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High-profile member of Wildrose party resigns

November 27, 2009

Strategist Stephen Carter, the co-owner of Carter
McRae, leaves party over business issues
Nathan VanderKlippe
The Globe and Mail
November 25, 2009

Calgary -- From Wednesday's Globe and Mail
Published on Tuesday, Nov. 24, 2009 8:23PM EST
Last updated on Wednesday, Nov. 25, 2009 1:36AM EST

When the world's ambassador of peace came to
Calgary, he left a battle in his wake.

The weeks following the Dalai Lama's visit to the
city in September have been filled with furious
recriminations and threats of lawsuits among
those who contributed to the event, only to find
out later they would not be paid the hundreds of thousands they are owed.

The fallout led Tuesday to the resignation of a
high-profile member of the upstart Wildrose
Alliance Party, which is challenging Alberta's
ruling Progressive Conservatives, and worries
about Calgary's future ability to host high-profile speakers.

The two-day Dalai Lama event enthralled Calgary,
featuring an appearance by former South African
leader F.W. de Klerk and concerts by k.d. lang
and Bryan Adams. Pictures of the Dalai Lama
wearing a white Stetson made local newspaper
front pages, while the Tibetan leader's speech
attracted 15,000 to the Pengrowth Saddledome,
each paying ticket prices between $25 and $75.

Tickets for the full two-day event cost several hundred dollars.

But more than two months later, some performer
expenses have not been paid, including for Mr. de
Klerk, the former South African president who
helped abolish apartheid. In total the event has
left $300,000 in unpaid bills after Carter McRae
Events, which was hired by the University of
Calgary to co-ordinate the occasion, told a
supplier that the event “lost money,” leaving it “completely insolvent.”

"They have no money to pay anybody," said Dan
Frerichs, the owner of Sound Art Calgary Inc., which is owed $51,000.

"Where did the money go is my question."

The debacle has several companies pursuing their
legal options and has infuriated city event
workers, who have watched Calgary become part of
the world speaking circuit. In recent years, Bill
Clinton, George W. Bush and Alan Greenspan have
all come here. Business leaders said the Dalai
Lama visit would cement Calgary as a place where
global luminaries come to talk.

But though other leaders have been brought to
town by different companies, the Dalai Lama mess
may tarnish the city's image, event workers say.

"It was on the news every night how proud Calgary
was to have brought these people in -- and then
we turn around and don't pay the guest speakers,
we don't pay the suppliers,” said Janet Bennett,
the western Canada regional director for
AVW-TELAV, an audio-visual company that is owed just under $70,000.

"It affects the city and its reputation."

It has also cast questions over the Wildrose
party, which hired Stephen Carter, the co-owner
of Carter McRae, as a strategist. Mr. Carter was
forced to apologize last week after making
Twitter comments that saw some as derogatory to
Alberta premier Ed Stelmach's Ukrainian heritage.

Following inquiries by the Globe and Mail
Tuesday, Wildrose spokesperson Shawn Howard said
Mr. Carter resigned from the party position
because "he did not want these business issues
becoming a distraction and did not want political
opponents to be able to use that against [Wildrose leader] Danielle [Smith]."

In an interview, Mr. Carter said he was as much
the victim as those with unpaid bills.

"I got screwed. And in turn others got screwed,"
he said. "There's lots of people devastated by
this. And no one is more sorry or sad than I am
-- I lost an awful lot through this. I know that
a lot of my suppliers are on the hook for tens of
thousands of dollars, but I added an extra
$200,000-plus to my own personal debt.”

Carter McRae Events was formed 12 years ago, and
became one of the leading events organizations in
Calgary. Owned by Mr. Carter and his wife,
Heather McRae, it had a staff of nine, and a
reputation as an ethical business. Its suppliers
often operated on credit, declining to demand the
deposits that are standard in the industry because they trusted the company.

According to Mr. Carter, the problems started
this summer. His company was hired to organize
the Water Ski World Championship 2009, which was
held south of Calgary, and oversaw most of the
financial aspects of the event. But when it did
not make the money it expected to, Mr. Carter was
left with just over $400,000 in red ink, which
the event's backers have been unwilling to pay, he said.

He also lost a significant sum of money from the
Dalai Lama event, after representatives for the
spiritual leader challenged his ability to profit
from the speech through higher ticket prices, he said.

"Anything we tried to do to increase the revenue,
the Dalai Lama's people said no to," he said.
"And ultimately, the event just couldn't generate enough revenue."

Combined, the two flops left him with about
$700,000 in unpaid bills, more than he could handle, he said.

But Mr. Carter's story was challenged by the water ski event organizers.

"It's true we haven't paid him. But that
presupposes that we owe him something. And
there's no way in heck I'm prepared to say that,
because the accounting is just an absolute mess,”
said Kim Reid, a lawyer who volunteered with the championship.

The university, which invited the Dalai Lama, is
also owed money by Carter McRae but it may,
through its own involvement and the tangle of
financial transactions, also become the target of
lawsuits – all thanks to an event meant to spread peace and harmony.

"The irony," Mr. Carter said, "is not lost on me."
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