Matters Of Import

Let me keep you advised respecting some fascinating new stories that I have found for your interest

PUBLIC AUTHORITIES SMELL PRETTY

It looks like our friends at the Blue Water Bridge do like to spend money. I wonder what Brian Masse, the big supporter of a Public Authority for a bridge here, would have to say on this question that was asked by one of his NDP colleagues in the House of Commons. The question was how much money did

• "Federal government departments and Crown corporations [spend last year] on discretionary items such as iPods, golf balls, flowers and Tim Hortons coupons."

Apparently, close to $600,000 was spent. Of this amount,

• "The tiny Blue Water Bridge Authority, which manages a federal bridge connecting Sarnia, Ont., with the U.S., alone spent $4,508 on floral arrangements.
  
  "Some of it is funerals, some of it is birthdays," said David Joy, chief financial officer for the corporation. "It could be poinsettias for Christmas dinner dance and decorations, that kind of thing."

My question for them to answer is how much money, if any, was spent by them on boutonnières for their consulting firm who billed them $7.5 million as the Auditor General disclosed.

• "to promote the Authority's interests to US and Canadian government officials and politicians, and to provide various consulting services"

After all, they did have to look nice when meeting such important people.

THE NEXT TUNNEL DEAL

With the 9-0 vote to override Detroit Mayor Kilpatrick's veto, it looks like Detroit Council has decided not to sell/lease/otherwise dispose of the Tunnel in a deal with Windsor. Instead, they are going to go out and borrow money to deal with their budget deficit

In any event a deal does not seem possible by June 30 since the Province of Ontario has not yet determined whether they will make a loan to the Windsor Corporation to provide money to Detroit.

I would frankly be shocked if the Province did so at this time of fiscal restraint for an about to become have-not province.

Does this mean that the Tunnel deal is dead? It should be. However, unless we are told that the Sutts law firm is no longer working around the clock on this transaction, then something must still be cooking. What could it be?

Let's make an assumption, a pretty good one I believe based on the Globe story, that the Minister who visited with our Mayor was Senator Fortier. He obviously would have come down here to talk about Brighton Beach but, since Eddie is such good friends with the Federal Government these days, let's also assume that they also talked about the Tunnel. You see, Senator Fortier is a money boy who worked in high finance and does Eddie ever need financing today.

I also believe that it is necessary, if the DRIC bridge is to be built, for the investor in that bridge to have a monopoly over the crossings in southwest Ontario or at least to know that another crossing cannot undercut it with respect to tolls. After all, with competition, that investor could go broke if tolls are kept low.

Being the cynic that I am, when the Bridge Company tried to do the deal with Detroit to manage the Tunnel, my belief now is that the Federal Government people came down here to talk with the Detroit Mayor to oppose the transaction because it is absolutely essential that for them to control the Tunnel and its tolls.

Let's also assume that the Province will not provide a loan for this transaction. How then would Eddie get financing since the Feds have already turned him down?

Here's what could happen, and I hope for Windsor taxpayer's sake that it does not IF we are at risk for paying back a loan or for guaranteeing the loan of the Windsor Tunnel Company or if the City could lose the Tunnel in a default.

Do remember that our Mayor invited President Cockrel to attend one of his State of the City speeches so they must have some kind of a friendship. President Cockrel is not opposed to a Tunnel deal if it makes sense. Politically, he would be the Mayor if Kwame was removed and may run for Mayor in any event. Remember also that our Mayor committed a faux pas when Hendrix was running for mayor against Kwame that might have cost Kwame the election so there may be no love lost between him and the Detroit Mayor.

It could well be that the Canadian Federal Government will now finance the Tunnel transaction but of course in an amount substantially less than the $75 million discussed. Mind you, the amount talked about in Detroit is now down to $58 million. Of course, if our Government financed the transaction, then the amount payable as fees to outsiders in Detroit would be significantly reduced as well.

What kind of the transaction it would be, I have no idea. Hopefully, it is not a loan but how it would be structured... I'm sure the decision will be political rather than financial if I am correct about the need for controlling the Tunnel and its tolls.

Eddie, on behalf of the Federal Government, may well try and end-run Kwame believing that his ability to conclude any kind of deal is severely limited. Instead, he will deal with President Cockrel to do the deal. Of course, I'm not certain that this can be done legally in Detroit given their form of government but let's assume that it can be.

I am not that far off the mark either. Here is part of a Detroit News Editorial:

• "Detroit won't be able to borrow its way to prosperity. Now that the City Council has overridden the mayor's budget vetoes, it will have to come up with a responsible way to balance the city budget.
  
  Papering over a deficit with notes or bonds rather than making tough decisions on spending won't work...
  
  It's only natural that the council would defend its prerogatives and override this veto. But the key to keeping the budget in balance was Kilpatrick's veto of the council's decision to borrow $78 million to fill a gap in revenues.
  
  The borrowing is needed because the council rejected the mayor's plan to sell the Detroit/Windsor tunnel.
  
  Council members said they were not satisfied by the documentation submitted by the mayor to support the sale and the revenue that would flow from it.
  
  Fair enough. But in opting to borrow to make up the shortfall, council members keep the city on a dangerous financial course that has already drawn unfavorable attention from Wall Street...
  
  If the council doesn't want to sign off on the sale of Detroit's rights to the Detroit/Windsor tunnel, its members will have to come up with cuts to balance the budget -- not try to hide it with so-called "budget stability" bonds."

There is the perfect opening for a deal with Detroit Council!

Would it be a tough sell for President Cockrel to his Council? Of course it would be since the amount of money would be less than before. Nevertheless, he can structure the transaction by saying that the money would be used to pay down the bonds that would have been issued by Detroit to finance their deficit and which may have cost them a reduction in their bond rating. It would be justified to pay off the debt so that the rating could be increased.

Moreover, I could see it being structured so that it is not a loan and so that that Detroit would not do have to pay back any of the money. Again, that could be the justification for accepting a lower amount. Don't forget, that the Canadian Government seem to like P3 deals.

Given the strained relationship between the Detroit Mayor and his Council, I could see President Cockrel using that animosity to his advantage to demonstrate that Council is ensuring that the City is running properly while the Mayor is involved in his trial activities.

Of course, saving the day for Detroit by completing the Tunnel deal would not hurt President Cockrel either if he decided to run for mayor, especially if Kwame was acquitted and decided to run again or even if President Cockrel ran against other Councillors or others who might want to be Mayor.

Canada gets what it wants without offending the Americans by getting control of the Tunnel by using Windsor as their front and Eddie gets his reward from Senator Fortier, whatever that may ultimately be. At the least, the new Tunnel Company would get $100 million to pay off the IOU to the City I am sure.

And that is how everyone lives happily ever after.

A MARTINI TOAST TO CLAUDIO

In case you missed it, here is a copy of the letter sent by John Middleton's lawyer, Claudio Martini, to the City of Windsor.

The question now is whether the City will back off and reinstate Middleton, or at least give him the opportunity to hear the charges against him and to try to rebut them, or will dare him to sue.

I wonder which day in court John will get to set out his side of the story. In front of Council or in front of a real judge.

• The City of Windsor
  Chief Administrative Office
  350 City Hall Square West, Suite 201
  P.O. Box 1607
  Windsor, Ontario
  N9A 6S1
  
  Attention: Mr. John Skorobohacz, Chief Administrative Officer
  
  Dear Sir:
  
  RE: OUR CLIENT: JOHN MIDDLETON
  REMOVAL FROM WINDSOR CRIME PREVENTION COMMITTEE
  
  We have been retained as legal counsel to John Middleton.
  
  Mr. Middleton has served as a volunteer member of the Windsor Citizens Crime Prevention Committee for nearly five (5) years. Most recently, Mr. Middleton served as Chairman of that Committee.
  
  By correspondence dated April 22, 2008, Mr. Middleton was advised that he was being removed forthwith both as Chair and as a member of the Crime Prevention Committee.
  
  Mr. Middleton has since that time requested particulars of the allegations made against him resulting in his removal, evidence in support of those allegations; and an opportunity to respond to those allegations. Unfortunately, these requests have been denied.
  
  The principles of natural justice and due process require an individual to be provided with particulars of allegations of misconduct and further be provided with an opportunity to defend himself prior to the imposition of sanctions. In this case, the City of Windsor has seen fit to impose sanctions without providing any particulars or evidence whatsoever and without providing Mr. Middleton an opportunity to respond to the allegations. This is inappropriate and unlawful.
  
  This wrongful conduct on the part of the City of Windsor has resulted in a diminution and tarnishing of Mr. Middleton’s reputation within the community.
  
  On behalf of Mr. Middleton, we hereby request his removal as Chair and member of the Crime Prevention Committee be immediately revoked. If the City of Windsor is intent on proceeding with the allegations of alleged misconduct by Mr. Middleton, we hereby demand full particulars of those allegations so that Mr. Middleton can review the allegations and the supporting evidence and be allowed the opportunity to properly respond and defend himself.
  
  Please also treat this correspondence as notice on the part of Mr. Middleton of an intention to claim damages sustained by him to his reputation in the community as a consequence of the wrongful acts noted above.
  
  We do require your immediate response.
  
  Yours very truly,
  
  MARTINI BARILE MARUSIC, LLP
  
  CLAUDIO MARTINI