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COMMENTARY · 17th July 2010
Merv Ritchie
Updated with pictures, documents and links.

It was a blip on the radar screen of the news when a 17 page letter written to former BC Cabinet Minister Grace McCarthy, detailing the infiltration of the government of BC by the Mafioso, was revealed. The letter was written by George Peden who worked as a private investigator for those very individuals he was revealing. Peden described details of the desire of the Mob to expand gambling and gaming houses into BC.

At that time Bill Vanderzalm was Premier of BC. The architects of the infiltration were concerned that his controversial and sometimes unpredictable nature would not facilitate an easy acceptance by the BC general public. They believed a new Premier would need to be selected.

Peden warned my recent actions had put my life in danger as the people I was currently doing business with were some of the world’s worst criminals. I had just finished installing a 160 kilowatt hydroelectric facility on a river at the north end of Harrison Lake at Port Douglas; the Heritage site and second biggest BC community at the start of the Gold Rush. After we finished the project the Papalia’s refused to pay the bill. I started taking actions to collect.

“You are a young businessman with a promising future,” stated Peden, “but you need to know who you are dealing with.” Peden then invited me to meet with him at a place of my choosing, Red Robins in Downtown Vancouver on Thurlow between Robson Street and West Georgia.

“I’d suggest you walk away from your losses and put it down to a learning experience,” he stated after he provided a list of books I should read about the crooks to whom I had just lost $136,000 doing business with; Contrepreneurs by Diane Francis and Sideshow, The Howe Street Carnival by Adrian du Plessis.

The Socred Party in British Columbia was the primary and most elected political Party since WAC Bennett started it by uniting the Liberals and Conservative Parties in the 1950’s. Wacky, as he was affectionately known, manipulated the BC electoral process with admirable precision maintaining his hold on power to the mid 1970’s. His right hand man, and leadership opponent through most of this time period was “Flying” Phil Gaglardi.

Gaglardi shared his office on the 17th floor in the Vancouver Stock Exchange Tower on Granville Street with the Papalias’. The letter George Peden wrote to Grace McCarthy wasn’t made public until 1991.

It was 1988 and Peden worked for the sometimes jailed and frequently VSE sanctioned corrupt Italian mobsters, twin brothers Roberto and Antonio Papalia. The 17 page letter he wrote to former Cabinet Minister Grace McCarthy detailed and warned about the infiltration of the BC Socred government by the mob. We spoke with Peden and flying Phil Gaglardi during that time while we performed the contract work on the hydro electric installation for the Papalia’s and their “Gold Mine” . Gaglardi stated they needed to replace then Premier Vanderzalm as he was far too controversial. The plan was to find a Provincial Premier who was more acceptable and calm so they could accelerate their gaming facility plans.

The Papalia twin brothers were a work of art. They would switch their attire such that one day Robert would be dressed in a nice suit and tie while Antonio would be dressed casual. The next time they would switch. One never knew just exactly who you were talking too. If I said, ‘but Robert stated this’, the one I was talking with could say, ‘but I’m Robert, it must have been Tony’. It was a brilliant act of deception detectable only by the closest people. A memorable moment was when they returned from a trip to San Francisco after visiting Randy Jackson, Michael’s younger brother, wearing a leather jacket with a logo from a recent tour. In a strange way I have fond memories of losing money to Robert and Tony. Getting beat by the best is almost a life memory worth $136,000.

Read about the Papalia twins HERE and HERE.

Garglardi’s statement about Vanderzalm proved to be even more accurate than initially thought as he, Zalm, was reported to have taken paper bags full of cash from a realtor, similar to former Prime Minister Mulroney. Rita Johnston took over the leadership of the Socreds in 1991 which sounded the death knell for the Socreds. The NDP formed Government as the Liberal Party of BC was revived by Gordon Wilson who became a fast rising superstar, forming the official opposition.

