Shakedown 2011

June 5th, 2016

A notable businessman wrote to us recently.  His business is significant in Canada’s electrical industry, a lot larger and more awash in money than PS Knight Co.  Apparently the Canadian Standards Association (“CSA”) was targeting him too, about a year before they came after us.

His letter was blunt; The “CSA is a corruption [sic], I detest their cozy financial relationships with manufacturers like Schneider and Magna and the like and I have told them that, to their faces (it was a nasty meeting) and I dared them to do to my company what they have done to your company.”

Well, that got us interested.  They had a nasty meeting?  This deserved a phone call, and a full interview and, as here, a public airing.

The businessman is well known in Canada, and while we haven’t had any formal relationship with his firm, we surely knew, like most people in the trades, all about his company.  Like us, his business references and complies with electrical laws.  Like us then, he was a target for a CSA shakedown.

Regular readers will recall that CSA’s litigation against PS Knight Co began in 2012, but before filing their lawsuit the CSA first attempted a shakedown of us late in 2011.  A phone call was scheduled between us, purportedly to discuss advertising in PS Knight publications.  When the call began however, I found myself talking to their legal staff, not their advertising staff.  One of their lawyers, Sarah Eisen, started by threatening that they’d destroy PS Knight Co if we didn’t pay them money.  What we didn’t know at the time was that earlier in that year the CSA had made exactly the same threats to this other businessman. 

“They ambushed me,” he said.  The CSA had requested a meeting with him to discuss handing him copies of that years’ Advanced Memoranda (draft legislation).  That was normal for him, as it was for us, his firm referenced electrical laws all the time.  So it was a normal meeting about normal matters, a one-on-one session.  But when CSA arrived at the meeting everything changed.

A full phalanx of lawyers filled the room.  The CSA had brought big guns along, layers of lawyers yes, and also some executives such as their head of marketing.  That’s what an ambush looks like.

Then the businessman got the same dog-and-pony show that I’d received; that public law doesn’t exist, that CSA owns the law, that he was violating CSA’s rights by quoting the law, that he owed them back payments of millions for having used the law for so long, etc., etc.

Our businessman shot back that the law is public property, it’s Queen’s Printer copyrighted by government.  Recall that this was in 2011, prior to the Federal Court Ruling in CSA vs. PS Knight that domestic law is now privately owned.  At the time of the businessman’s meeting, public law existed. 

The CSA responded that the law didn’t matter, they could harm his business with legal costs, they could destroy his business regardless of his guilt or innocence.  Then he reminded them of his license.

“You already gave me permission, I have your letter.”  Indeed he did.  Several years before, the CSA had given him a letter of authorization to quote as much as he liked from their text.  We have a similar contract from CSA for our business.

Well, they said, “you may have received [the] letter but thats not the same as getting approval from us.”  But the letter is exactly that; approval from CSA.  Well, they said, “it doesn’t count, it won’t matter,” they refused to acknowledge their own letter of authorization.  They did the same to us, in our case arguing that their contract, on their letterhead, signed by their executives, might’ve been forged by PS Knight Co.  I digress…..

The businessman countered that a letter of authorization has legal legitimacy, it cannot be unilaterally discarded for CSA’s convenience.  That’s illegal, it’s a massive breach of contract law.  In response, he said, “they laughed at me, literally, in the meeting, actual laughter.”  Remember CSA Superman?  They’re untouchable, above the law, etc.  That attitude surfaces so easily, so quickly, in meetings like these.

So, CSA was doing their usual shakedown, promising to harm the man if he didn’t pay whatever CSA wanted, and it’s protection money that they wanted.  The CSA disregarded Queen’s Printer laws, the Statutory Instruments Act, and Federal contract law, all in one magical meeting.  We got the same treatment, but it was by phone.  Face to face threat-making is so much friendlier.

After all this however, the businessman wasn’t feeling friendly.  “I am a fearless [man] who believes in freedom of expression and it has aways been in my nature to rebel against authority [and] I think they have none”.  He started speaking freely at the meeting.

“I told them if they want to go to war, but I’ve got [a large number of clients] and I’ll slam them.  The last thing you want to do is take on a [company] of this size.”  He ranted, it must’ve been a good show.  “You’re an association that’s done nothing in twenty-five years,” he said, you’re “a place that good ideas go to die.”

He complained to us of what we already know quite well, that CSA targets those who don’t pay protection money, “they hit you, not their friends, CSA is a corruption [sic].”  Yes, we know this.  “If you’re a player at the table, they’re not going to sue you in court.”

Of course, we also know that “if you’re not on the committee, you can’t compete as well in the market.”  This man’s competitors make more money by their CSA “alliances,” and they use these alliances “in marketing their products.”  Many of these corporate payments to CSA are like this, these members “stay on committee to control standards, to control the market.”  It’s worth it for them to pay CSA.  “Schneider [electric],” for instance, “gave ten grand to CSA to influence their committee.”  And that’s just one company, on just one committee.

And that’s normal at CSA.  In another case, one of our sources revealed that of the “twenty-four people at [the] meeting, twenty-two of them have commercial interest” in the committee’s standards, “they use it commercially” themselves.  And all this of course, without threats or lawsuits.

The connection between the power of committees and CSA’s ability to monetize that power is what drives CSA’s efforts to prevent public access to legislation.  They “want to control the messenger, the company, the money, everything.”  Controlling everything is lucrative.  And money breeds corruption.

“In [the 1980’s],” he said, “I wrote a book [with CSA].  I took a one time fee, not a royalty.  Every subsequent book or volume, they took my name off the book, the credit, stole my” name from his own authorship.  Does that sound legal?

More recently, the CSA got involved in this man’s company.  “This guy attended [our process] to get info on how to run them, then set up their own [process] to compete with me.”  The CSA attended his facility to “steal my […] corporate information”.

So, in time, the wild meeting ended and, paraphrasing Bernard Wolley, “the cleaners mopped up the blood in the morning.”

The CSA never got their protection money from this guy.  “They have left me alone, because I threatened to sink every penny of my resources to expose their corrupt practices through my [business ventures].”  Now, he said, “I do not have anything to do with CSA, or their content.  In my eyes, they are a corrupt, divisive, bully, existing far outside their mandate.”

This one businessman experienced early in 2011 exactly what we experienced later in that year.  The difference is scale; PS Knight is a small company, whereas this man’s firm is rather large.  We’re easier to victimize than he would’ve been.  He knows this too, having a touch of surviver’s guilt. 

“I am sorry for all your troubles,” he wrote.  The “CSA is a corruption [sic] and out of control in the industry, and I know that many people support your position against them.  I wonder if they will even bother to acknowledge [Peter Knight’s] passing and given credit to him for all the good he brought to Canadian industry.” 

That’s not likely.  The CSA was happily suing my father in his hospital bed.  Integrity isn’t what CSA’s famous for.