Sins of (the) Commission
The Financial Services Commission of Ontario is one pathetic excuse for a regulatory agency. We know that sounds harsh but, hey, if the boot fits, use it.
We've had our doubts about the FSCO's commitment to the public interest for a while now. The recent news - that it's going to delay the release of the follow-up to its May 2005 report about the UFCW's beleaguered pension plan so that pension trustees can see it first and comment on it - pretty much confirms our worst suspicions. At best the FSCO is a multi-million dollar taxpayer-funded babysitting service for miscreant pension trustees. At worst, it's been co-opted by a group of greasy trustees and is looking after their interests.
The May 2005 report left us with the uneasy feeling that the pension regulator wasn't anxious to hold the CCWIPP crew accountable for pissing away millions upon millions of pension plan members' dollars. A lot of members have been waiting a long time now for the release of the promised follow-up "addendum" which is supposed to announce what the regulator intends to do about the law-breaking it uncovered during its two-year investigation of the pension plan. Making the members wait around indefinitely because pension trustees were promised a sneak preview of the document is a big slap in their faces. How is it that a regulatory agency's obligations to the public take a back seat to its promises to the subjects of its investigations? What were they doing making those promises in the first place? These guys need to get their heads out of their asses.
It's not like there isn't some urgency to this. According to the FSCO's own findings, hundreds of millions of dollars have been sunk into investments that are the equivalent of a truckload of magic beans. Money continues to pour out of the pension plan to shore up failing and failed investments. While the CCWIPP boys and their business buddies continue to pretend to play business tycoon, the members are taking hit after hit. This past year alone, pension accrual rates were scaled back by 20%. CCWIPP's transfer ratio has slipped from a troubling .61 to an even more troubling .58 (members who want to transfer their pension out of CCWIPP will only be able to transfer 58 cents for every dollar). The wind-up solvency deficiency is now a whopping $700 million! Good to see that things have really been getting a lot better under the watchful eye of the pension regulator.
And the news keeps getting worse. This past month alone CCWIPP members were treated to one story after another about their pension trustees continuing misadventures.
A $100 million lawsuit by former CCWIPP cronies alleges that CCWIPP kingpin Cliff Evans was playing the FSCO for a bunch of idiots when he told told them that he was working hard to unload the defunct Bahamian South Ocean resort into which millions of pension plan members' dollars continue to pour.
Evans quietly buggered off from the Board of Trustees before that story broke - about the only good thing he's done for CCWIPP members in his long and sleazy tenure.
Here's another report about the lawsuit from the Nassau Tribune Buyer Unveils Lawsuit Against South Ocean.
Here's the lawsuit itself: Case Financial v. Evans et al.
On the heels of all of that good news there was more good news. Another lawsuit. This time from a Bahamas development company that is seeking to repossess the South Ocean Resort's Golf Course. If these guys are successful, the CCWIPP boys can kiss their resort and the millions that have been "invested" in it good-bye.
But hey, why would the regulator care about that? Its job isn't to enforce the law but to help bring the plan back into compliance by keeping the members in the dark and giving the trustees a head start on their next damage control project. Funny - we thought it was the pension trustees' responsibility to bring the plan back into compliance with the law. How the regulator is going to do it for them is a mystery - particularly when the trustees don't seem to give a shit about the law. At any rate, we're glad the FSCO doesn't build rockets.
So here we are. Three years after the regulator began its examination of the pension plan; a year after its draft report was presented to the trustees; six months after the official report was released and things are going from bad to worse. The pension plan is mired in lawsuits and repo men are lurking in the bushes. But rather than acknowledge that and take swift and appropriate measures to stop the bleeding and hold the trustees accountable for their actions, the regulator is withholding information from pension plan members so that the CCWIPP boys can see it first and comment on it.
This is shocking behaviour for a government agency that is supposed to be acting in the public interest. If the follow-up report is complete then the members have a right to see it. By withholding this document from them, the FSCO has demonstrated a shocking disregard for the rights of pension plan members and an equally shocking inclination towards sucking up to pension trustees. The delay in releasing the report and the sneak preview provided to the trustees serves no purpose other than to give the trustees some lead time to spin doctor the FSCO's findings and to continue to misrepresent the sad state of the pension plan to CCWIPP members.
