Here is what we know about questionable operations of the board of the Toronto Port Authority:

This is from a letter to Transport Minister Baird from the four whistle-blowing directors dated March 30, 2009:

Expenses: Payments were made without Board knowledge or authority, and were made contrary to legal advice available to the Board at the time. In addition, there is at least one instance where a member of management seems to have approved their own expenses for payment, contrary to TPA policy.

During a brief review of selected expense records for 2008, the former Chair and the TPA’s auditor discovered certain facts which require a more complete and independent examination for the purpose of determining whether internal controls at the TPA were effective with respect to established policies regarding management expenses.

Just one example of the types of issues identified during the review is the expenses of the port authority. Management spent more than $50,000 on hospitality and meals at the Harbour Sixty Steakhouse restaurant, a tenant of the TPA, during the first eight months of 2008. (This is the period immediately leading up to the last federal election, an election Lisa Raitt, then the CEO of the Toronto Port Authority, became a Conservative candidate and ultimately won.  We also note that one internal management lunch alone cost approximately $1,000). Records indicate that management has also patronized this restaurant regularly during the years covered by the upcoming special examination [the Canada Marine Act requires a special examination every five years – it is due soon].

Separately, four members of senior management spent a week in London, U. K. on a business matter that could have been accomplished by fewer people in less time which the then Chair had discussed with management but was ignored.

Procurement Policy: Management purchased approximately $65,000 of legal services from Goodmans LLP without following established TPA policies, and steps have been taken to prevent the full board from knowing what services were obtained and what advice was received.

These are the specifics attached to that letter:

Retainer of Goodman’s – In March 2008 shortly after the removal of the former Chair Ms. McCarthy and the illegal election of Mr. McQueen as Chair (each by a vote of 3 to 2, Watson, McQueen and Rix in favour), Ms. Raitt and subsequently Mr. McQueen retained the law firm of Goodman LLP to obtain legal advice at the TPA’s expense. They obtained advice throughout 2008. In December 2008, When Mr. Henley became the Chair, he reviewed the Goodman’s bills as out lined above and asked to see the file to determine what advice was given. Ms. Raitt, then the Minister of Natural resources and Mr. McQueen asserted a personal legal privilege over the files and their contents and objected to their disclosure to the then Chair of the TPA even though Goodman’s had been retained by the TPA for corporate business and the TPA paid Goodman’s bills.

In December, 2008, the Board’s counsel Davies Award refuted those allegations of privilege and ultimately an agreement was reached between Davies and the counsel for Raitt and McQueen (Chaiton’s LLP) whereby the files would be reviewed in a private arbitration before the Honourable Justice ground to be heard on March 4^th and 6^th 2009. This agreement to arbitrate was reached in order for Ms. Raitt and Mr. McQueen not to be served with the formal court process of a Notice of Application. As well, the arbitration dates were chosen to accommodate Ms. Raitt’s calendar.

When Davies pressed Chaitons for the signed agreement to be delivered on January 21^st, 2009, Chaitons advised that “Ms. Raitt and Mr. McQueen have agreed to arbitrate, committed to the dates and the delay in execution relates to the Minister’s busy schedule”. Later that afternoon the Board of the TPA met and after Mr. McQueen was elected Chair he brought a successful motion to remove Davies as Board Counsel, effectively shutting the matter down and sealing the Goodman files without the agreed arbitration proceeding and the advice from Goodmans being provided to all board members. Subsequently, at a board meeting on February 10, 2009 in a vote of 5 to 4 certain members of the board revoked Mr. Henley’s board authority to proceed with this matter.

 The questions I would have asked at the TPA AGM last week – if I had not been prevented from doing so – were:

1.      (to Watson and Rix) Why are you covering up the investigation into these two matters? Both involve very serious allegations of misspending of public funds.

2.      (to McQueen) You voted on the decision not to continue with this inquiry into Ms.Raitt’s expenses for Goodmans, at the same time you were asserting a privilege in the advice? Surely that is a conflict of interest under your Code of Conduct, and as egregious as Mr. Watson’s breach in voting, as the swing vote, to purchase a new $5 million ferry for Porter when he was by all accounts a good friend of Porter’s CEO? Without your vote, of course, the investigations would have proceeded.

3.      Is it not  now all too apparent that these cover-ups were desperate attempts to protect Ms. Raitt’s political career – as it turns out, at the potential cost of your own?

Brian Iler, Chair, CommunityAIR