Saturday, January 21, 2006
What is the Truth? SPEC HEADLINE: "Liberal MP's explanations don't always mesh with data"
It's a Matter of TRUST ...
Hamilton Spectator File Photo
Liberal MP Tony Valeri's property purchase and subsequent sale has raised enough questions to have Tories request an investigation.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Valeri opens door to more questions
Liberal MP's explanations don't always mesh with data
By Steve Buist
The Hamilton Spectator
(Jan 21, 2006)
A Liberal cabinet minister buys his next-door neighbour's property last spring.
Three months later, he sells the property for more than twice what he paid for it to the son of a local businessman who has been a longtime supporter of the Liberal party.
The transactions attract no media attention at the time, which is neither unusual or unexpected -- virtually all real estate deals in Canada take place with no media scrutiny.
Four months after that, a federal election is called.
Two weeks before voters go to the polls, the media are alerted to an anonymous posting on a website where they find certain public documents related to the purchase and sale of the property as well as the cabinet minister's public filings to the federal Ethics Commissioner.
No comment, no story -- just 43 pages of documents from public records.
Questions are asked. The cabinet minister offers an explanation, and then suggests the documents were deliberately released as part of a smear campaign to hurt him at a critical point in the election and threatens to sue the website operator.
Stories are published, new questions arise. The cabinet minister declines to answer the new questions or clarify his earlier explanation.
More stories are published and now there's a call for an investigation by a rival party's MP.
These are the bare bones of the events surrounding a land flip last year by Hamilton East-Stoney Creek MP Tony Valeri.
Yet several important issues remain unclear more than a week after the land deal documents were first posted, in part because Valeri's explanations aren't easily reconciled with other information and statements related to the deal that have been gathered.
Here are some of the key examples:
* Valeri's reason for acquiring the property.
Valeri has said that he purchased the property next door because he intended to build his new home so it would straddle the adjoining lots. After discussions with surveyors and his builder, Valeri said he learned he didn't need the property next door to accommodate the new home after all, so he decided to sell it.
But when he bought the property, Valeri should have already known that.
In 2003, Valeri applied for a building permit to construct a new home on his existing property, situated on Ridge Road along the escarpment in upper Stoney Creek.
In 2004, he also applied for a development permit from the Niagara Escarpment Commission (NEC) to build a home on his existing lot.
The NEC approved Valeri's permit more than two months before he purchased the property next door.
As well, both the City of Hamilton and the NEC say they have no record Valeri ever attempted to amend his building plans to have the home straddle two lots, and there was nothing about his application that would have required him to add more property to build the home.
Two days before Valeri purchased the next-door property, ownership of the Valeri family home was transferred from Tony Valeri and his wife jointly into the sole ownership of Valeri's wife.
Valeri then purchased the next-door property in his own name.
That kept the two adjoining properties distinct from each other, instead of becoming one merged property.
If Valeri intended to build a home straddling the two lots, he would have needed a merged property with one common ownership, according to an NEC planner.
Because the properties were kept as separate entities, Valeri did not require a time-consuming severance when he sold the property next door.
* The value of the property.
Valeri purchased the next-door property on April 29 for $225,000 from Len Davis, 76, who said health problems forced him to sell.
According to Davis's son, John, his father arranged to sell the house to Valeri in October or November 2004.
The Davis family then spent the winter getting their father into a nursing home and cleaning out the house before the April closing date.
The property covers 0.25 hectares and includes a 1950s-era ranch-style bungalow in disrepair.
John Davis said the house is in such poor condition that it would either need extensive renovations or would have to be demolished.
The house, along with Valeri's house next door, sits along the escarpment's edge with a splendid view of Stoney Creek and Lake Ontario.
Valeri said he improved the lot by burying some overhead wires and removing some poles but he could not say how much he spent on the improvements.
Both John and Len Davis told The Spectator that opinions were obtained from two real estate agents suggesting that the asking price reflected a fair market value. Both men said they were satisfied with the sale price.
They also said they didn't list the property on the real estate market before selling it.
