It’s just a computer glitch…nobody died

Posted on July 15, 2012 by susanonthesoapbox

Breathe in, breathe out, don’t breathe...the disembodied voice wafted over the sound of ball bearings hitting metal.  It was calm and confident.  I, on the other hand, was not.  In fact I was a little anxious…that’s what comes of being strapped to a gurney with a sensor belt around your waist and contrast dye flowing through your veins while stuffed inside an MRI machine somewhere in the bowels of the Foothills Services Building.

Breathe in, breathe out, don’t breathe…an hour is a long time to spend in an MRI machine.  Your thoughts run wild.  Would they remember to get me out if there was a fire?  Has anyone run amok in here because they were overcome by claustrophobia (MRIophobia?)  The contrast dye can cause coma or death in rare cases…am I a rare case?

What I didn’t know then but realize now is that I was a lucky case.  I was one of the fortunate Calgarians who underwent a scheduled surgery or procedure before July 11, 2012.  One day before to be precise.

On July 11th a transformer exploded on the top floor of the Shaw Communications building (bad) and started a fire (really bad).  The Alberta Health Services (AHS) computer and backup computer were in the same building (astonishingly bad).  The explosion and fire knocked out the AHS computer and set off the sprinkler system which knocked out the backup computer (like we couldn’t see that one coming).  The AHS IT system went down for 36 hours.  It’s still not completely functional.

So what’s the impact of this outage?  According to Health Minister Fred Horne, it’s no biggie.  “What’s important in this case is that no urgent or emergent healthcare services were affected”.*  

Think about that for a moment…how does Mr Horne know this to be true? 

Mr Horne would have no knowledge of who required urgent or emergent healthcare services and who didn’t unless he reviewed the patient records.  These records are housed in the AHS computer.  The AHS computer and the AHS backup computerwere rendered useless as a result of the fire and water damage caused by the explosion at the Shaw Communications building.  So it would be safe to assume that Mr Horne had no evidence to support his statement other than this:  the urgent or emergent cases that came in through emergency were not “affected” (whatever that means) by the outage.

Contrast Mr Horne’s complacent reaction with that of Dr Fernandes.  AHS called Dr Fernandes’ office to advise him of urgent medical results for two of his patients.  Dr Fernandes returned the AHS call an hour later, asking for the patients’ names, but by then the AHS computers had gone down, taking the patients’ identities with them.

Presumably Minister Horne could argue that advice of urgent medical results is not the same as being in need of “urgent health-care services”,however Dr Fernandes was not so cavalier.  His practice includes elderly patients, organ transplant recipients and patients on dialysis.  Rather than risk the health of two of his patients his office spent hours phoning hundreds of patients to check on their welfare.   

Minister Horne’s refusal to accept responsibility for this disaster is shocking.  Any enterprise with an inkling of common sense has a business continuity plan to protect itself from IT system failure.  And yes, I know that AHS outsourced its IT computer services to IBM (to the tune of $100 million/year I might add)**but this does not absolve AHS from ensuring that the IBM service contract obligates IBM to provide disaster recovery services and real-time backup services.  To do anything less for an IT network that is critical to the health and welfare of Albertans is not just poor business practice, it’s irresponsible.

Mr Horne’s position appears to be:  it’s OK, nobody died.  His facile response is typical of the PC government’s refusal to take accountability for its actions, but it really doesn’t cut it for the 110 patients who’ve had their elective surgeries cancelled and the 298 patients who’ve had their MRIs, CAT scans and other tests cancelled.  All of them are back in the wait list queue.

Furthermore, Mr Horne’s response is woefully inadequate for any Albertan who expects an ounce of compassion from the government minister charged with providing adequate healthcare to Albertans.

* Calgary Herald, July 14, 2012

**Calgary Herald June 14, 2012, A9

Posted in Alberta Health Care | Tagged , , | 9 Comments

“I’m a Dead Man Ha Ha”: The LIBOR scandal

Posted on July 8, 2012 by susanonthesoapbox

Who will save us from the Masters of the Universe and the Wall Street wizards?  In 2008 they brought the globe to the brink of financial collapse and last week they destroyed the integrity of the London Interbank Offered Rate (LIBOR), the benchmark used to set interest rates world-wide.  Here’s how Barclays bank did it and why.*

Before we start there are two things you need to know about LIBOR.

One—LIBOR is set by the British Banking Association (BBA).  Each day BBA asks 16 banks to submit their interbank interest rates—the interest rate another bank would charge the submitting bank if it wants to borrow money.  This interbank rate is set for a number of currencies and for 15 time periods ranging from overnight loans to one year loans.  BBA ignores the 4 highest and 4 lowest submissions and averages the remaining 8 to set the LIBOR for all of those currencies and time periods.

Two—the rate submitters, the bank’s treasury department, are not supposed to talk to the bank’s traders in the rate setting process because the traders sell financial instruments based on LIBOR.  If the traders can influence the LIBOR they would have to draw upon every fiber of their moral being to resist the urge to fiddle the LIBOR in their favour.

