This post is for Diana and her children.
Kenney govt replacing the Board will do nothing to fix the malignancy that is industry’s darling, the AER/ERCB/EUB/ERCB. By appointing Bev Yee, known industry crime cover-upper, Chair of the AER, govt knows the “regulator” will just protect polluters more, deregulate more, lie more, enable multinationals to cause more harm to innocent Alberta families, etc.
As a citizen said when Jim Ellis stepped down:
“Good Riddance. Bring in the next dickhead.”
An excellent comment on ASRG Facebook Page:
Was this an infraction on Ellis’s part or was he given the green light to continue the world wide regulatory missionary work that the EUB / ERCB had been doing for years ?
Alberta Auditor General Report, Backgrounder and Highlights
Key Findings
A prevalent finding in our examination was ineffective controls in relation to ICORE activities. Specifically:
AER engaged in activities outside of its mandate and public money was spent inappropriately on ICORE activities.
Controls and processes to protect against potential conflicts of interest failed.
AER Board oversight was ineffective.
Financial, information management, and human resource controls were ineffective.
Controls to track and monitor expenses related to ICORE activities were at first non-existent and then poorly implemented.
The tone at the top at AER did not support a strong control environment or compliance with policies. [And to fix that gross “Best-in-Class” disgrace, Kenney gov’t put Bev Yee, known oil patch corporate crime cover-upper on top of the AER! Let that obvious nastiness sink in!]
[In what other matters did AER staff and upper management act inappropriately? Who is going to investigate? Lying Justice Abella with Supreme Court of Canada? And who is going to investigate Premier Kenney’s gross misuse of $30 Million public money for Steve Allen’s Witch Hunt Inquiry and Encana/CAPP et al’s nasty Bunker (War Room)?
Who is going to investigate the endless lies spewed regularly by the AER (eg the oil and gas industry has never contaminated a water well in Alberta, only dirty water well owners have, by way of bacteria), notably lying about the Supreme Court Ruling in Ernst vs AER and publishing the lies? Who investigates AER’s outside counsel, Glenn Solomon, lying in a brief filed in Court of Queen’s Bench, saying Ernst is a terrorist, knowing there is “absolutely” no evidence to prove it? Who is going to investigate past AER staff Monique Dube’s (not a health professional) health report on the Daunheimer family, and the AER’s violation of the family’s privacy rights by publicly posting and distributing it – a fraudulent report filled with private family information – and refusing to remove it after Daunheimers asked? Who investigates AER, when it was EUB, violating Ernst’s Charter rights during then Chair Neil McCrank’s reign, trying to scare Ernst silent? Who investigates the AER slamming the door shut on drinking water contamination cases and other frac harms. The list of AER transgressions is endless.]
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REPORTS UPLOADED HERE, IN CASE COMMANDER KENNEY ORDERS THEM REMOVED FROM PUBLIC ACCESS:
1. Alberta Auditor General’s Report
AG Backgrounder
AG Hilites
2. Ethics Commissioner’s Report
3. Public Interest Commissioner’s Report
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2018 11 02: Alberta Energy Regulator CEO Jim Ellis to resign
… Ellis joined the AER in June 2013 as the first CEO of the newly formed regulator. [Appointed by the Alberta Conservatives]
Prior to the appointment, Ellis served as Alberta’s deputy minister of environment from 2008 to 2011. …
INDEPENDENT INVESTIGATIONS INTO ICORE-RELATED ACTIVITIES AT AER FIND CONFLICT OF INTEREST, GROSS MISMANAGEMENT OF PUBLIC FUNDS, AND CRITICAL OVERSIGHT FAILURES Press Release by Alberta Public Interest Commissioner, October 4, 2019
Edmonton, Alberta, Canada … Separate investigations by three independent officers of the Legislative Assembly of Alberta into activities at the Alberta Energy Regulator (AER) and the International Centre of Regulatory Excellence (ICORE) found a conflict of interest by the former CEO of AER, gross mismanagement and waste of public resources, and critical failures related to board oversight and management override of internal controls.
Investigations into AER’s ICORE-related activities by Ethics Commissioner Marguerite Trussler, Public Interest Commissioner Marianne Ryan, and Auditor General Doug Wylie, were prompted by complaints brought forward to their respective offices over a three-month period in 2018.
In her investigation, the Ethics Commissioner found:
Former AER President and CEO Jim Ellis had a conflict of interest in that he furthered his own interest and improperly furthered the private interest of three other employees.
The primary motivation behind ICORE not-for-profit was to provide future employment for Mr. Ellis and others.
The investigation by the Public Interest Commissioner found serious and significant wrongdoing occurring within the AER, through the establishment of ICORE, under the authority of the former AER President and CEO Mr. Ellis.
“My statement today confirms whistleblower protection legislation provides public servants with an effective mechanism they may access to ensure government maintains the highest possible standards of honesty, openness and accountability. The Public Interest Disclosure (Whistleblower Protection) Act creates a confidential avenue for public servants in Alberta to speak out about wrongdoings or make complaints of reprisal.”
The examination by the Auditor General focused on assessing the effectiveness of AER controls and processes to manage risks associated with ICORE activities. The Auditor General found there were critical failures related to the use of resources, managing potential conflicts of interest, information management, compliance with legislation, and corporate culture relating to ICORE.
