After a community group’s years-long search for answers, the current CEO of Kingston Economic Development (KED) admitted that, while spending complied with the rules in place at the time, some spending at the Kingston Economic Development Corporation (KEDCO) would not have been approved by current standards.
In August 2015, Jeff Garrah stepped down from his position as CEO of KEDCO. Despite rumours he was forced out, Garrah said on Facebook at the time of his departure he was leaving to pursue other interests, including spending time with his family.
Following his stepping down, Gillespie took over and KEDCO launched a full review of its tourism and job promotion mandate, service delivery, organizational structure and key performance indicators.
The review led to a restructuring of the organization and its eventual renaming to Kingston Economic Development.
Some members of the community were not satisfied by the restructuring, and a group who called themselves Friends of Kingston organized a freedom of information request demanding KED reveal more detailed KEDCO financial statements.
On Thursday, Gillespie revealed that during the timeframe delineated by the freedom of information request, there had been spending by the previous KEDCO staff on corporate credit cards that would not have been approved under current policies.
“The records do show that there was a lot of activity at local restaurants and bars, hospitality with food and beverage at sporting and entertainment events, adult entertainment venues, golf clubs and officers’ messes,” Gillespie said.
Despite numerous attempts to glean a specific number of questionable dollars spent, Gillespie said the current administration couldn’t ascertain what was excessive spending and what wasn’t, since all spending had been approved under the previous administration’s rules.
Gillespie did point to 22 visits and over $2,300 spent at the Original Six Sports Bar, a now-closed bar within The Plaza Gentlemen’s Lounge in Kingston, as an item that would most certainly not be approved under the current policies.
When pressed for who had been using the corporate credit cards for the questionable purchases, Gillespie did not answer, but said the organization had done an “in-depth review” of the former CEO.
Gillespie did not respond when asked whether any other staff members had been investigated.
Gillespie said KED hired a third party to go through corporate credit card spending line by line, but this process didn’t reveal a specific number of questionable expenditures.
“It’s hard to ascertain value, and the context is not there when you’re looking at financial records,” said Gillespie.
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Gillespie said, in the end, all spending was done above board. When asked who monitored CEO spending, Gillespie said that responsibility was taken on by the chair of the board. She went on to say that all CEO spending between 2010 and 2015 had been approved.
Nevertheless, Mayor Bryan Paterson was not pleased with what he heard from Thursday’s news conference at KED.
“As mayor I see this as a totally unacceptable and appalling use of taxpayer dollars. It’s imperative that our community has confidence that public funds are always used carefully and appropriately,” Paterson said in a statement.
Nadine Lollar from Friends of Kingston says the group was meant to have the documents delivered to them by Aug. 1, but as of Thursday, she had not seen anything.
In fact, Lollar was surprised to hear members of the media had been invited to KED headquarters to be briefed on the findings of their request, since she has not yet seen them, and was unaware that KED would be releasing information on Thursday.
Overall, the freedom of information process cost KED over $10,000. The original estimate had landed over $14,000, with Friends of Kingston asked to pay half of that sum up front.
Gillespie said they haven’t discussed any updated payment changes with Friends of Kingston, but she said KED will not be asking for the remaining $3,000 or so, since Gillespie believes the freedom of information request process was important.
Despite releasing some information about KED’s findings on Thursday, the organization did not release the documents gathered through the process. Gillespie said they would be available to view by appointment at a later date.
Gillespie repeatedly tried to point out that the organization she runs is doing things differently than KEDCO.
“Monthly CEO expenses for hospitality today are on average less than 25 per cent of what they were between 2010 and 2015,” Gillespie said. “The culture of the Kingston Economic Development Corporation and the way we do business today is vastly different in the culture and the way business was done by KEDCO Between 2010 and 2015.”
Specifically, checks and balances on spending are more in-depth, according to Gillespie.
Now, two board members must sign off on CEO spending, and the organization’s finance committee must receive copies of all staff corporate credit card statements.
KED also has a policy of no spending on alcohol without prior approval.
Gillespie said these changes were put into place after the review in 2016 when KED was transitioning from KEDCO.
When asked if those changes were implemented because the organization suspected spending issues by the previous administration, Gillespie answered: “I think there were rumours in the community. I think there was questions about how could economic development be done differently. It’s a rather old school way of doing business.”
Garrah did not respond to multiple requests for comment.
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