Pete McMartin: A fruitless quest to save the Downtown Eastside
Oversight: PEACH was an ambitious quest to help the Downtown Eastside. Why did it go so wrong?
Mary Morgan, an international consultant in developing countries, was brought in to head up Partners for Economic and Community Help (PEACH).
Photograph by: Arlen Redekop, Vancouver Sun
VANCOUVER
-- Mary Morgan has seen the worst the world has to offer. Guatemala,
Bosnia, Sierra Leone, Liberia, Afghanistan, Zambia, Zimbabwe — her
consultancy work in developing nations has given her first-hand
experience with war, poverty and disease. She has worked for CARE, CIDA,
and the International Rescue Committee, among others.
But nothing prepared her for Vancouver’s Downtown Eastside.
In 2002, she stepped into the job of executive director of Partners for Economic and Community Help (PEACH). The previous executive director had left, and Morgan was hired for the job.
PEACH was an initiative of the Vancouver Agreement, a joint program funded by federal, provincial and city governments. Its aim was to revitalize the Downtown Eastside. It has since been shut down, but there would be similar programs replacing it.
PEACH’s role was — and I quote from the official bumf — “to give residents of Vancouver’s Downtown Eastside the tools to improve their situation by furthering community capacity building, enhancing entrepreneurship and business development, and creating employment and employment training opportunities.”
Hear that, Mr. and Mrs. Taxpayer? The high-minded public relations babble? The complete absence of measurable goals? If you suspect that perhaps PEACH was not, in fact, peachy, you would be right. This fruit was rotten.
Walking into the job, Morgan found an agency without any oversight.
“I was stunned. ... There were no lending policies, (and this) for an organization that was solely dedicated to disbursing loans.”
The PEACH program was divided into two parts. The first was a $1-million grant fund, all of which had been given away to various DTES “projects” by the time Morgan had arrived. The second part was a $1-million loan fund. Morgan found it in disarray.
“Just to give you an idea of the mess the organization was in, two business loans of $100,000 had been disbursed with no contracts being signed because there was no lending procedures or lending policies in place. Without these procedures in place, the organization essentially handed out free money.
“In my first three months, I had to write off $350,000 of our $1-million loan fund that came from Western Diversification (the federal agency involved in the Vancouver Agreement). Western Diversification told me that it did not matter if the $1 million was written off. They would give me another million dollars!”
Among the organization’s board — which included Mark Townsend, executive director of the Portland Housing Society — was chair Peter Fairchild, a property manager and consultant who had worked in the Downtown Eastside (he now lives on Vancouver Island). He disagreed with Morgan’s view of the control over loans.
“All of the paperwork,” Fairchild said, “was done with the best due diligence possible. The money was in the local bank (Four Corners Community Savings bank) and they wouldn’t have loaned out any money without the appropriate paperwork being done and everything signed off.”
(Four Corners was shut down by the provincial government in 2004 after posting annual losses since its inception.)
But PEACH employee Melanie Buffel, pressed into the position of loans officer by Morgan, agreed the organization’s oversight procedures were a mess. “Mary and I ended up working together to close a number of loans that had really gone nowhere and were never going to be paid off. And then (we tried) to establish a very rigorous process for giving up new loans. ... So just the process of making decisions of who was going to get a loan was very messy and unclear, and so we spent a lot of time getting a policy and procedure manual in place.”
Said
Morgan of those loans: “They were giving loans up to $100,000 (later
reduced to a maximum of $50,000) without any checks or balances. For
$100,000, you have to get people in there who know how to run a
business. But it was essentially a last-resort lending option, which
means you get the people of highest risk. And so you get people coming
down who wanted free money, and (they) didn’t get penalized.”But nothing prepared her for Vancouver’s Downtown Eastside.
In 2002, she stepped into the job of executive director of Partners for Economic and Community Help (PEACH). The previous executive director had left, and Morgan was hired for the job.
PEACH was an initiative of the Vancouver Agreement, a joint program funded by federal, provincial and city governments. Its aim was to revitalize the Downtown Eastside. It has since been shut down, but there would be similar programs replacing it.
PEACH’s role was — and I quote from the official bumf — “to give residents of Vancouver’s Downtown Eastside the tools to improve their situation by furthering community capacity building, enhancing entrepreneurship and business development, and creating employment and employment training opportunities.”
Hear that, Mr. and Mrs. Taxpayer? The high-minded public relations babble? The complete absence of measurable goals? If you suspect that perhaps PEACH was not, in fact, peachy, you would be right. This fruit was rotten.
Walking into the job, Morgan found an agency without any oversight.
“I was stunned. ... There were no lending policies, (and this) for an organization that was solely dedicated to disbursing loans.”
The PEACH program was divided into two parts. The first was a $1-million grant fund, all of which had been given away to various DTES “projects” by the time Morgan had arrived. The second part was a $1-million loan fund. Morgan found it in disarray.
“Just to give you an idea of the mess the organization was in, two business loans of $100,000 had been disbursed with no contracts being signed because there was no lending procedures or lending policies in place. Without these procedures in place, the organization essentially handed out free money.
“In my first three months, I had to write off $350,000 of our $1-million loan fund that came from Western Diversification (the federal agency involved in the Vancouver Agreement). Western Diversification told me that it did not matter if the $1 million was written off. They would give me another million dollars!”
Among the organization’s board — which included Mark Townsend, executive director of the Portland Housing Society — was chair Peter Fairchild, a property manager and consultant who had worked in the Downtown Eastside (he now lives on Vancouver Island). He disagreed with Morgan’s view of the control over loans.
“All of the paperwork,” Fairchild said, “was done with the best due diligence possible. The money was in the local bank (Four Corners Community Savings bank) and they wouldn’t have loaned out any money without the appropriate paperwork being done and everything signed off.”
(Four Corners was shut down by the provincial government in 2004 after posting annual losses since its inception.)
But PEACH employee Melanie Buffel, pressed into the position of loans officer by Morgan, agreed the organization’s oversight procedures were a mess. “Mary and I ended up working together to close a number of loans that had really gone nowhere and were never going to be paid off. And then (we tried) to establish a very rigorous process for giving up new loans. ... So just the process of making decisions of who was going to get a loan was very messy and unclear, and so we spent a lot of time getting a policy and procedure manual in place.”
Morgan resigned after 13 months on the job. The last straw came, she said, when the board of directors killed a pilot project to encourage Downtown Eastside women to save money. For every dollar they saved, PEACH would kick in two, with the proviso that the money would go toward helping them become self-sufficient.
The board, Morgan said, voted it down because the money could not be considered a loan. “And that’s when I quit. The loans weren’t working ... and there was no interest whatsoever in real economic development. When you are working with marginalized people, there are appropriate business products, and business loans of $50,000 are not appropriate products for that population.”
The real issue for Morgan, however, was the lack of oversight by the government. It was that lack, still continuing today, she said, which leads to spending scandals like that of the Portland Housing Society.
“The fact that the government is giving out that kind of money and they don’t give a damn about what systems are in place, that’s the issue.
“They’re throwing money at (the Downtown Eastside) ... but it hasn’t improved.
“Listen, I’ve been to some bad places in the world. When I got off the plane in Liberia, there was no electricity in the whole country. And that place is moving forward.
“But this is Canada, and (the Downtown Eastside) is a 10-block area. And why don’t we have better services down there? And why aren’t we dealing with the real problems?”
pmcmartin
Amazing! Criminal and scandalous.
ReplyDeletethank you good sharing article
ReplyDelete