More on IMCO's Board Shakeup
The day before he resigned as Premier Doug Ford’s chief of staff amid a cronyism scandal, Dean French orchestrated the dismissal of the chair of a $60-billion public pension's board and appointed three new members, the Star has learned.Premier Doug Ford is certainly driving the bus here and any claim that Dean French was acting unilaterally is preposterous (French took the fall for Ford but he didn't act on his own).
On June 20, David Leith, the chair of the Investment Management Corporation of Ontario, was advised in writing that his services would no longer be required even though the respected Bay St. veteran had been expected to be reappointed to the $150,000-a-year post when his term expired June 30.
In what ended up being his penultimate day as Ford’s chief of staff, French decreed that Neil Selfe, Brian Gibson, and Geoffrey Belsher would be joining the board that manages assets on behalf of the Ontario Pension Board and the Workplace Safety and Insurance Board.
Reached by the Star on Friday, French hung up the phone when a reporter identified himself. He did not respond to an email with detailed questions about the moves.
Leith, a former top CIBC executive who has a masters from Cambridge University, declined to comment on Thursday.
The IMCO board now has nine members, but no chair.
Members are paid $50,000 annual retainers plus expenses, as well as an additional $1,500 per meeting attended, and $10,000 if they chair one of the board’s three committees. In 2018, some board members participated in 14 meetings, meaning they earned $71,000 from IMCO.
Sources close to Ford said French had concerns about IMCO president and CEO Bert Clark, and wanted to expand and shake-up the board.
Clark did not returns messages from the Star. He is the former president of Infrastructure Ontario and the son of Ed Clark, the one-time TD Bank chief executive who later served as Liberal premier Kathleen Wynne’s privatization guru.
Progressive Conservative insiders, speaking confidentially in order to discuss internal deliberations, said French felt IMCO was not performing as well as it should be and wanted the board to replace Clark, who made $1.78 million last year.
Leith and others who were on the board at the time resisted.
“It was personal. Dean had some issue with Bert Clark and none of us could ever figure out what it was,” a senior Tory insider said Wednesday.
Another government official insisted there is no intention of trying to oust Clark despite the board changes last month.
“That may have been Dean’s plan, but, of course, Dean is no longer here,” said the PC source.
Ford’s press secretary defended the revamp of the IMCO board. “The former board of IMCO was not delivering on its expressed mandate to pool assets,” Ivana Yelich said Friday.
“As a result, the government appointed new directors to get a better understanding of the issues at hand and explore ways to improve the fund’s performance. The time to make changes is at the end of an appointee’s term and prior to the (annual general meeting),” she said.
The new IMCO board members were not available for comment. Selfe is the chief executive officer of INFOR Financial Group, Gibson is the chief executive officer of TAVANI Relationship Investors, and Belsher is a lawyer and retired CIBC executive.
Yelich noted Ford is examining the overall appointments process in the wake of French’s sudden departure on the night of June 21.
“The premier has directed his staff to review all pending appointments. Additionally, if the premier finds that people have been appointed for the wrong reason and are not performing to the highest standards, these individuals will be removed from their positions,” she said.
“As an added level of scrutiny, the premier has directed that all public appointments must go to the Treasury Board for approval prior to going to cabinet and the multi-party standing committee.”
The changes at IMCO were announced at 4:15 p.m. on June 20, the same day Ford unveiled a massive cabinet shuffle that dominated the news cycle at Queen’s Park.
The announcement came 90 minutes after the government disclosed that Taylor Shields, a niece of French’s wife, and Tyler Albrecht, a 26-year-old lacrosse buddy of French’s son, were being awarded six-figure patronage jobs to be Ontario’s agents-general in London, England and New York City.
Early on June 21, Ford revoked the Shields and Albrecht appointments and, under pressure from cabinet ministers furious about the patronage scandal, accepted his chief of staff’s resignation that evening.
Over the past month, the “French connections” affair has led to six appointees stepping aside and sources in the premier’s office admit they do not know if there are other potential landmines out there.
“Dean did a lot of this on his own. The premier had no idea this was going on and when he found out he stepped in,” an official said.
