VSE fan Lawson's opponent revives Carter-Ward memories
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Wed 8 Dec 99 Street Wire
by Brent Mudry
PRESTON MANNING AND REFORM PARTY UNREPENTANT
The honourable Senator Ed Lawson's high-stakes Internet libel suit against
Preston Manning and the Reform Party of Canada may prove to be a costly
affair for the opposition leader and his party. In an 18-page decision
released Wednesday in the Supreme Court of British Columbia, Madam Justice
Linda Loo dismissed the Reform Party's petition to compel indemnification
by Western Union Insurance Co., its general insurer.
The judge ruled that the Reform Party's Senate reform Web site, which upset
Mr. Lawson so much, is not eligible for policy coverage for a "personal
injury" or an "advertising injury." "The posting of the Senate Scandals
article on the Web site was not intended to promote the petitioner's goods,
products or services, but was more in the nature of publishing or
broadcasting a political message and public policy positions on Senate
reform," ruled Judge Loo.
Mr. Lawson, a seasoned follower of Howe Street deals, was particularly
distressed to find himself featured in an unflattering list of alleged
Senate scandals, amid the Reform Party's move to abolish the present upper
house in favour of a "Triple-E Senate," that is elected, effective and
equally represented across the country. Judge Loo notes the honourable
senator was targeted for his appearances more than a decade ago in the
Carter-Ward scandal, which helped earn the Vancouver Stock Exchange the
moniker of Scam Capital of the World, and in the Teamsters corruption
scandal.
Mr Lawson's Vancouver lawyer, Vince Orchard, filed suit on June 15, 1998,
claiming he had been "seriously injured in his character, reputation and
standing and has suffered damages." In their defence, the Reform Party and
Mr. Manning claimed the unflattering portrayal of Mr. Lawson was based on
numerous critical articles in the media, either privileged or unprivileged,
and the Web site's broad attack on alleged Senate scandals "constituted
fair and reasonable comment."
The Reform Party's legal plight worsened on Nov. 2, 1998, when Western
Union sent an official letter denying coverage. "Unfortunately, the
commercial general liability policy purchased by the Reform Party
specifically excludes coverage of libel or slander," stated casualty
analyst Christine Olenick. The Reform Party subsequently filed a court
petition on April 30, in a bid to force its insurer to underwrite its
defence of the Lawson suit. Judge Loo's ruling comes five weeks after a
one-day hearing on Nov. 1, which pitted Reform Party lawyer David Donohue
against Western Union's lawyers, Bruce Butler and Jonathan Meadows.
In his statement of claim, Mr. Lawson took offence at the Reform Party's
three-sentence summaries of his Carter-Ward linkage and his Teamsters
tenure. "(March 1989) Lawson, former Canadian Teamsters union leader, was
involved in the U.S. government's anti-corruption lawsuit against the
Teamsters. Lawson and two other high Teamsters officials were removed as
defendants from the case after coming to an agreement with the government.
The Senator agreed not to obstruct the case at hand and to support efforts
to clean up the union by endorsing electoral reform and discpliinary
reform," stated the Reform Web site, quoted in both Mr. Lawson's claim and
Judge Loo's decision.
Although corruption in the Teamsters union is legendary, the offending
passage did not note that the United States government never presented any
evidence alleging Mr. Lawson was involved in any corruption himself. This
point was indirectly confirmed by Mr. Manning and the Reform Party in their
identical defences, which quoted a series of magazine and newspaper
articles on the Teamsters and Carter-Ward publicity of the senator.
"In fact, none of Lawson's colleagues, former or current, suggests that the
senator was involved in any of the corruption that infected the highest
ranks of the union," stated Macleans magazine in a March 23, 1992, piece.
The magazine article also included critical comments from Teamsters
grassroots reformer Diana Kilmury. "I was a rank-and-file member, and I
knew what was going on. How could he be sitting on the general executive
and not be aware?" Ms. Kilmury asked.
In the five-page claim, Mr. Orchard alleged that the Reform Party's
reference suggested that Mr. Lawson was "guilty of corruption in his
capacity as an officer and director of the Teamsters," that he "engaged in
criminal or unlawful conduct," that he "condoned criminal or unlawful
conduct by others," and that he "escaped criminal conviction by plea
bargaining with the U.S. government."
The Reform Party's Howe Street summary was more blunt. "(March 1988)
Lawson's name was used in one of the many alleged stock manipulation
tactics employed by promoters Ed Carter and David Howard Ward in 1984-85.
It was alleged that the promoters manipulated 15 stocks on the VSE in 84-85
and then paid $1.4 million in bribes to fund money to buy the stocks. It
was mentioned in court that in exchange for free trips on the Teamster
union jet, Lawson received free stocks in companies Carter and Ward
promoted," stated the offending Web site.
In the defamation suit, Mr. Orchard alleged the Web site summary suggested
that Mr. Lawson "manipulated or participated in a scheme to manipulate the
prices for shares of companies listed for trading on the Vancouver Stock
Exchange," that he "received bribes to purchase the shares of companies,"
and that he was "guilty of criminal activity by converting the Teamsters'
property for his own avaricious ends." It should be noted that at no time
during the lengthy Carter-Ward affair was Mr. Lawson alleged to have
perpetrated such criminal acts.