On July 15, three months after he acquired it, Valeri sold the next-door property for $500,000 to John Ng, the 30-year-old son of Joe Ng, a prominent local businessman and Liberal supporter.
The property was not listed on the real estate market before Valeri sold it, and the MP has said that when Joe Ng approached him about purchasing the property, he directed Ng to deal with his lawyer.
Valeri has said the $500,000 sale price fairly reflected the value of the property.
Tax assessment values offer little insight.
The 2005 property tax assessment for Davis's former lot is listed as $201,000, and the 2005 assessment for Valeri's existing property is listed as $186,000.
But a property several doors away with a six-bedroom, four-bathroom house which sold for $426,000 in 2004 had a 2005 assessment of $200,000.
* The purchaser.
Valeri sold his property to John Ng, an engineer who works for his father Joe Ng's company, JNE Consulting Ltd.
Valeri has said that it was Joe Ng who first approached him about buying the lot next door.
Ng is a longtime Liberal supporter who has contributed at least $26,000 to federal Liberals. Valeri has indicated Ng has contributed to his campaigns.
Ng's company has benefited in the past from at least two loans from the federal Export Development Corporation, and he has participated in a number of Canadian trade missions to Asia and the Middle East.
Joe Ng has indicated he does not want to comment publicly until after the election.
* The property's designation.
Valeri has said prior to purchasing the property next door, he contacted the Ethics Commissioner and told him the lot would be used to accommodate a new home Valeri wanted to build across the two properties.
Valeri said he was told by the Ethics Commissioner's office that he could register the purchase of his neighbour's house as a recreational property.
The recreational property designation meant the house and land could be considered an exempt asset by Valeri and not subject to public declaration with respect to his filings with the Ethics Commissioner.
But a spokesperson for the Ethics Commissioner's office subsequently told The Spectator they don't advise public office holders on how property should be registered. They merely receive information that MPs themselves must verify.
Conservative MP Jason Kenney has asked the Ethics Commissioner to investigate Valeri's land flip. In particular, he wants an investigation into how the property could have increased in value so sharply in such a short time and how a lot with a 1950s-era bungalow could be designated a recreational property.
* Valeri's obligations with the Ethics Commissioner.
Cabinet ministers are required to file public reports with the Ethics Commissioner, based on three categories of assets, along with a statement of any liabilities over $10,000.
Ministers are also required to notify the Ethics Commissioner within 30 days of any changes in their assets and liabilities.
Valeri obtained a $225,000 mortgage on the property next door on April 29, 2005.
The Ethics Commissioner's public filings do not show any report of the new mortgage filed in the 30 days after April 29.
There is a new public filing by Valeri on July 26 -- 11 days after Valeri sold the property next door. The July 26 filing says: "I have a mortgage ... on a recreational property."
It's not clear if the filing refers to the mortgage on the sold property next door or another recreational property he owned.
Valeri has said he is in compliance with the legislation and Kenney's allegations are wrong.
sbuist@thespec.com
905-526-3226
The following comparable properties are listed or have sold on the stretch of Ridge Road where Valeri bought his neighbour's house last year. The property details are from real estate listings, beginning with the most recent.
Description Lot Listed Sold Date
Immaculate 6 br, 4 bath, 76' x 192' $499,997 ------- Current Listing custom 2-storey, pool, sauna, view. 424,900 $426,000 September 2004
749 Ridge Rd., Valeri's sale 112' x 242' ------ 500,000 July 2005 Valeri's purchase ------ 225,000 April 2005 (1950s-era bungalow in disrepair. View.)
50-year-old updated 2-storey. 3 br, 2 bath. 125'x170' 249,000 247,000 March 2005 199,900 193,000 March 2003
Well kept 3 br, 1 bath bungalow with view. 100'x150' 249,000 225,000 September 2004
Custom built 4-level sidesplit. 3 br, 2 bath, view. 100'x200' 249,000 235,000 June 2004
Open concept 3 br, 2 bath bungalow, view. 75'x204' 249,000 245,000 January 2004
Oversize 3 br, 2 bath bungalow, view. 100'x175' 249,000 235,000 August 2003
Copyright 1991-2005, The Hamilton Spectator
Hamilton Spectator File PhotoLiberal MP Tony Valeri's property purchase and subsequent sale has raised enough questions to have Tories request an investigation.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Valeri opens door to more questions
Liberal MP's explanations don't always mesh with data
By Steve Buist
The Hamilton Spectator
(Jan 21, 2006)
A Liberal cabinet minister buys his next-door neighbour's property last spring.
