8 Toronto Street News — Vol. 8, #7, Sept.
15-28, 2006 Page 9
Softwood deal pours $450 million straight into White House,
says U.S. lawyer: Bush Slush Fund Money Laundering Results
<http://thetyee.ca/>Bush 'Slush Fund,'
Courtesy of Canada
Turning trade deal into Republican
ammo?
Softwood deal pours $450 million
straight into White House, says U.S. law-
yer.
By Elliot J. Feldman <http://thetyee.ca/
Bios/Elliot_J__Feldman>
TheTyee.ca
[Editor's note: On August 21 in Ottawa,
the Standing Committee on International
Trade heard a U.S. trade lawyer damn the
proposed softwood lumber agreement as a
terrible deal for Canadians. Elliot J.
Feldman <http://www.bakerlaw.com/
F i n d L a w y e r s . a s p x ?
Abs_Ppl_ID=c8368b77-88f4-4e5e-affc-
4749db007c08> of Baker & Hostetler LLP
argued that Canada caved at a moment of
strength, given that international rulings
continued to land firmly on our side. In-
stead, Feldman argued, this deal will kill
the NAFTA process which has favoured
Canada's position, and forfeit at least a bil-
lion dollars plus hundreds of millions of
dollars more in interest that would have
come our way had our negotiators hung
tough./
/Feldman, who is based in Washington,
D.C., offered one more bit of startling
analysis, excerpted below. The deal, he
said, will funnel nearly half a billion dol-
lars directly to George Bush's White
House, creating a political "slush fund"
available to the Republicans and the U.S.
timber industry for waging future cam-
paigns.]/
Honorable members, responsibility for
this deal ultimately resides with the gov-
ernment and with you, not the industry. It
has been forced on the industry for politi-
cal reasons. No one in the industry likes it,
but many believe they have no choice and,
therefore, many have already accepted it.
I want to talk for a few minutes about the
genesis of this agreement and one of its
most important and least discussed ele-
ments. There is a bit of Watergate in this
story and, as in Watergate, it is essential to
follow the money. Back before Christmas,
David Emerson, then minister in a Liberal
government, and his ambassador in Wash-
ington, Frank McKenna, were asking what
it would cost to buy peace in softwood
lumber. They were adhering to all of the
usual Canadian negotiating positions on
this subject: protecting Chapter 19 in
NAFTA, fending off onerous anti-
circumvention clauses, protecting Cana-
dian prerogatives. But, unlike any previous
dispute, this one involved the accumulation
of over 4 billion, now 5 billion, dollars.
And there was the Byrd Amendment,
which led the U.S. industry to believe that
if it could just stall long enough to wear
down the Canadians, while claiming title to
all of the money, they could settle for a lot
of it. They knew the Canadians had
brought a case in U.S. courts that could
prohibit them from claiming any of the
money pursuant to the Byrd Amendment.
They demanded a 60/40 split back at
Christmas.
Messieurs Emerson and McKenna nego-
tiated to 50/50 and then asked industry.
Industry calculated net present value
against litigation prospects, and said "no."
But, in the process, Messieurs McKenna
and Emerson asked what would be enough.
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At that time, under those circumstances,
they were told 70%. Think, then of how
impressed Mr. Emerson was with himself
when in April, he could tell industry that
he got 80%. But, there were at least four
huge problems, and he had neglected all of
them.
*'Legally entitled
to not a penny'*
First, on April 7,
the United States
Court of Interna-
tional Trade ruled
that the U.S. industry
was entitled legally
to no money. None
of it. It was not sur-
prising then, that 20
days later, the U.S.
coalition said that it
would take $500 million. It was hardly a
negotiating triumph to persuade them to
take $500 million, when they had become
legally entitled to not a penny.
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Second, net present value at the end of
April was not the same as it was at Christ-
mas, especially as the pot kept growing.