Insiders of the Socred Party began working with Wilson’s new Liberal Party switching their allegiance, abandoning Rita. In 1993, after telling the British Columbian public he had no interest in the Liberal Party and planned to remain Mayor of Vancouver, when Wilson accused Gordon Campbell and his organizers of infiltrating his party, Campbell successfully took over the leadership of the Liberal Party. The new Socred crowd, calling themselves Liberals, now had their new leader.

The British Columbia mainstream media treated every action of the NDP as dastardly and every action of the Liberals as an act of divine wisdom. Pacific Press (the Vancouver Sun and the Province), Black Press (every newspaper in the Northwest along with 70 other BC newspapers), BCTV and Global all participated in the kid gloves approach to Gordon Campbell. The media was shocked when Campbell did not win on his first two attempts to become Premier. After his second loss the BC media did everything, and it is even alleged the RCMP participated, to discredit the new leader, Glen Clark. The previous leader, Mike Harcourt complained about the unfair treatment of the issues and the NDP by the media in BC as he decided to quit politics.

After reporting for years, the terrible economy being all due to the NDP, Pacific Press started a new section in their newspaper called “Success” immediately after Campbell became Premier.

Now, after his drunken driving charge, the raid of the legislature, the sale of BC Hydro and BC rail, ongoing revelations of misdeeds and mistruths, along with the continuing trial against ex-government officials and the destruction of emails and documents against the orders of the Supreme Court, the BC media continue to hold their collective tongues.

Ever since Gordon Campbell has taken office the numbers and methods of gambling and gaming facilities have exploded. Last week the BC Government became the very first jurisdiction in North America to have Government sanctioned and controlled on line gaming. In 1931 the state of Nevada legalized gambling. In the 1950’s the crime families of America took over and controlled most of this activity. The question remains, was George Peden telling the truth, organized crime has been attempting to take over the Government of BC since the 1980’s? Who has a complete copy of this 17 page letter he composed to Grace MacCarthy? Comparing his notes to the actions of Gordon Campbell, the potential front man, would be interesting indeed.

George Peden died shortly after this letter was exposed in 1992. It is claimed he died of Aids. A woman was arrested at the Vancouver International airport a few months prior to his death attempting to return to San Francisco. Her offence . . .? Possession of a hypodermic needle full of blood heavily contaminated with the HIV virus. No allegations were made at the time of what she had intended or had done.

Updated - See new Pictures and Attachments Below;

And Thanks to BC Mary at;
for the link to the 1991 BC Legislature Hansard (the transcript of the debate, which refers to this incident), HERE.

Ministerial Statement - From the BC Provincial Legislature Hansard (the written record of the conversations) June 19, 1991

HON. MR. FRASER: Yesterday in the House the hon. member for Esquimalt–Port Renfrew raised the matter of the dismissal of my executive assistant. I responded that the matter was a personnel issue, and that is still my belief. Nonetheless, in response to questions and reports in the media, I would like to provide the House with the following information. In 1988 a lengthy letter by private investigator George Peden, which contained numerous allegations against a number of individuals, was received by Grace McCarthy, then the Minister of Economic Development. The member from Little Mountain in turn referred this document to the then Attorney-General Brian Smith. Ministry of Attorney-General officials confirmed at this time that the matter was under police consideration.

By September 1988, members of the RCMP and the Vancouver police department determined that the allegations were groundless. This conclusion was confirmed today by Assistant Commissioner Palmer of the RCMP. In late 1990 the same letter — or a letter containing similar allegations — was brought to my attention by my executive assistant, Bob Walsh. In reviewing the document, I decided that the allegations appeared to be without substance. Following my discussion with Mr. Walsh, he on his own initiative turned the document over to Peter Engstad, the director of the Coordinated Law Enforcement Unit. Mr. Engstad referred the document to the RCMP, who advised Mr. Engstad that they had already reviewed these allegations. The document delivered by Mr. Walsh did not disclose any new allegations, and in the opinion of the police the allegations were without substance. This fact was also confirmed with Assistant Commissioner Palmer today.