“ICORE-related activities at the AER provide a case study of how controls can be overridden, public money can be wasted and harm can befall an organization when potential conflicts of interest are present, and weak processes exist. The ICORE situation provides important lessons about how controls can break down when those charged with oversight fail to heed the warning signs and improperly assess systems and risks.”
This is the first time three independent officers of the Legislative Assembly of Alberta have conducted investigations under respective mandates stemming from both whistleblower and public complaints. While the three investigations were completely independent from one another, all three officers deemed it in the best interests of both Albertans and all parties involved to release their respective reports at the same time.
A report of the Public Interest Commissioner in relation to wrongdoings within the Alberta Energy Regulator is available at www.yourvoiceprotected.ca
The Auditor General’s Examination on the International Centre of Regulatory Excellence (ICORE) is available at www.oag.ab.ca
– 30 –
For more information, please contact:
Kent Ziegler
Chief Administrative Officer, Office of the Ethics Commissioner
T: 780.422.2273 E: email hidden; JavaScript is required
Amanda Clements-Harvey
Communications Manager, Office of the Public Interest Commissioner
T: 780.641.8661 E: email hidden; JavaScript is required
Val Mellesmoen
Executive Director, Stakeholder Engagement, Office of the Auditor General of Alberta
T: 780.644.4806 E: email hidden; JavaScript is required
October 4, 2019
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Oil patch “controls” today, just like “controls” way back then, 14 years ago:
Edmonton Journal’s War Room Section (eager for their share of taxpayers’ $30 Million) pimping for Kenney and the Bankrupting Polluters already?
ASRG Facebook comment to the article below by Mr. Gerein:
What bothers me about the Notley govt. is that she all through her years as an opposition MLA she was well aware of the failings of the EUB /ERCB/AER and when she was given the unexpected opportunity to correct those regulatory failings she chose to leave the AER as she found it. I suspect that Notley chose to put up with the rotten smell of the AER but I also expect the Kenny govt. to love that same smell. Bottom line is that nothing within the AER has been cleaned up with the public vilification of Jim Ellis.
Excellent tweet by Julie Ali in response to Jason Nixon’s dishonesty.
Damning investigations into AER show NDP was asleep at the pump jack by Keith Gerein, Oct 4, 2019, Edmonton Journal
[NDP were dreadful enablers when it came to AER and our polluting walk-from-responsibility-and-clean-up industry, but, they were no different than any govt Albertans voted for in the last half century.]
… The 135 pages of investigative findings released Friday by Alberta’s auditor general, ethics commissioner and public interest commissioner make for a shocking and damning read.
At several points during my perusal of their four separate reports, I found myself frequently shaking my head, squinting my eyes, and saying “Jeez” under my breath — all in disbelief of what had been allowed to go on at the Alberta Energy Regulator the last few years.
[Mr. Gerein has then been asleep for decades. Who knows what shit we’d see if investigations dug into Neil McCrank’s Charter-violation enabling, aquifer-fracing-caprock-demolition enabling, pollution enabling, bankruptcy setter-upper extraordinaire, and his unnamed “global” propaganda machines — all under Tory govts, likely ordered by those govts to keep America and foreign companies happy. And, investigations are needed into two-steak-lunches, Ex Encana VP Gerard Protti, appointed by Tory govts to Chair the AER. And into how Encana’s manager Mark Taylor (lying, cover-upper of the company’s frac’s into a community’s drinking water supply) made it to be VP of the “regulator.” The list of required investigations is endless. What is direly needed, is for the entire AER to be tossed into the shredders Alberta governments use so fondly.]
As chief architect of the alleged behaviour outlined in the reports, the regulator’s former CEO, Jim Ellis, will rightly take most of the heat. His alleged actions to use AER resources to further a pet project were inexcusable and may have caused considerable long-term injury to both the image of the regulator and to the reputation of the province’s energy industry generally.
But in this type of scandal, which involves Alberta’s most vital economic sector, there will be political fallout as well.
In terms of ammunition for the UCP, this is the equivalent of an artillery shell — a far-reaching, explosive and extremely damaging projectile they can aim at the NDP any time the Opposition tries to attack the new government’s energy policies. [Pffft, farts flying on Alberta’s polluted winds. NDP haven’t any power to attack anything. They blew their chance to do right by Alberta, instead, they let industry call the deregulating, royalty reducing, polluting shots.]
While it’s difficult to predict how such things will play out, there is every reason to foresee that this will live for some time as an oily black stain on the NDP brand, which, you’ll remember, came to government in 2015 with promises of washing out corruption and entitlement. [All Alberta govts spew the same promising crap, election after election. The oil industry, notably Encana and CAPP, have too much power. Kenney isn’t going to be telling AER/industry what to do. They, and America/Koch bro, are telling Kenney what to do.]
… [so, where are the AER staff willing to blow the whistle on the many others at the AER causing grievous harm? Enabling companies to massively waste and pollute drinking water is much more serious of a crime than what the reports say Jim Ellis did. Or is the Encana/CAPP plan to make Jim Ellis the fall guy for all the criminals at the AER? Perhaps Ellis was in on it from the start, thus why he received such insanely high salary and expense account ($737,060 in 2016, $621,680.71 in 2015)?]
AER staff also told investigators that they were fearful of raising complaints internally, and when a whistleblower finally did emerge, Ellis and other executives tried to learn his or her identity, the reports said.