Three months later, he sells the property for more than twice what he paid for it to the son of a local businessman who has been a longtime supporter of the Liberal party.
The transactions attract no media attention at the time, which is neither unusual or unexpected -- virtually all real estate deals in Canada take place with no media scrutiny.
Four months after that, a federal election is called.
Two weeks before voters go to the polls, the media are alerted to an anonymous posting on a website where they find certain public documents related to the purchase and sale of the property as well as the cabinet minister's public filings to the federal Ethics Commissioner.
No comment, no story -- just 43 pages of documents from public records.
Questions are asked. The cabinet minister offers an explanation, and then suggests the documents were deliberately released as part of a smear campaign to hurt him at a critical point in the election and threatens to sue the website operator.
Stories are published, new questions arise. The cabinet minister declines to answer the new questions or clarify his earlier explanation.
More stories are published and now there's a call for an investigation by a rival party's MP.
These are the bare bones of the events surrounding a land flip last year by Hamilton East-Stoney Creek MP Tony Valeri.
Yet several important issues remain unclear more than a week after the land deal documents were first posted, in part because Valeri's explanations aren't easily reconciled with other information and statements related to the deal that have been gathered.
Here are some of the key examples:
* Valeri's reason for acquiring the property.
Valeri has said that he purchased the property next door because he intended to build his new home so it would straddle the adjoining lots. After discussions with surveyors and his builder, Valeri said he learned he didn't need the property next door to accommodate the new home after all, so he decided to sell it.
But when he bought the property, Valeri should have already known that.
In 2003, Valeri applied for a building permit to construct a new home on his existing property, situated on Ridge Road along the escarpment in upper Stoney Creek.
In 2004, he also applied for a development permit from the Niagara Escarpment Commission (NEC) to build a home on his existing lot.
The NEC approved Valeri's permit more than two months before he purchased the property next door.
As well, both the City of Hamilton and the NEC say they have no record Valeri ever attempted to amend his building plans to have the home straddle two lots, and there was nothing about his application that would have required him to add more property to build the home.
Two days before Valeri purchased the next-door property, ownership of the Valeri family home was transferred from Tony Valeri and his wife jointly into the sole ownership of Valeri's wife.
Valeri then purchased the next-door property in his own name.
That kept the two adjoining properties distinct from each other, instead of becoming one merged property.
If Valeri intended to build a home straddling the two lots, he would have needed a merged property with one common ownership, according to an NEC planner.
Because the properties were kept as separate entities, Valeri did not require a time-consuming severance when he sold the property next door.
* The value of the property.
Valeri purchased the next-door property on April 29 for $225,000 from Len Davis, 76, who said health problems forced him to sell.
According to Davis's son, John, his father arranged to sell the house to Valeri in October or November 2004.
The Davis family then spent the winter getting their father into a nursing home and cleaning out the house before the April closing date.
The property covers 0.25 hectares and includes a 1950s-era ranch-style bungalow in disrepair.
John Davis said the house is in such poor condition that it would either need extensive renovations or would have to be demolished.
The house, along with Valeri's house next door, sits along the escarpment's edge with a splendid view of Stoney Creek and Lake Ontario.
Valeri said he improved the lot by burying some overhead wires and removing some poles but he could not say how much he spent on the improvements.
Both John and Len Davis told The Spectator that opinions were obtained from two real estate agents suggesting that the asking price reflected a fair market value. Both men said they were satisfied with the sale price.
They also said they didn't list the property on the real estate market before selling it.
On July 15, three months after he acquired it, Valeri sold the next-door property for $500,000 to John Ng, the 30-year-old son of Joe Ng, a prominent local businessman and Liberal supporter.