On May 21, Deputy Attorney-General Bob Edwards was confidentially advised that this document was inappropriately disclosed by Mr. Walsh to a person outside the ministry or any police agency. Mr. Edwards then conducted an investigation concerning this allegation of inappropriate disclosure, and last Thursday advised me of this matter. This was the first time I became aware of this inappropriate disclosure.

The deputy and I agreed that the proper course of conduct was for Mr. Edwards to speak to Mr. Walsh directly, which he did immediately. During this meeting Mr. Walsh confirmed that he had made the alleged disclosure. Following discussions with my deputy, I came to the conclusion that Mr. Walsh's conduct was unacceptable and required his dismissal. I advised Mr. Walsh of my decision on Friday, June 14, 1991.

Mr. Walsh requested an extensive severance payment of some three months, or until he had time to find a job. This request was refused, and he was advised that he would get exactly what was coming to him, not a penny more and not a penny less. Mr. Walsh was not satisfied and indicated he would make the matter public in some fashion. I have no information, other than just stated, as to any other persons who may have access to Mr. Peden's letter.

Mr. Walsh did not resign. He was dismissed for inappropriately releasing confidential information to a person outside the ministry or any police agency. This disclosure did not compromise an ongoing police investigation or a criminal prosecution. The circumstances of this disclosure demonstrate a lack of judgment concerning material he had obtained in his capacity as my executive assistant, and any future disclosures of this nature would produce a similar result. I am not aware of any other inappropriate disclosures of confidential information by Mr. Walsh — certainly not anything that would jeopardize an ongoing police investigation or criminal prosecution.

The dismissal of Mr. Walsh is in no way connected to the alleged disclosure of information from the Ministry of Attorney-General concerning the legal opinions dealing with the departure of Mr. Couvelier as Minister of Finance in April.

The 1988 letter by George Peden appears to have been made available to members of the media. As the allegations contained in it were determined by the police to be without substance, in my view it is not appropriate for me to discuss the details in a public forum. I refer members to the Owen report, which clearly addressed the issue of public disclosure of police investigations. As the allegations were investigated by the police in 1988 and as I have taken appropriate steps to deal with the problem in my office, a further inquiry is not required.

While it is the tradition of the Attorney-General to be provided the assistance of an executive assistant, this incident is of such concern to me that I have requested the Deputy Attorney-General to prepare a report and recommendations on the appropriate role of an executive assistant to the Attorney-General. It is my intention to act upon these recommendations provided, and I welcome any of you to provide me with any recommendations you may also have.

I might add that according to the Sun newspaper this morning, it has been suggested that Mr. Peden made allegations in 1975 that the CIA had infiltrated the NDP.

When allegations such as the ones raised by the member for Esquimalt–Port Renfrew come to light, there is an appropriate procedure to follow to ensure that justice is done and is seen to be done. Allegations of this nature are not to be dealt with in a public forum. The conduct of the member for Esquimalt–Port Renfrew was severely called into question in the Owen report. It appears that the member for Esquimalt–Port Renfrew has again proceeded down the same path. That brings into question his role as the justice critic, and that of the Leader of the Opposition in leaving him in that post.

MR. SPEAKER: Order, please. Before recognizing the next member to speak.... I did not interrupt the minister in the procedure of making his statement, but when people read statements that are prepared by people unfamiliar with the rules of this House, it would be the preferred course of action that members who are still members of this House be referred to by their constituencies and not by their names. There were several violations of that fundamental rule in your statement.

MR. ROSE: Mr. Speaker, I couldn't agree with you more. It went far beyond the bounds of a ministerial statement, which has to do with administration....


MR. ROSE: Are you finished? You guys learned to harrumph when you were about 15.

Mr. Speaker, it went well beyond the policy and administration guidelines assigned to ministerial statements. We didn't interrupt because it was an extremely important matter. Occasionally we like to get the truth from this government.