… As for the NDP, the former government has a few defences to its role in this.
They could note that Ellis was a hire of the PC government, that he and subordinates took sophisticated steps to conceal what they were doing from the AER board, and that the government put a stop to the wrongdoing as soon as it came to light in late 2018.
However, the report from auditor general Doug Wylie is far less kind to these points, finding that the NDP government too often left vacancies on the AER board and did not ensure it had the skills to conduct proper oversight.
Oversight from then-energy minister Margaret McCuaig-Boyd was also a disappointment, the auditor found. [Ha! Absolutely! Was she however, just operating on instructions from Encana et al to look the other way, to make sure the gravy flowed where Encana wanted it to and to make sure the “industry likes it” AER continues operating as corruptly and abusively as usual? Same as Notley. Her first phone call operating as premier was to Encana’s CEO Doug Suttles! That tells us everything a citizen needs to know about how things are done in govt in Alberta, likely across Canada]
Indeed, the NDP’s wrongdoing here was not of direct collaboration or even wilful blindness to the scheme, but of failing to detect it. They were asleep at the pump jack as all kinds of trouble was bubbling underneath their feet. [Or, looking the other way, as instructed by the big bully companies like Encana?]
The timing of the reports on Friday was a gift to the UCP, since it helped to distract attention from a new CBC News report offering further detail of alleged voting irregularities during the 2017 UCP leadership race. [Pfffft! Kenney doesn’t need it. He knows he can break whatever laws he likes, the courts and the AER/oil industry that controls them will keep him out of jail in exchange for more deregulation, royalty reductions, and $billions in gifts from taxpayers]
I suspect that may be why UCP reaction to the AER revelations was relatively muted Friday. But don’t expect it to stay that way.
Still, while Premier Jason Kenney’s government didn’t cause this scandal, they are the ones who now have to deal with its aftermath, restore credibility to the AER, and repair any damage to the sector’s reputation. [Not possible to do, thus industry’s/CAPP’s war room with which to lie to the world for industry and it’s pet crime enabler, AER. AER lost all credibility when it was the EUB. And the Tory govt removing it’s public interest mandate under REDA, only further eroded its credibility and the sector’s reputation.]
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EUB’s (after caught breaking the law in 2007, lying and spying) reputation in 2007 – which is why the Tory gov’t tried to bamboozle the world by turning the EUB into the ERCB. It didn’t work.
Above image from Justice D. W. Perras September 7, 2007 report on EUB’s (now AER) “repulsive” spying on innocent Albertans.
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In that vein, Kenney looks like a genius for having already fired the AER board and launched a review this summer — and it doesn’t matter so much that the UCP rationale was more around lengthy approvals than any mention of ICORE.
[Nice try Edmonton Journal Section of CAPP’s War Room. For sure AER/Kenney/CAPP et al, and likely Sheer/Harper too, will spin these reports to their advantage, but repairing the AER is impossible by replacing the Board, and putting corporate crime enabler, Bev Yee, at the top. The UCP’s intentional enabling of the AER’s fraud, corruption, law violations and continuing deregulation is already obvious.]
The NDP should also be wary that this could open the floodgates to other investigations of its oversight.
The political fallout is just starting to seep to the surface, but you can bet it’s soon going to be a gusher.
Former CEO of Alberta Energy Regulator diverted public funds to consultancy project, investigation finds by Jeffrey Jones and Justin Giovannetti, Oct 4, 2019, The Globe and Mail
The former chief executive officer of Alberta’s energy regulator set up a pricey side project that diverted resources, money and employee time from the agency while concealing many of the details from the board of directors, provincial investigations have concluded.
Jim Ellis, a one-time Canadian Forces officer who left the Alberta Energy Regulator late last year, came under investigation from three separate provincial bodies after a whistle-blower complaint about the development of an international consulting business he established along with some of his senior staff.
In a report released on Friday, Alberta’s public interest commissioner (PIC) said Mr. Ellis grossly mismanaged public funds when he set up an operation called the International Centre of Regulatory Excellence, or ICORE. Further, he mismanaged public assets and services by misappropriating intellectual property, the commissioner wrote.
“Mr. Ellis’ actions constitute a willful and reckless disregard for the proper management of AER funds,” the commissioner said in a detailed report on the investigation.
Mr. Ellis was also investigated by the Ethics Commissioner and the Office of the Auditor-General, which released their own reports on Friday.
The reports show how senior officials at the energy regulator were distracted from the agency’s crucial main tasks of vetting and approving energy projects as the industry’s financial fortunes dwindled and the province struggled with a rising tide of environmental liabilities tied to aging oil and gas wells.
According to the PIC report, Mr. Ellis established ICORE in July, 2016, with the intent of providing training to other countries on energy regulation. Related entities were subsequently set up, including a not-for-profit corporation to deliver the services. Mr. Ellis was a director.
At the time, the AER described itself as a founding member of ICORE and said it would provide in-kind services under what it called a “strategic partnership.”
ICORE charged other jurisdictions, including Mexico, for its services, but also used the resources of the AER in delivering them, according to the findings, which include text messages that show how expenses related to ICORE were concealed. In addition, Mr. Ellis sought to commercialize a computer-based regulatory system that had been developed at the AER, the PIC report said.
Auditor-General Doug Wylie found that ICORE drained the AER’s resources during a time when the provincial regulator’s attention, as well as that of its CEO, were needed at home.
