David Baines is the most hated man by man of Vancouver's business community, and apparently the most feared, too, judging by the answers received when we contacted the investment community looking for a few insights into the ‘troublemaker’.
Rogues, scoundrels, ne’er-do-wells, lend me your ears! I come to bury David Baines, not to praise him... okay, admittedly, it’s premature. Although it stands as a disappointment to many Howe Street regulars, David Baines still walks the earth, using his position as the Vancouver Sun’s most prominent business writer to scourge old enemies and curry new ones. But this retrospective was still intended as a great ceremony – a virtual burial at which antagonists could read belligerent eulogies, piling vilification upon complaint, savaging Baines’s reputation from a safe distance. Baines himself had lent a hand. First, he dug his own big hole, clawing about Vancouver’s financial district for two decades, flinging great clods of mud at every stock promoter, broker, regulator and, lately, lawyer or accountant who ever had passing involvement in an ‘unsuccessful’ stock play. Baines also agreed to stand still for the anticipatory post mortems, going so far as to provide a list of people he thought most likely to say nasty things behind his back. This, he understood, was to be their moment. Unfortunately, the celebrants refused to show. Even with their nemesis in easy range, hardly a maligned soul had the courage to fling any dirt back – at least, not if there was any chance that Baines would recognize their fingerprints. The pattern was the same, time and again. I would call, identify myself as a reporter for BCBusiness, say that I was doing a profile on David Baines and ask for comment. Whoever answered the phone – receptionist, assistant or spouse – would utter a low, knowing chuckle and say, “Oh, yes! [insert antagonist here] has a lot to say about David Baines. I’ll tell him you called.” But if the antagonist answered the call, it was only to stammer, “No, really, I have nothing to offer – not on the record.” Often, there would follow an emotional outburst. Baines, they would say, is a master manipulator of convenient fact, a vengeful slander artist. The most unsavoury of these characters would go on to recite scandalous and unsubstantiated rumours about Baines, most of which have already been debunked in a very colourful court case. But, inevitably, they would end by saying, “If I told you what I really think, it would only fuel his fire,” and, “I really don’t want to get back in his Rolodex.” David Baines, it seems, finally has Howe Street cowed. Western Canada’s most loathed financial journalist is also its most lauded. In addition to being sued more times than any journalist I’ve ever met (18 suits and counting), David Baines has also won more National Newspaper Awards (three) than any Western Canadian writer since the poetic Bruce Hutchison graced the pages of the Sun. Whenever you bump into Baines at the Webster Awards or the B.C. Newspaper Awards or the Western Magazine Awards, he seems almost embarrassed to be, once again, on the list of nominees. Like the Sun’s religion and ethics reporter Doug Todd, Baines is likely to explain that a shelf full of trophies helps maintain management’s support. He’s needed it. Although Baines’s critics now seem wary of attention, they have seldom hesitated to besiege Sun management with irate phone calls and angry letters – not to mention writs. The great promoter Robert Friedland, chair of Ivanhoe Mines, penned one purple outburst in response to a Baines article in Canadian Business magazine that was so quotable, Friedland later repeated it in a letter of complaint to the Sun. “The article,” Friedland said, “was a fever-swamp of false, misleading and unfair headlines and text, which substituted outright errors, innuendo and half-truths for an accurate presentation of the facts.” No one at the Sun ever thought of putting in a security system until two dozen placard-wielding protesters breached the newsroom in the early 1990s to denounce a Baines exposé on a pyramid scheme. No Vancouver reporter ever took seriously the periodic death threats (“I’ll kill you if you print that”) until the detectives from the Coordinated Law Enforcement Unit rolled up one day to tell Baines that someone was shopping a contract on his life. Given this history of conflict, it’s no surprise that Baines is also party to the largest libel award in B.C. history. The surprise is that, on this occasion, Baines was the plaintiff. Of the 18 suits filed against him, only three have made it as far as examination-for-discovery – and none has made it to court. The single suit that Baines filed against a detractor yielded a judgment, in Baines’s favour, of $825,000 and an ultimate settlement