Craig Ferguson Investigates

For the bullet summary, please go here. To contact your MP regarding the Veto issue, please go here.

Thanks again to the panel at the Make it Seven roundtable rant page for digging deep. Patrick Romanoski, Gregory Galante, Jay Martin, Joe Smith, Bryan Kirkham,Ken Connolly, Corey Schlueter, Aaron Mernick, Wade Tiefenbach,  Jennifer Zarull, and if I have missed anybody, don’t worry , it won’t be because I wanted to, but I will find you! Insight abounds, and is making this summary very easy indeed.

Have you ever had a chance to play the ‘Lemmings’ computer game? I remember one Christmas, they had a version on the internet with little Santa Lemmings, all decked out. You had to build certain paths that kept them safe, and if you didn’t, they didn’t have enough sense to save themselves. Set them on the wrong path, and they’d fall off the edge of a cliff, one after the other, with no ability or concern for trying to find a solution on their own.

To me, the National Hockey League, it’s executive, and employees responsible for trying to stop Jim Balsillie, are acting like those Lemmings. No matter what happens, they continue on the path over the virtual cliff, with no apparent consideration for the ridiculouslness of their own actions. With no apparent concern for the ramifications or long term consequences of what lies ahead.

And, with the changing of the guard in the NHLPA, the writing is becoming even more quickly apparent. There is a mutiny on the bounty in the works.

Can we figure the Lemmings will figure that out? Or, are they headed for the cliff with the same speed as ever?

Part of the problem with the NHL head office, is the arrogant attitude that self policing has earned them. They like to not be told what to do, and they intend on keeping it that way.

Well again, the people ‘they’ serve, the players and the fans are starting to voice an undying opinion that ‘we aren’t going to take it anymore’.

There is a mutiny in the works. Can anybody see it?

Let’s begin with material readily available for fan and player consumption. The depositions of Bill Daly, Gary Bettman, and Craig Leipold.

To start, Mr. Daly…

In deposition, Bill Daly had made a very confident statement  regarding his comments made on May 7th, 2009:

Daly: "We don't usually like to pick fights, but we end them."

Reiterated comment from Daly of May 7th :

“Mr. Balsillie is acting again in total disregard of any rules or any structure, I’d be very surprised if the Board would look favorably on the way that Mr. Balsillie has conducted himself in this instance.”

Question from counsel: “Did you make that statement?”

Daly: “Yes, I did.”

And, another quote that Bill Daly had made:

“He makes his own decisions. And he’s making a decision that this is the way he wants to get into the National Hockey League. We don’t usually like to pick fights, but we end them.”

Now, the obvious question to Mr. Daly is, ‘how would you propose to end this fight?’

Let us guess.

You would, as league officials do ANYTHING necessary to end this fight?

After all, Jim Balsillie has decided how he is going to enter the National Hockey League, and Mr. Daly is of obvious opinion that Mr. Balsillie does not have the right to exercise his rights to use legal processes to do just that.

Would that be accurate?

It might even give league officials enough willpower to decide to structure ‘an attack’ to counter this man who does not listen to the league and it’s rules.

Would there be motive to alter and withhold information to suit the needs of a league desperate to stop a man with strong will?

The deposition of Bill Daly continued…..

Q from counsel: “Mr. Daly, are you familiar or did you see the various Kroll Reports that were prepared on Mr. Balsillie?”

Daly: “I’m familiar with them.”

Q: “Have you seen them?”

Daly: “I’ve seen them physically, but I can’t tell you – other than potentially skimming them, I didn’t read them in any great detail.”

Q: “Do you know why there are different versions of the report prepared, one on June 15th, which was of James Balsillie and Heidi Balsillie, and then one on July 23rd, which is just of James Balsillie, and yet another on of July 21st, which was a separate memorandum to Mr. Zimmerman? Do you have understanding of why there are different versions floating around?”

Daly: “No”

Q: “Were you involved in any discussions about taking materials in the Kroll Report out or including some materials in the Kroll Report?”

Daly: “No”

Q: “Do you know why the Kroll Reports were not given to the executive committee or to the Board of Governors before making their decision?”

The document cuts off before we get Mr. Daly’s answer. How appropriate that mishap is. What do you suppose his answer was? Tough one?

Anyhow, May 7th and already directing a bias toward the Board of Governors. Perhaps enough of a bias to ensure the Board members are not given a clear, unbiased amount of information to make a good decision on Mr. Balsillie?

