AFSC board of governors dismissed

The six-member board of Agriculture Financial Services Corp. (AFSC) in Alberta has been dismissed by the provincial government following an investigation that showed some senior executives under its oversight had acted improperly.

Agriculture and Forestry Minister Oneil Carlier said today that an investigation was launched in January, a few months after his department received an anonymous tip in November 2015.

He said it revealed “a culture of entitlement” within AFSC that he found unsettling.

“I’ve lost confidence in that board,” Carlier said during a news conference.

As well, three senior executives have been relieved of their duties, with pay, while a five-member interim board considers the investigative report and decides on further action, said interim board chair Bev Yee, a deputy minister.

Those three are president and managing director Brad Klak, who was also a board member, chief operating officer Merle Jacobson and vice-president of innovation and product development Wayne McDonald.

Members of the board who have been dismissed are Klak, Dean Gallimore, Patrick Bieleny, Ian Reynolds, George Groeneveld and Harold Schmaltz.

The investigative report indicated the three senior executives “received meals, alcohol, paid entertainment including theatre and concert tickets and sporting event admissions, rounds of golf and gifts on a frequent basis over four years” from a broker not identified in the document.

This violates AFSC procurement policies that prohibit acceptance of gifts, and also contravenes the corporation’s code of conduct, the report said.

It noted approximately 30 cases in 2014-15 when the three men charged a per diem expense for meals when the broker had provided meals.

In a list of claimed expenses deemed “not clearly reasonable or necessary in performing work duties,” the report showed:

– $1,880.25 for limousine trips in 2011, most of it for taking Klak from Edmonton to Lacombe and back for a Christmas party that involved four hours of waiting time

– $1,506 for limousine service in 2012, most of it related to attendance at hockey games, a dinner and a concert

– $5,108 for a 2011 dinner in Tokyo that hosted an unidentified Alberta government representative in Japan

– $880 for Red Deer Rebels hockey tickets in 2011

– $19,144 paid to a consultant for a 25 percent share of Edmonton Oilers luxury box tickets.

The investigation, conducted by Alberta’s chief internal auditor, made numerous recommendations that Carlier said the interim board will be expected to implement.

The temporary board will also recruit a new board, and Ed Knash has been appointed as interim chief executive officer. Knash is vice-president, business and agriculture, with ATB Financial.

Carlier said the auditor’s report has been given to law enforcement to see if any legal action is necessary.

The minister said annual audits ensure the various operations of the AFSC, which include administration of hail and livestock insurance, lending and AgriStability, have been conducted properly.

“This crown corporation does very important work and as such its senior executive team and board of directors are expected to meet the highest standards of conduct,” said Carlier in a statement during the news conference.

“After all, they are public servants accountable to the citizens of Alberta, entrusted with taxpayer dollars.”

He said the abuses noted in the auditor’s report made for “a difficult and unsettling read.”

The department received the report at the end of April and had been prepared to release it when the fires occurred at Fort McMurray, putting the plan on hold.

Contact barb.glen@producer.com

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