of $350,000. Half of that went to legal bills but there was enough left over that Baines began, for the first time in his life, to invest in the stock market – mostly blue-chip TSE and NASDAQ stocks in a portfolio that is permanently available for review by Sun management. Baines also donated $60,000 towards a David Baines/Vancouver Sun scholarship in business journalism at UBC, potentially somenting a whole new generation of David Baineses. Or perhaps not. On this, at least, everyone agrees: Baines is one of a kind. His dad was a banker – ultimately a very successful one. Born in Vancouver, 55 years ago, David enjoyed an itinerant childhood as his father was transferred – usually every two years – from one bank to another, and from one coast to the other. The young Baines may have learned how to stand alone, so stolidly, during formative years that included 12 different schools. The family’s journey ended in a nice neighbourhood in Toronto, from which Baines departed to study English at Queen’s University in Kingston. On finishing his B.A., he moved to Winnipeg for two years of presumptuous “investigative journalism” at the rambunctious Winnipeg Tribune. Working closely with Gerald Haslam (who was later editor of the Trib and publisher at Pacific Press) Baines says now, “We came up with nothing revelatory.” In 1974 Baines moved to the Sun, then at the height of its power. “They were the salad days,” Baines recalls. “There were more people than there were things to do.” (This, in clear contrast to the situation today. Thanks to the “synergies” arranged by CanWest Global, 40 per cent of the desks in the Sun’s current newsroom stand empty. You could organize a swordfight at noon and endanger no one.) Still, Baines was unsatisfied. In 1976 he approached the crusty Jack Brooks, a Fleet Street refugee who was then the Sun’s city editor. Brooks was holding the phone to his ear, apparently taking direction from a chatty reader, and he covered the mouthpiece and said to Baines: “What do you want.” Baines: “I want to talk about my future.” Brooks, still listening to his caller: “Go ahead.” At which point Baines quit. He was accepted into two business schools. Queen’s complained about the mediocre math marks on Baines’s GMAT but said the standard of financial journalism in Canada was so appalling, they hoped it might be worth their while to teach a reporter something about business. Baines chose the University of Western Ontario instead and graduated in 1978 with an MBA. Back at Pacific Press, he was rehired as a financial analyst. The company was in the midst of a huge capital investment in what was then cutting-edge information technology. Baines did a cost-benefit analysis on whether to lease or to buy and was, by his own admission, instrumental in committing PacPress to buying the worst piece of word-processing trash ever foisted upon a Canadian newspaper (a mistake repeated by the Toronto Star the same year). The next year brought the longest strike in Pacific Press’s history (11 months) – the event ended PacPress’s unchallenged dominance of West Coast news. After crossing the picket line for four or five months, Baines quit once more, signing on as a commercial account manager at his father’s old haunt, the Bank of Montreal. There followed some wild and useful years. Working at “an obscure branch at Carrall and Hastings,” Baines “spent the first couple of years shoveling money out the door and the last couple trying to collect it.” Interest rates ran to 20 per cent, the Vancouver housing market collapsed and, suddenly, it became critical to study what Baines calls the four C’s of lending: credit, character, capacity and collateral. [pagebreak] He made some mistakes – mistakes that would later colour his vision and harden his heart against the dream merchants who populated the Vancouver Stock Exchange. In one memorable case, he was working with the young owner of a troubled insurance company. Baines doesn’t say he pushed any banking boundaries but “worked hard” to keep the client aloft. He adds, almost apologetically: “I liked the guy.” Then, one darkening evening as Baines was leaving the office in his rusted-out Rabbit, he stopped at a red light and noticed the “troubled” borrower sitting next to him in a brand new, bright orange Mercedes convertible. “It was completely incompatible with the austerity that was appropriate,” Baines says, adding, “I knew at that moment that I was going to pull his loan.” The experience left him with “a deep distrust of hedonism” – another bias that was sure to colour his later reporting. The practice of journalism is vaguely addicting. For some people there is an allure of power (although, as a former Sun editorial writer, I can attest that actual amount of power is highly over estimated). For