The editor of the Winnipeg Free Press provided at least one (unpublished) letter from readers critical of the Crocus Fund, directly to Crocus CEO Sherman Kreiner in Feb. 2003.
Then-editor Nicholas Hirst warned Kreiner “This letter become insidious if followed by others. It suggests there really is something wrong.”
The letter specifically alleged that the $10 Million cash infusion from the Solidarity Fund of Quebec (Fond) was “a short term loan with high interest rates (20%)” and questioned why Crocus called it an “investment” when it could be cashed in on demand.
Hirst explained his emailing the 'Letter to the Editor' to Kreiner, “as an example of one of the many letters we are receiving about your fund.” Saying he had already found it "difficult to keep such letters out of the newspaper”, Hirst admonished Kreiner “I was not being light”.
“Part of our job is to provide balance,” reminded Hirst, concluding “the only way to combat it is to continuously reply with facts.”
At the same time, the same letter writer wrote a similar email to opposition leaders in the Manitoba Legislature that was acquired by CBC.
When reporter Krista Erickson asked Crocus about the reasons for the deal with the Fond , Kreiner wrote back , “As for the inference to liquidity raised by ...., it is simply false.”
However documents before the court include the letter to the Fond requesting the money, dated August 1, 2002. The first reason Kreiner listed was “We presently face a short term liquidity challenge”.
Kreiner then listed “several causes for this problem”, and first cited lower net sales in 2002 than projected. He blamed this shortfall on “a malicious and false attack on our fund by the Finance Critic for the Conservative Party opposition just two weeks before the end of RRSP season. This became a front page story."
"In the end we were vindicated.", Kreiner assured Fond president and CEO Pierre Genest. He detailed the apology and political repercussions suffered by the Opposition, but added “the damage had been done and our sales were affected”.
In that letter, Kreiner vowed to repay the $10 million plus 7 % interest after 18 months, "even if the consequences of the redemption would place us offside our regulatory requirements regarding Reserve Funds" - in other words even if the Crocus Fund broke the law to do so.(In fact, Crocus eventually committed to pay 10% interest, not 7%, to get the "investment".)
After Kreiner misled Erickson, the next week Crocus Vice President Bob Jones emailed her, demanding to know which opposition member gave her the email critical of the Fond loan.
Jones never answered any of her questions about the financial details of the Fond deal, choosing instead to launch a personal attack on the complainant, reminded Erickson how Crocus silenced critics the year before, and changed the subject to whether Erickson was planning a similar investigation of rival labour fund Ensis.
The Great Canadian Talk Show will continue to go through the documents and report the behind-the-scenes-details the mainstream media has not.
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