This case is a very serious matter. It involves a public servant, his termination, his personal life, his future and his whole reputation, and we on this side of the House don't.... Since we didn't receive any kind of notice about this.... We didn't receive the courtesy of a copy of the ministerial statement. We're prepared to respond to the minister, but we would like to ask leave to have our response delayed and deferred until we can make a very responsible, accurate and thoughtful response to the minister's statement. To proceed right now, I think, would be unfair not only to the minister and my colleague, but also Mr. Walsh.


MR. SPEAKER: Order, please. Leave has been requested. The normal procedure is that when a ministerial statement is made, there is an opportunity for response at that time. Of course, our rules can be waived with unanimous consent. So I'm going to ask: is such leave granted? There are several noes.

HON. MR. RICHMOND: On a point of order, Mr. Speaker, I listened very carefully to the opposition House Leader, and he did not rise on a point of order. Therefore I submit to you that they have had their response to the ministerial statement.

MR. ROSE: Mr. Speaker, I have no desire to prolong this agony, but I don't know where in the rules it says there can be only one response to a ministerial statement.

MR. SPEAKER: Order, please, hon. members. Under the circumstances.... There are times when members rise to bring matters as points of order and don't actually articulate the fact that it's a point of order. For the purpose of this interpretation, the Chair is going to make the arbitrary decision that the remarks made by the opposition House Leader were in fact a point of order to seek leave. Such leave is not granted.

I will now allow the member for Esquimalt–Port Renfrew to make a reply to the ministerial statement.

MR. SIHOTA: Mr. Speaker, the minister has made a statement to the House. My colleague the opposition House Leader has pointed out that there was no advance notice given of that, as is usually the courtesy in these matters. The minister made....


MR. CLARK: I would request that you ask the members on that side to refrain from their pathetic ramblings. If you wish a formal request to withdraw, I'd be happy to oblige.

MR. SPEAKER: The member for Esquimalt–Port Renfrew has been recognized, and he stood in his place. If he wishes to begin speaking he can do so; otherwise I'm afraid the Chair is powerless to stop interjections. I'm not going to comment on the editorializing or the quality of the objections.

MR. SIHOTA: As I said, it is customary to receive notice, and in this case that courtesy has not been extended to this side of the House. If that is the decision the Attorney-General has made, he has to live with the consequences of it.

At this point I have a lot of questions to ask the Attorney-General. A number of issues, in my mind, remain unanswered in the statement that he so carefully prepared and presented to this House. I would prefer, rather than dealing now with the comments he made in the House today, to review his comments in the Blues later on today and refer to this issue again later. I can assure the Attorney-General that I have a set of questions that I will be putting to him tomorrow in relation to this matter, because it seems to me that a number of issues have not been attended to. But at this point, Mr. Speaker, given the sensitivity of the issue and the absence of courtesy from the opposite side, I have no intention of responding in detail to the minister's statement.

Direct copies of the two links provided above ie; Read about the Papalia twins HERE and HERE.

West Vancouver stock promoter arrested in Italy

Italian police have arrested West Vancouver stock promoter Robert Papalia in Milan and charged him with associating with Mafia figures.
By Vancouver Sun October 25, 2007

VANCOUVER — Italian police have arrested West Vancouver stock promoter Robert Papalia in Milan and charged him with associating with Mafia figures.

The arrest on Tuesday was part of a campaign by Italian authorities to dismantle a financial empire allegedly run by Canada’s top Mafia boss, Vito Rizzuto of Montreal.

Rizzuto is in prison in the U.S. for three gangland slayings, but according to Italian authorities, he still runs a network of Mob-related companies.

Some of those companies are listed on European and North American stock markets, “including one registered in Vancouver to develop business projects linked to gold mines in Canada and Chile,” according to the National Post.

This appears to be a reference to Infinix Ventures Inc., a Vancouver-based company that has been closely linked to Papalia and his twin brother, Anthony.

Like most of their recent stock deals, the company’s shares are quoted on the loosely regulated OTC Bulletin Board in the U.S.

On Tuesday, police conducted a series of raids in Italy and France, seizing 22 companies, freezing $689 million worth of assets, and charging 17 men, including Papalia.