Canadian industry had in mind a fixed sum
for the coalition, maybe as much as $150
million, not half a billion. Third, it was not
quite as obvious in the two and a half page
term sheet of April 27, that Canada would
give away everything that the previous
government had been defending in order to
complete a deal, because political priorities
had changed so radically. And fourth, the
term sheet promised a major joint initiative
to improve North American competitive-
ness. The "remainder" -- that was the word
the terms said -- would go to so-called
"meritorious initiatives" in the United
States.
Industry was troubled by this last devel-
opment. It wondered why it was providing
foreign aid to the United States, but it was
also reassured that the sum would be small.
More impressively, Minister Emerson told
CEOs that, as long as they were getting
back 80 per cent of their money, it was
none of their business what would happen
to the rest. He was, by all accounts, very
blunt on this subject. And, meanwhile, we
were advised by negotiators that the White
House had taken a direct and active interest
in this money, but that Canadian industry
ought to focus on other things. As the min-
ister had said, it was not really their con-
cern. The "remainder," then, became $450
out of $500 million dollars.
*'Gift of $450 million to the presi-
dent'*
That, honorable members, is a colossal
sum of money. It certainly got the U.S.
government, as well as the coalition getting
the other $500 million, committed to the
deal. It is astonishing how little, nothing
really, the Canadian Government got in
exchange for it. And let's understand this
money -- the $500 million -- not the coali-
tion's money, about which you heard some
on July 31, but the rest.
Some perspective. At the height of the
Commissions Are
Negotiable:
Call Linda Bawn
Watergate scandal, focus was on an illegal
slush fund available to the Committee to
Re-Elect the President, that was thought to
be tipping the balance of American poli-
tics. The fund never exceeded $20 million.
One
of the articles
of impeachment against Richard Nixon
was that he received foreign campaign do-
nations, perhaps as much as $50,000. Both
by statute and by the U.S. Constitution,
gifts of money to the U.S. must go to the
treasury and be appropriated by Congress.
The lone, aberrant and still controversial
exception has been money donated in the
immediate aftermath of the emergency cre-
ated by Hurricane Katrina, and the sums
involved were very small.
So, here we have the government of Can-
ada requiring that Canadian private parties
sign over $450 million to an escrow fund
slated to be conveyed to the White House.
The agreement does not mention Congress,
and the Bush administration says that Con-
gress will not be involved in any way with
this agreement. The government of Canada
thus is making a gift of $450 million to be
spent by the president. That was more than
a belt buckle, even more than a stetson, on
July 6th. There is only one date certain in
the deal: that the planned expenditure of
the $450 million must be determined by
September 1.
*Political blowback?*
Curious, that date, which traditionally is
the kick-off for campaigns in the United
States in election years. Yes, it's an elec-
tion year, and the Republican control of
Congress is considered in trouble. The en-
tire Republican campaign war chest is less
than $300 million. Canada will add to it by
150 per cent in funds to be expended for
"meritorious initiatives." It does not require
much imagination to foresee the strategic
places where this money will be spent.
This peace on softwood lumber will
probably not improve Canada's relations
with the United States, because this colos-
sal sum of money is going to the White
House, not the U.S. Treasury. When the
Democratic party learns of it and under-
stands it, it's not likely to be pleased, and
it's possible that, despite the infusion of
such money, the Democrats nevertheless
will win in November. Canada may then
have much improved relations with the
Republican party but not with the United
States.
/During questions following Feldman's
presentation, NDP MP Peter Julian <http://
www.parl.gc.ca/information/about/people/
k e y / b i o . a s p ?
Language=E&query=18594&s=MTK>
(New Westminster/Burnaby) noted the
"quite a staggering revelation that the fund-
ing of $450 million would be, if I under-
Office: 416 391-3232 Ext. 4
Direct Line: 416 704-2119
Fax 416 391-0319
linda@lindabawn.com
www.lindabawn.com
stand it, under the control of the White
House; Congress would have no say and
Canada would have no say as to the
use of that money. And, hence, in a
mid-term election year we
would be giving $450 million
to a massive political fund."
Feldman responded:/
This is in my view an his-
toric, unprecedented, astounding intru-
sion into American politics. We searched
all the way back to the Revolution and
found nothing like it in American history.
