Warning signs: B.C. politicians ‘shocked’ by spending scandal missed many clues

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The roots of the spending scandal that envelops the British Columbia Legislature today can be traced back decades. Time and again, politicians have been caught exploiting the many perks that can be tapped at taxpayers' expense. The province’s air-ambulance fleet that was treated as a private taxi service for cabinet ministers. Gold-plated pension plans for MLAs. A politician’s preference for Pouilly-Fuissé wine on the taxpayer’s dime.

The cumulative effect of those revelations drove reforms. MLAs must now submit detailed receipts for travel and meals, which are publicly available for scrutiny, while decisions around their pay and benefits are handled by independent adjudicators.

“The knowledge that the details of their expenditures will become public alters behaviour,” said Mike de Jong, a veteran MLA who pushed for that disclosure.

But it could take a log splitter, truckloads of liquor, $1,000 suits and an expensive set of luggage to finally bring the senior unelected officials who run the legislature into the glare of public accountability for the first time.

Speaker of the House Darryl Plecas released a damning report on Monday that targets two of those officers of the House, alleging flagrant spending and other abuses of taxpayer money by Clerk of the House Craig James and the Sergeant-at-Arms, Gary Lenz. Both men, who have been suspended with pay, deny wrongdoing.

To back up his allegations, Mr. Plecas released a raft of receipts and other documents that were never expected to be exposed to the sanitizing powers of public review. Those receipts chronicle lavish overseas travel, purchases of luxury clothing and trinkets, and negotiations for sweetheart deals in pay and benefits.

Many profess to be shocked by the allegations in the Plecas report, including Premier John Horgan: “Cufflinks – who buys shirts that don’t have buttons on the sleeves? I don’t get that,” he told reporters as he vented about the harm done to public trust.

But the warning flags were there.

In 2007, then-auditor-General Arn van Iersel put the lack of spending controls under a spotlight. The bank records hadn’t been reconciled for five years, his report found, and his staff could find no policies or guidelines on internal spending controls. Moreover, there were no financial statements or service plans to review. “We found no clear procedure for the approval of the budget," he wrote.

In 2012, Auditor-General John Doyle got more aggressive when he discovered nothing had changed. He delivered a withering progress review – and refused to sign off on the financial statements for the legislature. “There are significant deficiencies in the financial control and governance of the Legislative Assembly’s financial affairs,” he wrote, adding that the people responsible for governance – the Legislative Assembly Management Committee (LAMC), the Speaker and the Clerk – were failing to execute their duties.

His rebuke did prompt change: Financial reports are now available to the public, and LAMC has started to meet regularly – albeit only a few times each year – in public.

But some things didn’t change. The oversight of the administration remained opaque, with authority spelled out in an organization chart that is best described as nuanced. The Clerk technically answers to the elected members of the Legislative Assembly, as does the Speaker. In practice, the two offices wield immense authority.

Nor can the politicians – particularly those who sit on LAMC – claim to be unaware that Mr. James and Mr. Lenz were frequent fliers whose salaries are well above their counterparts in the federal House of Commons.

Mr. James took up his legislature post in 2011, just as a public scandal erupted about his travel spending when he served as head of Elections BC. While serving in that office, he had claimed more than $43,000 in travel in the span of four months, including a trip with his wife to Kenya for a conference.

As the Clerk of the House, Mr. James continued globetrotting at taxpayers’ expense. Over the past five years he billed more than $235,000 in travel costs. His total travel costs last year roughly equalled that of the Premier. Although the details of his claims were only made public on Monday, the annual totals are publicly available.

Mr. James’s salary, as well, had been the subject of debate on several occasions. Independent spending watchdog Dermod Travis, of Integrity BC, noted that Mr. James got a large raise in 2013, bringing his salary to $289,000 – at that time, more than his counterpart in the House of Commons in Ottawa.

Mr. James currently makes $347,000 annually – about $100,000 more than the maximum allowable for the Clerk in the House of Commons, and more than the Chief Justice of the B.C. Supreme Court. To get a raise or boost his benefits, the Clerk only needs to convince one person: The Speaker of the House.

The Speaker is responsible for the day-to-day administration of the House, while the Clerk has overall responsibility for management and administrative services. There are few policies that curb their authority. When Mr. Plecas took up his position as Speaker in 2017, he discovered three cupboards full of liquor in his office, a cache approved by the previous Speaker. The Speaker has unique discretionary powers to authorize such purchases.

Likewise, the Clerk, the Sergeant-at-Arms and the Speaker are all entitled to expense their uniforms, but there are no spending caps, nor a clear definition of what constitutes a uniform. So when Mr. James submitted a $1,300 bill for “Chamber attire” purchased at a high-end tailor in London, Mr. Plecas signed off.

In his report, Mr. Plecas recounted that he signed off on additional remuneration at Mr. James’s request, including a life-insurance benefit, and a resignation benefit that he later rescinded. When he called deputy Clerk of the House Kate Ryan-Lloyd into his office to discuss Mr. James’s request for a retirement allowance, he said she responded, “I can’t believe he’s doing it again.”

Mr. Plecas wrote that she pointed him to an incident in 2012 when Mr. James had persuaded the Speaker of the day, Bill Barisoff, to pay out a “lump-sum retirement allowance” to the top officers of the House. Mr. James collected $258,000. Ms. Ryan-Lloyd repaid her allowance.

The Sergeant-at-Arms is responsible for security and protocol in the legislature, and answers to the Clerk in most circumstances. Mr. Lenz was appointed in 2008 with a salary of $93,000. The documents included in the Plecas report show his requests for a raise were twice turned down by the previous Clerk of the House, but in 2013, Mr. James began the first of a series of pay hikes, along with increases to Mr. Lenz’s benefits package. Mr. Lenz is currently paid $194,000, with seven weeks’ vacation annually and a car allowance. The maximum salary for his counterpart in the House of Commons is $160,000.

Mr. Lenz logged fewer air miles than Mr. James – $218,000 worth over the past five years. But the Plecas report also indicates he has a taste for the finer things, charging for mother-of-pearl cufflinks, for example, as part of his uniform. Mr. Plecas also alleges that both men regularly cashed out vacation days – Mr. Lenz went years at a time in which he took zero officially recorded holidays, and instead had been paid out in lieu for the entirety of his vacation days.

An RCMP investigation into Mr. Plecas’s allegations continues, and the Auditor-General, who has subpoena powers and legal access to all receipts, has launched a special inquiry into the affair. As well, work has started to write, or refine, a series of policies for spending, a signal that the culture of entitlement in the B.C. Legislature may be over.

How much changes will depend on the MLAs, who are ultimately accountable.

Mr. de Jong, who championed reforms to bring disclosure to the spending of the elected officials in Victoria, said it is now time to broaden those reforms. “The principle is, everyone involved in public service needs to embrace the notion that it’s not your money, and the public deserves to know how it is being spent,” he said. “The best way to safeguard against abuse is detailed disclosure.”