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Lethbridge Herald, The (Newspaper) - October 4, 1974, Lethbridge, Alberta 1 i 1 if' 1 Manitoba project exploited by profiteers' WINNIPEG (CP) A provincial government com- mission has concluded that a plan to build an integrated forest industry in northern Manitoba with large sums of public money was hastily conceived, im- properly supervised and taken advantage of by inter- national profiteers. The three-member commission released its six- volume report today following an extensive look at the Churchill Forest Industries (CFI) complex near The Pas, Man. The report says Dr. Alexander Kasser, a naturalized U.S. citizen now reported living in Europe, developed the plan for "self-enrichment." His companies received an estimated million in excess fees, virtually all tax-free, the report says. It adds that Dr. Kasser, using anonymity and secrecy and more than a dozen corporations on two continents, had gross earnings of million from CFI and would have made more had the project not been taken over by the province. Kasser not located Criminal charges were later laid against Dr. Kasser and six other foreign nationals but Dr. Kasser has not been located and three others are residents of Switzerland which has no extradition treaty with Canada. The Swiss residents have been identified as Oskar Reiser, mentioned in the commission's report as Kasser's European agent, Alfred Robert Zingre, general manager of one of the companies hired as contractor for the project, and Kurt Wuest, represen- tative of another company owned by Three United States residents have also been charged. They are Stephen Mochary, Kasser's son-in- law, Bernard William Goldenberg, a New York law yer, and Stanley Mullette, former president of Cane- quip Exports Ltd. of Montreal. The provincial government says the U.S. state department has said publication of the report should not affect an application- for extradition of the three. The commission, which makes 36 recommendations in its report, concludes that the former Conservative government under Duff Roblin was ill advised to em- bark on a multimillion dollar venture in 1965 with vir- tually no knowledge of its partners from the private sector or their financial backing. Cabinet acted 'unwisely9 "In agreeing to deal with the representatives of un- known Swiss principals, the cabinet group acted un- wisely and laid the foundation of the fraudulent ac- tivities that later the report says. The New Democratic Party government of Premier Ed Schreyer, which paid out the bulk of funds for the project, is also criticized for not reviewing the CFI situtation sooner. The Schreyer government had the four companies at The Pas put into receivership Jan. 8, 1971, for alleged default on loan agreements after million had already been advanced from public sources. By March of this year, the government's total bill, including some advance operating capital and the es- timated cost of settling lien claims, had risen to million for fixed assets the commission values at million. Some of the major recommendations made by the commission: government agency should enter contractual arrangements with a company which refuses to iden- tify its principal shareholders, refuses -to file audited financial statements, or is located in a country where laws prohibit disclosure of shareholders; agencies should not permit a borrower to enter agreements with foreign firms or in- dividuals without first soliciting tenders from Ca- nadians; Tightened responsibility and provincial legislation should tighten up the responsibilities of auditors to improve the ac- curacy and reliability of their reports; and uses of Canadian financial agencies as shareholders for undisclosed persons should be investigated to determine their real purpose and possi- ble abuses; should be a criminal offence to make a docu- ment retroactive without making this clear to all per- sons involved and explaining the reasons; Income Tax Act should be amended to require companies to disclose transactions that are not "at arm's length." The commission of inquiry, headed by former chief justice C. Rhodes Smith, was set up shortly after the receivership action. Mr. Justice Smith, Leon Mitchell, chairman of the Manitoba Municipal Board, and Murray Donnelly, provost of University College at the University of Manitoba, spent the next 3% years attempting to un- tangle the web of detail surrounding CFI. The complex took its name from Churchill Forest In- dustries (Manitoba) Ltd., the first and largest of four companies at The Pas project..The kraft pulp mill was to be complemented with a sawmill built for River Sawmills Ltd.; a kraft paper mill under the name of MP Industrial Mills Ltd.; and the James Bertram and Sons (Canada Ltd. pulp and