And the question that I came this morning
to put is, "Will the Parliament of Canada
accept responsibility for possibly tipping
the balance in American politics in pre-
serving the control of Congress by the
president's party?" This softwood lumber
agreement is an historic moment in part
because of that proposition, and it's up to
this Parliament to decide whether it will
accept the responsibility. That responsibil-
ity cannot be shifted and, indeed, that
money inevitably will go to shore up the
electoral aspirations of the Republican
party through the president -- it's not going
to be touched by Congress -- it's going
through an escrow fund. And these are
questions that could impact American poli-
tics for generations and impact relations
between Canada and the United States for
generations to come. And that is entirely in
the hands of this Parliament.
/Mr. Julian:/ So what you're saying is that
we are not only providing money to the
coalition to fight further legal victories, for
further legal battles -- giving half a billion
dollars to them -- but we're also providing
money that may go to political purposes
for the re-election of Republicans, many of
whom have been the most adamant against
allowing free trade in lumber. It is ridicu-
lous.
/Mr. Feldman:/ The provision in Article
13.A.2 of the agreement, which recites the
meritorious initiatives, is language which
could be defined only as a slush fund for
the president.
/Elliot J. Feldman <http://www.bakerlaw.
com/Fin dLawyer s.aspx?
Abs_Ppl_ID=c8368b77-88f4-4e5e-affc-
4749db007c08> is a partner of the law firm
Baker Hostetler and represents clients in
Europe, Asia, Latin America and Australia.
He is the former director of the University
Consortium for Research on North Amer-
ica at Harvard University and is a director
of the Canadian-American Business Coun-
cil./
Right At Home Realty Inc.
———————————–
Member of Toronto
Real Estate Board
Why Do Tory Prime Ministers Sell Out?
Harper Puts Canada On Auction Block
Masse speaks cepts the advice of his officials he will a strengthening of the powers of the In- Since 1985 when the Act came into ef-
out on sug- be placing Canadian sovereignty on the vestment Canada agency to halt foreign fect, 87% of takeover acquisitions have
gested changes auction block. takeovers of critical Canadian resources been automatically approved. In almost
to weaken the “If the Minister of Industry guts the and infrastructure. 20 years, with almost 11,000 cases, not
Canada Invest- Investment Canada Act like his depart- “When the Chinese state that owned once has a foreign acquisition been de-
ment Act ment is telling him to, he will expose MinMetals was in negotiations to pur- nied. Masse points to this failure as
Windsor – NDP Canada to inevitable job losses, and chase Canada’s largest zinc and copper proof that the House of Commons must
MP Brian Masse with increased takeovers of sensitive in- producer, Noranda, the NDP raised the take action.
is calling on In- dustries like telecommunications, in- concern that non-democratic state gov- “Clearly, the Minister and his depart-
dustry Minister creased security and privacy concerns as ernments can purchase Canadian com- ment are on the wrong track,” said
Maxime Bernier well,” said Masse. “You can’t simply panies with no accountability, and in se- Masse. “They seem to think increasing
to immediately put our multi-billion dollar mineral min- crecy,” said Masse. “The Liberals, foreign investment in Canada is the way
and publicly re- ing industry up for sale. These proposed Bloc and Conservatives ignored the to a bolster our economy. What they fail
ject Department changes to the Investment Act would do issue.” to realize is that as we sell off our re-
of Industry inter- just that.” At the time of the proposed takeover, source industries piece by piece, our
nal advice to al- Masse reissued his call to have the In- Masse tabled a motion in the Industry sovereignty as a nation is also being
low increased for- vestment Act overhauled by the House Committee to aggressively review the sold. When you no longer control your
eign ownership in of Commons Industry Committee. He is act – his motion was denied by the Con- resources, you no longer control your
Canada. Masse demanding a full and comprehensive re- servative, Liberal and Bloc members of sovereignty.”
says if Bernier ac- view of the Investment Canada Act and the committee.
How Much Did U.S. Agents Promise To Pay Harper For Treason?
