Hudson Mews v. Portland Hotel Society

I was reminded of this item from July 2014 after hearing Michael Campbell’s latest rant on CKNW. He suggested too little attention had been paid to inappropriate spending at the Portland Hotel Society but, as usual, Campbell ignores an even larger landscape of fraud and potential fraud.

Ideologues like Campbell pretend outrage when social agencies perform badly and public funds are misspent. However, if billions of dollars are transferred from the public sector to business through grants, subsidies and tax expenditures, the indignation vanishes.

We might wonder why an ideologue like Campbell stayed on air throughout the death spiral as NW slipped from Top Dog to Mangy Mutt in Vancouver’s radio wars. His survival demonstrates media owners have a wider set of goals than earning profits from one segment of their asset portfolio. Corus Radio may not earn the profits it once did from NW but the billionaire Shaw Family has more important objectives. Most of its business is conducted in government regulated oligopolies and serving special interests comes with that territory.

The same principles apply at Postmedia, the publisher of many of Canada’s important daily newspapers. The company – whose beneficial ownership is held by American hedge funds – has partnered with operators that annually extract and export tens of billions of dollars of natural resources. Controlling the public dialogue on resources is critical to continuing the status quo. If that takes a few hundred million to fund a money-losing newspaper empire, it shall be done.

* * * * *

The Code of Ethics published by the Society for Professional Journalists includes, among others:

  • Be vigilant and courageous about holding those with power accountable.
  • Deny favored treatment to advertisers and special interests and resist their pressure to influence news coverage.

Is the pro-media of British Columbia guided by those or similar principles? Consider the following.

When insiders at the Portland Hotel Society were caught misusing tens of thousands of dollars provided them by public agencies and donors, outrage echoed for weeks and heads rolled at the PHS. I did a Google search tonight, using the phrase,

“Portland Hotel Society” audit.

The search engine returned 165,000 results. Among the first listed were numerous items by Postmedia, Global TV and CBC. Even a release produced by was near the top of the Google search page. Undoubtedly, the PHS story deserved wide coverage. That occurred and I have no objection.

Has the same diligence been applied respecting the powerful Ilich family’s Townline Group of Companies and parties also associated with the Portland Hotel Society affair? Those others are Cabinet Minister Rich Coleman, BC Housing and auditors acting for the public. I did a Google search, using the phrase,

Townline “Hudson Mews” audit.

Hudson Mews

The search engine returned one result. That was Bob Mackin’s article at The Tyee, Internal Audit Slammed BC Housing Deal in Victoria. He wrote about Rich Coleman’s plan for BC Housing to invest $32.8 million in a decidedly upscale Victoria housing project being developed by people the Minister knew well,

…But a May 13, 2011 Internal Audit and Advisory Services report released to The Tyee via Freedom of Information tells a different story. The report said auditors rejected B.C. Housing’s claim that Hudson Mews would improve directly or indirectly social housing in Victoria. It concluded that the project would expose the province to “significant and unnecessary financial risks.”

“B.C. Housing was prepared to go forward with this project despite the fact there were significantly unresolved issues with respect to the project’s financial viability,” said the report. “Further, B.C. Housing management knew of these issues, but appeared undeterred in proceeding with the project.”

…The executive summary said auditors found the Townline-retained appraiser overstated the property value by approximately $900,000, leading to a public perception that the province was receiving a substantial discount on the announced $4 million land purchase.

In fact, the province was receiving a discount of less than $100,000 in exchange for the direct award of the management contract to TLHS.

So, if the overstatement of value uncovered by auditors was close to a million dollars, the obvious conclusion is that Hudson Mews was potentially a financial controversy far larger than that involving the wayward Portland Hotel Society. If that’s the case, why is it only covered by one independent investigator?

If mainstream media’s political reporters were truly vigilant and courageous about holding those with power accountable, they’d have been all over the Hudson Mews story before one under-resourced freelancer could get his laptop warmed, even though he is the most diligent and feared public affairs journalist in the province.

If Postmedia didn’t offer favored treatment to advertisers and special interests, it might have had one of its non-conflicted political reporters working on Hudson Mews. But then, the publisher of BC’s largest daily newspapers seems determined to follow its current business plan for whatever time is has left before the Trustee in Bankruptcy arrives.