“We have seized many companies and hundreds of millions of euros all around the world because we believe that behind these companies is Vito Rizzuto,” Silvia Franze, an investigator with the Direzione Investigativa Anti-Mafia in Rome, told the Post.

Even though Rizzuto is in jail, Italian authorities issued a warrant for his arrest.

They also issued warrants for Rizzuto’s father, Nicolo, and three other men — Paolo Renda, Francesco Arcadi, and Rocco Sollecito — all of whom are in Montreal awaiting trial.

Another Canadian businessman — Felice Italiano of LaSalle, Que. — was arrested in his Rome hotel room just before he was scheduled to fly home to Canada. In the 1990s, Italiano was arrested in connection with one of Canada’s largest drug seizures, although charges were eventually dropped.

The Post reported that, according to legal documents filed in connection with the case, Rizzuto sought to “manage and control the economic activities connected to the acquisition of contracts in public works” and “commit a series of crimes — killings, international drug trafficking, extortion, frauds, smuggling, stock-market manipulation, insider trading and criminal transfer of securities.”

Details of Robert Papalia’s alleged involvement are not known, but his specialty, and that of his brother, has been stock promotion.

Born in Italy and raised in Montreal, the Papalia twins attracted police and regulatory attention early in their careers. In 1974, the Montreal Exchange delisted their company, Pacific Nickel Mines, for allegedly using company funds to buy shares of a Toronto Stock Exchange company.

The brothers then went to England, where they got into more trouble. In 1977, they were arrested by Scotland Yard in connection with an alleged plot to defraud investors through their company, Metals Research S.A., which claimed to have a gold mine on Texada Island (a property that would be repeatedly featured in later promotions). After lengthy court proceedings, they were acquitted of all charges.

Meanwhile, Anthony Papalia was charged in Vancouver with defrauding Continental Securities of $51,000. He was convicted in 1982 and sentenced to two years less a day, but the appeal court overturned the conviction and ordered a new trial. Rather than re-try the case, the Crown dropped the charge.

In 1986, the Papalias took control of Vancouver Stock Exchange-listed American Westwater Technology Group and the stock rose to a high of $9.75 on the basis of its proposed acquisition of some medical technology and an interest in a car distributorship.

RCMP alleged in search warrant documents that the brothers had been manipulating the company’s stock price. In December 1988, Robert was charged with issuing a false prospectus, but that charge was eventually dropped.

In 1990, the Papalias joined the board of VSE-listed Rhyolite Resources, once again promoting the Texada property. However, the VSE refused to reinstate the company for trading due to the Papalias’ history, so the brothers moved to the U.S. over-the-counter markets.

One of these deals was Crys-Tel Communications Ltd., an OTC Bulletin Board company which proposed to offer long-distance telephone services over the Internet. The stock peaked at $4 US in January 1999, then fell apart.

According to documents obtained by The Vancouver Sun, Anthony Papalia — who was then in regular contact with Vito Rizzuto — was an active trader of Crys-Tel stock through Lines Overseas Management, a controversial Bermuda-based brokerage firm used by many Vancouver promoters.

Robert Papalia was also heavily involved in another bulletin board company called Nano World Projects Corp. In August 2004, the SEC barred him for life after he was found to have issued a series of false and misleading statements about Nano World’s business affairs. The B.C. Securities Commission similarly banned him.

Meanwhile, Infinex Ventures, under the control of Howe Street promoter Mario Aiello, proposed to acquire some technology from Nano World. However, in April 2003, Infinex cancelled the deal, perhaps due to the SEC’s investigation into Nano World.

Control was ostensibly passed to Montreal promoter Michael De Rosa, but this did not break the connection with the Papalias. In May 2004, Infinex acquired an option on the Papalias’ Texada property.

A month later, the stock peaked at $2.30. The company later acquired a Chilean property, but the shares have since slumped to 46 cents.

