Veteran Leader Refers Trust Fund Case to CBC
OTTAWA, ON, September 22, 2000 - Cliff Chadderton, Chairman of the 38-member National Council of Veteran Associations, has forwarded a letter to the CBC Ombudsman regarding what he perceives to be an unbalanced story on trust accounts held by Veterans Affairs Canada for disabled former members of the military who were hospitalized.
The text of the letter to the Ombudsman and the letter initiating the interview from the CBC producer follows.
| Subject: |
CBC's The National, Item concerning Veterans Trust Accounts handled by Veterans Affairs Canada |
Dear Mr. David Bazay (CBC Ombudsman),
The purpose of this letter is to make an enquiry, of you, as to whether it is within your jurisdiction to investigate two aspects of this program, as follows:
- The circumstances upon which I was requested by your producer to appear on the program; and
- The use by the editors of (1) statements by The Honourable George Baker, Minister of Veterans Affairs and (2) a statement by one of the lawyers made near the conclusion of the program.
Last week I received a telephone call from Mr. Larry Murray, Deputy Minister of Veterans Affairs, advising that the CBC was planning to do a story on the trust fund issue and had requested that the Minister appear. Mr. Murray informed me that, presumably because the case was before the courts, the minister either would not or could not appear.
I was advised, however, that the minister had expressed an interest in having me take part in the CBC program and Mr. Murray asked whether I had any objection if my name were forwarded to the CBC producer. I replied in the affirmative.
The producer was Mr. Stuart Coxe. The initial contact was made on Friday, September 15, 2000.
Prior to this, the minister's office had faxed to me a copy of a letter sent by the CBC producer to Ms. Janice Sommerby, dated September 14, 2000. A copy of this letter is enclosed.
In view of the history of this matter, I would be able to challenge the Minister's statement on the program, which I quote hereunder:
| CBC: |
But the government argued that, under a 1990 law, it's obligated to pay back interest accrued only after that date, not before. It's awkward for the Veterans Affairs Minister George Baker. In Opposition back in 1990, he argued against that law. Now, ironically, he must defend it. |
| Baker: |
We lost the argument at the time and, at the time, we were, I must say, not supported by the Veterans organizations. If those organizations came to me as Minister and said, look this law has got to be changed, and this law should be changed, then of course I would look at it and say, my goodness, they're the people who should be telling me what the law should be and I would take another look at it. |
My records on this situation go back to the early 1960's. Therefore, I was surprised that my researchers could not find any reference to Mr. Baker's opposition to the bill which authorized payment of trust funds subsequent to January 1, 1990, and, more to the point, prohibited retroactive payments prior to that date.
The second issue concerns the interview generally, with Mr. Dan Bjarnason, and, in particular, the statement by one of the lawyers which might well be interpreted as a criticism as to why I had not attempted to remedy the situation regarding non-payment of interest. I enclose a copy of the notes which I prepared based on the recorded interview with Mr. Bjarnason.
I found the reference by the lawyer which I inferred to be critical of me to be particularly ironic in that my reputation as an advocate of veterans' rights is well known in Canada. The producer was well aware of the fact that I would not have seen fit to protect the interests of the possible beneficiaries of the class action, in that I hold the belief that they are, in most part, extended family members.
During my interview, I had made the point that the intent of the Pension Act was to provide benefits for disabled veterans, their spouses, children and dependant parents.
There was no provision in the act to provide benefits for extended family members, many of whom would stand to benefit from the fact that interest was not paid on estates of veterans who had died many years ago.
The Committee to Survey the Work and Organization of the Canadian Pension Commission, called the Woods Committee (1965-68), of which I was Secretary, received complaints concerning non-payment of interest which were discussed with the late The Honourable Roger Teillet, then Minister of Veterans Affairs. The complaints also concerned improprieties in handling trust accounts. Mr. Teillet directed that the mandate of the Committee did not include investigations into this matter. Moreover, the Chairman of the Committee, the late Mr. Justice Mervyn Woods, stated that, in regard to the possible improper handling of accounts which might involve criminal intent, the Committee was not equipped to investigate such matters and advised the Minister to turn the matter over to the RCMP.