Fiddling the LIBOR for Personal Greed

On the topic of moral fiber, Barclays traders recognized that if they could convince Barclays’ rate submitters to submit LIBOR numbers that suited their deals they would maximize Barclays’ profits and minimize Barclays’ losses—and boost their bonuses to boot!  Of course this meant that the person on the other side of the deal, the mortgage company, pension fund, insurance company, whoever, would make a smaller profit or suffer a greater loss which increased costs to the consumer, but who cares.

Emails between Barclays’ traders, rate submitters and outside traders demonstrate how blithely this was done.  The LIBOR under discussion is a rate which will go into effect 3 months hence (the 3 m libor).

Trader 1:  “where do u think 3 m libor will be today?”

Trader 6:  “submitter thinks 38”

Trader 1:  “wow…unchanged!!?!???!…if it comes in unchanged I’m a dead man ha ha”

Trader 6:  “I’ll have a chat”

Later that day Trader 1 contacts Trader 6:  “Dude, I owe you big time!  Come over one day after work and I’m opening a bottle of Bollinger!  Thanks for the libor!”

Trader 6 (who, in addition to a lack of morals, doesn’t know how to spell): “know worries!!!”

Did the traders know they were doing something wrong?  Some say that the existence of these emails is proof that the traders weren’t trying to hide their actions—they thought it was fine.  Another possibility is that the traders were too dense to realize that their emails, text messages and recorded phone calls live forever in the ether and would respond to the siren call of a subpoena.  (That’s one of the problems with being a Master of the Universe, these mundane details can slip by you.)

Fiddling the LIBOR for Corporate Self Preservation

In addition to the manipulation of LIBOR by individual traders, Barclays deliberately understated its LIBOR submissions to BBA.  It wanted to avoid the impression that other banks were concerned about its financial health and were charging it higher interest rates for interbank loans.

Interestingly, Bob Diamond, Barclay’s ex-CEO, says the Bank of England was aware that Barclays and other banks were understating their LIBOR submissions and implicitly approved  this practice.  Mr Diamond says Mr Tucker, Deputy Governor of the Bank of England, told him that it did not always need to be the case that [Barclays] appeared as high as [it had] recently”.  Mr Diamond passed this message on to his Chief Operating Officer who instructed his staff to continue to underreport the interbank rate.

Mr Tucker denies this allegation.  But consider this:  Barclays contacted the UK securities regulator, the Financial Services Authority (FSA), 13 times in the course of a year**to express concern that all banks were understating LIBOR to protect their reputations in the fallout from the 2008 financial crisis.  Barclays told the regulators that it was “not clean clean, but clean in principle” and “we’re dirty-clean, rather than clean-clean”.  Good lord, do the regulators need to be hit over the head with a mallet?

What’s next?

Barclays was fined $451.4 million for its misconduct.  Barclays’ CEO and 3 other top executives graciously offered to forgo their bonuses for the year.  That promise vapourized when the CEO and the COO abruptly “resigned”.  There are no criminal charges pending against any of Barclays executives.  The bank was granted “leniency” for cooperating with the investigation.

Prime Minister David Cameron called for a parliamentary inquiry into the UK banking industry.  The inquiry will likely recommend even more legislation.

That would be unfortunate.  The last thing we need is another arcane and ultimately ineffective law to address the problem of gross irresponsibility bordering on criminality in the finance industry.  A quick look at the Dodd-Frank Act demonstrates that in spades.  What we need is the creative interpretation of existing criminal, quasi-criminal and securities legislation already in place and the political will to enforce it.

If the Masters of the Universe are facing jail time, the loss of their personal fortunes and the prospect of being barred from ever working in banking again (goodbye fat bonuses and cushy directorships), they might think twice before rolling the cosmic dice for their own personal gain.

*Research for this article is taken from articles in the New York Times Online (Sept 7, 2010, Jun3 27, 2012, July 2, 3, 4, 2012 and Reuters.com June 28, 2012.

**Barclays contacted the US Federal Reserve 12 times in the same one year period.

Posted in Economics, Uncategorized | Tagged , , , | 14 Comments

Mustard Bean Pickle is NOT Tough to Swallow

Posted on July 1, 2012 by susanonthesoapbox

Before we talk about what is tough to swallow (hint:  21 day standardized menu for seniors in LTC facilities) let me tell you about mustard bean pickle.

My friend Kirsten unleashed an animated facebook exchange when she said she’d spent the weekend making mustard bean pickle.  Some of us said mustard bean what?? Others demanded the recipe ASAP!!!  We were all fully engaged in the quest for mustard bean pickle.

Mustard bean pickle is a condiment created under extremely trying circumstances—anyone who’s canned anything knows that it’s a hot sticky procedure performed on an unseasonably hot, usually muggy,afternoon.  (Apparently there’s no point in canning if you don’t run the risk of succumbing to heat exhaustion.)

Not only does mustard bean pickle taste like nothing you’ve ever tasted before, fresh and sharp on the tongue, but it comes loaded with memories…like Uncle Frank’s root cellar.