paper machinery plant Trudeau accused of assassinating Parliament Herald Ottawa Bureau OTTAWA Prime Minister Trudeau has been accused, in the Commons, of assassinating Parliament. The weapon, recounted for- mer Conservative Prime Minister Diefenbaker, was so- called which so "emasculated" the Commons as to leave it powerless to scrutinize government spen- ding. "It was a dagger driven into the heart of stormed Dief, reducing the Commons to the helpless status of a "House of puppets to be pushed around by the Prime Minister." Dief mounted the attack in scoring as what he termed the Prime Minister's new-found admiration of Parliament. It was the same Parliament, recalled Dief, that just yesteryear the Prime Minister had scoffed at as be- ,ing packed with MP including as Mr. Trudeau had spoken of some of his own Lib- eral members. As a result of this "death of the Prime Minister had been able, without fear of serious questioning, to spend hundreds of thousands of the taxpayers dollars to enhance his personal comfort and con- venience in the official resi- dence on Sussex Drive, at the summer lodge on Harrington Lake and in his Centre Block offices. These expenditures, protested Dief, were only a few that could be listed in the government's record of "profHate waste and ex- travagance." And now, warned the former prime minister, Mr. Trudeau with more Parliamentary "reform" would be trying to bury the corpse of the Commons. "If this kind of thing contin- he cried, "Parliament will cease to exist." Mr. Trudeau was not in the House to hear the attack, "he's always so busy elsewhere every time I laughed Dief. The Conservatives, including Tory Leader Stan- field applauded, beating their desk-tops in glee, while among the Liberals, Government House Leader Sharp shook his head as if what he was hearing was beyond reason and under- standing. Now, as a diversion to es- cape the onus on him to do something about inflation, the Prime Minister, said Dief, was turning to the repatria- tion of the constitution. The former prime minister saw this as a mockery of real- ity, for what was to repatriate about a constitution that was "written by Canadians in Can- The Lcthbridqe Herald VOL. LXVI LETHBRIDGE, ALBERTA, FRIDAY, OCTOBER 4, 1974 15 Cents 32 Pages Grain group backs rail close-out GRAINS COUNCIL REPORT DOUBTS ECONOMY OF COUNTRY ELEVATORS, SUCH AS AT WHITNEY. Energy corridor scheme shifts industry away from big cities EDMONTON (CP) An energy corridor into the oil sands area of northeastern Al- berta designed to shift the concentration of industry away from Edmonton and dis- tribute it among several smaller communities was an- nounced today by Premier Peter Lougheed. The premier told a news conference the government intends to make sure as many areas of Alberta as possible benefit from development of the oil sands. The corridor, a combination of power lines, pipelines, rail- ways, highways and other transportation systems, will swing south from refinery and petrochemical installations north of Fort McMurray, 220 miles northeast of Edmonton, to Skaro, about 50 miles northeast of Edmonton, and then east through the com- munities of Andrew and Two Hills to Myrnam. where it will turn south to Hardisty, 100 miles southeast of Edmonton. The area selected for the corridor already contains two pipelines as well as sections of highway 63. The Alberta Energy Co., a Crown corpora- tion established this year, will build a 32-inch pipeline in the corridor with construction starting in 1976. Mr. Lougheed said the corri- dor will be developed between now and 2003. Edmonton will have access to the'corridor with a connection at Skaro. "The possible deterioration of the qualify of life in Alber- ta's two major metropolitan centres because of unorderly growth, over concentration, location of heavy industrial complexes and scattered utili- ty and commodity transporta- tion systems has forced the government to the premier said. He said the corridor will be- come a preferred area for location of future refining and petrochemical plants. "All such plants and com- plexes will be restrained from using prime agricultural land. It is government policy to prevent over-concentration in any one site tending to result in saturation of the airshed and surface waters. "Widely-spaced smaller in- dustrial sites will be preferred. "No additional refineries or petrochemical complexes will be encouraged to locate in the Edmonton metropolitan area." Mr. Lougheed said existing industries in Edmonton will benefit from the initial stages of the corridor and the city will remain a major service and distribution centre. The Progressive Conser- vative government intends to hold down the price of land in the corridor. 