More than 50 employees were seconded to ICORE’s development over a number of years, including two senior executives at the provincial agency who were moved full-time to the private company. “While the former AER CEO did not log the time that he spent on ICORE, the evidence shows that it was considerable,” concluded the report.
A significant amount of travel for ICORE was also conducted on the public dime, disguised internally as “AER reputation building,” according to the Auditor-General’s office.
Over three years, Mr. Ellis and a senior AER executive billed the AER more than $200,000 in airfare and hotel bills for ICORE work.
ICORE is estimated to have cost the AER $5.4-million, of which $3.1-million has so far been collected. The commissioner and Auditor-General warned that more money has been spent by the public agency on the private company than revealed in records that have been altered to mask the amounts.
Investigators said Mr. Ellis did not personally benefit from any of the funds.
The PIC recommended that Mr. Ellis should be barred from working with the AER or receiving contracts with the agency.
Mr. Ellis has not publicly commented on the allegations since the investigations began and could not be reached for comment Friday.
Alberta Energy Regulator wrongfully used $5.4M in public money to create international centre, probes find, Former CEO displayed ‘reckless and wilful disregard’ for the proper management of public funds, report says by Tony Seskus with files from Kyle Bakx, CBC News,Oct 04, 2019
Alberta’s energy regulator wrongfully used its resources to establish an international centre outside its mandate, while its former CEO displayed “reckless and wilful disregard” for the proper management of public funds, according to investigations by three different provincial government watchdogs.
The damning reports by Alberta’s auditor general, public interest commissioner and ethics commissioner centred on the creation and operation of the now-defunct International Centre for Regulatory Excellence, or ICORE.
The Alberta Energy Regulator (AER), which is [100%] funded by a levy charged to the energy sector, oversees the province’s massive energy sector and is expected to ensure the safe and environmentally responsible development of the industry.
It established ICORE in 2017 as a separate, external entity that would offer training toregulators around the world.
In findings released Friday, both the auditor general and public interest commissioner found this was outside the AER’s mandate and that public money was spent inappropriately on ICORE activities.
“AER engaged in activities outside of its mandate and public money was spent inappropriately on ICORE activities,” read the report from Alberta Auditor General Doug Wylie.
He estimated the total financial impact of ICORE activities on the AER totalled $5.4 million, though $3.1 million was recouped. The AER is still out of pocket $2.3 million, according to the audit.
Wylie also concluded that ICORE activities lacked a credible benefit to the AER.
‘Gross mismanagement’ by former CEO
The Office of the Public Interest Commissioner report levelled some of its strongest criticism at Jim Ellis, who was president and CEO of the AER and president of ICORE.
“His actions demonstrated a reckless and wilful disregard for the proper management of public funds, public assets and the delivery of a public service, which … constitutes gross mismanagement,” the report said.
Ethics Commissioner Marguerite Trussler’s report also found that Ellis had a conflict of interest “in that he furthered his own interest and improperly furthered the private interest of three other employees.”
“The primary motivation behind ICORE not-for-profit was to provide future employment for Mr. Ellis and others.”
However, Public Interest Commissioner Marianne Ryan told reporters during a news conference that there was no evidence to suggest Ellis benefited personally from a financial perspective.
The matters did not reach the threshold to refer them to the solicitor general for potential criminal charges, she said.
Ryan added that her report is not a condemnation of the AER as a whole. “It was employees of the AER that brought this matter to my attention and assisted with the investigation,” she said.
Controls to monitor expenses at first ‘non-existent’
The auditor general’s report also found that controls and processes to protect against potential conflicts of interest failed and that oversight from the AER’s board was ineffective.
“Controls to track and monitor expenses related to ICORE activities were at first non-existent and then poorly implemented,” the report states. “The tone at the top at AER did not support a strong control environment or compliance with policies.”
Wylie’s report said a “culture of fear” at the AER stifled concerns regarding ICORE activities, with a number of staff interviewed by his office saying that employees who expressed complaints felt at risk of losing their jobs.
AER sued ICORE in 2019
A recent CBC News investigation found a close and complicated relationship between the AER and ICORE, including the involvement of Ellis.
Several key figures who were involved with ICORE, including Ellis, are no longer associated with either organization. Ellis resigned from his post at the beginning of 2019. Ellis could not immediately be reached for comment Friday.
Also earlier this year, the AER sued ICORE and received a default judgment in its favour for $2.6 million for money it said it was owed for the development and delivery of training materials.
The results of the provincial investigations come at a time when the energy regulator is under scrutiny from the provincial government.
In September, Energy Minister Sonya Savage announced her department was launching a review of the AER and appointed an interim board of directors to set its future direction.
Savage and Environment Minister Jason Nixon issued a joint statement Friday on the results of the investigations, saying they “cannot condemn the practices noted in these reports strongly enough.”
“Our government was elected on a promise to reform the AER, which is precisely why we have already taken action, launching a review of the AER in August and replaced the board in the same month,” the statement said. [Ya, right! Govt plunked oil patch corporate crime cover-upper Bev Yee to Chair the AER!]
The recommendations contained within these reports will inform the Alberta government’s review of the AER, they said, noting that they expect the agency’s interim board to implement the reports’ recommendations.
Among the recommendations outlined in the three reports:
- Corporate governance throughout Alberta agencies, boards and commissions needs to be strengthened.