My Uncle Frank was a Hungarian immigrant who’d come to Canada before WW2.  He owned a produce farm in Saskatchewan.  The root cellar was buried in a hillside; a semi-spooky place accessible through a tiny Hobbit* door.  It was pitch black inside, cool and earthy.  Uncle Frank fiddled with the kerosene lamp while my little sister and I waited in hushed silence for that gauze sock thingy to ignite and flood the space with light, revealing bushels of potatoes, carrots and turnips waiting to be carted back to the house and turned into delicious food.  What an adventure!

Mustard bean pickle is much more than food.  But then again, for most of us, food is more than fuel to be ingested for the sole purpose of recharging the body for one more day.  Food is an excuse to congregate with the family, to catch up with friends or to simply break up the tedium of the day (Starbucks anybody?).  Which brings me to the Alberta Health Services 21 day standardized menu.

In 2009, AHS implemented the 21 day standardized menu in 78 hospitals and nursing homes across Alberta.  Goodbye fresh food, locally grown and prepared on site.  Hello “food” purchased in bulk, pre-cooked, prepackaged and shipped to Alberta from other provinces and the US.  That potato nestled in its cubby on the plastic “plate” started life in Idaho, detoured to El Paso for processing and bumped along in the back of a truck for days before it hit the steam tray and found its way to the seniors’ lunch room.

How bad is it?  Check out the video Tough to Swallow created by the Alberta Union of Public Employees.  The AUPE sent food critic John Gilchrist on a covert mission (complete with hidden camera) to the Stettler Hospital and Care Centre to check out the menu.  Mr Gilchrist does not mince words.  He described the “food” as appalling, nasty, gluey and, in the case of the lowly potato, obscene.

Are there any redeeming features to the 21 day standardized menu?  Apparently not.  If the objective was to save money, the experiment is a miserable failure.  Food costs rose 6 percent in the two years since the 21 day menu was implemented.  And the so-called “ease of preparation” has damaged staff morale rather than improve it as caregivers fret over their inability to change an unpalatable situation.

For 3 years, seniors and their families pursued the government and AHS officials begging for the return of fresh local food.  They’ve gotten absolutely nowhere.

The government/AHS say the food is satisfactory—after all that’s what their consultants tell them.  We can speculate on whether seniors confined to a long term care facility have the wherewithal or the courage to voice their complaints to a government consultant; but one thing is certain, seniors no longer line up in eager anticipation outside the lunch room and their general health is suffering—AUPE staff have observed an increase in infections and slower healing since the implementation of the standardized menu.

And the government continues on its merry way, ignoring complaints and mouthing platitudes like the recent statement by Doug Horner, President of Treasury & Finance Minister who said (in connection with the 2011-12 budget) “Albertans have been very clear on their priorities—health, education and supporting the vulnerable.  We’ve worked hard to meet expectations and we’ll stay focused on providing the programs, services and infrastructure to support them…** 

Alberta’s seniors have resigned themselves to the fact that every day represents more and more subtracted from less and less.***Is it too much to ask this government to help Alberta’s seniors enjoy what little time they have left in the company of their friends and families over a delicious home-cooked meal?  And please let it include Kirsten’s mustard bean pickle!

*nod to Kirsten for this great description

**NationTalk Online June 28, 2012 

***Hitch 22, by Christopher Hitchens, p 4

Posted in Alberta Health Care, Politics and Government | Tagged , , , , | 18 Comments

Jason Kenny’s Bozo Eruption & the Edelman Trust Barometer

Posted on June 24, 2012 by susanonthesoapbox

Jason Kenny’s bozo eruption just dropped Harper’s Conservative government down another notch on the Edelman Trust Barometer*—not because he called Alberta’s deputy premier, Tom Lukaszuk, “a complete and utter asshole”  but because he refused to build a relationship with a key representative of the people of Alberta.  Lest we forget, these very same Albertans elected Mr Kenny and 27 of his fellow Albertans to represent them in Ottawa and just happen to control the natural resources that Mr Harper is working so hard to export to the US and Asia.

Mr Kenny’s response to the request by Mr Calkins, Chair of the Alberta federal caucus, for a “fill-in-host” was blunt and perfunctory.  “I say a definite ‘no’ to Lukaszyk.  I don’t think it makes sense to create a precedent to do a special caucus meeting for every visiting minister from the provincial government.  Plus he is [insert expletive here]. 

Pause for a minute to consider what Mr Kenny said.  Mr Calkins asked whether any member of the Alberta caucus could host a meal with a visiting politician.  Mr Kenny twisted it into a discussion about the need for a “special caucus meeting” with “every visiting minister” from Alberta.

