Enforcement staff atthe B.C. Securities Com-mission in Vancouver last month cited former NDP member of Parliament Nelson Riis for making false and misleading representations about Canadian Rockport Homes International Inc., a Vancouver-based company that is promoting low-cost, pre-fab concrete homes as a solution to the world housing problem.

Riis, who served as the MP for Kamloops, B.C., for two decades and as NDP caucus chairman for four years until his defeat in 2000, joins a lengthy list of former politicians who have worked for junior companies that have promised much more than they have delivered.

Such former politicians include former Canadian prime minister John Turner (Harvard Industries Corp., Unique Broadband Systems Ltd.), former Ontario premier David Peterson (YBM Magnex International Inc.), former Alberta premier Don Getty (Canglobe International Inc., Capital Reserve Canada Ltd.), former federal solicitor general Doug Lewis (Visa Gold Explorations Inc.) and former British Columbia attorney general Bud Smith (Farm Energy Ltd.).

Along with Riis, Rockport chairman and CEO Bill Malone is accused. If the allegations stick, Malone and Riis — who is now retired in Ottawa — face possible stock market suspensions and financial penalties.

Riis, however, is not concerned about the enforcement action, “Not at all,” he says. “I stand by everything I have ever said publicly about the company. [BCSC enforcement staff] may ask me some questions, but I have a very firm and elaborate response to any inquiry they could ever put to me.”

Riis, 66, is a former high-school and college geography teacher. He served as a Kamloops alderman and a school trustee before entering federal politics in 1980. After his 2000 defeat, he joined Rockport as a director and vice president of investor and government relations.

The company initially planned to raise US$16 million in a public offering and open plants in Chile and other far-flung countries. There were many optimistic forecasts: sales would be in the billions of dollars; the company’s shares would be listed on Nasdaq, the Frankfurt Stock Exchange, the London Stock Exchange and the Toronto Stock Exchange.

Riis and Malone aggressively promoted the sale of seed shares — initially at $2 a share, then at $5 — to private investors, including about 300 Kamloops residents.

During 2003, Riis issued a series of e-mails to Rockport shareholders that gave the impression that orders for the company’s prefab homes, as well as financing offers, were flooding in. The e-mails included the following examples:

> June 9, 2003: “We have recently been approached by SNC-Lavalin — one of the largest engineering firms in the world, operating in 100 countries — with a contract of 10,000 homes in Bahrain.”

> Aug. 29, 2003: “Two weeks ago we signed a contract in Chile with a company called Sercon for 1,000 homes. The US$90-million housing deal with Codelco in Chile closes Sept. 22 and we are told that we have a good chance of getting it. We have now finalized a $3.7-million convertible debenture offering.”

> Nov. 3, 2003: “An American company has been working for the past year on some large housing projects in Nigeria and in Ghana and they should come onstream in the next few weeks. They are considering 10,000 to 20,000 house contracts. The BIG NEWS is in Mexico where we have signed a [memorandum of understanding] with a large Mexican company to immediately build a 2,150-home project and have agreed with them to build out 10 plants throughout the country. Our investment bankers in Ottawa are still working to sell out the debenture for up to US$10 million.”

In early 2004, Rockport’s five-year estimates projected revenue of US$55 million in the first year, climbing to US$1.5 billion by the end of the fifth year. During the same period, net after-tax earnings would jump to $485 million from $8.9 million. These figures escalated in subsequent projections.

Meanwhile, Riis was telling investors that a public stock listing was imminent. “We want to time our stock launch on Wall Street when we can get the greatest bang for our buck, which should be relatively soon,” he said in a June 11, 2003, e-mail. “When trading begins Rockport will ‘SWEEP THE STREET.’ Wall Street will not know what hit it.”

The company never did obtain a public listing, and revenue and profits have fallen far short of projections. As of Sept. 30, 2007 — the date of the company’s last financial report — total revenue since inception was only $73,000, and cumulative losses were almost $17 million.

@page_break@The BCSC alleges that from January 2002 to June 2005, Rockport made claims that were “overly optimistic,” “not objectively justifiable” and “false or misleading.”

The BCSC also alleges Rockport sold $4.4 million of shares under offering documents that were not in the required form, and failed to report its share sales to the BCSC.

The BCSC further alleges that Riis and Malone “authorized, permitted or acquiesced” in these contraventions.

A hearing is pending.

Over the years, many former politicians have lent their names and services to junior public companies, many of which have failed to deliver on their promises.

In 1993, Harvard Industries, which was listed on the old Vancouver Stock Exchange, announced that former PM Turner would serve as chairman and the company would develop the world’s finest french-fry vending machine.

After announcing contracts to sell US$258 million worth of machines and potato powder to unknown companies in faraway places such as Brazil and Guyana, Harvard Industries’ share price catapulted to $28 on the VSE. But none of these deals materialized, and the only thing that got fried was the stock.

In 1999, during the high-tech bubble, Turner joined the board of Unique Broadband Systems, based in Concord, Ont. The stock jumped to $17.75 a share on the former Canadian Venture Exchange, then collapsed after numerous financial irregularities were uncovered.

Former Ontario premier Peterson thought he had found a winner when he joined the board of YBM Magnex, which was supposedly manufacturing magnets and bicycles in Eastern Europe. The stock leaped to $20 a share in early 1998 on the TSE before U.S. authorities discovered it was infested with Russian mafia. Enforcement staff at the Ontario Securities Commission sought to ban Peterson from the market for five to 10 years for failing to blow the whistle, but the hearing panel gave him only a mild reprimand.

In 1991, former B.C. attorney-general Smith became a director and big promoter of Alberta Stock Exchange-listed Farm Energy, which was developing a system to convert cereal grains into ethanol and high-protein mash for cattle. A couple of years later, former Alberta premier Getty joined him on the board and became chairman of the executive committee. Alas, by the end of 1999, the company had become insolvent and the shares were delisted.

In 2005, Getty became chairman of Canglobe (now Globetech Environmental Inc.), an Alberta-based medical-waste treatment company that traded on the lowly OTC Bulletin Board in the U.S. Its majority shareholder was Bert Lavallee, a businessman from Edmonton who was accused of numerous securities offences relating to two other OTCBB issuers in the U.S. (He was later found to have engaged in illegal trades and distributions of securities, and suspended from the Alberta securities market for five years.) So far, Globetech’s attempts to develop a viable business have produced nothing but losses.

More recently, Getty has been serving as chairman of Capital Reserve, an Edmonton-based company that plans to build 230 salt caverns at Two Hills, Alta., to store 125 million tons of carbon dioxide captured from oilsands production 400 miles to the north. The proposal is raising much concern among local residents, but the market doesn’t seem to think it will amount to anything. At press time, the stock was trading at only 3¢ per share on the OTCBB.

In 1999, former federal solicitor general Lewis listed his company, Visa Gold, which was exploring for sunken treasure off the coast of Cuba, on the Canadian Dealing Network. The stock initially surged to more than $2 a share, then declined to the 50¢ level by February 2000, when Lewis resigned. Toronto promoter Paul Frustaglio took over and in June 2003, the RCMP searched 13 Toronto brokerage firms for evidence that someone had been manipulating the shares. Lewis was not accused of any wrongdoing, but the story adds another chapter to the rather dubious history of penny-stock promotions involving Canadian politicians. IE