3 Crown corp. chairs paid $284,000 compensation for 'part-time' work
Per diems paid for golf outing, Paris air show and a reception in Washington
Taxpayers paid out more than $284,000 in compensation to three successive board chairmen of a little known Crown corporation called the Canadian Commercial Corporation, CBC News has learned.
The job was supposed to be a "part-time" position with "incidental" compensation, according to the website of the Privy Council Office.
The bulk of that compensation was paid in what the government calls per diems, a sort of daily rate for extra work.
These kinds of per diems are typically paid to board members to compensate for their time spent travelling to, preparing for and attending board meetings. They might also get an honorarium for attending a conference for the agency they represent.
In the case of the three chairmen for the Canadian Commercial Corporation, the majority of the per diems appear unrelated to board meetings and include compensation for attending a reception in Washington, an air show in Paris and a golf outing in Montreal.
The board chairman paid the most in the CBC News review was Robert Kay. He served from 2009 to 2012 and claimed per diems worth $159,000 for 424 days of extra work over a three-year period.
"It's shocking sometimes," says Aaron Wudrick with the Canadian Taxpayers Federation.
"How could this not set off an alarm in your head that this is not the right thing to do? This is public money, this is money that goes towards our schools and our hospitals and our roads, and if it's being wasted, you know that leaves less for the really important things."
The revelations come as part of an ongoing review of spending at Crown corporations and government agencies by the CBC News' Investigative Unit.
CCC brokers contracts
The Canadian Commercial Corporation helps broker large contracts between foreign governments and Canadian corporations, often in the defence industry.
For example, the CCC is responsible for the controversial $15-billion contract to sell Canadian-made light armoured vehicles to Saudi Arabia. Last year, it helped negotiate contracts for Canadian companies worth $1.26-billion.
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The chair of the board of the CCC is appointed by the federal government and is entitled to claim a per diem worth $375 per day. That's on top of any expenses he or she might incur for travel and meals, and an annual stipend worth $9,400.
The bylaws for the CCC spell out the chair's responsibilities.
In addition to running board meetings, they include helping to provide "leadership and guidance," interacting with the president of the corporation to "manage strategic direction and public policy issues" and acting as the point of contact between the board and the minister.
The board chair can also play a role in the CCCs mandate to promote trade, which might include attending trade shows.
The Privy Council website says per diems are "normally payable" for three reasons: physical attendance or attendance by phone at meetings of the board, travelling time to and from board meetings and "special executive, analytical or representational responsibilities."
In all three cases, more than half of the per diems paid to the board chairs and reviewed by CBC News fell into the "special" category.
The most recent chairman of the CCC board, Ray Castelli, claimed the least amount in per diems of the three board chairs reviewed by CBC News. Still, more than half of his per diems appear unrelated to attendance at board meetings, including $1,500 for four days for a reception in Washington.
Castelli was appointed by the former Conservative government in 2012. In the 1990s he worked as a political staffer for Conservative Kim Campbell while she was minister of national defence and also during her brief stint as prime minister.
He is the CEO of a Vancouver-based company called Weatherhaven, which makes portable shelters, largely for military applications.
Castelli's appointment was renewed by the Harper government, along with several other government appointments, in June 2015, just weeks before the federal election campaign began.
When the Liberals came into power, Castelli offered to step down, though he told CBC News he was "willing to stay on." Last month, however, he resigned permanently.
CBC News reviewed Castelli's per diem claims over a 16-month period. He charged for a total of 73 days, or just over $27,000 in per diems during that period. Just over half of his per diems appear unrelated to attending board meetings.
However, the CCC insists all of the per diems charged by Castelli are allowed under its rules, which have been approved by the government.
"Not only have all of Mr. Castelli's expense and per diem claims been compliant with our policies, but in every year of his term he has consistently claimed fewer per diems than permitted by our policies and bylaws," the CCC's vice-president for legal services, Tamara Parschin-Rybkin told CBC News in an email.
"Don't rake me over the coals over a couple of per diems, that doesn't seem fair," added Castelli in a phone interview.
"If anything we dramatically cut board expenses in the three years I was there, compared to the three years before. Go back and ask the [Privy Council Office] why the chairman before me charged 100 per diems in his last year and what they did about it."
Paris air show
It's a fair question.
Robert Kay, who was also appointed to the CCC by the Harper government, currently serves on the boards of two private companies and is a deputy judge with the Superior Court of Ontario Toronto Small Claims Court Branch.
CBC News reviewed Kay's per diem claims over a 36-month period. He charged for a total of 424 days earning $159,000 on top of his annual stipend. His average annual compensation at nearly $62,000 was more than double Castelli's.
CBC News took a closer look at more than half of the perdiems claimed by Kay, and the vast majority of them appear unrelated to attending board meetings or were paid without a clear explanation.
In one example, it appears he claimed a per diem for attending an air show in Paris.
"It's ludicrous," says Ken Froese, a Toronto based forensic accountant with Froese Forensics.
"Either there are a lot of days being put through that have less than a clear link to what the board's role was meant to be, or the organization's asking far more of a board than it ever should.
"Either way, there's a problem in the corporation. It's one or the other."
Kay declined to be interviewed for this story.
"My term as chairman of the CCC was completed more than three years ago," he told CBC News in an email. "I retained no records of any matters related to my term at the CCC. Nor do I have any authority to speak to matters on behalf of the CCC."
Alan Curleigh earned roughly $62,000 during his final 11 months as the chair of the board at the CCC. That includes his annual retainer and the per diems for extra work.
Curleigh was appointed by the Jean Chretien government in 2002.
In his last 11 months as chairperson, he charged 129 days of per diems, earning just over $48,000 over and above his annual compensation. Again, the vast majority of his per diems appear to be unconnected to board meetings or were paid without a clear explanation.
From the records, it appears Curleigh charged a per diem for a day of golf with members of the CCC board at Montreal's Beaconsfield Golf Club. On that outing he also billed taxpayers for the cost of the green fees and golf cart rental totaling at least $540.
However, Curleigh insists he did nothing wrong because, he says, it was up to the board he chaired to decide how they spent their time and for what they should be compensated.
"The board is responsible for the affairs of the corporation, not the [PCO] and not the management of the corporation, so the board must decide on the time it spends in the best interests of the corporation."
"This is carefully spelled out in the Financial Administration Act and a good board member takes this very seriously," he told CBC News in an email.
"Please remember that the job and responsibility of a good chair encompasses more than just presiding over board and committee meetings."
The CCC also defended its decision to approve the per diems for all three of the chairmen reviewed by CBC News.
"All of the chairs' activities, including an extensive outreach program requested by the board, were validated as compliant and approved by auditors and the board at the time," Parschin-Rybkin wrote in an email to CBC News.
While the PCO does set guidelines for per diems, it is ultimately up to each Crown corporation to write its own rules about when a per diem can be claimed.
In an email to CBC News, the PCO confirmed that each board has "flexibility" to decide how it pays out per diems.
According to Ian Greene, a retired professor of public policy and government ethics at York University, too much flexibility can lead to abuse.
"If something is so flexible that it can mean almost anything, it means that some people will take advantage of it for their own benefit," he says.
"It's a dangerous policy to have something that's that unclear."
For confidential tips on this story, please contact Timothy Sawa at email@example.com or 647-382-7789
With files from Jeremy McDonald