By doing so Mr Kenny created a new rule governing the interaction between the Feds and the Alberta government.  This is what the “special caucus meeting—with food” rule looks like:

  • Any request for an informal get-together, be it lunch, dinner (coffee?) between a provincial MLA and his federal counterparts is deemed to be a “special caucus meeting—with food”
  • An MP may overrule the Chair of the Alberta federal caucus if the Chair (foolishly) requests a “special caucus meeting—with food”
  • The MP’s authority to kibosh such a request is not even remotely dependent on any of the following factors:
    • The rank of the “visiting minister” (um…do we punt the premier?)
    • The provincial government’s ability to enhance the federal government’s agenda (the extraction of Alberta’s fossil fuels will add billions to Canada’s GDP; for which Mr Harper will surely take credit)
    • The alignment of the political ideologies at the federal and provincial levels (admittedly weak in this case)
    • The MP’s authority to deny a request for a “special caucus meeting—with food” is directly dependent on whether the MP has a “personality clash”** with the requesting MLA, in which case the MP may unceremoniously reject the request in any crude and vulgar way that suits his fancy
    • In the event that the MP’s crude rejection of the meeting request hits the front page, the MP may refuse to take responsibility for his idiotic lapse in judgment and may protect his fragile ego by apologising well after the fact and behind closed doors.

And this is where the Edelman Trust Barometer comes into play.  Edelman, an international PR firm, has conducted a global trust survey for 12 years and presents its findings at conferences such as the Davos World Economic Forum.

In 2012 Edelman recorded an unprecedented decline in trust in government.  In 12 countries the government is less trusted than business, non-governmental organizations (NGOs) and the media (yes, the media).

Canadians are slightly more trustful than some countries…56% of us trust the government to “do what is right”.  Not an outstanding result, but better than the US (43%) and the UK (38%).

But when asked whether we trust our government leaders our results are deeply troubling.  Almost half (46%) of all Canadians do NOT trust their government leaders to tell them the truth.  Given that only one-third of Canadians (36%) don’t trust business leaders to tell them the truth this means that Canadians see government leaders as less trustworthy than business leaders (cue the smooth talking CEOs).

What can government do to reverse this trend?  Edelman makes four recommendations and while they are geared to business leaders, two are equally applicable to government leaders.  First, exercise principles-based leadership, not rules-based performance and second, practice radical transparency.***

Mr Kenny gets zero points for radical transparency—tripping on his keyboard and sharing his vulgar comments and muddled thinking by hitting “reply all” was hardly a well reasoned intentional act.

Mr Kenny gets less than zero points for principles-based leadership.

The principle underlying an Alberta MP’s job is this:  represent the people of Alberta to the best of your ability.  This means go to dinner with Mr Lukaszuk.  Increase your understanding of the issues concerning Albertans.  Learn more about the Alberta politician who holds the second highest governmental post in Alberta and has the premier’s ear.  All of this will make you a more effective advocate for Albertans.

Instead Mr Kenny chose to satisfying his own ego driven need to one-up the deputy premier…not a very mature response and not one that engenders confidence in our government leaders.   Let’s face it, if Mr Kenny can’t overcome a personality clash and suffer through a simple dinner, how on earth can we trust him to represent us properly in Ottawa?

*In my humble opinion.

**Ms Redford quoted in CBCNews Online June 20, 2012

***2012 Edelman Trust Barometer, slide deck, p 31

Posted in Politics and Government | Tagged , , , | 4 Comments

It’s not what you say…it’s how you say it

Posted on June 17, 2012 by susanonthesoapbox

Do you know why some politicians are known simply as Raj or Alison while others are known as Mr Harper or, in a fit of frustration…Stephen Harper?  Bear with me and I’ll tell you.

This weekend I met Raj Sherman, the ER doctor, former Tory MLA and leader of the Liberal party at the Liberal AGM.  Raj had just finished his “support me as leader” speech and was working his way through the crowd.  We chatted briefly and, like many in the crowd, I was impressed.

Raj’s “support me” speech was sincere, pragmatic and self deprecating—he characterized his 118 vote margin in Edmonton Meadowlark as a “landslide victory”.  He was gracious, thanking the incumbent MLAs and all of the candidates who’d run and offered a personal apology to anyone he may have let down along the way.  He emphasized the hard work that lay ahead in order to rebuild the party from the ground up.

The speech hit all the right notes and was brief to boot.  Brevity is a welcome thing when you’re grinding through the administrative minutia of an AGM.  It wasn’t so much what Raj said but how he said it that was so engaging.  He was energetic, sincere and focused.  He mixed in elements of humour and humility.  He connected with the audience.

Raj was a little nervous about the leadership vote but he and his team came well prepared.  Buttons and pamphlets entitled Support Raj Vote NO were scattered on the tables.  This was wise given that the leadership vote is stated in the negative (rather like “yes we have no bananas”) so a vote in favour of Raj’s continued leadership required the voter to circle NO, not YES, on the ballot.  The fact that Raj found a way to convey the need for a negative vote to produce a positive outcome demonstrates he understands how voters think.

Raj was endorsed with a 94% vote in support of his leadership.  Admittedly the 250 to 300 votes cast is a fraction of the total Liberal party membership, however, these people cared enough about the vote to travel from all over the province to attend the AGM.  If they wanted Raj out, he’d be out.

True to form, Raj was not afraid to show some surprise at the overwhelming vote of confidence.  He admitted to being speechless and made comments about a grown man blushing.  He then moved to the heart of the matter—the Liberal party was facing a long hard road, the going would be tough, but the party had to rebuild from the ground up.  Raj would be there every step of the way.  If someone wanted to invite him to meet their friends, he’d come—as long as he was given some food and a place to stay.

