In March, 2011, then-city finance director Cathie O’Toole told Halifax council that city officials had improperly advanced a series of loans to concert promoter Harold MacKay, that those loans violated the city charter and the city’s rigorous financial controls and that the city was left holding the bag for $359,550. The next month council adopted the 2011/12 city budget, but leaving the concert bill unresolved.
A June report by auditor general Larry Munroe spelled out the the impropriety, and in December The Coast published further details with documents gathered through the freedom of information act. From 2008 through 2010, a total of $5.6 million was advanced to MacKay’s company, Power Promotional Events. The loans were arranged by top city bureaucrat Wayne Anstey and mayor Peter Kelly, with the assistance of Scott Ferguson, the president of Trade Centre Limited, a provincial crown corporation.
In fact, it was Ferguson who suggested the loans in the first place, even though an auditor had previously reprimanded Ferguson for using a similar scheme to finance a hockey tournament promoter. The plan hatched by Ferguson worked like this: Tickets for Common concerts were bought through Ticket Atlantic, a TCL division; that money was advanced to MacKay to put on the concerts, and guaranteed with an obscure Metro Centre bank account nominally owned by the city but managed by TCL.
The scheme was extremely risky. If a concert was cancelled, the city could potentially be out both the money it advanced to MacKay *and* an equal amount for ticket refunds. At one point the risk was nearly $8 million, yet no one in city hall even knew the Metro Centre account existed, and council never approved the loans. In the end, the last two loans went belly-up, and TCL presented the city a bill for $359,550.
Furthermore, Munroe’s report showed that TCL had taken ownership of Ticket Atlantic from the city in 2006, without any authority to do so. “There is no documentation available showing the change---with respect to Ticket Atlantic---was officially approved by HRM, Regional Council or the TCL Board,” he wrote.
In the wake of the revelations, Anstey took early retirement. Incredibly, neither Kelly nor Ferguson have suffered any consequences whatsoever for the scandal, and Percy Paris, the minister for economic development, has said that he has “great confidence” in Ferguson, who Paris says did “a wonderful job.”
Before he was allowed to put on last year’s Metallica show, the city collected $38,000 from MacKay, supposedly to pay back some of the lost money. But neither the $38,000 nor the $359,550 was accounted for in the 2012/13 city budget passed by council just three weeks ago, and TCL still lists the full amount as outstanding.
Asked about the unaccounted-for money, city spokesperson Shaune MacKinlay says a staff report on the concert money will be “going to council soon---hopefully within the month.”
In his auditor’s report, Munroe had suggested that the city could mount a legal challenge TCL’s claim. Munroe also said that he was going to conduct a follow-up investigation examining the relationship between TCL and the city, specifically with regard to the ownership of Ticket Atlantic. The results of that investigation have yet to be published.