I fully understand that the standards which govern broadcast journalism within the CBC require a balance. It would be my view, notwithstanding, that most people would find it difficult to agree that there was an adequate balance in the program between my views as to why payment retroactively of trust funds, reputed to be approximately $1.5 billion, would represent a payment which is contrary to the Pension Act and certainly not justified, and the views of the lawyers which represent the claim of the plaintiff for payment of interest on trust funds held for a member of her family.
In this letter, I am not registering an official complaint, in that I require to do considerably more research before I would be in a position to take such action. I would, however, wish to have your view as to whether this is a subject which could properly be investigated by you.
Yours sincerely, H. Clifford Chadderton
The points raised by Mr. Chadderton in the interview, as mentioned in the Ombudsman letter above, are as follows:
- I hope the Department of Justice brings out the intent and purpose of the Pension Act which mentions veterans, children, spouses and dependent parents. There is no provision under the Act for extended families.
- Veterans organizations have been watching the situation regarding administration of trust funds by DVA/VAC practically since inception of the Act. We think it is scandalous for a Court Action to indicate that DVA/VAC was not doing its job in helping veterans.
- We cannot accept criticism of the way DVA looked after the trust funds. The Legislation was weak.
- Those who are critical are ignoring the set-off principle (see Callie decision).
- One cannot compare a trust company with DVA funds under administration. Admittedly, a trust company pays interest but it also charges for service.
- Why did the lawyers go for a Class Action? This was first raised in the Callie case. If it had simply been the niece who was the beneficiary of the estate, attempting to create an additional liability against the Crown for interest, I doubt that any individual lawyer would have taken the case on.
- Presumably, the idea was to engage the services of a high powered law firm and a PR firm because the only way the lawyers could "cash-in" would be on a Class Action suit.
- Why are we against? We realize if the case is successful it would create a large hole in the VAC budget. This is at a time when we need additional funds for Merchant Navy; Ferry Pilots, etc.... In other words, should I be fighting for distant relatives or for those who actually served, such as Ferry Pilots, Red Cross Overseas Workers, etc...?
- In answer to the question as to why the case came up now, I referred to the Auditor General's report and pointed out that NCVA had requested that interest be paid if this was going to become an issue.
- CBC interviewer said it was "ironic" that I had fought all my life for veterans benefits but was against this one. I pointed out that I did not see my responsibility as that to fight for "extended family" and in fact I was fighting for veterans to conserve the money for Merchant Navy, etc....
- I pointed out that in my correspondence with the Minister, I had suggested an appellate procedure to take care of any legitimate cases.
The following is the text of the CBC producer's letter to Veterans Affairs:
September 14, 2000
To: Janice Sommerby, Department of Veteran's Affairs
As discussed on the telephone there are a number of points regarding the case in Windsor I would be grateful if you could help clarify. I have contacted the lawyers in Windsor, but so far no luck in reaching them.
- Why did the department settle the Callie case in Calgary Federal Court?
- Why was only subsection 5.1 (4) of Bill C-87 passed into law?
- What is the legal basis for the Department placing the assets and income of a veteran under administration?
- Why was Privy Council order-in-council (P.C. 24 Feb 1919) not enacted? (It required the payment of interest on all open accounts of members of the Canadian forces who have been under medical treatment for 3 months or longer.)
- Why was the Task Force on Interest on Trust Funds (July 11, 1975) that recommended the payment of interest, not followed?
- Why did the federal government pay interest to prisoners (held in trust) and not to those under medical treatment?
- What was in the documents that the federal government moved to have removed from the record in the Windsor case (the Ottawa Citizen reported they were department of justice recommendations regarding the strength of the government's case)?
- Can we have a copy of the 1995 Treasury Board Audit of the Department? And the subsequent audit that cleared the department's employees?
- Has Mr. Baker appeared before the Commons Veterans Affairs committee regarding these audits?
- How many veterans have been in long-term care since the war?
As discussed with Mr. Hobbs, we have requested to interview the minister at his convenience next Monday or Tuesday, and we would be most appreciative of your help with our request so we can prepare the rest of our story.
Sincerely,
Stuart Coxe
Producer, The National