A major spending scandal at the Thompson-Nicola Regional District has led to some difficult questions of its board of directors, which includes Sun Peaks mayor Al Raine and Area P director Mel Rothenburger.
In a major investigative series, Kamloops This Week (KTW) reporter Jessica Wallace detailed how the regional district’s former chief administrative officer put to use his tax-payer funded credit card.
Over a five-year period, Sukh Gill spent over $500,000 on the card. This included $174,000 on coffee shops and restaurants, with Gill charging money on the card an average of once every two days.
Former staff and outgoing directors were treated to dinners and pricey parting gifts. A number of gift cards were also purchased and working meals at high-end restaurants were numerous.
On Monday, March 1, current board chair Ken Gillis announced the Thompson-Nicola Regional District (TNRD) will commission an investigation into the spending scandal, though the timeline and scope have yet to be determined.
“On behalf of myself and the entire board of directors, I am here to say that we take full ownership and accountability for the lack of financial oversight on this matter,” said a media statement from Gillis.
None of the spending was against policy, and the TNRD has stated publicly that the spending was not the reason for Gill’s departure in February of 2020.
The regional district has not explained why he left and called his departure a retirement; it has been reported that he received a $500,000-plus severance and payout upon his departure.
The spending scandal has drawn widespread condemnation, with Kris Sims, director of the British Columbia Chapter of the Canadian Taxpayer Federation, calling it one of the worst examples of government misspending she has seen.
“This is one of the worst examples I’ve seen when it comes to expense accounts,” said Sims.
Sims said it isn’t just the “big eye-popping” spends, such as an $8,000 spent at the Bearfoot Bistro in Whistler, B.C., but rather the “constant drip” of spending.
“Like every other day, more or less, this person was eating and drinking and not paying for it themselves,” said Sims.
Sun Peaks Mountain Resort Municipality (SPMRM) is one of 11 member municipalities of the TNRD. Raine, who is one of 26 directors for the TNRD, has served on the board since 2010, and currently chairs the organization’s auditing committee, a position he held in 2013 and 2015 to 2017.
The audit committee’s role is to approve of the hiring of an audit firm, meet with the auditor to review the plan for audits and then receive the end product.
Like other TNRD staff and directors, Raine is mentioned in the reported spending. Raine appears on four line items over the five-year period related to the Federation of Canadian Municipalities Annual Conference in Halifax, N.S. in 2018.
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Raine declined comment for the story, instead directing Sun Peaks Independent News to speak with current TNRD board chair Gillis.
Gillis said that while some of the spending highlighted in the KTW investigation was lavish, in other cases, it was justified, and that one must also keep in mind that Gill also often paid for required big-ticket items, such as hotel rooms for directors or working lunch meals for directors, on his credit card.
“In mea culpa mode, we obviously should have had some means in place to have the CAO’s expenses reviewed, which we do have now,” said Gillis.
Gillis added the board was not fully aware of the scale of spending that was taking place as CAO spending was not presented in one clear place for directors to see.
Asked if some of the meals that he joined Gill and others at raised a red flag, Gillis said that they did, but they never translated into policy.
“I thought that this is a bit extreme,” said Gillis. “And I mentioned it to Mr. Gill on one occasion, but he didn’t seem to be particularly concerned about it. You think well, I guess that this is the way things are done?
“There were red flags raised on certain issues at certain times, but for some reason, they didn’t really seem to go anywhere.”
In 2018, Gillis attended a dinner at Whistler’s high end Bearfoot Bistro during the Union of Municipalities Convention. The meal cost taxpayers $8,000 and has a flashpoint for outrage around the CAO spending.
Gillis said that while wine may have flowed a bit too freely, the evening was a strong networking opportunity that brought together staff with local and provincial politicians.
“It was a wonderful networking opportunity,” he said. “It gave us a great chance to become more familiar with the municipal councillors and the issues that they were dealing with at any given time.”
Gillis added that while board members were discouraged from “badgering the MLA” with specific issues, they were able to make connections and get the ball rolling on important matters.
Gillis said the organization has put in a number of measures to curb spending in recent months.
This includes changing the TNRD’s hospitality policy to limit drinks to two (beer or wine) at events. The regional district has also created policies where the chair or vice-chair has to sign off on CAO expenses and staff are not allowed to expense alcohol.
“We have made a requirement that all Visa receipts submitted must be accompanied and backed up by the invoice,” he said. “So in other words, you can’t just submit the little tab that comes off the machine at a restaurant, you have to have the restaurant bill attached to that.”
Mel Rothenberger, director for Area P, which covers Sun Peaks, said that he would like to see the rules go even further. He noted that he pushed for a cash bar this summer when the board voted for the two-drink limit at events.
Rothenburger was elected in 2014 and is tied to numerous meals out with Gill, including a $523 meal at the Boathouse Restaurant in downtown Vancouver in 2015. Rothenburger was also part of a 13-member party from the regional district who stayed at the Pan Pacific between three and five nights at $399 a night during a conference. The total cost of the accommodation for the party was $6,094.66.
Asked about his presence at the dinners, Rothenburger said that he kept his orders to a reasonable amount.
“I’ve always tried to be careful about my spending and my expenses tend to certainly be on the lower half of the list of the totals over the years,” he said.
“Two years ago, for example, I made a motion which was successful that the cost for spouses not be paid, that we clarify that spouses are not eligible to be paid when they accompany directors to various events. That was approved that it was actually reinforced last year.”
Rothenburger said that he would like the TNRD to take an “open book approach” to CAO and director spending in the future.
“I think if we could produce a report with details of that spending, at least quarterly, maybe even monthly, if that’s possible, that would go a great distance towards restoring public confidence and also giving us a means to pay careful attention to that spending,” he said.
Moving forward, Sims of the Canadian Taxpayer Federation said things will need to be different.
She said that the incident highlights the need for a strong office of the Auditor General for local government, where staff can report misspending.
“We don’t have a strong, effective municipal Auditor General,” she said.
“And we don’t have a team of watchdogs keeping an eye on these books. Whistleblowers have next to nowhere to call, and when they get a sense that something is going wrong in their workplace, they’re scared for their jobs.”
Overall, Sims said she hopes that the event does not turn people off local government. She added local government is among the most personal forms of government and while scandals like this can result in disillusionment, it is important for citizens to demand for change and better safeguards.
Since the publication of the KTW report, one board member — Area E Director Sally Watson — has gone on record saying that the board of directors was complicit in the CAO spending over the years.
Sims added it’s important for all board members to speak up on the issue.
“They owe it to the people to give an explanation,” she said.
“And maybe they do have an explanation. Who knows? Maybe they honestly didn’t know. Maybe they were somehow being kept in the dark. If that’s true, just say so.”
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