- AER staff need to be made aware of and sufficiently trained on the whistleblowing process.
- The AER should evaluate whether any additional funds expended on ICORE activities are recoverable.
[Why not recommend to govt that AER’s legal immunity is removed, pronto!]
In statement, the interim board of the AER said it will take the recommendations seriously and implement any required actions “in order to enhance public confidence” in the regulator. [That’s a mighty slippery avoidance trick, to avoid taking responsible action. Sounds like what Bev Yee would say to protect industry’s darling corrupt AER]
“While ICORE was originally established to provide training to AER employees and support information-sharing across jurisdictions, it is clear now that a small group of senior leaders used AER resources in a way that is unacceptable,” the regulator said in a statement. “These individuals are no longer employed at the AER.” [Why would CBC give the foul AER last word in their article on such an important filthy matter?]
A few of the comments:
Jim Redmond
Fortunately the new UCP government has already removed the entire Board of the AER, but every single one of those former Board members should be held accountable for gross negligence in corporate governance — they should have to repay the taxpayers.
Diana Daunheimer Reply to @Jim Redmond: Except under REDA, AER employees and governance are legally immune from all their actions or inactions. Ellis/Steber/Taylor/Syed knew they were protected by REDA (and wilfully ignorant provincial governance) and therefore indemnified from gross negligence.
Jim Redmond Reply to @Diana Daunheimer: We’ll just have to agree to strongly disagree on this matter — no one is protected from their gross negligence. [Mr. Redmond has a lot of reading to do, to get caught up on how things are done in Oilberta!]
Diana Daunheimer: Reply to @Jim Redmond: Division 5 of REDA: Protection from Action, para 27.
Ian L Jones
It is amazing the lengths these ‘energy regulators’ will go to avoid actually regulating the polluting industries they are supposed to be holding to account.
Ragnar Loth And the consequences for this individual? …
Jean Monroe Reply to @Ragnar Loth: Another corporate bonus
Paul Whittaker
most regulators are recruited from the industry they “regulate” In Alberta at least one well know case had the regulator refusing to even correspond with a complainant whose water supply has been contaminated by the industry. [Ha! That’s my case Paul!]
Harvey Bishop: The UCP has already made over $13 billion in very costly mistakes, and Jason Kenney has become Alberta’s premier by controversial means, so I don’t think the UCP will deal with this effectively.
Bart Roberts Reply to @Bart Roberts:
Okay. I’ve read the report. I’ve read the materials available online. I’ve checked independent sources and independent sources about independent sources from Ottawa, Mexico, Singapore. While there is some small indication of contrary information, on the whole the auditor’s report is not only solid after 20 minutes of review, it’s if anything conservative and understates how much the culpability and wrongness of Mr. Ellis’ deeds, his conflict of interest, his abuses of his position, and his egregious disregard for ethics and morals stand out.
Which as an Alberta rent-seeker is pretty impressive. He’s almost as bad as an oil company.
Oka Nagan
Alberta……..They’ll vote for an American and forgive the weasels that fleeced them.
James Carpenter
This guy is retired army, lol
Dane Foley: White collar crime, should be charged but it probably never happen sadly.
Paul Whittaker Reply to @Dane Foley: this falls under the law for the rich, no repercussions required.
Jake Wright
“Savage and Environment Minister Jason Nixon issued a joint statement Friday on the results of the investigations, saying they “cannot condemn the practices noted in these reports strongly enough.”
Maybe these two should investigate the legitimacy of the “leadership” of their Master Mr. Kenney.
[Below is the original version of the CBC article, before it was updated:]
Alberta Auditor General Doug Wylie examined the relationship between the Alberta Energy Regulator and ICORE: ‘AER engaged in activities outside of its mandate and public money was spent inappropriately on ICORE activities,’ his report says.
Alberta’s energy regulator wrongfully used its own resources to establish an international centre outside its mandate — at a loss of $2.3 million — with the agency’s former chief executive displaying “reckless and wilful disregard” for the proper management of public fund. Those are among the key findings of three provincial probes into the Alberta Energy Regulator’s decision to create and operate the now-defunct International Centre for Regulatory Excellence, or ICORE, in 2017.
The AER, which is funded by a levy charged to the energy sector, oversees the province’s massive energy sector and is expected to ensure the safe and environmentally responsible development of the industry.
The provincial auditor general and the public interest commissioner both began looking into ICORE last year after concerns were raised about the relationship between it and the Alberta Energy Regulator. The Office of the Ethics Commissioner also conducted its own investigation.
ICORE was established as a separate, external entity that would offer training to regulators around the world. It was launched during a ceremony in Mexico City in 2017.
In results released Friday, both the auditor general and public interest commissioner reports found this was outside the AER’s mandate and that public money was spent inappropriately on ICORE activities.
‘Gross mismanagement’ by former president, probe finds
But the Office of the Public Interest Commissioner levelled some of its strongest criticism at Jim Ellis, who was president of the AER and ICORE.
“The wrongdoing occurred under the authority of the former AER president and chief executive officer Jim Ellis,” says the report from the Office of the Public Interest Commissioner.
“His actions demonstrated a reckless and wilful disregard for the proper management of public funds, public assets and the delivery of a public service, which … constitutes gross mismanagement.”
The ethics commissioner also found that Ellis had a conflict of interest “in that he furthered his own interest and improperly furthered the private interest of three other employees,” its report says.