The opportunity for the trustees to comment on the follow-up report before its release to members is that much more troubling when we consider that trustees' comments to the May 05 report actually ended up in that report. Check it out:
It should be noted that the administrator has rightly pointed out the "the FSCO Draft Report failed to take note and acknowledge that in 2001 the Board of Trustees actively began focusing their efforts on rebalancing the CCWIPP investment portfolio so that a greater percentage of the Fund's assets would be under the management of professional Investment Managers. In this regard considerable work has been undertaken by the Board through the divestiture of Trustee Directed Investments and Propco Corporations resulting in over $200,000,000 being returned to the CCWIPP to date".
It is acknowledged that the Board of Trustees did take steps in April 2001 to focus on the active rebalancing of CCWIPP. It is further acknowledged that the Board continues to take steps to move a greater pecentage of the assets to professional Investment Managers. ... In addition, the adminstrator has taken steps to establish new procedures for the oversight of these investments."
WTF? Since when does a regulator allow the subject of an investigation to contribute material to a report of findings? Maybe instead of lauding the trustees for finally putting half of the pension fund in the hands of professional investment managers the FSCO should be asking why the hell half of the pension fund wasn't in the hands of professionals to begin with. If over $200,000,000 has been returned to the pension fund since 2001 why has the solvency deficiency grown larger since then? And as far as those "new procedures" that the CCWIPP administrator is supposedly taking for the oversight of investments, all we can say is: What new procedures? Did you idiots read your own report? There are no procedures and those that exist aren't being followed. Thanks for taking the CCWIPP boys' word for it you regulatory dimwits. Good to see you earning your six digit salaries.
Bad enough that the CCWIPP boys got a draft of a report about their pension plan months before the members were able to see it. It's painful to see the trustees' self-serving (and not particularly accurate) comments included in the official report. It validates their lame-assed efforts at damage control by giving them the FSCO seal of approval when what they really needed was a good regulatory boot in the ass. Now FSCO officials are once again going to provide the CCWIPP boys with an opportunity to add content to a regulator's report. We can hardly wait to see what flights of fancy will the administrator will rightly point out this time around.
We have to wonder what's motivating FSCO officials to allow the CCWIPP crew, which has heaped scorn on the May 05 report and thumbed its nose at the regulator on a regular basis since its release, to call the shots about when the follow-up report will be released and contribute its comments about the report long before it is released to the members. This is behaviour that can't be explained by mere stupidity or ineptitude. This is collusion of the most appalling sort.
Whatever the reason for its collusive behaviour with the pension trustees and against the interests of the pension plan members, the FSCO has proven itself both incompetent in carrying out its mandate and unworthy of the public's trust. The officials responsible for the suppression of the report should be fired from their six figure jobs and the money thus saved handed over to CCWIPP members as partial compensation for losses incurred while the regulator was busy sucking up to their trustees. A major review of this corrupted government agency is badly needed complete with a housecleaning of the overpaid louses who have made it that way.
While the FSCO is busy helping the trustees to cover their tracks, the recipients of their largesse continue to live large, like the Pension-Fleecing Pervert to whom they've given about $280 million dollars at an ROI of ...well, who the hell knows. It's a number less than 0 whatever it is.
The pension plan members have been waiting a long time now for the FSCO to enforce the law. Having found that the CCWIPP crew broke the law, over and over again, the members are waiting to see what you're going to do to enforce the law.
There's absolutely no reason for the regulator to sit on the report and even a half wit could figure out why the members are just as entitled to see it first. The only reason they could possibly have for delaying its release even further is to protect the CCWIPP crew's and possibly their own hides from the righteous anger of the members and the scrutiny of the media. But then again what should we expect from a regulator that gets told what to do by pension administrators and their lawyers. Shame on the whole disgraceful lot of you.