zeal.

Regrettably, there is a distinct lack of public outrage at this disgusting display of privilege, contempt for the public interest and for the law. Why are Treusch and Gallivan still in their jobs? And why did MPs let KPMG executive Greg Wiebe, with an arrogance matching the CRA executives, stonewall the parliamentary committee examining the issue by citing “client confidentiality?” This is sheer nonsense. There is no legal basis in Canada for accountant-client confidentiality, and any claim is outweighed by parliamentary privilege.

If Justin Trudeau can’t deal with the rot in his own rogue agency, his carefully crafted political persona will be permanently tainted. What will remain is the same old Bay Street Liberal Party unashamedly serving the rich and powerful.