“The primary motivation behind ICORE not-for-profit was to provide future employment for Mr. Ellis and others.”
AER still out of pocket $2.3M, AG says
Alberta’s auditor general also concluded that ICORE activities lacked a credible benefit to the AER.
Auditor General Doug Wylie’s report estimated that the total financial impact of ICORE activities on the AER totalled $5.4 million, of which $3.1 million was recouped. The AER is still out of pocket $2.3 million, however, according to the audit.
“AER engaged in activities outside of its mandate and public money was spent inappropriately on ICORE activities,” the report from the auditor general found.
The audit also found that controls and processes to protect against potential conflicts of interest failed and that oversight from the AER’s board was ineffective.
“Controls to track and monitor expenses related to ICORE activities were at first non-existent and then poorly implemented,” the report stated.
“The tone at the top at AER did not support a strong control environment or compliance with policies.”
AER sued ICORE in 2019
A CBC News investigation this summer found a close and complicated relationship between the AER and ICORE, including the involvement of Ellis.
Several key figures, including Ellis, who were involved with ICORE are no longer associated with either organization.
Earlier in 2019, the AER sued ICORE — the organization it had created — for $2.6 million, saying it was owed the money for the development and delivery of training materials.
The AER received a default judgment in its favour in the spring. ICORE never filed a statement of defence. The regulator reported that it collected from ICORE the full amount awarded by the court.
The results of the provincial investigations come at a time when the energy regulator is under scrutiny from the provincial government.
In September, Energy Minister Sonya Savage announced her department was launching a review of the AER and appointed an interim board of directors to set its future direction.
Savage said at that time that recent months have brought questions about “operational efficiencies, executive oversight and budgetary spending practices” at the regulator.
More to come
Subject: Industry Dollars—Not Government Funds!!
Date: Mon, 7 Oct 2019 01:15:11 -0600
From: Stewart Shields email hidden; JavaScript is required
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As I had thought the missing funds originally belonged to the energy industry—who cover all the AER budget expenses??
Wait until a real old pro like Kenney gets his turn at the trough—if the RCMP and Election Commissioner cannot bring him to heel over his crime spree during his run for the UCP leadership!!
I thought it it very odd that Kenney would show such interest in this caper if it was indeed simply public funds going missing to oilpatch folks—this has been going on for years and the reason the AER budget requirement didn’t show the regulators demands for budget funds not decreasing in a slowing oil economy!! Certainly now is the time to put an end to the why the entire AER is managed—in following the example set by our publicly owned bank the ATB— by making the public regulator a Crown Corporation and moving the government to arms length from having the largest business in Alberta maintained solely by a single “Minister Of Energy”!! Industry have done so well with the present system we will hear nothing worthwhile from their budget funding being misused—as they simply can operate in any fashion they please—the very reason– they are refusing to lower the Alberta petroleum unemployment rate– by hiring back their service workers to reclaim some of the 90,000 idle wells across Alberta ?? Change that is badly needed in managing the public’s petroleum properties will not be coming from Kenney any time soon—and the sole reason he is interested in chasing the ICORE funds is that they are really industries dollars—not public funds!!
Stewart Shields, Lacombe Alberta
Former Alberta Energy Regulator CEO ‘grossly mismanaged’ public funds: Commissioner by Janet French, October 4, 2019, Edmonton Journal
The former CEO of the Alberta Energy Regulator “grossly mismanaged” public funds, public assets and public services when the regulator created a non-profit corporation to sell Alberta’s expertise to other countries, according to investigations by Alberta’s auditor general and public interest commissioner.
Alberta Auditor General Doug Wylie found at least $2.3 million of AER money was spent and never recovered from the non-profit, called the International Centre of Regulatory Excellence (ICORE), according to its investigation results, released Friday.
In a third and fourth report, also released Friday, Alberta’s Ethics Commissioner Marguerite Trussler found former AER CEO Jim Ellis breached the Conflicts of Interest Act and was in breach of the regulator’s conflict of interest policies.
The AER spurred the creation of ICORE to help people from other energy-producing countries learn how Alberta regulates [aka, enables and deregulates!] extractive industries like oil and gas. Providing advice to other jurisdictions is not part of the regulator’s mandate.
Ellis established ICORE Energy Services as a not-for-profit corporation in May 2017 after exploring different ways of offering training and consultation services, the public interest commissioner’s report said.
But AER and ICORE didn’t operate separately, as they should have, Public Interest Commissioner Marianne Ryan and auditor’s investigations found.
“(Ellis’) actions demonstrated a reckless and wilful disregard for the proper management of public funds, public assets, and the delivery of a public service,” the public interest commissioner concluded.
As many as 50 AER employees were working on ICORE, from a few hours to full time, the auditor found. AER spent an estimated $5.4 million on ICORE activities, such as developing and delivering training courses in other countries and paying salaries. Only $3.1 million of that was recovered from ICORE, the auditor said.
AER is funded by levies from the energy industry. The regulator’s legal counsel told its board those levies should not be used for ICORE.
The public interest commissioner found email exchanges between Ellis and an unnamed AER employee that discussed disguising that his international travel expenses were for ICORE work.
An employee said in an August 2017 message to Ellis there are “multiple scrubbers behind the scenes on your expenses.”
