Canadian state bank scammed for $27 million as corrupt Africans make off with luxury jet
There are ten-thousand reasons governments shouldn't be allowed to do at least half of what they do. Here's just one.
Bombardier is a Canadian maker of small commercial jets--the so-called "regional jets" that are used extensively by virtually all U.S. airlines. They're a huge export earner for Canada, so it's no surprise to find that the company is...um...politically connected.
The company sells a top-of-the-line, intercontinental-range business jet for $42 million or so, and the notoriously corrupt Gupta family in South Africa wanted one. But the Guptas--in a pattern all too familiar to residents of South Africa--didn't want to actually pay cash for the jet.
Normally you'd think that would be the end of the story. But not in Canada, thanks to a government-owned entity called Export Development Canada (EDC). EDC's government mission was to help Bombardier make the sale. So EDC--that is, the government, funded by Canadian taxpayers--loaned the Guptas $41 million to buy the plane.
Now, one of the bedrock principles of international business is that only a dumb sonofabitch loans money to a corrupt group with no in-country, fixed collateral to secure the loan. And you can just hear the EDC political appointee now, wailing "But the loan WAS secured--by the jet!"
Ah, there ya go.
EDC now says the family defaulted on the loan and still owes the bank $27 million.
And the jet? Oooh, sorry: The first thing the new owners did was to take it to Africa. Or Europe. Or India. No one in Canada knows where it is. And as soon as the Guptas stopped making payments on the loan, they removed the plane's location data from sites that track the location of planes around the world.
"Oh, you mean THAT collateral?"
EDC is now pleading with a South African court to help them find and return the jet--or at least to ground it. But EDC first has to find the plane.
A commercial bank might have investigated a bit more, found out how corrupt the Guptas were, and declined to make the loan. But of course a government bank doesn't have to worry about pesky things like stockholders or bad decisions, because...politics.
EDC, for its part, insists it performed due diligence on the Guptas. It insists that the credit check they paid "Nigerian Prince Credit Verification Service" to perform was only one part of that due diligence.
This is how canny crooks fleece taxpayers in stupid liberal-run countries. Oh, and the U.S. Remember Fannie Mae and Freddie Mac? Stuffed with Democrat cronies and apparatchiks, both government real-estate giants sucked up about ten Billion in taxpayer funds after the real-estate meltdown. The Canadian fiasco is small by comparison.
At least the real-estate can't fly away.
This is just one more reason why government shouldn't do a tenth of what it's now doing. But no one will ever be able to make it stop, just as Trump won't be able to root Obama appointees out of their Deep-State burrows.
Bombardier is a Canadian maker of small commercial jets--the so-called "regional jets" that are used extensively by virtually all U.S. airlines. They're a huge export earner for Canada, so it's no surprise to find that the company is...um...politically connected.
The company sells a top-of-the-line, intercontinental-range business jet for $42 million or so, and the notoriously corrupt Gupta family in South Africa wanted one. But the Guptas--in a pattern all too familiar to residents of South Africa--didn't want to actually pay cash for the jet.
Normally you'd think that would be the end of the story. But not in Canada, thanks to a government-owned entity called Export Development Canada (EDC). EDC's government mission was to help Bombardier make the sale. So EDC--that is, the government, funded by Canadian taxpayers--loaned the Guptas $41 million to buy the plane.
Now, one of the bedrock principles of international business is that only a dumb sonofabitch loans money to a corrupt group with no in-country, fixed collateral to secure the loan. And you can just hear the EDC political appointee now, wailing "But the loan WAS secured--by the jet!"
Ah, there ya go.
EDC now says the family defaulted on the loan and still owes the bank $27 million.
And the jet? Oooh, sorry: The first thing the new owners did was to take it to Africa. Or Europe. Or India. No one in Canada knows where it is. And as soon as the Guptas stopped making payments on the loan, they removed the plane's location data from sites that track the location of planes around the world.
"Oh, you mean THAT collateral?"
EDC is now pleading with a South African court to help them find and return the jet--or at least to ground it. But EDC first has to find the plane.
A commercial bank might have investigated a bit more, found out how corrupt the Guptas were, and declined to make the loan. But of course a government bank doesn't have to worry about pesky things like stockholders or bad decisions, because...politics.
EDC, for its part, insists it performed due diligence on the Guptas. It insists that the credit check they paid "Nigerian Prince Credit Verification Service" to perform was only one part of that due diligence.
This is how canny crooks fleece taxpayers in stupid liberal-run countries. Oh, and the U.S. Remember Fannie Mae and Freddie Mac? Stuffed with Democrat cronies and apparatchiks, both government real-estate giants sucked up about ten Billion in taxpayer funds after the real-estate meltdown. The Canadian fiasco is small by comparison.
At least the real-estate can't fly away.
This is just one more reason why government shouldn't do a tenth of what it's now doing. But no one will ever be able to make it stop, just as Trump won't be able to root Obama appointees out of their Deep-State burrows.
posted by SF at
3:23 PM
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