Drug war about damage control

By MINDELLE JACOBS

Public policy experts are often at odds with governments on how best to handle complex social issues and it was no different yesterday at a national addictions conference in Edmonton.

There is no evidence that tough enforcement of drug laws either reduces the availability or increases the price of illicit drugs. Yet the U.S. has consistently maintained its hardline stance on drugs over the years and the Harper Conservatives just announced that Canada, too, will impose stricter sanctions for certain drug crimes.

The Tories, for instance, plan to bring in a two-year minimum sentence for running a pot grow-op of 500 plants or more.

The keynote speaker at yesterday's conference, however, stirred the pot by adding his voice to a growing list of drug-policy reformers who propose that we just legalize pot.

Marijuana should be legalized for personal use and free distribution, Mark Kleiman told delegates at the 2007 conference of the Canadian Centre on Substance Abuse.

"Not everybody has a green thumb, so you could get your pot from your friend," Kleiman, a professor of public policy at UCLA, said in a later interview. "Do I think people would sell it? Of course they'd sell it and I couldn't care less. I don't want the billboards."

The goal of drug policy should be to limit the damage from drugs -- such as disease, accidents, crime and social functioning -- not to wage "cultural warfare" on drug users, Kleiman said.

TARGETS

To that end, he offered several other prescriptions. Drug sentencing should be based on the behaviour of the drug dealer, not the particular drug or amount being sold. The most dangerous and violent dealers are the ones police need to target, he said.

"You want the (additional sentence) for having a gun to be sufficiently large compared to the original sentence that a drug dealer will consider not having a gun because he wants to avoid that sentence," he said.

"You want to create competitive disadvantage for the most obnoxious dealing styles. And, unfortunately, routine drug law enforcement creates competitive advantage for the most obnoxious dealing styles."

In the U.S., for example, the minimum sentences for selling small amounts of drugs are already so lengthy that another few years tacked on for the use of a weapon has no impact on a dealer's conduct, he said.

Tougher sentences for the most violent dealers won't shrink the volume of illicit drugs on the streets, but they will at least reduce the amount of damage done, Kleiman said.

"Most of the users are going to find a way to get their drug. But you can save the neighbourhood from the side effects of dealing."

He also proposes routine random testing of drug offenders on probation and parole and a two-day stint in jail every time they test positive. "Anybody who's trained a puppy understands these principles," he said. "That will dramatically reduce the amount of drugs they use."

Alcohol may be legal, but 20% of the beds in acute care hospitals are filled by patients with a booze-related disorder of some kind, Kleiman added.
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Two years in $146-million fraud of DND

Former officer who moved more than $10M in fraudulent invoices first to be sentenced in scheme

James Bagnall, The Ottawa Citizen

Tuesday, November 06, 2007

Cholo Manso's last hour of freedom yesterday featured a bit of dark humour. The former naval officer -- who pleaded guilty in September to his part in a fraudulent $146-million Department of National Defence invoicing scheme -- had trouble opening a door on the way to his sentencing hearing.

"I better get used to this," he said, with only a trace of a smile.

A few minutes later, Mr. Manso sat impassively in the provincial courtroom of Justice Ann Alder and listened as his lawyer, Robert Meagher, pointed out that Mr. Manso was not the main villain in this piece.

Mr. Meagher added a touch of theatre by noting that Mr. Manso had had to tell his 10- year-old daughter the night before that he was going to prison. "It was the hardest thing he's had to do," said Mr. Meagher.

However, the lawyer also acknowledged that Mr. Manso's moral compass "had gone askew here."

Then it was the turn of Judge Alder, a former federal prosecutor. Briefly she met

Mr. Manso's gaze, then explained why she was sending him to prison for two years.

"This was a very large fraud," she said, "and you had a significant role."

A short time later, Mr. Manso, 44, was escorted to the Ottawa-Carleton Detention Centre where today he awaits his transfer to a federal prison.

Mr. Manso thus becomes the first of three people charged early in 2006 to actually serve time.

Paul Champagne, the former DND employee credited with masterminding the scam, pleaded guilty in the summer and is awaiting a sentencing hearing scheduled for Jan. 16. The third businessman to be charged with criminal fraud, Peter Mellon, maintains his innocence and is preparing to take matters to trial if necessary.

Mr. Manso has stipulated he moved more than $10 million worth of fraudulent invoices through his company, Avemore International, between June 3, 1998 and March 24, 2003. He also received $1.6 million in lump sum payments directly from Mr. Champagne.

Mr. Manso, who has no previous criminal record, could serve as little as six months with time off for good behaviour. Nevertheless, Judge Alder maintained that Mr. Manso's sentence -- the product of a joint recommendation from the defence and the
Crown -- is a significant deterrent. Time in a federal prison was warranted, she said, because the crime involved huge amounts of money and took place over a period of years. This was not, she nodded toward Mr. Manso, "a momentary lapse in judgment."

Nor, the judge added, was Mr. Manso's behaviour to be excused because he played a relatively small role.

"This may not have been your (invoicing) plan," she told Mr. Manso, "but you went along willingly."

The judge added that people have a tendency to think that in cases involving theft from governments or corporations, no great harm has been done. She said she disagreed profoundly with this notion and wanted to send a message to other would-be white-collar criminals.

"You were doing business with the government of Canada," she admonished Mr. Manso. "That is a position of trust."

The length of Mr. Manso's sentence, she noted, was mitigated somewhat by the fact that he co-operated fully once the criminal investigation got under way. And, by pleading guilty, Mr. Manso has also saved taxpayers the considerable cost of a lengthy trial.

Mr. Manso was not required to make good on the money he stole -- in large part because DND was fully reimbursed three years ago by Hewlett-Packard, the computer maker duped by Mr. Champagne into issuing invoices for goods and services that were never delivered.

Hewlett-Packard likely reasoned it was better to pay the $146 million up front and then try to recover the money on its own. That way, it could continue to do business with the federal government.

HP sued Mr. Champagne, Mr. Mellon, Mr. Manso and several other businessmen in 2004 and 2005 for tens of millions of dollars in damages. Mr. Champagne settled out of court for an estimated $30 million -- turning over title to various properties in Dunrobin and Turks and Caicos as well as shares in publicly held companies such as Workstream.

HP is seeking $26.5 million in damages from Mr. Manso and his various corporate entities. It is also suing Mr. Mellon (and entities controlled by him) for $26 million in economic and punitive damages. Mr. Mellon is countersuing HP for at least $15 million in damages.

The invoicing scheme was complex, but simple in concept.

Mr. Champagne, as DND buyer, would instruct HP to issue purchase orders to third party contractors such as Avemore. These companies forwarded the purchase orders to RMC Systems, an independent firm. Mr. Champagne had convinced RMC to perform recordkeeping and invoicing services for an entity called Champagne Group.

In other words, Mr. Champagne not only ordered the goods and services, he certified they had been delivered. Meanwhile, his Champagne Group ultimately collected the cheques approved by DND.

Mr. Champagne kept people in the dark for roughly a decade, ending in 2003, by citing national security and instructing people to avoid using specifics on the invoices.

He also arranged for Mr. Manso to hire key DND employees, allowing Mr. Champagne to deal with less experienced personnel at the department.

Mr. Champagne funnelled $142 million into his bank accounts, according to the agreed statement of facts attached to his guilty plea. His personal benefit was "in excess of $100 million."

Given the disproportionate reward received by Mr. Champagne, along with his larger role, it seems reasonable that federal prosecutors will push for a stiffer sentence for him than the one meted out yesterday to Mr. Manso.

© The Ottawa Citizen 2007
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