by DAVE PINK
A leading sales agent for Pigeon King International said in Kitchener Superior Court Tuesday that the company’s owner, Arlan Galbraith, was never willing to discuss his marketing strategy for the birds he was to buy back from breeders across North America.
“He said, ‘That’s my problem. You don’t have to worry about it,’ ” Ken Wagler told the court.
Since 2001, Galbraith had been in the business of selling breeding pairs of pigeons to people, most of them farmers, with a promise to buy back the offspring. Initially, these pigeons were described as racers and show birds and were to be sold to pigeon hobbyists and enthusiasts around the world. But late in 2007, Galbraith changed his approach, announcing to his investors that he would be developing a breeding program to grow pigeons, or squabs, for human consumption.
Galbraith is on trial, charged with defrauding investors in his company of millions of dollars. He’s also facing charges under the Bankruptcy and Insolvency Act. He has chosen not to hire a lawyer and is representing himself.
“People would invariably ask, ‘Where did these birds go and what are they used for,’” Wagler said. Typically, Wagler said, Galbraith would answer that they were “racing, sport and show birds.”
Wagler added later that Galbraith had told him, “If you need to know the answer to that you will not be raising pigeons for me.”
Wagler said that Galbraith had told him that there were too many potential competitors wanting to move in on him and the pigeon business, and that he wanted to keep his business plan to himself. “He kept insisting he had a business plan.”
Wagler testified that he first approached Galbraith about buying some pigeons to put in his newly built barn in the fall of 2005, and soon after Galbraith visited him at his farm near Embro. Wagler said that he told Galbraith about his missionary work and regular visits to Africa. “Arlan said, ‘I like what you’re doing,’” Wagler testified. Galbraith then gave him a cheque for $100, as a donation to that missionary work. Then Galbraith said, “I believe you’re the kind of person who could sell pigeons,” Wagler told the court.
Soon after, Wagler signed a 10-year contract agreeing to buy 160 pair of breeding pigeons for $16,000, with a promise to buy back the offspring at $25 each.
A short time later, Wagler agreed to become a straight-commission salesman for the company.
And, things were good.
“I was very satisfied with how it was working. Everything was working according to what Arlan was telling me,” said Wagler.
In 2006, Wagler testified that he earned about $100,000 in commissions – not counting the money he received for selling his birds back to Galbraith. And in 2007, his commissions climbed to about $150,000.
“It was coming together. Everybody was getting paid. I was getting paid,” he said.
In testimony earlier in the trial, many of the growers who had lost thousands of dollars after investing in pigeons, said they had made their initial purchase through Wagler.
And on Tuesday, Wagler conceded that everything he knew about pigeons was told to him by Galbraith, and when he didn’t have an answer for a prospective breeder he would ask Galbraith.
Wagler said that he and a neighbour partnered on another pigeon contract. And Wagler said his son, David, also invested heavily in pigeons.
When Galbraith offered his growers a newly structured contract – one that required a much larger down payment with the promise of much bigger returns – Wagler wondered what he was doing.
“The $500-dollar contract . . . I thought my sales career was over. Nobody is going to be that foolish to spend that kind of money.”
He was wrong. “A lot of people showed interest because of the rate of return,” Wagler said.
Crown attorney Lynn Robinson asked Wagler, “Did there come a point when you were concerned about the volume of birds being produced for sport?”
After reviewing the statement he made to police on Oct. 1, 2008, Wagler said, “Initially we could not provide enough birds. By mid-2007, Arlan was looking for more and more holding barns.”
As well, several news articles were questioning the viability of the Pigeon King operation – which
Wagler said he found disturbing. “There were a lot of stories that didn’t square with me,” he said, and along with a few other breeders, Wagler said he approached Galbraith to ask what he planned to do about it.
Galbraith told them he was not planning to do anything.
“I felt we had to be proactive to counter what we thought was untrue,” said Wagler. “There was a lot of negative publicity, and it was going to affect the company greatly.”
In 2008, Wagler said sales dropped off sharply. And in June 2008, he got the word that Pigeon King was bankrupt.
Wagler said he immediately felt the need to speak with the people he had sold pigeons to. “I said to myself, I gotta go and talk to people. I can’t let them find out in the media. I started driving.”
Later, Wagler said he had to sell off 100 acres of his farm to help his son recover his pigeon investment losses.
Under cross examination by Galbraith, Wagler said he was never pressured to make sales and did not have to attain any sales quotas – although he was encouraged to meet with and sell pigeons to people in the Hutterite colonies of Western Canada. Typically, Wagler agreed, prospective pigeon buyers were encouraged to take some time and think about it before committing to a contract with Galbraith.
The trial continues Wednesday before Justice G. E. Taylor, and could continue well into December. BF
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