But NDP MPP Taras Natyshak (Essex) said Thursday that it strains credulity to claim Ford was out of the loop and that French acted unilaterally.
“We see his signature on every certificate,” said Natyshak, referring to the cabinet orders in council that the premier often signs.
“He knows exactly who those people are. Either he’s ignorant to the process or he’s complicit” the New Democrat said.
“I mean, Doug’s driving the bus here. This is his show.”
Last week, I discussed whether Doug Ford's gravy train hit IMCO, stating the following:
I'm not going to accuse Doug Ford's government of meddling with IMCO, but if it does, it will be the downfall of that organization. Period.I stick by those words and I'm deeply disturbed by what has transpired at IMCO. David Leith, the former chair of IMCO, should have never been terminated. His contract should have been renewed.
This part of the article is ridiculous:
Ford’s press secretary defended the revamp of the IMCO board. “The former board of IMCO was not delivering on its expressed mandate to pool assets,” Ivana Yelich said Friday.What does Ford’s press secretary know about whether David Leith was delivering on his mandate? She's a government bureaucrat who has no idea about IMCO, its operations and is certainly not qualified to make any judgments on David Leith, Bert Clark, or anyone else on IMCO's board and management team.
I am actually shocked that IMCO's governance is so weak that the government of Ontario can do all these backroom shenanigans.
I asked someone who is more familiar with the situation for their input and here is what he shared:
I believe that with most of these plans the government appoints a number of board members - at OTPP that is 5 of the 11 board members. The Ontario Teachers' Federation also appoints 5 board members and the 10 board members then appoint the chairman. Presumably they can fire those board members at will but it is very unusual for the board members to be fired. More likely they may not be reappointed for additional terms, but even that rarely happens as board members typically serve 2-3 terms as it takes time to get up to speed on the organization and having board members for 5+ years can be very helpful. But for a board member not to be renewed at the last minute is pretty shocking. IMCO had to cancel its July board meeting due to this upheaval.Like I said, I doubt Dean French acted unilaterally and it remains to be seen whether this was a one-time event or whether there will be more political interference at IMCO.
IMCO has a board structure that has closer ties to the Ontario government as the Ontario government takes more of the risk than in a Jointly Sponsored Pension Plan like OTPP.
From my experience in Canada, outside of la Caisse, there has been very little political influence into the provincial pension plans. The board members appointed by the province did not appear to be patronage type of appointments as the board members were often very well qualified as past senior executives of financial institutions, accounting firms, etc. They did not appear to be outwardly political and appeared to be focusing solely on working int he interests of plan stakeholders, like active members, pensioners, and taxpayers.
That may be changing in Ontario with these moves by the Ford government - or it may just be a one-time event that was led by Dean French who has now left the Ford administration.
If I were the Ontario Pension Board (OPB) and the Workplace Safety and Insurance Board (WSIB), IMCO's initial clients, I'd be extremely concerned with what is going on and would be extra vigilant to make sure there's no political interference whatsoever in IMCO's operations.
Folks, this is Canada, not Greece. If it was Greece, political patronage at a large public pension would be business as usual, but in Canada we should adhere to the strictest governance standards when it comes to public pensions.
Unfortunately, I see Canada becoming more and more like Greece and other banana republics where there's no governance whatsoever.
IMCO has tremendous potential to become a world-class organization but political interference will destroy this potential and harm current and future members. They need to clean up the governance to make sure this never happens.
IMCO's CEO Bert Clark has a tough enough job running this place and trying to attract new clients to IMCO. He doesn't need them reading these articles and questioning the organization's governance. The same goes for attracting talent to IMCO, nobody will want to embark on the Doug Ford bus, if that's where IMCO is headed.
There's trouble at IMCO, a constitutional crisis of sorts, and the sooner they address it, the better off the organization will be over the long run.
That's all I have to say on this matter, if you have anything to add, feel free to contact me.
Below, Doug Ford spoke to reporters in Ontario for the first time in over a month on Tuesday. Richard Southern with what the premier had to say about his government’s patronage scandal, negotiations with The Beer Store and the state of the economy.
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