Categories: Journalism, Postmedia

25 replies »

  1. Norm, I read Bob Mackin's story the other day but what I couldn't figure out was how much if anything the Province lost on this deal ? From my understanding of the story, the Province backed away and the project went on without Provincial assistance. Am I wrong ?

    Guy in Victoria


  2. Code of ethics you say? Sorry that went the way of the Dodo bird.

    At one time in history, if a cabinet member of a government, which his/hers department were found to have screwed things up, that government member would resign from cabinet on a point of honour. No written rule but a code of honour.

    This code of honour lasted until Glen Clark's reign (Harcourt resigned over the bingo fiasco which he had no part in), then with Fastferries in mind, the honour system quickly eroded and when Gordo had hia Maui wowie, the code of honour disappeared altogether.

    Codes of honour are not written laws but a code where an honourable person will vacate him or her self one position if a major transgression takes place. With Gordo, came the era of government and corporate gangsterism, where friends and government insiders raped the province and the provincial treasury with impunity as he age of honour is now only a footnote in BC's history.

    A code of ethics is just a scrap of paper unless it is backed up by law.

    One doubts that that will ever happen.


  3. I cringe whenever I have a chat with some of the folks I encounter, folks who get their information from PostMedia and such. When does the bubble pop? Thanks tor doing this.


  4. “Should” is the key word in the journalists' code of ethics. It occurs nine times in the document.

    In my work on bargaining teams for local teacher contracts, “should” was known as a weasel word that had no strength in contract language (or law.) “Shall” and “must” are far more direct and powerful.


  5. Agreed. When groups write their own rules, they tend not to be onerous. Even when the CBC Ombudsman found that Legislative reporter Stephen Smart was in conflict, the CBC kept him in place and let him report. They pretended there was no conflict. Not a single member of the Press Gallery ever referenced the situation.

    The Current on CBC Radio did a broadcast that discussed conflicts of Mansbridge and Murphy taking payments from the oil industry but the show's host admitted that she too has taken payments from other than her employer. That shows how common the situation is. CBC couldn't even do a show about financial conflicts without using a host who may have been in conflict.

    Similarly, Corus Radio allows Sean Leslie to report and comment on the Liberal Government without advising listeners that Leslie's spouse is a communications manager for the Liberal government, appointed outside the Public Service Act, which is typical of political appointments. Nor has Corus, Global or Postmedia required any of Good, Palmer and Baldrey to report that they receive payments from groups with direct interests in the issues they cover.

    That conflicts continue unresolved does not mean that we should excuse them nor stop reporting on them.


  6. Bc Liberals a lot less than 6 degrees of separation”
    Esp with media revolving door ,overlapping pay checks that beg conflict of interest.


  7. You are right that the deal was cancelled. In the times before the 2013 election, which many expected Liberals to lose, a number of deals were thrown into the hopper by insiders who thought their opportunities to extract money from the public purse were going to disappear. I've been told that apolitical civil servants blocked the worst of these but some paid a price, post-election.

    After Coleman went public with his plan for BC to invest $34M in the Hudson Mews development, a number of complaints were raised within the civil service. It was obviously an ill suited plan for an agency with a long list of people waiting for basic, affordable housing to be investing in a large upscale residential development near downtown Victoria.

    Although this project was blocked, Rich Coleman's reputation stayed intact. He is still a go-to-guy for people seeking special treatment from the provincial government. Don't you feel lucky he's involved with negotiating LNG subsidies?


  8. Thanks Norm…….. & you're right about Coleman. I've been keeping a file on this guy because sooner or later he will be exposed in a way that even he will not be able to cover up. I hope that day is soon.

    Guy in Victoria


  9. Norm,

    If you keep up with your vigilance, when the change comes to responsible professional reportage in BC, you will be singled out at the vanguard of the group of independents who made it happen.

    I couldn't help but draw a parallel between the Hudson Mews lack of reportage and the issue of Alex Tsakumis going dark for most of half a year now. I suspect many of the top bloggers are aware of what happened or have the contacts to find out, but I have read little if anything on why/how we lost him.

    There are precious few of you indepent reporters who write well and do their homework before publishing, and when we lose one of you we are all diminished.

