Pigeon King 'dead in the water'

Tuesday, June 17, 2008

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by BETTER FARMING STAFF
 
The Stratford Agricultural Society has confirmed that space is booked at the city's new fairground complex for a meeting for producers Saturday at 1 p.m.

In the meantime, Waterloo Regional Police is considering an investigation of Pigeon King International.

Sergeant Robert Zensner says Waterloo Regional Police Service received two complaints concerning insolvent Pigeon King International (PKI) on Thursday. Zensner is with the police service's fraud squad.

Right now we're just entertaining the complaints and we're going to look into the matter to see if it's viable to start an investigation, he says. The police are waiting for complainants to bring in their statements and supporting documentation for review.

On Tuesday, PKI founder Arlan Galbraith ended months of speculation about his controversial pigeon breeding scheme. His only market was new investors or existing investors increasing their stake.

PKI is dead in the water, according to a notice from Galbraith dated June 17. The notice, distributed to contract growers, suppliers and holding barn operators, says he has handed his business over to a bankruptcy trustee. Galbraith couldn't be reached for comment.

On Wednesday, his voice mailbox was full and the company's 1,500 sq ft. headquarters in a rented storefront in Waterloo was locked, leaving the building's owner wondering what had become of his tenant. The company's large "business development office," in rented facilities in the former township offices in Moorefield, was also locked. 

Company salesman Ken Wagler, Embro, did not immediately respond to a message left on his home telephone number Wednesday. His message suggested that callers reach him on his cell phone. The mail box on Wagler's cell phone was full and was not accepting new messages. PKI salesman Keith Van Dyk was also unavailable for comment.

Galbraith's notice advises that those who received his free birds, as well as holding barn landlords, are free to deal with the pigeons in their barns in any way they choose. You can sell them for whatever price you want to whomever you want. You can auction them off. You can let them fly free in the fields with the wild pigeons. You can gas them and bury them on your farm.

It is an offense for a person to willfully neglect birds in their care, says Hugh Coughill, chief inspector, Ontario SPCA. Producers may have to explore the option of euthanizing their birds, noting that the disposal of spent laying hens has also become an expensive proposition.

I suppose, in the case of pigeons, opening the doors may be a humane option, adding, I don't know how well these birds survive in the wild.

I don't know that half a million pigeons set free is going to do the environment any good in Ontario, especially if they all decide to head to downtown Toronto … and you end up having half a million extra pigeons in front of city hall, what do you call it, Nathan Phillips Square? Our friends in Toronto would really like that.

The Ontario Farm Animal Council has no plan for dealing with the collapse of Pigeon King International, Kelly Daynard, program manager told Better Farming several weeks ago.

In his letter, Galbraith says he is suffering from Hodgkins Lymphoma which he describes as a serious type of cancer. He says the pigeon business gave him the will to fight it. The company sold pigeons for up to $500 per pair to about 1,000 farmers in more than a dozen states and at least four provinces. Investors typically paid $100,000 but some invested $1million or more.

If PKI's earlier estimates of having 1,000 growers and an average investment of $100,000 each are correct then existing PKI's liabilities under their 10-year contracts could be close to $1 billion.

Galbraith's statement, which says his business has been reduced to ashes, repeatedly blames FEAR MONGERS (sic) for the collapse. He claims critics have used the Internet, e-mail, phone and the media, to spread their hateful attack and poison the minds of the public. In December, Iowa became the first state to halt the company's sales alleging that the company’s pigeons were props in a Ponzi scheme where new investors are recruited to pay off early investors. Later, South Dakota, Maryland, and Washington also moved against the company.

Galbraith also blames high fuel and feed costs, a weakening American and Canadian economy and Canadian tax authorities who want to collect hundreds of thousands of dollars, in unpaid Goods and Services Tax for pigeons sold in earlier years. Galbraith says he’ll need to sell his home to cover the federal GST bill. He complains that poultry breeding stock is exempt from GST and he always believed pigeons are no different than poultry.

Canadian authorities have always insisted that PKI was doing nothing wrong although former PKI salesman Bill Top wrote letters to federal and provincial politicians and met with authorities in an effort to get them to prevent new investors from joining the PKI scheme. I'm just glad it’s over, Top told Better Farming in an interview Wednesday morning. His name and cell phone number were recently mentioned in an anonymous letter to the editor of Plain Interests, an Amish paper published by avowed PKI opponent David Wagler. Top, now a long-distance trucker, says that triggered hundreds of inquiries over the past two weeks from prospective PKI investors. He estimates that at least 15 opted out of the scheme after talking to him. Top is left wondering how he's going to deal with a cell phone bill that could exceed $2,000.

In his statement Galbraith claims that in 2007 he paid out more than $12 million to his growers. Since none of that payout came from an outside market, but rather from new PKI investors or existing ones who reinvested, PKI would have had to come up with double that amount in the next year.

If more information gets out to fellow breeders it is probably better that the word spreads, Tupperville grower Kris Harris told Better Farming. Harris has also found that telephones are not being answered at PKI offices. Harris who began about two years ago with 250 pairs when he was an engineering student followed up that investment by building a new barn capable of housing 900 pairs. He had planned on an annual gross income of $287,500 yielding full payback on his investment in about four years. Attached to Galbraith's statement distributed to W-S Feed & Supplies by Wagler is a letter addressed to breeders by PKI bookkeeper Joan Carter who explains she still can't believe what has happened.

Carter says despite all the extreme hardships this has brought on my family I do not really regret knowing Arlan Galbriath. In fact aside from Carter's role as PKI bookkeeper, the way she describes her involvement is fairly typical of the manner in which PKI drew in families: My sister and her husband (who were equal partners with my brother on the second contract) have lost their retirement fund, my brother will be years digging himself out of the debt he went into to put up and fill his second barn besides not having paid off the first flock. Then there is my son and his young family who have lost their dream of being able to raise their children (they just found out another one is on the way) on a farm.

Paul Waldner, a minister involved with a Hutterite branch where three Alberta colonies invested as much as $3 million, predicted the loss would be hard for the individual colonies involved but wouldn’t threaten their existence. He said however that all of the colonies in his branch had been advised not to participate so there would not likely be any help for those suffering losses now. They’ll just have to struggle along and get themselves out of it. The warning was out so nobody’s going to be too helpful there.

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