Niagara FallsPeter Power/The Globe and Mail
As Canada's busiest publicly owned tourist attraction took a multiyear dive into unprecedented financial losses, its top executive in charge of bringing in revenue spent nearly $400,000 on flights, high-end hotels and pricey restaurants between 2006 and 2009, a Globe and Mail investigation has found.
Joel Noden, who left his $130,000-a-year job at the Niagara Parks Commission on Nov. 9 amid questions about an untendered publishing contract, was clearly not shy with his corporate MasterCard, according to monthly statements obtained through a freedom-of-information request.
Less clear is who approved the expenses at the Ontario government agency. Mr. Noden's former boss and the agency's corporate services director each say the other was responsible.
The expense records, which took several months and $1,800 in processing fees for The Globe to obtain, have surfaced in a frosty climate around public-sector spending. Ontario's Liberal government has struggled to contain expense scandals at other agencies, and Toronto voters have elected a new mayor, Rob Ford, on promises to "stop the gravy train" at city hall. In Ottawa, the Conservatives have moved to slash employee perks and trim the federal bureaucracy in line with private-sector restraint in a slowly recovering economy.
As Niagara's parks suffered a steep decline in visits from Americans, Mr. Noden jetted to Asia, the Middle East, the United States and Mexico, charging $395,751 to his corporate credit card between October, 2006, and October, 2009. Among hundreds of transactions were an $1,800 nightclub tab, a $199 liquor-store purchase, plane fares worth $9,665 each and a $10,729 hotel stay in London, England.
In the same period, the Crown agency reimbursed Mr. Noden for $23,950 in out-of-pocket expenses from roller-coaster rides in Las Vegas to health supplements in Korea to a pound of Starbucks coffee in Niagara Falls, which he claimed as a meal.
Errors in these out-of-pocket entries, including a duplicate claim for U.S. currency, appeared to work in Mr. Noden's favour to the tune of more than $800.
The Globe has not yet received copies of the receipts Mr. Noden submitted to support his credit-card purchases, and the statements do not say who he was entertaining or for what purpose related to his parks position. Mr. Noden paid roughly $1,500 back to the agency over the three-year period, or 0.38 per cent of what he spent, parks officials said. Repeated attempts to reach Mr. Noden for comment have been unsuccessful.
Niagara's policy when Mr. Noden made his purchases stated that expenses had to be "modest and appropriate" and that "the most practical and economical arrangements for travel, meals, accommodation and hospitality must be made." But it also granted broad leeway to managers to make exceptions "on a case-by-case basis."
John Kernahan, the agency's general manager and top bureaucrat, had authority as Mr. Noden's boss to approve his travel plans and expenses, but said he delegated that authority "years ago" to the agency's corporate services director, a position equal to Mr. Noden's in the corporate hierarchy.
"They didn't ever come across my desk," Mr. Kernahan said of the MasterCard bills, referring questions to Robert McIlveen, the current corporate services director. "I don't think I've signed Joel's expense accounts in years."
Mr. McIlveen disputed Mr. Kernahan's claim and cited the commission's policy on corporate credit cards, signed by Mr. Kernahan himself, which says credit card statements "shall be approved by the general manager upon review by the executive director, corporate services or designate."
"I can't approve them," Mr. McIlveen said. "It wouldn't be good governance practice."
Fay Booker, chairwoman of the commission's publicly appointed governing board, was incredulous when told of Mr. Kernahan's comments.
"John Kernahan is Joel Noden's boss; it's the person's boss who is responsible to approve the expenses of their subordinate," Ms. Booker said. "So did the general manager just say he shirked his responsibilities?"
Asked if he is not ultimately responsible for his subordinates' spending, Mr. Kernahan said, "Ultimately, I suppose you could take it all the way to the top. [Responsibility]stops with the commission; everyone has a role in it."
Mr. Kernahan, however, admitted that agency managers are the ones who approve expenses, and that appointed commissioners are given periodic expense reports for "inspection and review."
Parks officials including Mr. Kernahan have previously defended the agency's spending autonomy on the grounds it finances itself through its golf courses, restaurants, gift shops and attractions, not tax dollars. However, the province is a financial backstop in providing loans for the parks' capital projects, and after four straight years of financial losses - the first in the agency's 125-year history - its activities have attracted closer scrutiny.
In 2008, the commission quietly approved an untendered 25-year lease for the Maid of the Mist tour-boat operation, prompting objections from potential competitors. This led the province to order audits of the agency's governance and procurement practices, and to overturn the Maid decision in favour of a tendering process that is under way now.
The U.S.-owned boat company's lease fees pour about $5-million into a $77-million annual budget at the agency, which maintains 1,720 hectares along the Niagara River, including the perennially busy promenades next to the Horseshoe Falls.
The provincial audits, meanwhile, found opaque decision-making, loose procurement practices and perceived conflicts of interest. A Globe investigation last winter found that Archie Katzman, a long-time political bagman and perennial Niagara Parks appointee since 1971, had personal ties to several parks contractors.
Mr. Katzman has since stepped down as the commission's vice-chairman in a larger shakeup that has seen some board members replaced and the board's meetings opened to the public after more than a century behind closed doors.
Ms. Booker took the chair in May with a mandate to sharpen governance and transparency, and to refocus the agency on preserving and enhancing the natural beauty of Niagara Falls. She was appointed by the Ontario government as it struggled to move on from spending scandals at its agencies, and to answer persistent questions about the parks commission's stewardship of Canada's busiest tourist attraction.
In September, 2009, Premier Dalton McGuinty ordered all agencies to adopt stringent public service rules for travel and entertainment expenses after the Liberals were embarrassed by runaway spending at eHealth and Ontario Lottery and Gaming. Last month, Mr. McGuinty learned he hadn't gone far enough, when the provincial auditor revealed that hospitals had misdirected millions in health-care money to free-spending consultants and lobbyists.
Before the government clampdown, Niagara Parks was among dozens of Ontario's 615 agencies that were free to write their own expense rules, despite the accountability inherent in managing provincial assets.
The departure of Mr. Noden, whose many trips Mr. Kernahan has said were justified as a way to boost international tourism to Niagara, signals further changes ahead. Another commission executive is due to retire soon, and Ms. Booker has hinted at a complete restructuring of the agency's management.
"I know there have been some bad practices in the past and I think there was a certain culture that was established in the past," she said. "Hopefully it's being changed now, but unfortunately what's happened has happened."