The auditor pored over thousands of recovered emails and text messages to conclude public money was spent inappropriately on ICORE, protections to prevent conflicts of interest failed, AER board oversight was ineffective, and controls to monitor expenses were poor.
Last month, the UCP government launched a review of the AER’s mandate and governance structure. The review is supposed to be done by spring 2020. The government fired the whole AER board on Sept. 6, 2019.
AER CEO Jim Ellis resigned in November 2018.
The Public Interest Commissioner investigates reports of potential wrongdoing for whisteblowers/employees of the Alberta public sector.
Taxpayers out $2.3 million as investigations into AER find ‘gross mismanagement’ of public funds by Nadine With files from Andrew Jeffrey, Star Edmonton, Oct. 4, 2019
EDMONTON—Three independent investigations into Alberta’s energy watchdog have revealed inappropriate spending of $2.3 million in funds over the past year, and singled out former CEO Jim Ellis for splurging on travel expenses and furthering his own interests.
The investigations, conducted by Alberta’s Auditor General, the Public Interest Commissioner, and the Ethics Commissioner, say significant issues were found during probes of the Alberta Energy Regulator (AER) and its International Centre of Regulatory Excellence (ICORE), a not-for-profit organization that was operated by the regulator but is now defunct.
The investigations found that Ellis misappropriated thousands of dollars in funds, and operated with a conflict of interest to further himself and three other employees of the AER. They also found that “the primary motivation behind ICORE was to provide future employment for Ellis and others,” the Ethics Commissioner said.
The AER operates with a budget of around $270 million, according to its 2017-2018 financial report. It’s responsible for overseeing multiple facets of the province’s energy sector, including oilsands, coal resources and pipelines, and is meant to ensure that energy companies in Alberta operate in a safe, efficient, and environmentally responsible manner. The regulator is funded by fees collected from the energy sector.
The probes into the AER began following several complaints received by all three independent officers in the summer of 2018, which raised “a number of serious concerns” regarding the relationship and operations between ICORE and the AER.
Jim Ellis, former CEO of the Alberta Energy Regulator, was found responsible for mismanagement of funds and excessive spending on travel expenses.
According to Canada’s database on federal corporations, ICORE was established in 2016 and headquartered in Calgary. The regulator’s 2016-17 report states that ICORE’s launch was announced jointly with the Mexican government, with a mandate for regulators across the world to exchange “best practices.”
“Our ability to effectively manage energy development and environmental protection in Alberta depends increasingly on our engagement beyond provincial borders,” AER’s former president and CEO Jim Ellis said in the report. “ICORE gives Canada the opportunity to continue advocating for co-operation in the regulatory community on a global stage.”
The Auditor General’s investigation found that public money was spent “inappropriately” by the regulator on ICORE activities. It also found that the system the AER had to prevent conflicts of interest has failed, that board oversight was ineffective and that financial information along with human resource controls were “ineffective.”
All three investigations found excessive and gross mismanagement, failed leadership, poor ethical and conflict of interest controls and wide-ranging financial mismanagement.
Some of the more notable financial details were included in the Auditor General’s report, which found that Ellis and an unnamed vice-president of national and international relations routinely upgraded their seats on flights and flew business class, despite policy saying employees were to remain cost-effective. One flight for the former vice-president from Calgary to Copenhagen and London cost taxpayers just over $8,000. Another round trip taken by the CEO to London racked up a $8,700 price tag.
The report also found that expenses incurred during travel by top executives weren’t well-supported through documented rationale and that some were excessive, like $5,000 spent in flight change fees from March to November of 2018 by Ellis.
Furthermore, “The tone at the top at AER did not support a strong control environment or compliance with policies,” the Auditor General report’s key findings state.
Public money was spent outside the regulator’s mandate through its ICORE activities as well.
“We estimate the total financial impact of ICORE activities to be approximately $5.4 million,” the auditor stated. “Of this, AER recouped $3.1 million from ICORE (not for profit), resulting in an uncollected amount of $2.3 million.”
The activities taken on by ICORE were found to be “focused on generating revenues from foreign jurisdictions,” the report stated. The regulator also sought $30 million in federal government funding for ICORE operations, according to the report, but was unsuccessful.
The Public Interest Commissioner’s investigation stated similar findings to that of the auditor.
In its report, the commissioner’s office said it found wide-ranging problems in the relationship between the AER and ICORE. It specifically singled out Ellis, who “demonstrated a reckless and wilful disregard for the proper management of public funds, public assets, and the delivery of a public service, which under the Act constitutes gross mismanagement,” the report said.
The commissioner said the investigation was “extensive,” and included interviews with executives and employees of the regulator, as well as the analyzing of more than 5,700 records and electronic communications regarding ICORE.
The commissioner’s office deals with whistleblower complaints and looks into matters related to the Public Interest Disclosure (Whistleblower Protection) Act.
Last month, the United Conservative government announced they’d be reviewing the AER and its operations. Energy Minister Sonya Savage said the AER’s timeline for approving projects is slower than other jurisdictions, using Texas and Saskatchewan as examples.
“It’s too expensive, there’s too much red tape, it’s too cumbersome,” Savage said at the time, adding that “they have a lot of people working there.”
The AER, established in 2013 to oversee the province’s oil, natural gas and coal resources, has a dual role that has occasionally sparked tension.