others, journalism is a calling. As long as there are stories to tell – or wrongs to right – they can’t sit by idly. In 1985, Baines succumbed once more, joining the Province as a stock market reporter. Again, he made some mistakes. In a Vancouver magazine piece that Baines wrote in 1994, he says in his first few months “I produced a series of upbeat articles on Howe Street’s habitués, including “The Prince of Deals” – a celebration of nouveau stock promoter Nelson Skalbania – and “The Shakers” – the story of ‘three superbrokers, how they make their money and how they spend it.’” Baines grimaces. “They were among the worst articles in Vancouver journalism history.” You have to like this about Baines, the way he searches out and shares the aspects of his past that he finds most humiliating. For example, he once took a swipe at Robert Friedland in the Sun, and quoted from a story in Canadian Business magazine to substantiate his criticism – without acknowledging that he was also the author of the Canadian Business piece. It was shoddy – beneath someone who is generally so careful. And during the course of our interviews, he mentioned it twice and provided two different documentary sources, including Friedland’s florid letter of complaint. If you’re going to hear bad things about David Baines – if they’re true – you’ll hear them from Baines first. It also points to something else in Baines’s character – to a sense that he ascribes to the old aphorism ‘Fool me once, shame on you. Fool me twice, shame on me.’ It’s as if he relies on each mistake to guide his current conduct. Such being the case, it became increasingly clear, even before Baines returned to the Sun in 1988, that he was no longer going to stand as an easy mark for the stock touts. Whenever a new promotion began to brew, Baines’s first question was, “Show me the financials.” If the answer was, “Oh, they’re really not material to what we’re doing right now,” Baines broadcast the news like a siren warning for investors to bail out. That’s when he really started to get under the skin of the VSE. Something else happened around the same time that cemented Baines’s role as a market scourge. Walwyn Stodgell Cochrane Murray (a forerunner to Midland Walwyn Capital) sacked a young floor trader named Adrian du Plessis, allegedly for refusing to conduct rigged trades. Du Plessis was mad – righteously indignant – and he knew too much to go quietly. He knew which promoters were most likely to be involved in questionable deals and he knew exactly how they manipulated the market. And he spent the next decade doing research and telling any reporter, anywhere in the world, everything that he knew. No one, he says, listened as well as Baines. Stockwatch editor John Woods, who hired du Plessis as a reporter, and who also fed Baines, says of journalists in general: “They have very good minds, but not necessarily very inquiring ones.” Baines, on the other hand, “looks and looks and looks. He looks under things, he looks into files – he really looks into the documents.” He also looks with the skepticism of a moneylender. Calling on his banking skills, Baines got into the habit of asking the ‘character’ questions, which he says began politely enough – “Tell me about your track record” – but became increasingly belligerent – “Have you ever been associated with a profitable enterprise?” – and finally “Have you ever done anything worthwhile in your entire life?” That’s about when the lawsuits started to fly. Baines would arrive in the middle of a stock promotion – in the early days, the touts would actually invite him around – and he would look at who was involved and how the deal was structured. If it fit the pattern, he would denounce the whole affair as a sham. The next day, that writ would hit the desk at the Vancouver Sun. Barry Gibson, the Farris and Co. libel lawyer who generally represents the Sun, says this: “Most of the time people were suing him just to go on record telling potential investors that ‘I’ve sued him and he’s all wrong.’ Then they’d finish running the promotion and walk away from the suit.” Still, it made everyone twitchy. “David’s work is rigorously edited and vigorously lawyered,” says Sun business editor Paul Bucci. But the “lawyering” process has been a pleasure, says Gibson. “David’s a tenacious researcher. One thing that’s a given with David is that he’s got his facts right. I can’t say that with respect to very many reporters that I deal with.” By October of 1992, the relentless reporting of preponderantly negative facts had pushed someone to the breaking point. When the police reported the threat on Baines’s life, it was different than the usual telephone intimidation. Someone was actually offering money for a hit. “I found that a little stressful,” says Baines’s wife, Dympna, in