I think Mr. Daly had better take a very important fact into consideration. It isn’t his hide on the line should the Board members be held accountable as directors and league authorities. It is the directors. Nice to be making decisions for them, if that is the case.

On to Mr. Bettman……

In his deposition, Gary Bettman starts to wash his hands. This should be a huge red flag to the Board of Governors, and I will explain more as we go along.

As an employee of the National Hockey League, Gary Bettman reports to the Board of Governors. The problem with any leader reporting to the Board, is the fact that Board Members tend to take the direction of the leader (commissioner in this case), and don’t necessarily ensure they understand all the liability and problems that they, not the commissioner is going to be held accountable for.

So, for Gary Bettman to advise the court what comes next is a key warning to those Board members that you had better obtain good counsel of your own, or it’s their  (Board members) collective and individual hides on the line.

On to the point.

In the deposition, Gary Bettman discussed article 4:

Q: “Is it correct that any ammendment of article 4 has to be evidenced by an instrument in writing signed by all members of the league?”

Bettman: "I have on repeated occasions advised the Board that there's an aspect of article 4 of the constitution which is unenforceable and will not be applied."

Bettman: “Not necessarily”

Q: “Not necessarily. And why would that be?”

Bettman: “Well, there are a couple of reasons. One, when you’re referring to article 4 of the constitution, it needs to be reconciled with bylaw 36; and secondly, I have on repeated occasions advised the Board that there’s an aspect of article 4 of the consitution which is unenforceable and will not be applied.“

 Is Gary Bettman saying his only obligation is to advise the perhaps stubborn Board members that there are aspects of the constitution that are unenforceable? Is this a ‘washing of his hands’ and responsibility? Would Gary Bettman be better advised to inform the Board that in the current form the constitution is flawed and creates a great potential liability to the members of the Board?

Gary Bettman was under oath. He likely knew there were questions and a line of questioning that would implicate him responsible. What does he choose to do? He washes his hands and defers responsibility to the Board he serves. Board of Directors, this is your wake up call.

It continued….

When asked if he as commissioner had the right to interpret the league rules and establish policies regarding the constitution and bylaws, and that he (Commissioner) had the right to change provisions of the constitution by his (Bettman’s) interpretation, Bettman said:

“If they need to be reconciled either with other documents, resolutions and applicable law, yes.”

I wonder if that law would include the Competition Act of Canada?

So, is Gary Bettman saying he as commissioner has the right to change aspects of the constitution as required by applicable law, in this case the Competition Act of Canada? I would think so.

Regarding article 4.3, the counsel asked a specific question:

“I’m asking you a very narrow question. Has there ever been a written ammendment to that provision of the constitution signed by all members of the league?”

Bettman: “I don’t believe so, but that shouldn’t matter because I’ve advised the board-”

Bettman: “- on repeated occasions that we are not enforcing that provision, and there hasn’t been any objection to that, and in fact, the competition bureau in Canada has affirmed our policy and practice in that regard.”

“There hasn’t been an objection to that”? What about the letter from the Toronto Maple Leafs hand delivered to the office of the National Hockey league in 2006? Was this part of the information given to the Competition Bureau in Canada? Somehow, I think not.

So, Mr. Bettman in 2009 states that there was no objection, but clearly the Toronto Maple Leafs did object.

As pointed out by Patrick Romanoski, methinks we have a problem here. Would this be lying under oath?

Would this include withholding material evidence from the Competition Board of Canada?

I think we leave it for now on those valid issues. We will continue next time with more Gary Bettman deposition analysis, and for Craig Leipold.

The NHLPA got a fresh leader, eh?

Hmmmm……

Well, I must make a final comment to Mr. Bill Daly. Bill, you as a league know how to end a fight?

I don’t think you will be able to ‘end’ this one.

For the bullet summary, please go here.

There are proposed changes to the Competition Act that are compelling. The reason must be based on problems and issues with the current system.

The question is, ‘How far are you willing to go as Board of Governors to back up the whims of the Commissioner? Who would be the ones to ‘go down’?

 

Is the NHL being ‘petty’, or is this more about Peddie?

 Richard Peddie and the MLSE that is!

In the “Butterfly Effect” series of movies, the character can go back in time and try to alter the past. Well, given the chance now, would Peddie have intercepted the sending of the 2006 letter to Gary Bettman that the lawyer representing MLSE sent? At the very least, the lawyer could have checked the spelling of Mr. ‘Betteman’s name’. That must have been more annoying than the letter’s content. Ironically, little research or care in it’s preparation then, which may result in plenty of clockable legal hours now. Funny how that works, eh?

