CALGARY – Three investigations conducted by the province of Alberta into complaints of activities at the Alberta Energy Regulator has found "gross mismanagement and waste of public resources" by the former CEO of the agency, costing taxpayers about $2.3 million.
Ethics Commissioner Marguerite Trussler, in the report dated June 14, 2019 found Jim Ellis, the former CEO of AER, breached the Conflict of Interests Act in order to further his own interests and the interests of three other employees at the organization.
Trussler also found the primary motivation behind the non-profit International Centre of Regulatory Excellence (ICORE) was to aid Ellis and others in future employment opportunities.
The plan, according to the documents, was to launch ICORE as an independent firm and in doing so, Ellis and others put it in conflict with other oil companies the AER was supposed to be overseeing.
Furthermore, Ellis also sought to conceal his true involvement with ICORE Energy Services from the AER Board, Deputy Minister for Energy, the Minister of Energy and the Deputy Minister of Executive Council.
A separate investigation, conducted by Public Interest Commissioner Marianne Ryan, found "serious and significant wrongdoing occurring within the AER" under the authority of Mr. Ellis.
"Mr. Ellis was responsible for diverting AER funds (i.e. salaries and budgets) intended to support the AER in fulfilling its regulator duties. Moreover, as CEO of the AER, Mr. Ellis had overall responsibility for ensuring the AER's ICORE-related financial costs were not concealed, but rather tracked accurately and transparently," the report reads.
As a result of Ellis' involvement with ICORE, the privacy commissioner found the AER incurred approximately $3.14 million in ICORE related costs, including $2.19 million for salaries and benefits for 14 AER employees and $950,000 in operating costs.
A third investigation from the auditor general found "critical failures" in use of resources, managing potential conflicts of interest, information management, compliance with legislation, and corporate culture all related to ICORE.
The auditor general found $5.4 million of AER funds were used for ICORE activities and only $3.1 million was recovered from the organization, leaving $2.3 million unaccounted for.
In a statement released on Friday, Minister of Environment and Parks Jason Nixon and Energy Minister Sonya Savage said the three reports revealed "a disturbing number of unscrupulous activities within the [AER's] leadership over a number of years."
"Public servants are beholden to the taxpayers they serve, and we cannot condemn the practices noted in these reports strongly enough. Our government was elected on a promise to reform the AER, which is precisely why we have already taken action, launching a review of the AER in August and replaced the board in the same month."
The AER board also released a statement in regards to the multiple investigations into ICORE, saying the reports have made it clear the agency's resources were misused.
"The findings from the reports are disappointing, especially to the employees, stakeholders, and Albertans who put their trust in the leadership of the AER. There has been substantial progress already to improve governance, policies, controls, and culture, and we will advance this work further with the benefit of the important insights and recommendations from the investigation findings."
The AER also commended the employees who came forward with their concerns, calling it an "important element" used to identify and investigate the issue.
Mr. Ellis has since resigned from the AER and the three other employees involved in the investigations are also no longer working there.
This is the first time three independent officers with the Alberta government have conducted investigations based on whistleblower and public complaints.