    I believe there is a story out there that is worth the telling.

    With respect,



  10. Speaking of conflict…Ombudsman Lapointe found that CBC's Stephen Smart was in a conflict…love to see that little crack open up between Liberal-lite and Liberal-Nocred servants.

    July Morning


  11. The BC NDP is not in bed with the MSM the way the Socreds and now renamed BC Liberals are. The are bosom buddies and work for each other. I remember when Marjorie Nicols wrote for The Van. Sun. She was extremely good at analyzing BC political life. Now we have softball “journalists” that just repeat the spin they get from the politicians. I also remember reading about I F. Stone. He was an American journalist who wrote very accurate analyzes of politicians. He was told to “cool it” or else. He left the MSM and started his own newspaper, “The IF Stone Weekly.” It was a very accurate analysis, with no interviews, so no BS. And it became quite popular. We need better reporting rather than a bunch of “Yes Men.”


  12. I am presently reading a very interesting book titled “Necessary Illusions” by Noam Chomsky. It was published in1989. Its subtitle is “Thought Control in Democratic Societies.” Here is a paragraph from page 10.
    “Case by case, we find that conformity is the easy way, and the path to privilege and prestige; dissidence carries personal costs that may be severe, even in a society that lacks such means of control as death squads, psychiatric prisons, or extermination camps. The very structure of the media is designed to induce conformity to established doctrine. In a 3 minute stretch between commercials, or in 700 hundred words, it is impossible to present unfamiliar thoughts or surprising conclusions with the argument and evidence required to afford them some credibility. Regurgitation of welcome pieties faces no such problem.”


  13. Coleman was the supposed champion of providing housing on the downtown eastside through having the province buy and renovate existing SRO fleabags. I wonder how many of those hotels were taken off the hands of BC Liberal supporters by the government because they had become money-pits with no escape. Particularly the ones acquired just before the 2010 Olympics when the pressure was on for those owners to clean up.

    How did the government know they were for sale? Who owned them? How many were advertised for sale before the government bought them? What was the asking price? How close to asking did the government pay? If they weren't for sale, how was the price negotiated? Who else bid? Was the government the only bidder? Were there any political relationships between the owners and the government (i.e. donations) before or after the sales? How many rooms did this actually add for those in need? How many of the hotels have been renovated to date? etc.etc.
The BC Liberals don't do anything unless it will benefit their supporters. And their supporters sure don’t live in SROs.


  14. Highlight and click on the link Paul provides. The excellent article (a description that applies to all work with the Willcocks byline) includes this:

    “It's kind of a private-public partnership in reverse. The risk transfer is to taxpayers, not the private partner.”

    That's a style of business that Coleman has come to enjoy and he's applying the same principle in negotiating LNG deals.

    The only question is, “Why?”


  15. Actually, the only question is “Where?” as in “Where are the untraceable foreign bank accounts that go along with this business style?”


  16. I've no way of confirming but I did hear a while back that Alex was aiming for a Conservative Party nomination to run in the 2015 federal election. It may be that he will emerge with a new kinder, gentler version of self: Alex 2.0


  17. I have always wondered just how much monies the Campbell clan made with the sale of BC Rail( lands)?
    The Campbell clan are speculators not developers or investors.
    I listen to Michael Campbell through morbid curiosity, he has little else to offer.
    All too often his “financial” opinion is nothing less that political posturing & smoke screening for the establishment.


  18. This reminds me of a history of the Holocaust I just finished reading. One of the questions the author asked is how could a “civilized” nation like Germany do such a thing? He concludes one of the big factors was how the Nazis had total control of the press, pushing only one point of view and suppressing all others, effectively brainwashing the populous. Now substitute “free market fundamentalism” for “antisemitism” and the parallels become clear.


  19. Why can't one ferret out the original offering for the 'sale' of BC Rail to find out just what it included. I understand there was a certain amount of land that was included in the package (with the exception of the rail bed). Then one should be able to determine what has happened to that land?
    Is there any evidence that BC actually received the “Billion Dollars” from the transaction? I understood it was somewhat compromised by a Federal tax exemption. It would be interesting to read a final analysis of that travesty now that the dust has settled. Or has it?


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