Harper: Easily The Most Dangerous Man In Canada
Readers know we’ve been following Canadian politics for years. ing the fact from the rest of the country they had the same ambitions for the west to sepa-
So, it’s not without real fear for our Canadian future that we print a strong headline for rate. They wanted to stop giving money to Quebec under Canada’s balance of payments
this little article. system whereby have provinces gave to those in need of supplements.
We’ve watched Harper’s moves over the past months and we have yet to see a prime Alberta has a lower universal standard of government; health care costs are much
minister who bothers to come to Toronto for a friendly visit. higher and no sales tax means no government services. Mounties are murdered at country
We’ve watched Harper visit foreign countries such as Mexico and the United States to homes where women are abused more so than in the rest of the country.
strengthen ties or weaken Canada to do it. The aim therefore is to drop the rest of Canada, reward the rich, exploit hard-working
Alliances with these two countries with the end goal of taking down our borders with Newfies who are asked to travel there after being accused of being welfare bums.
them is something that will destroy our fine Canadian standards as they are headed for As a U.S. state, Harper and Alberta will be able to live happily ever after on their oil
with our new immigrant blood giving us a vigorous new life. sands riches.
The danger is that the elites that run the country pull the rug out from under everybody We know the Reform Party was long ago infiltrated by the CIA, the Mormons (one Re-
by weakening a sense of Canadian identity. former reportedly in love with the idea of polygamy) .under the guidance of Preston
If that happens, we will be lowered to the foreign standards of the United States and Manning who travelled to Vietnam on his honeymoon to evaluate the effectiveness of the
Mexico. U.S. assassination project known as the Phoenix Program.
For just one issue — drug usage — these two countries are leaders in consumption of Later, he worked with U.S. corporations such as the infamous Rand Corporation which
drugs — whereas foreign corporations such as Japan and Korea’s car manufacturers planned atomic warfare for Vietnam and the TRW corporation which helped Preston plan
know it is safe to build car plants in Canada as opposed to the United States and Mexico. non-military peacetime versions of the Phoenix program.
One thing we have in comparison to these countries is a superior work ethic — believe Watch Mr. Harper very closely. Canada
it — in comparison to them — and we have a better standard when it comes to surviving has everything to lose and nothing to gain
mentally and emotionally without the use of drugs to get through the day. by buddy-buddy with Bush.
That is our future— not one in which we sell out to global criminals like George On the weekend we spoke with a Harper
Bush — his economists witness the fact that all the big bucks have left that country for cabinet minister who evoked political
foreign investment as there is no hope for the U.S. alarm over the Afghanistan fact.
Yet, Harper, an actual lap-dog of the United States has obviously fallen for their corrupt Why do our politicians see no harm in the
line — there is nothing in the United States which we do not have in equal or better form fact that opium production has increased
here in Canada. hugely under Canadian soldiers’ protection
Our diverse, quiet country will lose out in respect by the rest of the world if we fold to and British tanks (see elsewhere in this is-
the lying, corrupt Bush crime family whose family was charged in wartime with financ- sue) protecting opium crops.
Victor Fletcher
ing Adolf Hitler. The U.S. cannot exist without 90% of its Editor
The Israeli government has nothing but contempt for the Bushes so it manipulates that heroin being supplied by the Afghan effort. vpflet@hotmail.com
government mercilessly for billions in cash, arms deliveries and military secrets which it It’s time we started doing citizen arrests of
can sell to China for north Koreans to use as well. generals who won’t reply about
Cynically, Harper saw fit to waste an opportunity to speak to the United States and the heroin problem.
Canada by not speaking English when he had that forum. Instead, he spoke in French- How many more homeless in
Canadian in order to follow his plan to break up Canada for the western advantage to be- Toronto will be kicked to death in
come a U.S. oil state. their sleeping bags by soldiers in
He gave away Canada’s global voice to the province of Quebec — an illegal act — training?
when Canada speaks at UNESCO. He is training the world to believe Quebec and Can-
ada are on equal footing and should give Quebec a separate vote at the United Nations in 416 288-0117 Fax 416 288-0117
order to break up Canada.
His Reform Party roots show him as starting up to fight separatist Quebecers while hid-
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