Translation of letter: If the MLSE doesn’t want a team in ‘our turf’, then too bad if all other teams do. Problem: Legal liability imposed by a member of the Board of Governors hanging the other members out to ‘legal’ dry.

In early August the issue of depositioning Peddie came into play:

However, the league wants Judge Redfield T. Baum to reject the proposed deposition of Toronto Maple Leafs owner Richard Peddie.

Attorneys for Canadian billionaire Jim Balsillie want to question Peddie over what role the Maple Leafs might play in the proposed relocation of the Coyotes to Hamilton, Ontario. The league contends the relocation issue is moot because the NHL Board of Governors has overwhelmingly rejected Balsillie as an owner.

 

And, wouldn’t the NHL love to keep the deposition of Peddie a ‘moot’ point, and not have it rear it’s ugly head again. Can Peddie count on this the longer this case takes? Is he a gambling man? How does he like the ‘outside world’?

And, as reported by Globe Sports:

The NHL’s objection, filed with the court yesterday, stated the Maple Leafs abstained from the NHL governors’ unanimous vote on July 29 that rejected Balsillie as an owner. Presumably yesterday’s objection was made to counter Balsillie’s charge that the Leafs are playing a leading role in blocking the move of a team into their territory.

Peddie could not be reached for comment last night.

 

I’m sure he will be unavailable for quite some time too. But, he can’t stay N/A forever!

 

Well, if I were the Toronto Maple Leafs or the Ottawa Senators, I would be wondering the consequences of backing up the league on the issue related to anti-trust and monopoly powers.

 There are laws, and the laws are getting more stringent.

In March 2009, according to Mondaq:

The Government is proposing a long-debated reform to the cornerstone criminal conspiracy section by removing the requirement to show that an agreement among competitors would lessen or prevent competition unduly. Under the new provision, which will make such agreements “per se” illegal, competitors who agree, conspire or arrange among themselves to fix, maintain, increase or control prices or fix, maintain, control, prevent, lessen or eliminate supply of a product or allocate sales, territories, customers or markets for the production or supply of a product, are guilty of a criminal offence. Penalties will be increased to a maximum of $25 million for each count and up to 14 years of imprisonment. A new defence has been created where the agreement is ancillary to a broader agreement and is reasonably necessary to give effect to the broader agreement, provided that the broader agreement when considered alone would not contravene the criminal conspiracy provision. In addition, the common law principles that relate to a defence for regulated conduct will continue to apply to the new provision.

Criminal conspiracy! Criminal conspiracy! Did you hear that? Criminal conspiracy?

Not just collusion as we saw in Phoenix. No, this time we are talking about perhaps more serious consequences including up to 14 years behind bars. Who would be with you in that ‘pen’?

Well, commissioner Gary Bettman is an employee of the NHL. He is hired by the Board of

Governors. Ultimately, the Board of Governors and the individual members that make it up are individually and collectively responsible for the operations and the liability of the league as a whole. Not Gary Bettman.

Repeat: Not Gary Bettman. No, you’d be on your own!

This must be made clear to the members of the Board of Governors who want to ‘listen’ and ‘agree’ with the commissioner. He won’t be the one serving time for you if that is the case.

How far will you go, if you are a member of the BOG in this man’s NHL? Will you be willing to undergo examinations in court? Will you be willing to admit things you did not want to admit? Will you be willing to stand up, under oath, and testify that the reason you may have agreed to something is because, and largely due to the fact that ‘all the others were doing it, and I thought I should too’. Is that what it boils down to? Are you listening to an employee exercising his influence to the detriment of your own safety? Good questions BOG members. Better start checking with your lawyers. Good lawyers that is.

Because, here’s the deal.

If you are Eugene Melnyk in Ottawa, and Richard Peddie in Toronto, you and your operations in Canada are subject to the Canadian Competition Act.

Knowing what you know of Balsillie’s persistence, what do you figure the ‘odds’ are that will become a reality, especially if the NHL will drag this out legally for the reported years to come?

As the heads of your organizations, you can now be likely found guilty of a criminal offense to knowingly conspire to keep a competitor out of a territory. That competitor in this case may be Jim Balsillie. Mr. Bettman is an American running an American company, but in Canada, having teams here? A little different.

Is it a good idea to follow a man obsessed?