Not only is the group tasked with ensuring all projects benefit Albertans economically, but it also oversees the environmental cost. After forming government in 2015, the NDP considered splitting the group in two to prevent any conflict over its economic and environmental responsibilities, but ultimately decided to maintain the regulator’s status quo.
Investigation finds misuse of funds, scant oversight at Alberta Energy Regulator by Global News, October 4, 2019
WATCH: Three separate investigations have found the misuse of funds and a lack of oversight under Alberta’s Energy regulator. As Tom Vernon explains, the scandal has left taxpayers out about $2.3 million.
A government investigation concludes the former head of the Alberta Energy Regulator grossly mismanaged public funds in a scandal that has left taxpayers about $2.3 million out of pocket.
The findings were announced by Alberta’s auditor general Doug Wylie, public interest commissioner Marianne Ryan and ethics commissioner Marguerite Trussler.
The investigation revolved around the activities of Jim Ellis and other executives with the energy regulator between 2017 and 2018.
A report says Ellis and other executives set up a non-profit agency to sign contracts around the globe to advise on best regulatory practices.
The plan was for the agency to be spun off from the regulator and go independent, but the report says the reason behind that was to provide future employment for Ellis and others.
The report also says Ellis and others worked to get the agency off the ground, even though it was not part of the regulator’s mandate and potentially put it in conflict with the oil companies it was overseeing.
It says the executives used regulator funds, travelled business class and stayed in lavish hotels.
READ MORE: Cover-ups, lies ‘a systemic cancer’ in world of oilpatch health and safety breaches: whistleblowers
Dozens of regulator employees were redirected to work for the International Centre of Regulatory Excellence, even though the regulator faced criticism for long approval times, the report says.
It adds that the board was kept in the dark on some issues and didn’t provide proper oversight on others. It estimates that taxpayers lost $2.3 million in salaries, work time, travel and other costs related to the international centre.
Ellis quit the energy regulator earlier this year and last month Premier Jason Kenney’s government replaced its board. The province is reviewing the regulator’s operations.
Auditor general to release results of probe into energy regulator’s international work, Public Interest Commission will also release its findings into the creation and operation of ICORE by Tony Seskus and Kyle Bkx, Oct 3, 2019, CBC News
Following months of investigation, the results of twin probes into a decision by Alberta’s energy watchdog to set up an international, not-for-profit institute are to be released Friday.
The provincial Auditor General and Public Interest Commissioner both began looking into the International Centre of Regulatory Excellence (ICORE) late last year after concerns were raised about the relationship between it and the Alberta Energy Regulator (AER).
Their findings will be detailed in a joint news conference in Edmonton.
ICORE was established two years ago as a separate entity that would offer training to regulators around the world.
But its operation has led to questions about the direction and priorities at the AER, which has been a target of criticism for executive travel, how long it takes to approve oil and gas projects and the rising cost of abandoned energy infrastructure, like old oil wells, in Alberta.
The AER, which is [100%] funded by a levy charged to the energy sector, oversees the province’s massive energy sector and is expected to ensure the safe and environmentally responsible development of the industry.
A spokeswoman for the Public Interest Commissioner’s office told CBC News this summer that its investigation would be “thorough” and focus on “allegations of gross mismanagement relating to the use of public funds, public assets and AER human resources to establish and support the operation of ICORE.”
The Auditor General’s office has also confirmed it was looking into the relationship between ICORE and the AER. The job of the auditor general is to examine and report publicly on the government’s management of public resources.
When Alberta’s then-NDP government learned of the concerns, it suspended all ICORE-related activities.
A CBC News investigation this summer found a close and complicated relationship between the AER and ICORE, including the involvement of Jim Ellis, who was the president of both organizations.
Several key figures, including Ellis, who were involved with ICORE are no longer associated with either organization.
Documents obtained by CBC News show about a dozen AER employees were assigned away from their regular duties to do work for ICORE. Some of that work included training people in Mexico on ICORE’s behalf.
One former employee, who told CBC News he’d spoken with provincial investigators, said he had raised questions internally about the goals of the venture and whether there was really a public benefit.
Earlier this year, the AER sued ICORE — the organization it had created — for $2.6 million, saying it was owed the money for the development and delivery of training materials.
The AER received a default judgment in its favour in the spring. ICORE never filed a statement of defence. The regulator reported that it collected from ICORE the full amount awarded by the court. [Who paid for the lawyers and court costs? Alberta taxpayers?]
The results of the investigation come at time when the energy regulator is under scrutiny from the provincial government.
Last month, Energy Minister Sonya Savage announced her department was launching a review of the AER and appointed an interim board of directors to set its future direction.
Savage said at that time that recent months have brought questions about “operational efficiencies, executive oversight and budgetary spending practices” at the regulator.
Refer also to:
Deputy Environment Minister Bev Yee – who helped cover-up Encana’s crimes: diverting water without required permit under Water Act, illegal aquifer fracs, community-wide drinking water contamination & exploding water tower – appointed by Alberta gov’t to chair the AER in “steps to clean house.”
Vomit bags needed to read these pro-polluter propaganda pieces: Albertans should take back to the streets to stand up for the AER & What A Revamped Alberta Energy Regulator (AER) SHOULD Look Like (After a Little History). “Should” is one of AER’s & industry’s beloved escape hatch words, used incessantly to avoid accountability and responsibility!
Many corporate bankruptcies listed in the xref section of this post: