The Ontario Public Service Employees Union is accusing three former union executives of unjustly awarding contracts to certain associates in exchange for financial kickbacks to enrich themselves.
The union is seeking $24-million in damages for the alleged wrongdoing by the three executives and numerous entities tied to them.
The allegations have yet to be proven in court and no statements of defence have been filed by the accused.
The lawsuit, filed Thursday in Ontario Superior Court, is the latest in a series of legal actions the union’s new leadership has pursued since taking office, in an attempt to scrutinize exactly how the union’s money has been used over the past decade.
OPSEU is one of Canada’s largest public sector unions, and has more than 180,000 members. The union’s main source of revenue is union dues paid by these members.
In January, OPSEU accused the union’s long-time former president, Warren (Smokey) Thomas of improperly using millions of dollars in cash and assets, including union dues, for personal enrichment. That lawsuit also accused former vice-president and treasurer Eddy Almeida, as well as Maurice Gabay, a financial administrator at OPSEU, of misappropriating union funds. Mr. Thomas has called the claims bogus, saying that the current leadership is waging a “nasty, political campaign” against him because of his political affiliation with Ontario’s Progressive Conservative Party. Mr. Gabay and Mr. Almeida have not responded to the accusations.
Thursday’s lawsuit does not name Mr. Thomas but names Mr. Almeida, Mr. Gabay and a third union employee, Stephen Ward.
The crux of the accusations centres upon schemes that Mr. Almeida, Mr. Gabay and Mr. Ward allegedly orchestrated to award certain union vendors contracts at inflated costs, in return for payments they received from those vendors in the form of salaries or dividends. OPSEU believes that in total, the three men received more than $700,000 in kickbacks between 2018 and 2022.
The companies that were awarded these contracts – at least six in total – often performed construction, security and marketing work for OPSEU. But the union is also alleging that Mr. Almeida, Mr. Gabay and Mr. Ward held financial interests in the form of shares in almost all of the companies that they contracted. These direct ties were never disclosed to OPSEU, according to the lawsuit. In total, the union alleges these various schemes of commissioning work that was sometimes unnecessary from these companies using union money cost OPSEU approximately $30-million.
OPSEU’s constitution requires that any invoices that are dispensed which fall over the $50,000 threshold have the approval of the union’s president, executive committee and executive board. To conceal the various schemes and circumvent this policy, the lawsuit alleges, Mr. Gabay, Mr. Almeida and Mr. Ward often created fake invoices.
“The union was harmed by the conspiracy,” the lawsuit states. “It has suffered substantial damages as a result of charges for services that were not actually performed, or were unnecessary.”
Mr. Gabay, Mr. Almeida and Mr. Ward did not immediately respond to The Globe’s queries about OPSEU’s accusations against them.
In a statement to The Globe, OPSEU said it remained “financially sound and ready to continue the fight for the rights of our members, and the people of Ontario.”
Both Mr. Almeida and Mr. Ward were former correctional officers and colleagues for over a decade. Mr. Ward was terminated by the union in December after an investigation into his conduct. Mr. Gabay was terminated by the union last April and Mr. Almeida sought re-election for his position but lost out to the current leadership.
Since they took office in April, 2022, the union’s new president JP Hornick and vice-president and treasurer Laurie Nancekivell have embarked on a campaign to clean up the union by hiring a third-party forensic accountant to conduct a thorough investigation into the union’s finances, particularly how they were used by OPSEU’s former leaders. Ms. Hornick and Ms. Nancekivell have stated in multiple lawsuits filed against former executives that they grew concerned about the union’s finances when they felt the previous leadership was not being transparent enough about certain transactions.
The forensic audit, according to Thursday’s lawsuit, is still incomplete.
The lawsuit goes into detail about the nature of the numerous schemes allegedly organized by Mr. Almeida, Mr. Gabay and Mr. Ward.
For example, between 2019 and 2022, a company called Marquis Protection Services Inc. owned by Michael Evan St. Pierre, purportedly provided security, surveillance and alarm monitoring services to OPSEU. When Marquis was engaged as a vendor by OPSEU, Mr. Ward received at least $55,000 in alleged kickbacks from Marquis, and $20,000 in the form of dividends because he was also a shareholder in Marquis. Mr. Almeida and Mr. Gabay were shareholders as well. At no point did either of them disclose the fact that they were shareholders to OPSEU, a violation of the union’s conflict-of-interest rules.
The lawsuit alleges that the three men conspired with each other to manipulate OPSEU’s tendering process to award security contracts exclusively to Marquis. They did this by getting Mr. St. Pierre to send in three estimates for security contracts from three different companies including Marquis. The two other companies were also associated with Mr. St. Pierre. At Mr. Ward’s recommendation, Mr. Almeida approved the contract with Marquis. But the paper trail of estimates, the lawsuit states, was created to give the illusion that OPSEU legitimately received multiple bids for that one security contract.
In total, OPSEU alleges that Marquis received more than $3-million from the union. The lawsuit also claims that Marquis did not provide all of the services that were documented in invoices, sometimes provided unnecessary services and ultimately overcharged the union for all of it. The three men manipulated the invoice trail, the lawsuit claims, by creating hundreds of invoices below $50,000 for work that did not take place to escape scrutiny from the executive board.
Identical schemes were allegedly orchestrated with other companies – Elite Concierge, a travel and event services company; Mother Earth, a construction, cleaning and sanitation company; Fully Completed, a construction company; and ABD Construction, another construction company. All these entities, along with their owners are named in the lawsuit. Mr. Almeida, Mr. Ward and Mr. Gabay held shares in all of these companies.
Earlier Thursday, OPSEU sent an internal e-mail to staff informing them of the new allegations. “We know these types of updates can be unsettling, but we believe it’s important that you, and all members, know what’s happening so that we can continue to build trust and transparency across the organization,” the e-mail stated.
Vanmala Subramaniam