the kind of stunning understatement that clearly runs in the family. “David tends to downplay things. We had a few discussions – I wasn’t particularly thrilled about it – but you know how it is with these things. You don’t put a lot of thought into it; you just get through it.” With three boys in a Richmond public school (Dympna adds that the school officials were also “a little stressed”), the family lurked about for a week or so, taking different routes to and from work and tolerating the police cars constantly ghosting by the house. And then they just tried to forget. In the stilted lingo you’d expect from the police spokesperson, Baines concludes, “To this day, we can never ascertain what veracity the whole thing had.” Baines never lost a step. It helped that he had someone strong by his side. Asked why she didn’t insist that her husband switch to, say, theatre reviews, Dympna says: “That isn’t who David is. He really seems to enjoy what he does. He likes digging up the dirt.” Baines couldn’t know that he was in for a personal dirt flurry the likes of which he had never seen. In 1994, during a period when he had actually considered a break from financial reporting, he got hit with a face full. George Chelekis, a purported reporter for the tout sheet The Bull and Bear, began an exposé on Baines. Chelekis’s most compelling allegation was that Baines had been short-selling the stocks on which he was writing – that his journalistic attacks were intended to drive down the price of his targets so that he and his “partner” Adrian du Plessis could make a profit. [pagebreak] This was a wonderful story in the stock community – something slimy promoters could finally understand. As du Plessis says, one of the things that made the hustlers so uncomfortable about him and Baines was their lack of pecuniary motive. “I really believe those guys would have felt better about me if they thought that I had found a way to use this to make money,” du Plessis says. Except that none of it was true. As Chelekis’s conspiracy theories became more detailed, and as he became more aggressive in trying to disseminate the stories, the Sun turned the tables. It sued. “God knows I don’t believe in newspapers launching libel suits,” Sun editor-in-chief Patricia Graham says now. “But this was so egregious, it was hurting the reputation of the newspaper and we couldn’t make it stop short of a lawsuit. It’s an unfortunate thing. It created a precedent that is capable of coming back to bite us . . . but it had to be done.” It also succeeded beyond anyone’s expectations. The victory was clear, huge and came about a year after Chelekis was busted in the U.S. for exactly the kind of stock fiddling of which he had accused Baines. It hasn’t ended the slander. People still whisper the allegations, but no one will get caught putting name to paper in an atmosphere in which truth is the only defense. There remains the question of why Baines carries on. At a time in life when many business journalists have drifted into comfy jobs as corporate communicators, Baines is still shuffling about the Sun, of late turning his attention on the self-regulating professionals who, in his view, do too much to facilitate the business scams and not nearly enough to hold their clients – or one another – to account. But Baines answers the question simply: “After nearly 20 years, it’s difficult to generate much sympathy for the perpetrators, but I can still generate indignation for the victims.” One of those victims was Alma McGauley, who was a 63-year-old retired teacher from Castlegar when the Teachers Investment and Housing Co-op crashed in the mid-1980s. “David was the first one who gave me an appointment,” says McGauley. “He took the story in hand.” For seven years, McGauley worked – with generous direction and extensive coverage from Baines – to rally the investors who had lost money and to fight for a better deal. “I put the seven best years of my retirement into that fool thing.” At the end of the day, investors got an additional $32 million – 84 cents on the dollar instead of the 51 offered originally. “He’s most definitely our hero,” McGauley says. If that makes Baines sound more like an agenda-driven consumer advocate than an ‘impartial’ reporter, you won’t catch him denying it. In fact, it speaks to his unique and perhaps original theory. Baines believes there are two kinds of journalism: “producer” journalism, in which reporters accept and pass on the views of a “news producer” without any critical analysis; and “consumer” journalism, in which the reporter tries to identify the targeted news consumers and then investigates the story with their interests in mind. The obvious instances of producer journalism can be seen in the laudatory stories that result when a reporter