MORE ON SCANDAL,
MLAs vote for forensic audit as report unveils details of spending scandal at legislature
VICTORIA — B.C. politicians are scrambling to figure out how the checks and balances on spending at the B.C. legislature — checks that the suspended clerk had described as “bulletproof” against fraud — failed to catch lavish expenses by two senior officials outlined in a new report by the speaker.
Improper signatures, duplicated approval forms, expenses pushed through financial services, and a fear of reprisal within the building about speaking up when something looked inappropriate, were all factors contributing the thousands of dollars in allegedly inappropriate expenses claimed by Clerk Craig James and sergeant-at-arms Gary Lenz, said Alan Mullen, the special adviser to Speaker Darryl Plecas who helped craft an investigative report that was released on Monday.
“There obviously is a clear process if anybody at any level put in expenses, they have to be signed off by another party,” said Mullen. “What we found on a lot of these expenses was Mr. James would sign on Mr. Lenz’s and vice-versa. There were some that go to financial services that get sort of questioned, and ultimately sort of pushed through.”
In addition, Mullen said, the investigation turned up instances in which signed approval forms from the speaker for some expenses were then allegedly duplicated and attached to other expenses that hadn’t been approved.
“Some of the expenses, the speaker did sign off on, and willingly,” said Mullen.
“There’s an approval form, and it seems that approval form was attached to other receipts. So, essentially the speaker would sign off on a set of expenses and receipts, and that approval form would then be attached to other packages ... and subsequently submitted.”
James and Lenz haven’t been charged with any crime. The RCMP is investigating the case, overseen by two special prosecutors.
“We are only now able to read the allegations for the first time and we are confident that time will show they are completely false and untrue,” the two men under fire said in a joint statement on Monday.
James had been a leading force inside the building on reforming the legislature’s financial processes to include more checks, annual audits, public disclosure of expenses, and accountability.
“I have established processes in the legislative assembly that are essentially bulletproof,” he told reporters at a news conference on Nov. 26 after his suspension.
However, Plecas’ report highlighted thousands of dollars in misspending, including high-end suits and pearl cufflinks expensed as uniform items, overseas trips to the U.K. and other locations in during which little work was done, $5,000 in digital subscriptions to magazines, and other items.
The report also pointed to a $13,000 log splitter and trailer ordered for the legislature but allegedly kept at James’ personal residence, and a truck load of alcohol that James allegedly took off the premises in 2013 to deliver to previous Liberal Speaker Bill Barisoff.
Other questionable items included life insurance policies, cash-in-lieu for unused vacation, and retirement benefits for the men, cited Plecas.
MLAs were forced to reform the legislature’s spending practices after a scathing 2012 audit. Electronic expense forms and receipts are now placed online quarterly for MLA travel, meals, office spending and accommodation. That process was overseen by James as clerk.
But neither James nor Lenz were included in the same level of transparency as MLAs. Both were only required to post global totals of expenses without any documented receipts or itemized lists.
“First and foremost ... we need to do business differently,” said Mullen. “We have polices and procedures, but clearly those checks and balances are failing somewhere along the way.”
James had pointed to the legislature’s financial services division as a check on his expenses, as well as MLAs on the all-party legislative management committee, and the auditor-general of B.C., who reviews the books. But MLAs and the auditor say they focus on planning, policy and major capital spending, and never saw detailed expense forms for James and Lenz.
The report painted a damning picture of how the legislature’s internal financial approval system actually works. One example was a $1,138.34 Victorinox luggage set James bought at the Hong Kong Airport on a trip and expensed back to the legislature in June 2018.
The legislature’s manager of financial services first questioned the expense to the executive director of financial services, who then spoke with James and “received the explanation” for the expense, according to emails contained in the report.
“In connection with my purchase of luggage, please be advised that the recent purchases are intended to provide staff ... with luggage when travelling overnight on official Legislative Assembly business,” James wrote in a July 3 email contained in the report.
“I have received requests for a service of this kind to be made available. We have several pieces now, which is enough, and I don’t foresee any additional purchases at this time.”
The expense was then approved. Plecas wrote it wasn’t clear if any MLAs ever used the luggage.
“There’s nothing in this world that would justify the taxpayer spending $1,000 for a piece of luggage,” said Green leader Andrew Weaver, who called the expenses outrageous on Tuesday.
NDP MLA Gary Begg, a 38-year RCMP veteran who sits on the all-party legislature oversight committee, questioned the culture within the building.
“I really believe, over a period of years, that familiarity breeds contempt, and a process comes into place through a lack of leadership and ability that creates an almost wilful blindness,” he said. “We may very well be in that kind of situation here.”
The NDP, Liberal and Green MLAs on the legislature management committee voted Monday to authorize a forensic audit of spending by an auditor-general from another province.
MLAs also voted to conduct a review of workplace conditions. They have asked for a written response from James and Lenz by Feb. 1.
“There must be a culture of fear and retribution in this place,” said Weaver, who pointed to allegations in the Plecas report that some past legislature staff were terminated without cause.
Mullen said the speaker is discussing past terminations with those involved. He described them as “essentially being warned, ‘Don’t ask questions, and if you do, you’re out of here.’ ”
Liberal house leader Mary Polak said the clerk and sergeant-at-arms should have been forced to undergo the same level of transparency as MLAs when changes were made in 2012.
The speaker has also turned over unstated allegations to the RCMP that weren’t contained in his public report, said Mullen.