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Crocus scandal taints WCB: Auditor

What's that smell, we asked ourselves.

We knew the hog plant intended for St. Boniface was still at the planning stage, and they tell us its not supposed to stink anyway. So we kept sniffing around, and it wasn't long before we caught wind of it---the sickly scent of scandal and the stench of fear coming from government circles.

It didn't take long to confirm the tip that our digging into the Crocus-sponsored Manitoba Property Fund was on target, that the barely-remembered fund was a focal point of a new report which dismantles the veneer of competency at the Workers Compensation Board.

The NDP is holding another hot potato. Potato? Hell, it's a bombshell about to go off and singe their eyebrows away again.

Auditor General Jon Singleton is putting the final touches on a report into governance, human resources and investment management at the WCB. Ordinarily our reaction to that news would be "dull, dull and duller."

Not this time, not when people who know what's in the report say it's already sending ripples of fear throughout the administrations of government and the compensation board.Could it be because we're about to hear echoes of the Crocus Fund scandal?

Certainly some of the same players are about to be named in the WCB Report---Wally Fox-Decent, Alfred Black, Sherman Kreiner. (These days, it seems its not an auditor general's report if it doesn't mention Sherman Kreiner.) And you can bet the links between Crocus and WCB don't bring a smile to Singleton's face. Far from it.

And need we mention red flags. There will be red flags. There were bright red flags which were flown and ignored by government ministers. Again.

We know that the auditor general has some harsh words for the WCB. Words like "shocking and unacceptable" at the arrogance of some WCB officials who stalled his work by refusing him access to documents, and even questioned why he wanted them in the first place.

It's the first time a public sector organization has given him a hard time, and it doesn't sit well with him.

And just when he thought he was getting the proper cooperation, he discovered a climate of fear, with people scared to talk to him for fear of getting fired. They had seen it happen and they didn't want to be next.

The auditor general's report covers a lot of ground---from the shabby treatment of whistleblowers to a hostile work environment in the organization that's a centrepiece of the Manitoba labour movement.

But its the way the WCB manages the millions of dollars in premiums it collects from more than 20-thousand companies and over 325-thousand workers that's going to raise eyebrows and raise questions about government oversight.

Shades of Crocus.

The Black Rod has learned the report will raise concerns about :
* the WCB's lack of due diligence in making investments,
* an investment committee not accountable to anyone,
* perceived conflicts of interest in one high-profile $10 million investment,
* and, especially, a practice of accepting lower rates of return for under-performing investments in Manitoba without even trying to determine if better returns could be achieved out-of-province.

The audit of the WCB was started, in part, because of a letter of complaint about former CEO Wally Fox-Decent. The report has much to say about his tenure, including the fact he was appointed and reappointed to the post so often by both the Filmon and Doer governments that he stayed for 12 years even though the Act specifically sets a five-year limit for board members.

Singleton will say Fox-Decent managed with an iron hand, and problems arose after a period when he served as both Chairman and CEO when he couldn't let go of control even after a new CEO was hired in 1998. He and she butted heads until she was fired by the board in 2001.

The auditor general is particularly critical of Fox-Decent for phoning a consultant, hired by his office, at her home. He will say the consultant was unnerved by what she considered a warning that her career was threatened if the report was critical of the WCB or Fox-Decent.

In the strongest language in the report, Singleton condemns this "interference" with the work of his office.

Next: The ABC's of WCB conflict of interest.

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