rewrites a press release touting a corporate announcement, without so much as picking up the phone to verify the facts. Consumer journalism is harder; it demands a degree of skepticism and it takes time. It’s also inconvenient to stock fixers who don’t want people asking embarrassing questions about their hype. But the application of the producer/consumer journalism model isn’t limited to the business pages. One of Baines’s favourite examples was the story of Sheldon Kennedy, a former NHL player who had earned an unpleasant amount of fame in 1995 when he told the world that he had been the victim of sexual abuse at the hands of his junior hockey coach. A couple of years later, in 1998, Kennedy set out on roller blades, announcing his intention to cross the country, Terry Fox-style, raising money for a Rocky Mountain ranch that would serve as a healing centre for other victims of childhood abuse. There followed a moving series of stories, as Kennedy popped up in one major market after another, to retell his story and collect donations. With the Kennedy story, producer journalism reigned; David Baines was alone in asking some new and embarrassing questions. Was Kennedy really skating all the way across the country? Well, no. He was skipping the lightly populated areas. Was he taking any of the money that he was raising for himself? Well, yes – $7,500 a month in salary plus expenses. Did he or his partner, Vancouver promoter Stephen Funk, have a business plan for this proposed ranch? Well, no again. At the end of the day, the Kennedy campaign flamed out and the dream of a victims’ retreat disappeared in a cloud of tax-deductible gifts that were consumed, in large part, by the campaign itself. From many people, this earned Kennedy more sympathy. He had tried and failed. From Baines, Kennedy got no more than a sneer. The consumers – the kids who had laid out their own money and the taxpayers who got fleeced underwriting “non-profit” donations that went straight into the producers’ pockets – those consumers were not well served. It’s this clear-eyed judgment – this unforgiving high standard – that makes some people nervous in Baines’s company. As Adrian du Plessis pointed out, the Howe Street crowd could never understand why Baines was so determined to break up their game when there was nothing in it for him – and when so many other reporters seemed so malleable by comparison. Ask Baines about this, especially about the performance of his fellow reporters, and suddenly he is the picture of discretion. His criticism of producer journalism is not so much directed at his colleagues, he says. “It’s a condemnation of the people who employ them.” Companies can often hold reporters hostage, exactly because those reporters don’t understand the business world, Baines says, adding: “I have yet to see a requirement that an applicant [for a business reporting job] know how to read financial statements.” Sun editor Patricia Graham bristles at such criticism. “Is he saying there are reporters who can’t [read financial statements]? Really, you don’t take shots like that without attaching names.” Business editor Paul Bucci deflected the same question nicely by concentrating instead on Baines himself, who Bucci calls “uniquely qualified.” And then Graham sums it up: “David’s not the easiest person to be the editor of, but he’s worth it.” [pagebreak] All of the foregoing may have left an impression of someone who is self-righteous and humourless but Baines is neither. Righteous, yes, but relentlessly self-critical. At home he produces a periodic ‘organization chart’ to update his three boys as to where they stand in the family hierarchy. Baines says he always puts himself and Dympna at the top “generally followed by the dog” (a 14-year-old standard poodle). The boys follow in an order dictated by their most recent transgressions. Says Dympna: “David has high expectations of himself and everybody else.” As for a sense of humour, Baines’s sometimes heavy-handed style belies the delight that he takes in his work. For example, he particularly enjoyed crashing an elaborate promotion being run by one Michael Henderson, the former president of Lasik Vision, a company that collapsed not long after Baines started reporting the tawdry nature of its accounting procedures. The background: Henderson was trying to rustle up funding for the biggest of Las Vegas casinos – a dream that he calls “The Moon”. When he sent out a press release announcing a promotional session at The Four Seasons Hotel in Las Vegas, Baines called for an invitation. Henderson refused, promising to have Baines thrown out if he showed his face. Of course, Baines showed up. “Some events are just too good not to get thrown out of,” adding that he was most flattered when the Vegas bouncers recognized