You may be subject to criminal prosecution for conspiring as two teams, even though you represent a broader league as a whole.

The members representing other teams are not the issue. In this case, the two teams in Ontario (Ottawa and Toronto) are the Canadian issue.

Do you think as companies running in Ontario, you will be able to continue to defer obligation to Gary Bettman, as has been done to date related to issues of article 4.3 of the NHL Constitution? Are you banking on that?

Do you as BOG members in the NHL, but owners of Ontario companies think that you will be immune to the laws of Ontario companies? You had better hope so, but how far are you willing to go?

According to the Hamilton Spectator of August 29th, a very interesting truth became known:

“After repeatedly telling this court that such unlawful veto rights do not exist, both Mr. Bettman and Mr. Daly were forced to admit at their depositions that the Article of the NHL Constitution providing for this veto (Article 4.3) has never been amended in an unanimous writing (as required by the explicit terms of Article 12 of the NHL Constitution) and that the Toronto ownership group has expressly ‘reserved its rights’ and to whether its unlawful veto remains in effect.”

But this week Daly advised the Spectator via e-mail that the board of governors has the final say on the NHL coming to Hamilton.

“Nothing to do with Toronto, or the alleged “veto” right.

OK, so let’s get this straight. We had Mr. Peddie and Mr. Melnyk involved likely in the article 12 ammendment that says article 4.3 must be removed. But, the article 4.3 was never actually removed by some fluke?

Now, we have the MLSE ready to stand by the ammendment (4.3), and take advantage of the fact that it still appears in the constitution, even though both companies (Leafs and Senators) agreed to it’s removal?

Oh, that’s of incredible character, don’t ya think?

And, the Teacher’s Pension Fund owns now 66% of MLSE. What is that supposed to teach the kids? Cheat when you can, and if the teacher gives you a bad mark, but it gets written in the records as a good mark, don’t do the right thing and tell her. Just take advantage of the misfortune. The teachers on Ontario would go along with this? Maybe we should have a referendum on that issue, and have it debated in classrooms everywhere. Good, let’s mark that down for the future, shall we?

OK, so Mr. Peddie wants to ensure the 4.3 that was supposed to be removed but wasn’t should be upheld, and MLSE would sue whoever tried to violate it, including the league it is part of, despite having agreed to it’s removal. For the record? OK.

Well, take a close look at who told us about the fact that it is still there. It wasn’t Mr. Peddie or Mr. Melnyk, it was Mr. Bettman and Mr. Daly, under deposition.

If I was a betting man, which I am not (sorry Eugene and Jeremy), I would guess that the Balsillie camp has got a checklist of strategy. And, once those depositions were obtained from Daly and Bettman, a little check was applied.

The information will surface again, don’t worry.

But, if I were Mr. Melnyk and Mr. Peddie I would be a little worried. Because unlike Mr. Bettman and Mr. Daly, you run corporations in Ontario subject to that nasty Competition Laws Canada has. Nasty stuff, and getting a whole lot nastier.

And, Mr. Peddie and Mr. Melnyk are directors and high ranking officials directly responsible to the laws of Canada. Lots of liablility. Mr. Daly and Mr. Bettman? Not so much.

That 26-0 vote is going to rear it’s ugly head as this goes on, don’t kid yourselves.

So, the bottom line is, if the Ottawa Senators and Toronto Maple Leaf brass are ‘listening’ to Mr. Bettman, don’t expect him to serve the penalty that might be coming your way. You know, the whole ‘together we stand, divided we fall’ thing? That’s right, you will be on your own.

You might get a ’sorry’ from Bettman and Daly on the ‘we thought the vote would do it’ thing. But that won’t be good enough.

Again, if I were a betting man, I might be inclined to think that the vacation of Richard Peddie, and his conveniently missed attendance in the  26-0 vote was more planned than would seem apparent.

And, the fact that the NHL protected Peddie from being deposed earlier in the procedings may have been to avoid another ‘checkmark’ in the course of legal  ‘to do’ s of the Balsillie legal team.

But,don’t worry Mr. Peddie, they will get you to answer the ‘for or against’ question soon enough.

If I was a betting man, I’d bet on that!

Conspiracy to stop competition? A criminal offense, eh? Sounds a little risky. Especially for those so sensitive about their reputations.

Mr. Melnyk, how would you like a criminal record on your ’character’ resume? Didn’t think so.

How far should you be willing to go as a person to follow the crowd?

 Or, how much should you listen to an employee telling you what to think and how to think it?