Hydro One chief's expenses come under fire

TORONTO, ONTARIO - Pressure is mounting on Premier Dalton McGuinty to fire Hydro One chief executive officer Tom Parkinson for allegedly breaking company rules that require approval from the board of directors for his expenses.

In the aftermath of a searing 413-page report by Auditor General Jim McCarter — it exposed problems in the hydro sector, at Children's Aid societies and in the health system, among other places — McGuinty's biggest political headache was the province's most highly paid civil servant.

Parkinson earned $1,536,221 plus $41,615 in taxable benefits last year as head of the hydro transmitter. He is under fire after his secretary used her corporate credit card to pay $52,000 in expenses, many of which were for him, according to the report.

These included $11,000 in first-class airfare to his native Australia and $15,000 for new furniture and fixtures after his Bay Street office was moved. The rest was for couriers, taxis, meals and other office expenses.

"It is, to say the least, disconcerting," a grim-faced McGuinty said.

"There are always going to be some people who misbehave, who act irresponsibly and give the others a bad name.

"The point I'm trying to make today is, you will be found out."

The morning after McCarter's report, Energy Minister Dwight Duncan, Parkinson's de facto boss, could barely contain his anger over what he called the "unacceptable" actions at both Hydro One and Ontario Power Generation.

"There is a culture there that is unacceptable. I'm not happy that it still exists," said Duncan, who so far has resisted calls for the Hydro One CEO to be axed.

"It's a culture that says, in the case of OPG, you give away ($8,000 worth of) leather jackets instead of a... nice note from the boss saying, good work for five years," he said. He added that, at a public utility, you need "a certain modesty in how you conduct affairs."

While he has met with Hydro One chair Rita Burak, the minister said, he has not spoken to Parkinson, who was embroiled in controversy two years ago for using one of the utility's helicopters to go to Muskoka.

Such perks are a sore subject at Hydro One, where previous CEO Eleanor Clitheroe was fired in 2002 for alleged lavish spending habits.

Clitheroe is still fighting her dismissal in court.

Duncan declined to say whether the controversy that dogged the previous Progressive Conservative government over the Clitheroe debacle was a factor in his thinking on Parkinson's future.

"I'm looking at a range of options," he said.

Parkinson could not be reached for comment — Hydro One's switchboard refused to put calls from the Toronto Star through to his office — but spokesman Peter Gregg defended his boss.

"There's an impression being left that they were, somehow, inappropriate expenses," said Gregg. "All of the expenses are legitimate business expenses."

The airfare was part of Parkinson's executive compensation deal with Hydro One and was "improperly processed" through the secretary's credit card, he said.

"There was no attempt to hide anything," added Gregg, noting the problem was first noticed by Hydro One's internal reviewers. When the auditor general issued his draft report in October, Parkinson took the expenses to the board for approval to be "squeaky clean," the spokesman said.

"We certainly don't see from any of the evidence that's in those expenses that there was anything that would require discipline from Mr. Parkinson's boss."

McCarter's audit also found problems at Hydro One and OPG, many of which related to curious use of company credit cards.

In 2005, a single Hydro One staff member wrote almost 32,000 cheques worth $41.2 million to a charge-card account. And the company paid $30 million in interest on cheques and cash advances. At OPG, some $6.5 million in credit-card purchases were made without a single receipt submitted.

Progressive Conservative Leader John Tory, himself a former corporate executive, said he was troubled by the auditor general's findings and wondered why "we don't see any obvious consequences when these kinds of scandals are unearthed.

"The message that is sent by that is that no one is responsible. There are no consequences for this abuse of the taxpayers' money," said Tory.

In the Legislature, New Democratic Party Leader Howard Hampton repeatedly demanded to know when the Liberals were finally going to fire Parkinson.

"There is a problem when expense-control measures are circumvented by the very person who's supposed to enforce them, the chief executive officer," said Hampton. "If you want to change the corporate culture at Hydro One, then I suggest you change the chief executive officer."