And you know what, I believe him.

Which brings me back to the question:  why are some politicians referred to by their first names?  Because the voters “…feel that the candidate speaks to them and is in touch with their personal concerns.” *Raj understands the critical need to connect with the voters, to live by the Warren Beattymantra “People forget what you say, but they remember how you made them feel”.*  

So far we’ve seen the energetic, charismatic, sometimes all-over-the-map politician.  Now that the Liberal party has validated Raj as its leader we can expect to see a leader who’s prepared to push his agenda a little harder, to be more shrewd and more focused when grappling with those other “first name” politicians, Alison and Danielle.

If this comes to pass the Liberals will have finally found the right combination of conviction, compassion and charisma to make some real inroads in Alberta’s political landscape.  Over to you Raj.

*Words that Work, by Dr Frank Luntz, p 82. 

Posted in Politics and Government | Tagged , | 15 Comments

Dr Eagle’s bonus and the Goldilocks Test

Posted on June 10, 2012 by susanonthesoapbox

Ah, the joys of being a public figure…this week we learned that Dr Chris Eagle, the president and CEO of Alberta Health Services (AHS), got a bonus of $90,000.  That’s in addition to his base pay of $580,000.  And significantly less than what he would have received had he met more than 63% of his “pay at risk” targets.  Let me say that again in non-HR speak:  Dr Eagle’s total compensation package is $725,000/year.  It is made up of $580,000 in base pay and an additional $145,000 in “pay at risk”.

This news immediately brought to mind the Goldilocks test.  Not because of any resemblance between Dr Eagle and Goldilocks but because figuring out how much Dr Eagle should be paid boils down to one question:  is it too high, too low or just right.

As any HR comp specialist will tell you, setting executive compensation is like pirouetting through a mine field.  Consultants like Mercer and Towers Perrin provide benchmark data but every organization is different and every executive thinks he’s uniquely gifted and deserves to be paid more than his peers.  Introduce the added complexity of a CEO working in a quasi-public entity and you could have one heck of a mess.

Is Dr Eagle’s total compensation package of $725,000 too high, too low or just right?

Dr Eagle’s job is CEO of AHS.  CEOs are compensated for strategic leadership, for understanding the marketplace and leading the organization so that it achieves its objectives.  The CEO’s board of directors will be happy (they didn’t hire a dolt) and the shareholders will be delighted (share prices go through the roof).  A CEO who achieves this result is paid “just right”.  In fact he might argue he’s paid “too little” and demand a raise.

But there’s a snag in Dr Eagle’s case.  Dr Eagle works for Alberta Health Services.  AHS is a creation of government.  The former Health Minister, Mr Zwozdesky, described the relationship between the government and AHS as follows: the government (through the Dept of Health) is responsible for policy, strategy, global budgets and doctors’ pay.  This “…trickles down to our delivery arm, which is Alberta Health Services…[which] then puts it all into effect”.*

So unlike a corporate CEO, Dr Eagle is not a strategic leader and developer of policy but rather the delivery boy who delivers government strategy and policy through the vehicle of the AHS to the citizens of Alberta.  For this he will get paid as much as $725,000. Applying the Goldilocks test I’d say Dr Eagle’s total compensation is too high.

Is Dr Eagle’s “pay at risk” too high, too low or just right?

Turning now to Dr Eagle’s bonus.  There are 2 elements to the “pay at risk” equation:  how much of Dr Eagle’s total compensation is “at risk” and just how risky is it.  Only 20% of Dr Eagle’s pay ($145,000) is “pay at risk”.  This is significantly lower than corporate CEOs whose “pay at risk” is in the 50% to 60% range.  But to be fair, corporate CEOs are strategic leaders and we’ve already determined that Dr Eagle is not, so the 20% pay at risk target is probably “just right”.

The more important question is just how much “risk” is Dr Eagle really exposed to—how likely is it that Dr Eagle will achieve his performance targets?  Consider this.  Dr Eagle would have met his target for ER wait times if 60% of patients coming into ER were admitted within 8 hours.  That’s not 100% of patients in ER, just 60%.  Dr Eagle missed that target—only 45% of the patients coming to ER were admitted within 8 hours.

It’s unclear whether the AHS board gave Dr Eagle a partial bonus on this performance metric, however the AHS board says partial bonus payouts are “justified” because Dr Eagle’s targets are “stretch targets” (meaning they’re intentionally set high).**But this misses the point.  If a target is “met” you get a small bonus, if the target is exceeded you get a better bonus, but you don’t get a partial bonus for failing to meet a target no matter how “stretched” it is—at least not in the corporate (real) world.

Applying the Goldilocks test, the degree of risk for this target is “too low”.

The Goldilocks Test

Mr Horne, our new Health Minister, says Albertans need to “look at the big picture”.** Okay, here’s the big picture—the delivery of healthcare in Alberta continues to stumble,    Albertans are still stuck in ERs awaiting admission, wait times for surgical procedures continue to drag on, the elderly are still parked in hospitals awaiting continuing care, the culture of intimidation continues and we’ve heard absolutely nothing from the judicial inquiry into queue jumping.

Albertans are not living in a fairy tale.  They expect their government to do more than set fairy tale targets for improvement and then pay out $450,000 to executives who fail to meet them.  Notwithstanding what Mr Horne and the AHS board of directors believe these bonus payouts are nowhere near “just right”.

*Hansard Apr 13, 2011, p 645 

**Calgary Herald, June 8, 2012, A6

Posted in Alberta Health Care | Tagged , | 4 Comments

Bilderberg? Illegal Political Contributions? What??

Posted on June 3, 2012 by susanonthesoapbox

Is it just me or did things become even less transparent after Alison Redford swept back into power as premier of Alberta?  First we have the Premier’s participation in the “by invitation only” Bilderberg meetings in Virginia.  The Bilderberg is one of the most prestigious and secretive meetings in the world.  Participants from the worlds of finance, politics, business, academia and communications come together to “discuss topics of current concern…in foreign affairs and international economy”.*  The meetings are conducted under a cone of silence—a fact that is even more strange given the participation of the editor-in-chief of The Economist and two Economist reporters who are listed as rapporteurs.  (A “rapporteur” is a person designated by an organization to report on its proceedings—perhaps they take the minutes in invisible ink.)

Redford said she’s attending because it’s the premier’s job to advance Alberta’s interests in different forums around the world.**

I don’t fault Ms Redford for accepting the invitation—I’d go too if only to see whether Bilderberg really is a cabal controlling the financial, economic and political forces of the planet.   However, the Bilderberg website makes it clear that “participants attend Bilderberg in a private and not an official capacity”.

So notwithstanding Ms Redford’s attempt to characterize this as a business trip, I agree with Danielle Smith that Ms Redford should have travelled on her own dime.  And yes, the $19,000 the taxpayers are paying to cover her travel expenses won’t break the bank but the fact the taxpayers are footing the bill in the first place is symptomatic of the way this government blurs the line between governmental activities and political ones.

Which leads me to the growing controversy over improper political contributions.  We started the week with the government refusing to disclose how much money the PCs had received in illegal political contributions.  They claimed their hands were tied because the former Chief Electoral Officer had recommended legislative changes that made both the investigation and its findings, confidential.

This—what shall we call it—misstatement, blew up in the PC’s face when the former Chief Elector Officer denied it.  Then Deputy Premier Lukaszuk said the Electoral Officer could release whatever information he wished.  This was contrary to what the Justice Minister had said the day before.

Instead of making it up on the fly I’d suggest that both the Deputy Minister and the Justice Minister read the Election Finances and Contributions Disclosure Act.  It is so tightly drafted (under Ms Redford’s watch as Justice Minister I might add) that it may well require an amendment in order to allow the Electoral Officer to disclose the amounts that were wrongly contributed to the PCs (or any other political party for that matter).  Unfortunately an amendment won’t be possible until the Legislature resumes sitting in the fall.  Meanwhile the gong show continues.

On Friday the story got another boost when the media reported that “indirect contributions” may have flowed from the University of Calgary to the PC party.  The allegation involves a series of emails between U of C in-house counsel and Joe Lougheed, a Tory supporter and the son of the former premier.  Mr Lougheed, a lawyer who was providing government relations services to the U of C at the time, describes the emails as “poorly drafted”.  The U of C says it received “conflicting information” as to whether the donations were improper.  The opposition is in an uproar and the ball is back in the Chief Electoral Officer’s court.

Given that the Chief Electoral Officer has identified 41 cases of questionable donations to date and administrative penalties have been paid or are pending in 19 of those cases the best way to resolve this mess is to follow Brian Mason’s (NDP) advice and call an independent public inquiry into PC fundraising.  Ironically the one thing the Chief Electoral Officer does have the power to do under the existing legislation is to call a public inquiry.  That would be a real example of transparency…will he have the courage to do it?

*Bilderberg Official Website

**Calgary Herald Online May 30, 2012

 

Posted in Politics and Government | Tagged , , , | 10 Comments

Redford’s Throne Speech: Deja Vu All Over Again

Posted on May 27, 2012 by susanonthesoapbox

At last, we have the Throne Speech setting out Redford’s agenda.  It was eagerly anticipated by all (okay by some…well maybe a few) and finally it’s here for all of us (okay, a few of us) to dissect and discover exactly what Redford has in store for us over the coming months.

It started with the usual fanfare, literally.  That’s the beauty of reading the Throne Speech in Hansard, it comes complete with stage directions:  [The Premier, the Clerk, and the Sergeant-at-Arms left the Chamber to attend the Lieutenant Governor]  [The Mace was draped]  [A fanfare of trumpets sounded] [Preceded by the Sergeant-at-Arms, His Honour the Lieutenant Governor of Alberta, Colonel (Retired) Donald S. Ethell…and Mrs Ethell, their party, the Premier, and the Clerk entered the Chamber.  His Honour took his place upon the Throne]*

Gives you goose bumps, doesn’t it.

The Lieutenant Governor couldn’t resist commenting on the fact that Alberta was blessed with a female Premier and a female Leader of the Official Opposition.  “They’re taking over the world”. [laughter]* 

And then…the speech.  And what a strangely insipid speech it was.  Here, judge for yourself:

  • Global economic recovery is underway (really?) and demand for our energy and skills will grow.
  • Albertans chose to “engage with the world around them and through investment and innovation [Alberta will] play a leading role in making our world a better place”. (Read: wisely voted PC not Wildrose).
  • The government will find the right balance between progressive and conservative thinking.  (Shot across the Wildrose bow—the PC’s intend to occupy both the centre and the right of the political spectrum).
  • Examples of progressive thinking are subsidized child care payments and more family care clinics (notwithstanding the Alberta Medical Association’s legitimate concern that FCCs will cannibalize existing primary care clinics).
  • Examples of conservative thinking are no new taxes, no sales tax and multiyear budgets to control public spending. (Read: public services will continue to be dependent on revenue from the extraction of fossil fuels and budgets (and people) will live or die based on the success, or lack thereof, of the oil and gas industry).
  • There will be greater openness and transparency in government (this would be a good thing if it really happens).
  • Critical public sectors—education, health and municipal services—will receive stable funding in the form of three year budgets.  (Hopefully the public has forgotten that the last Premier and his health minister, Mr Zwozdesky, rebuffed all criticism of the health portfolio by touting their five year budget for healthcare, oops.)
  • Business will have even greater “freedom” to “operate without interference” because the government will “simplify regulatory burdens” while at the same time advancing world-leading resource stewardship and responsive natural resource development   (that’s confusing if not downright contradictory).
  • Redford will push the Canadian energy strategy with the provinces and pursue improved environmental monitoring with the Feds to create a “comprehensive, transparent and scientifically credible system”  (ie. she’ll continue the dialogue to promote fossil fuels in the face of growing resistance from BC and ongoing efforts by the Feds to hack federal environmental monitoring to shreds).                

Redford pitched her government as the government of change.  One that’s responsive Albertans’ desire “…to look forward…to look outward…to be citizens of the world”**but there’s nothing new here, just the same old reliance on fossil fuel revenue coupled with the same old tinkering with public services, notably healthcare and education.  This strategy failed Albertans in the era of Klein and Stelmach and there’s nothing in the Throne Speech to indicate that it will succeed today.

[Preceded by the Sergeant-at-Arms, Their Honours, their party, and the Premier left the Chamber as a fanfare of trumpets sounded]  [The Mace was uncovered] [The Premier returned to the Chamber].***

And the business of governing carried on just as before.

* Hansard May 24, 2012, p 5

**Calgary Herald, May 25, 2012, p A11

***Hansard May 24, 2012, p 11

Posted in Alberta Health Care, Energy & Natural Resources, Politics and Government | Tagged , , | 2 Comments

Did Facebook Do A Face Plant?

Posted on May 20, 2012 by susanonthesoapbox

If Facebook is such a good investment why did Zynga’s second quarter profits drop 90%?  To understand how Zynga is relevant to Facebook’s success one needs to read FB’s prospectus (oh joy).* There we learn that FB’s success is based on creating “value” for 3 types of customers.

The “user” group is the 845 million people who post on FB each month.  Half of them are grandparents posting pictures of their grandchildren, the other half are people posting pictures of their dinner (sorry, couldn’t help myself).  The second group are “advertisers and marketers” who post personalized ads based on information FB harvests from the user group and sells to the advertisers/marketers.  This explains why I get ads telling me about the 50 things I should do in Calgary before I die while my hairdresser gets ads promoting the best gay bars in town.

The third group are “developers” who use FB to launch applications (often games) and  drive traffic to their sites.  They also access FB’s payment structure to get paid for “visual and digital goods”.  What?  A “visual/digital good” is the bale of virtual hay you buy to feed your virtual cow on the virtual farm you’ve bought from Zynga’s Farmville. 

The FB business model is dependent on the user group as a source of personal information which can be sold to the advertising/marketing and developer groups.  Unfortunately the needs, desires and legal rights of the user group frequently conflict with the economic drivers of the advertising/marketing and developer groups, resulting in a business model is fraught with knotty contradictions.

The biggest irritant to the user group, aside from a lack of privacy, is advertisements.  Some FB users simply ignore the ads, other install ad blockers to eliminate them altogether.

The advertiser’s lack of exposure is exacerbated by the fact that FB users are accessing FB on their cell phones.  In Dec 2011, approximately half of the 845 million monthly users accessed FB through their mobile devices.  There are no ads on a mobile phone—the screen is too small.  Ad revenue is dropping.  In 2009 advertising revenue accounted for 98% of all revenue, in 2010 it dropped to 95% and in 2011 it dropped to 85%.  This hole in the revenue stream must be replaced by increasing the size of the user group, developing ways to put ads on to mobile devices (and further irritating the user group) or developing alternative revenue sources.  And there lies the rub.

FB’s business model is based on FB’s unimpeded ability to sell personal information from its users to advertisers, marketers and developers.  This ability is under attack here and abroad.  In 2009 the Canadian Privacy Commissioner ruled that FB breached Canadian privacy laws by sharing users’ personal information with developers (such as Zynga).  The recent dust up with German data protection officials demonstrates that this problem won’t go away anytime soon—German federal agencies were ordered to take down their FB pages and disable the “Like” button on their websites.   

FB fought these decisions but recognizes that evolving US and foreign privacy and data protection laws could seriously harm its business and that it is powerless to do anything about it. 

So, is FB a good investment?  The fact that FB’s IPO roared out of the gate at $42.05, sputtered and settled gently at $38.23 (just 23 cents above its “reserve price”) does not engender investor confidence.  Particularly when one takes into account the fact that the FB IPO was a “bought deal” which required Morgan Stanley, JP Morgan and Goldman Sachs, as underwriters, to step in at the 11th hour to prop up the share price to prevent it from sinking below $38.

There are two explanations for why the IPO shuddered.  The first is that the investment bankers did such a good job pricing the investment that everyone knew that $38 was the right share price (tell that to the underwriters now holding millions of FB shares on their books).  The second is that a market capitalization of $104 billion—a multiple 100 times earnings—FB will require “bold new revenue streams to justify the mammoth valuation”**and FB’s contradictory business model doesn’t outline a clear way to get there from here.

The correct explanation will emerge in the fullness of time, in the meantime I’m keeping an eye on Zynga.***If Zynga says goodbye to FB, I’ll pack my virtual cow into my virtual truck and mosey over to an investment more closely tied to the real world.

*Facebook, Inc. Form S-1 Registration Statement filed Feb 1, 2012

**Constine and Cutler in TechCrunch Online May 17, 2012 

***Zynga provided 12% of FB revenue in 2011. If Zynga reduces its use of the FB platform, launches games on competitor platforms or becomes dissatisfied with its relationship with FB then FB’s financial results will be adversely impacted.  Registration  Statement p 18. 

 

Posted in Uncategorized | 5 Comments

A $500 Dinner and a $15 Cab Ride

Posted on May 13, 2012 by susanonthesoapbox

I left the $500 a ticket fundraising dinner for Premier Redford and stepped into the cab.  I was crestfallen and concerned.  The reason for my unease became crystal clear when my cabbie, a lanky young Frenchman, asked what all the fuss was about (people were streaming out of the Telus Convention Centre and he knew something “big” was going on).

His question kicked off a fascinating conversation as we raced through the city streets taking a “shortcut” to my home.  (It really was a shortcut and not just an excuse to crank up the fare).

It’s the Premier’s Dinner I said.  Oh, he said, did she say anything interesting or was it blah blah blah?

Hmmm.  She started with a slick PR video—inspirational music, Alison with horses, Alison with campaign supporters, Alison with MLAs, Alison’s bus, comments from all 61 MLAs (which was a nice way to introduce her team), ending with more inspirational music and words about building a better future. 

Then she took the podium and spoke about the PCs being written off only to emerge with an historic victory “stronger than ever”.  She talked about building a new future based on the traditional PC values of Peter Lougheed.  She promised to invest in public services, to build schools and hospitals and to fix public healthcare.  

She said Calgary was an exceptional city with the right expertise to make Alberta and Canada a global energy leader.  Energy was “paramount” to the PC party.  She would defend the oil sands and push ahead with her Canadian Energy Strategy.  She was committed to sustainable resource development, free enterprise and a beautiful Canada.  She’d embrace change and lead the charge.  Albertans had a special identity—true and proud. 

So back to the question:  Did she say something interesting or was it blah blah blah?  Answer:  It was blah blah blah.

To be fair, this was a fundraising dinner and not a Legislative debate so some level of blah blah blah was to be expected.  Nevertheless the Premier said very little of substance and the audience became uneasy.  They applauded politely at the appropriate moments but wondered—had she gone too far down the path of social spending?  Could she (or any government for that matter) do anything to calm the stormy waters facing the Keystone and Northern Gateway pipelines?  And, most important, could she keep the disgruntled PC voters who’d switched to the Wildrose and came back at the 11th hour in the fold?

My cabbie was not prepared to let the matter rest.  Politicians promise to build roads, he said, they should stop.  He fixed one eye on me, clearly expecting a response.  Politicians should stop building roads…?  Oh I get it, he’s talking about broken promises!  Yes, I agreed, they shouldn’t promise something and then not deliver.

He changed gears (figuratively).  Albertans are afraid of change he said.  He’d voted Liberal because governments should not stay in power too long or they stop taking care of the public preferring to take care of themselves and their friends.  Even here in Canada.  Wow…who is this kid? 

I agreed with him and he told me about politics in France.  Soon we were sitting in front of my house.  I paid the fare and he turned in his seat, introduced himself and shook my hand.  We were united in the fight for a better Alberta.  My spirits soared.  This election was a miraculous thing.  It stirred the population.  Albertans are engaged and like a dog with a bone, we’re not about to let this one go without a fight.

A $500 dinner and a $15 cab ride.  It was the best $15 I’d spent in a long long time.

Posted in Politics and Government | Tagged , , | 10 Comments