More TPA Revelations
Not directly related to Porter Airlines, but another revealing article on the shroud of secrecy and lack of accountability that surrounds the Toronto Port Authority.
Raitt accused of expense abuse
She improperly approved her London trip, Port Authority's former chair says
Federal cabinet minister Lisa Raitt signed off on her own expenses on at least one occasion – more than $3,000 spent on a trip to London, England – when she was president and CEO of the Toronto Port Authority.
Raitt signed on the line reserved for the board chair on the February 2008 claim, according to correspondence with the agency's auditor, Deloitte & Touche LLP, obtained by the Star.
The Raitt file is the latest in a series of controversies that have dogged the port authority since its inception in 1999.
It has been accused of secrecy and a lack of both accountability and oversight. It has had to fend off allegations of an arrogant, insular culture, fuelled by complaints even by directors appointed by the Conservative government.
Trouble has followed the publicly owned agency, which operates at an arm's length from Ottawa, and has, until recently, lost money. It owns and operates the Toronto City Centre Airport, waterfront land, the marina and port operations, and in 2008 boasted its first-ever operating profit of $863,000.
"(The London trip) was not pre-approved and she signed off on it when I would not," Toronto lawyer Michele McCarthy, who was in her second term as chair in February 2008, said in an interview.
She says port authority policy requires the chair's signature, adding: "I was waiting for a justification of the expenses. ... Expenses are either right or wrong."
Documents also show nobody signed off on $50,000 spent at Harbour Sixty Steakhouse in the port authority building, including a $9,000 lunch for about 50 people, and another for $1,000 at a Sept. 11 "internal management lunch."
Other expense claims appear to bear Raitt's signature, and two unsigned claims for February 2008 have notes attached: "Chair refused to sign. No reason given."
The documents obtained by the Star do not provide a tally of questionable Raitt expenses.
The expenses cover eight months of 2008. On Sept. 9 of that year, Raitt took a leave of absence to run for the Conservatives in Halton, resigning after her win in October. She is natural resources minister.
Secrecy over her spending prompts NDP Olivia Chow (Trinity-Spadina) to ask: "Was she using the Toronto Port Authority to further her political career?"
Raitt declined comment.
CEO Alan Paul wrote the Star to say nobody had to sign off on the $50,000 hospitality expenses at Harbour Sixty because "the 2007 board unanimously approved the 2008 Operating Budget. The Chair of the Board (or the Chair of the Audit Committee) approves expenses from time to time."
McCarthy insists: "The CEO's expenses are required to be submitted to and approved by the Chair of the Board. Expenses are different from operating budget items. ... No Harbour Sixty was ever in that budget. They just used it."
Paul says he "believes" Raitt's expenses were tabled in the House earlier this year. But a freedom of information request by Chow shows 2007-08 hospitality expenses of about $30,000, with no details. No mention of a $50,000 Harbour Sixty tab, nor a $9,000 lunch.
McCarthy was not the only chair to raise questions about Raitt in 2008. Toronto investment manager Chris Henley, who became chair that December, asked for a meeting "to review the President and CEO's expenses" with auditor Steve Stewart and Paul. Henley summarized the findings in writing to Stewart.
On Jan. 7, 2009, Stewart replied to Henley by email: "I concur with the accuracy of the observations that you have noted."
Henley told Stewart: "When we asked why (Raitt) signed the (London) expense claim, we did not get a satisfactory answer."
"It's all muddy," says Henley, who was allowed only 90 minutes with the file. "The issue for me is to get the facts in a proper and thorough manner, and reviewed by a proper independent party."
He adds: "Why did she sign when it was supposed to be the chair? What other expenses were incurred? ... What's their magnitude, and what are they related to?"
Paul told Henley the $9,000 covered a Quarter Century Club lunch. Who was there, asks Henley.
In January 2009, Mark McQueen, president of the Wellington Fund, became chair of a new, larger board. His election followed 10 months of turmoil over board governance.
The Star interviewed three of four directors who, earlier this year, wrote to Auditor General Sheila Fraser and Transport Minister John Baird over alleged irregularities. They include McCarthy, the lone provincial appointee who's in bank regulatory work, and federal Conservative nominees Henley, who owns investment firm Capitalcorp, and Douglas Reid, a business strategy expert who teaches in the Queen's University MBA program. The latter two left the board in August. David Gurin, former Metro Toronto planning commissioner appointed last December by the city, declined comment.
They asked Fraser for a special examination of the port authority.
Without naming Raitt, they say there was "at least one instance where a member of management approved their own expenses for payment contrary to TPA policy." Further, they say of the post audit report and draft financial statements for 2008, "we were concerned to read in (the) conclusion, the auditors did not uncover any errors of irregularities (or) non-compliance with regulatory or accounting disclosure requirements."
Deloitte spokesperson Jacqui D'Eon says the firm has a "professional obligation" of confidentiality and would not comment on the revelations in the documents.
Fraser replied she didn't have a mandate to conduct a special examination; Baird ignored their letter.
Reid says McCarthy "had been pushing back on management expenses. ... Lisa lived quite well." In the (2008) board climate of tumult, "who, then, was approving Lisa Raitt's expenses?"
Earlier this year, McQueen insisted the Harbour Sixty expenses had been approved by a board that included McCarthy, Henley and Reid. Chris Day, Baird's press secretary, said: "We have been assured by the Toronto Port Authority all expenses and hospitality policies were followed."
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