The property was not listed on the real estate market before Valeri sold it, and the MP has said that when Joe Ng approached him about purchasing the property, he directed Ng to deal with his lawyer.
Valeri has said the $500,000 sale price fairly reflected the value of the property.
Tax assessment values offer little insight.
The 2005 property tax assessment for Davis's former lot is listed as $201,000, and the 2005 assessment for Valeri's existing property is listed as $186,000.
But a property several doors away with a six-bedroom, four-bathroom house which sold for $426,000 in 2004 had a 2005 assessment of $200,000.
* The purchaser.
Valeri sold his property to John Ng, an engineer who works for his father Joe Ng's company, JNE Consulting Ltd.
Valeri has said that it was Joe Ng who first approached him about buying the lot next door.
Ng is a longtime Liberal supporter who has contributed at least $26,000 to federal Liberals. Valeri has indicated Ng has contributed to his campaigns.
Ng's company has benefited in the past from at least two loans from the federal Export Development Corporation, and he has participated in a number of Canadian trade missions to Asia and the Middle East.
Joe Ng has indicated he does not want to comment publicly until after the election.
* The property's designation.
Valeri has said prior to purchasing the property next door, he contacted the Ethics Commissioner and told him the lot would be used to accommodate a new home Valeri wanted to build across the two properties.
Valeri said he was told by the Ethics Commissioner's office that he could register the purchase of his neighbour's house as a recreational property.
The recreational property designation meant the house and land could be considered an exempt asset by Valeri and not subject to public declaration with respect to his filings with the Ethics Commissioner.
But a spokesperson for the Ethics Commissioner's office subsequently told The Spectator they don't advise public office holders on how property should be registered. They merely receive information that MPs themselves must verify.
Conservative MP Jason Kenney has asked the Ethics Commissioner to investigate Valeri's land flip. In particular, he wants an investigation into how the property could have increased in value so sharply in such a short time and how a lot with a 1950s-era bungalow could be designated a recreational property.
* Valeri's obligations with the Ethics Commissioner.
Cabinet ministers are required to file public reports with the Ethics Commissioner, based on three categories of assets, along with a statement of any liabilities over $10,000.
Ministers are also required to notify the Ethics Commissioner within 30 days of any changes in their assets and liabilities.
Valeri obtained a $225,000 mortgage on the property next door on April 29, 2005.
The Ethics Commissioner's public filings do not show any report of the new mortgage filed in the 30 days after April 29.
There is a new public filing by Valeri on July 26 -- 11 days after Valeri sold the property next door. The July 26 filing says: "I have a mortgage ... on a recreational property."
It's not clear if the filing refers to the mortgage on the sold property next door or another recreational property he owned.
Valeri has said he is in compliance with the legislation and Kenney's allegations are wrong.
sbuist@thespec.com
905-526-3226
The following comparable properties are listed or have sold on the stretch of Ridge Road where Valeri bought his neighbour's house last year. The property details are from real estate listings, beginning with the most recent.
Description Lot Listed Sold Date
Immaculate 6 br, 4 bath, 76' x 192' $499,997 ------- Current Listing custom 2-storey, pool, sauna, view. 424,900 $426,000 September 2004
749 Ridge Rd., Valeri's sale 112' x 242' ------ 500,000 July 2005 Valeri's purchase ------ 225,000 April 2005 (1950s-era bungalow in disrepair. View.)
50-year-old updated 2-storey. 3 br, 2 bath. 125'x170' 249,000 247,000 March 2005 199,900 193,000 March 2003
Well kept 3 br, 1 bath bungalow with view. 100'x150' 249,000 225,000 September 2004
Custom built 4-level sidesplit. 3 br, 2 bath, view. 100'x200' 249,000 235,000 June 2004
Open concept 3 br, 2 bath bungalow, view. 75'x204' 249,000 245,000 January 2004
Oversize 3 br, 2 bath bungalow, view. 100'x175' 249,000 235,000 August 2003
Copyright 1991-2005, The Hamilton Spectator
# posted by mike @ 12:00 PM 