him on sight; Henderson having obviously circulated his picture. Baines quickly convinced the Sun to send him to Vegas. “I’d like to say I’ve been thrown out of nicer places,” Baines said, as they rushed him toward the gold-plated doors, “but it wouldn’t be true.” So, whether it’s a sense of mission – or a sense of mischief – Baines is not about to give up the fight, happily irritating and alienating news “producers” in favour of defending the “consumer” rights. “It’s not very profound,” he says, in obvious reference to the Alma McGauleys of the world, “but if you can help people, it makes you feel good.” Conversely, Baines is completely content that he doesn’t have any buddies on Howe Street. “Collegiality,” he concludes, “is the enemy of good journalism.” And don’t they know it. MONEY ON THE BLOOD In the life of every over-achiever stands a father figure whose accomplishments can never be quite matched. In the case of David Baines, it’s Fred Baines, the man who son David calls “the biggest influence in my professional career. “He [Baines senior] is a former VP of the Bank of Montreal – in charge of central Ontario, including Toronto. He has spent much of his life dealing with captains of industry but he has never lost sight of basic values. “He was born and raised in rural Saskatchewan but he never permitted himself to be dazzled by the bright lights. Every morning he would be picked by a uniformed chauffeur in a big, black Lincoln Continental but he never played the part. He would pick up neighbours on the way to work. He would take me with him but he always dropped me off a few blocks from school so nobody would get the wrong impression. “He’s 93 years old now and lives in Victoria. He never gives advice but I can always tell what he is thinking. That, to me, is a very high form of communication.” THE LONE CRITIC Of a dozen periodic targets – brokers, businessmen, lawyers, regulators – contacted for this story, only securities lawyer Howard Shapray had the courage to go on the record criticizing Baines. His comment: “I first met David Baines when he was a cub reporter for the Province. He had been assigned to cover a notorious civil action Involving a massive stock fraud known as the Carter/Ward case. I was representing a victim. Baines loved that case because it exposed a slimy side of Howe Street in a fashion never before chronicled in a Vancouver courtroom. Day after day, the Province ran front-page headlines that put both of us in the limelight. After that case, I don’t believe that David could ever imagine that any good could emerge from the peculative capital markets. “Since then, David has honed his writing skill to become a master of the art of innuendo. We have crossed swords many times, mostly over his hostile and unfair treatment of Robert Friedland, a client who has been responsible for two of the world’s most exciting mineral deposits – in Voisey’s Bay, Labrador, and in Mongolia. For example, Baines implied that Friedland was in some manner responsible for an environmental problem in Colorado, failing to mention the landmark decision of a highly respected justice, now a member of the Ontario Court of Appeal, who found that the U.S. Justice Department had suppressed and fabricated evidence to misrepresent Friedland’s alleged role.” For the record, Baines acknowledges reporting U.S. Justice Department allegations against Friedland – and later the Sun reported an Ontario court judgment quashing a US$152-million order obtained by the Justice Department against Friedland’s assets. Still, Baines remains one of Friedland’s most trenchant critics and, as Shapray implies, it’s mutual. STICKS, STOCKS, BODY CHECKS When not high-sticking in the financial press, Baines’s principal pastime is Canada’s own: hockey. He plays one night a week in each of two different leagues and then a third night every week with a bunch of old buddies. “He’s a very intense guy,” says Peter Norwood, who has known Baines since they did their MBAs together at the University of Western Ontario in the mid-1970s. “Whether it’s hockey or any other port, he is just as tenacious.” Baines also brings his famous sense of moral rectitude to the rink, Norwood says. “He’s not afraid to tell teammates or opponents if he thinks they’re not doing the right thing.” And, Norwood adds, Baines is a little thin-skinned. “I’ve heard guys on other teams say that he doesn’t mind giving it out, but he doesn’t like taking it.” But everybody agrees, as Norwood says: “He’s not particularly a guy you want to go into the corner with.” In the locker room, Norwood says Baines is a wonderful storyteller and a loyal friend, but concludes (in a comment that might also find wide agreement), “I don’t know that I would like to play against him, as much as I like playing with him.”