Nanotechnology company executive banned for 25 years for fraud and misrepresentation
The B.C. Securities Commission November 01, 2005

Vancouver - The head of a nanotechnology company who committed fraud when he issued news releases containing false or misleading information and sold shares has been ordered to pay a substantial fine and serve a lengthy market ban by the British Columbia Securities Commission.

Under the commission’s orders, Robert Papalia cannot act as a director or officer of any issuer, nor can he engage in any investor relations activities, for at least 25 years. He must also pay an administrative penalty of $75,000 (a sum which takes into account a fine imposed earlier by a U.S. court).

Papalia was a director and chairman of Nano World Projects Corp., and from December 2000 its chief executive officer. Nano World’s business was the development and commercial exploitation of nanotechnology. The Delaware-incorporated company had a B.C. business and mailing address and maintained a corporate office in Vancouver with support staff. Its shares were quoted on the U.S. Over-the-Counter Bulletin Board until Nano World was delisted in April 2001 for failing to file mandatory reports.

Earlier this year, a commission panel decided that Papalia and Nano World violated securities laws when Papalia, on behalf of the company, issued seven news releases between September 2000 and January 2001. These documents contained false or misleading information. Papalia lived in B.C. during this period.

Papalia reviewed and approved the issue of each of the seven news releases and he also directed or was fully involved in all the negotiations referred to in the releases.

In its June 22, 2005 decision, the panel found that the news releases contained false statements or omitted important facts about financing deals or financial backing, business partnerships, contract contingencies, or Nano World’s poor financial condition. The panel found that Papalia knowingly or recklessly put investors’ economic interests at risk by making the company look more valuable than it was.

In its sanctions decision, the panel concluded that Papalia poses a significant risk to investors and markets in B.C.

“His contraventions were serious. He is clearly unfit to hold a position of trust as a corporate director and officer and he should not be involved in investor relations. We must deter him, and others, from similar conduct,” said the panel.

The panel will examine more information and submissions from staff before awarding costs in this matter.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the decision on our website by typing in the search box, Robert Papalia or 2005 BCSECCOM 648. If you have questions, contact Andrew Poon, Media Relations, 604-899-6880.
Dear Merv
Comment by Deedee Panesar on 26th October 2013
Are you a journalist? Here, we would like to address the Press:

People tend to react uncomfortably to reports that there are members of our government institutions whose sole purpose is to investigate, interrogate, intimidate, and harass legitimate citizens, whose ideas and ways may differ from the norm.

Our supposed Free Press when faced with such stories rarely push hard enough against the people or methods behind the accounts. The story itself is always more newsworthy. Insinuations derived from established sources such as the police, army or government agencies are often accepted at face value without addressing the possible real motives behind the accusations.

There have never been any convictions. Please take take your time or get yourself an italian translator to understand the above. We ask you to retrack your slanderous comments of calling the Papalias 'mobsters' .

Deedee Panesar
Comment by Catherine on 20th March 2013
So what attracted the Papalia's to BC? Are you not worried that they will come after you for exposing this? Have located the first book, Contrepreneur, but not the second.
Comment by BC Mary on 26th July 2010
Bravo, Merv!

Is it OK if I re-post your article on my blog? My readers have faithfully followed the BC Rail give-away and other nefarious deeds,

they'll want to see this, too. Thanks for bringing it to public attention again. I remember enough of W.A.C. Bennett to recall how heavily he depended upon RELIGION to bolster his own reputation.
complicit electorate
Comment by Ron Savard on 20th July 2010
By now, it is common knowledge that the Cambell Liberal government is criminal in intent as well as effect but what does that say about an electorate that consistently votes for and rationalizes their antisocial and inhumane policies?
the truth
Comment by les wamough on 19th July 2010
Thank you my young friend. I have been on the political scene,Provincial and Municipal for 35 years, and have seen most of what you describe, and more. les.
Not only the media holds their tongues
Comment by Terry Gresl on 18th July 2010
I wonder how many people feel uncomfortable about making a comment with regards to an article of this nature ?