Overall, Mr. Orchard alleged that the Reform references suggested that Mr.
Lawson "is of a reprehensible and odious character and is not fit to hold
public office as a result of his alleged scandalous conduct," and that he
has "discredited the Senate of Canada through his alleged scandalous
conduct."
In their defences, Mr. Manning and the Reform Party assert that none of the
Web site references were posted maliciously and none of the quoted words
are false and defamatory. "In fact, the statements of fact made ... are
accurate summaries or verbatim repetitions of previously published media
reports concerning two different court proceedings and which media reports
contained specific reference to the plaintiff," state Mr. Manning and the
Reform Party.
"These previously published media reports ... were privileged publications
... of proceedings publicly heard before a court exercising judicial
authority, as published contemporaneously," state the defendants, who also
assert the media reports constituted a "fair and accurate report" of the
proceedings.
In their defences, Mr. Manning and the Reform Party quote from seven
assorted articles in Macleans, The Montreal Gazette, The Vancouver Sun, The
Financial Post and The Toronto Sun, mostly from 1989, dealing with the
Teamsters' troubles with U.S. authorities and Mr. Lawson's involvement in
the case.
On the Howe Street side, the defences cited three Globe and Mail articles
from 1988 and 1990 on the Carter-Ward debacle, and a B.C. Business magazine
article published in February of 1998. "The duo (Ward and Carter) were
often flown to San Antonio, Texas, on an International Teamsters jet
courtesy of Senator Ed Lawson, who received free shares in their flagship
company, Tye Explorations. Canarim's Peter Brown received commissions for
introducing them to the Senator," stated the B.C. Business article. (San
Antonio was the headquarters of the United Services Funds, which were
bilked of $22-million when Mr. Carter and Mr. Ward bribed fund manager Carl
Lazelle to load up his portfolios were worthless shares of their VSE
promotions.)
One of the Globe articles noted the testimony of Shirley Rogers, Mr. Ward's
former executive assistant in his Vancouver office, who told the court that
Mr. Ward and Mr. Carter gave Mr. Lawson free stock in their companies and
took trips on his Teamsters jet. Ms. Rogers testified that Mr. Ward "was
very friendly with Senator Lawson" and gave him shares in several
Carter-Ward promotions. "Mr. Ward sometimes paid for the flights and
sometimes did not, she said. The senator got into "quite a few" of the
promoters' ventures, "both in buying stock and getting free stock," she
said," as the Globe reported.
In a previous Carter-Ward piece, the Globe told the tale of Boston
Financial. "Senator Edward Lawson, a Teamster union leader with a taste for
stock deals, surfaced last November as a director of Boston Financial
Group., a comatose company whose share price climbed to $1.30 from 10 cents
in 20 trading days around the time he joined the company," reported the
Globe.
While Mr. Lawson disclaimed any association with Boston Financial before
November of 1989, the Globe noted his wife had been president of the
company since its inception in 1986 and the couple's Vancouver waterfront
condo served as its headquarters during much of 1989. An Alberta Securities
Commission company filing was fax-stamped "From Senator E.M. Lawson."
The Globe noted that Boston had two executives at the time: Mr. Lawson's
wife Beverly Babb and Carol Ward, the promoter's wife. At the time of this
story, Mr. Ward was on parole after serving one of three years on his
sentence for manipulating Tye Explorations.
"Excerpts from Mr. Carter's pretrial questioning, read in court, portrayed
the senator as an avid follower of the promoters' tips," stated the Globe.
"I would get a call from Lawson - 'What is good in the market, Ed? What is
good in the market? Where can we make some money?' Then I would tell him,"
Mr. Carter testified.
"Then a minute and a half later Ward would ... walk into my office and say,
'Jesus, I just had a call from Senator Lawson.' I would say, 'What did he
want?' How to make money. 'What did you tell him?," Mr. Carter told the
pretrial hearing.
"I would tell him one thing and possibly Ward would tell him the opposite,
and then he would have bought both," Mr. Carter testified.
In addition to refuting Mr. Lawson's allegations of Internet libel, Mr.
Manning and the Reform Party took the opportunity of their statement of
defence to launch into a further attack on the senator.
"The reputation and standing of the plaintiff has been lowered as a
consequence of reasonable and fair comments and editorial columns
previously published in newspapers or other periodicals in which the
authors have legitimately criticized the plaintiff in respect to the
plaintiff's deplorable record of infrequent attendance at sittings of the
Senate, the plaintiff's receipt of substantial compensation from the
taxpayers of Canada despite his deplorable attendance ... the credibility
of the plaintiff in his alleged lack of awareness of any improper behaviour
by any executive members of the International Brotherhood of Teamsters, the
plaintiff's grossly extravagant lifestyle and significant personal fortune
in contrast to the financial position of other union leaders and his gross
vulgarity and lack of proper judgment in attempted crude jokes in the
course of public speeches," stated Mr. Manning in his defence.
With both sides so heavily entrenched in their positions, Mr. Lawson's
libel suit promises to feature a hard-fought trial, set to begin on Feb. 5,
2001. With its insurer now out of the picture, the Reform Party will be
paying its own way each step of the way.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com
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