'fluids, rest and hide the financial Inside Classified........26-30 Comics............24 Comment...........4 District............19 Family..........20-22 Local Markets...........25 Sports...........14-16 Theatres...........13 Travel.............11 Weather............3 At Home..........23 LOW TONIGHT 30; HIGH SAT. 40; CLOUDY, SNOW. V. The influential Canada Grains Council has' recommended the federal Prisoners try escape from court A glass door and police of- ficers thwarted an attempted escape of two prisoners from the provincial court house in Lethbridge today. After being informed that his case would not be heard for another week and he would remain in custody until then, Ducharme Stozier of Ontario leaped from the prisoner's box and ran from the courtroom Another prisoner. Allan Charles Parker, 19, of On- tario, also leaped from the prisoner's box and followed Stozier. Stozier was caught on the sidewalk after he ran into a locked glass front door of the building and put his foot through it. Parker was caught in the hallway by an RCMP of- ficer. Both were handcuffed and placed in city cells. Parker was remanded for an Oct. 17 preliminiary hear- ing in Medicine Hat on a charge of non capital murder in connection with the August beating death of a Medicine Hat service station attendant. was arrested three weeks ago and charged with committing about 25 break iiis in the Fort Macleod Car- mangay area. Clerides to stay in office, gets Makarios' support NICOSIA (AP) Acting Cyprus President Glafkos Cle- rides said today he has decid- ed to stay in office as a result of "significant" recent developments. He said his decision was bol- stered by statements by Greek Orthodox Archbishop Makarios and a declaration of Andy Russell applauds foothills report A report urging restrictions on coal mining in the eastern slopes of the Rockies was applauded today by naturalist Andy Russell. But Mr. Russell cautioned that the recommendations from the Environment Conservation Authority released Wednesday "can't be allowed to become just tokens." "Even the confounded prospecting for the coal has Interviews inside In order to make Lethbridge residents better acquainted with candidates seeking office in the Oct. 16 civic election. The Herald plans to print in- terviews with the 19 city coun- cil and 23 school board can- didates between now and elec- tion day. Interviews with-six persons seeking office are on page 6 today and will be a daily feature in The Herald until all candidates have appeared caused a hell of a lot of Mr. Russell said in a telephone interview from Pincber Creek. "God knows, the oil com- panies are destructive enough but these people are even worse." A coal industry spokesman was not immediately available for comment. Mr. Russell supported a stand by Opposition Leader Bob Clark that coal develop- ment permits should not be issued in light of the recom- mendations. (Additional story on Mr. Clark's charges is on page "They do a token bit of reclamation but it's the well known Southern Alberta naturalist claimed. Grass seed planted above the timber line had little chance of growing, be said. "Some scars won't heal up for years. Exploration cfald be carried out much cheaper by helicopters "and core drills instead of those confounded bulldozers. "What we must do is figure in the future costs of these things. If we're going to pay more than the coal is worth with respect to the en- vironmental damage then it's not Mr. Russell said. In its report, the authority which has studied the eastern slopes for three years, said aerial surveys and "light ground operations" should be used to explore for coal. It said government inspec- tion staffs should be beefed up to implement stricter enforce- ment of land use legislation. Known deposits of coal should be new declared as future reserves and left un- disturbed until required to service Alberta's needs, the 224-page report said. support by the House of Representatives. Makarios, currently in New York, said Thursday that Cle- rides "enjoys my confidence in the political negotiations he is carrying out and has my wdiut support- Clerides, a Greek-Cypriot, had threatened to resign un- less Makarios, deposed as president in a National Guard coup July 15. gave him a free hand to negotiate a settlement of the Cyprus problem with the Turkish-Cypriots. But he said he reached the conclusion that remaining in office "is necessary under the circumstances SMD and heard About town Marilyn Fabbro trying to quit smoking but wondering now to keep her bands and mouth occupied in tbe mean time the national anthem surviving Rex Little's pianistic assault on it A government communique said police exchanged shots with gunmen in a speeding car Thursday night five minutes before Clerides was due to drive past the spot on the way home from his office. CSA drops legal action EDMONTON