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ALL OR NOTHING'

MARY NEMETH October 30 1995
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ALL OR NOTHING'

MARY NEMETH October 30 1995

Harcourt’s headache

The B.C. premier is dogged by a funding scandal

CANADA

The western side of Cabriola Island is a vertical wall of grey rock stained black and orange with lichens, a forbidding rampart guarding the entrance to Nanaimo harbor on neighboring Vancouver Island. In a secluded home set among the oak, pine and arbutus that fringe the cliff top, David Stupich, 74, a former B.C. NDP finance minister, MP and federal NDP caucus leader, and his longtime companion, Elizabeth Marlow, live in gracious retirement. But over more than three decades stretching well into the 1990s, Stupich and Marlow were central figures in a clutch of closely related non-profit societies and very much for-profit private companies that operated in the orbit of the Nanaimo Commonwealth Holding Society (NCHS)—an organization created in 1954 to serve and disseminate socialist ideology in British Columbia. On paper, the goal never changed. “Our only reason for existing as a society,” Stupich wrote in a 1991 letter to its members, “is to help the NDP.” At the same time, he added: “The party owes us nothing.”

By last week, however, those sentiments were laden with heavy irony for British Columbia’s remaining socialists—not least for beleaguered NDP Premier Michael Harcourt. Far from helping the NDP, a forensic auditor’s report documenting the Nanaimo society’s record of shady financial dealings—completed four months ago but released only on Oct. 13—seemed likely to sink beyond salvation whatever hope Harcourt may have had for extending his one-term mandate past the next general election, which he must call within 12 months. Already badly trailing the Opposition Liberals in public opinion polls, Harcourt and deputy premier Elizabeth Cull faced mounting demands that they explain their shifting accounts about what they knew— a and when—about NCHS affairs. | Meanwhile, if anyone owed the 8 society anything, it appeared to $ be Stupich and Marlow themselves: according to the report of auditor Ronald Parks, the pair directly profited from their long relationship with the society. Asserted Parks: “Mr. Stupich used NCHS money as if it was his own.”

While Harcourt huddled in Victoria with his caucus to try to draft a recovery strategy, other British Columbians struggled to follow the latest revelations in a scandal that has dogged the government since

1992, and whose roots stretch back more than 20 years. By the mid-1970s, the NCHS had struck a fund-raising gold mine in the form of provincially licensed bingo games supposedly held to raise money for charity. But instead of donating its profits

to charity, as required by B.C. law, Parks found that the NCHS, under Stupich’s direction, diverted as much as 80 per cent of the millions of dollars it earned to other purposes. The lion’s share went to pay off debts the society incurred when several ill-fated commercial real estate investments in the Nanaimo area turned disastrously sour following the 1981-1982 recession. But, according to Parks, hundreds of thousands of dollars also went to companies controlled by Stupich, his sister Marjorie Stupich, and Marlow.

Still worse for Harcourt, however, was Parks’s revelation that questionable transactions involving the Nanaimo society extended into the highest echelons of the provincial NDP. Among other things, the NCHS diverted $56,646 earmarked for charity to a party newspaper and disguised the source of hundreds of thousands of dollars in corporate donations. In fact, Parks noted, the society often “acted as a bank for the NDP,” a relationship that continued until as recently as 1993, when the party repaid the NCHS

more than $60,000 for the money that it had diverted a decade earlier to the party newspaper. That transaction, said Parks, was disguised as an educational grant.

Parks’s disclosures contradicted months of denials by both Harcourt and Cull that any such links existed. In fact, just hours before the auditor’s report was released— on the order of a B.C. judge responding to a petition from several Vancouver news outlets—Cull stood by the same claim, insisting: “There were no transactions, no money coming from the NCHS to the party.”

With those assurances now in tatters, New Democratic Party loyalists were in some-

thing close to shock as they absorbed the full political implications of Parks’s report. And, not surprisingly, widespread speculation about an autumn election call evaporated after Harcourt last week abruptly ruled out a vote any time soon.

For his part, Stupich has not been charged with anything related to his dealings with the NCHS. However, documents filed in a Vancouver court in support of a police application for a warrant to search NDP offices in Burnaby, B.C., on Oct. 12 revealed that the RCMP suspect him of more than two dozen fraud-related violations of the Criminal Code. Still, contacted at his home, Stupich himself seemed to be in good humor despite the allegations against him. Citing his lawyer’s advice, Stupich restricted himself to the briefest of comments. “I do not want to do anything to make it harder for [the party] with an election due,” he told Maclean’s. “I still am a New Democrat, and I support the government.” In light of the week’s events, it was support that Harcourt must fervently wish the party stalwart had withheld.

CHRIS WOOD

JOHN PIFER