​Investigation finds gross mismanagement at the top of the Alberta Energy Regulator

Jim Ellis, former head of the Alberta Energy Regulator. Image: AER

EDMONTON — A government investigation concludes the former head of the Alberta Energy Regulator grossly mismanaged public funds in a scandal that has left taxpayers about $2.3 million out of pocket.

The findings were announced by Alberta's auditor general Doug Wylie, public interest commissioner Marianne Ryan and ethics commissioner Marguerite Trussler.

The investigation revolved around the activities of Jim Ellis and other executives with the energy regulator between 2017 and 2018.

A report says Ellis and other executives set up a non-profit agency to sign contracts around the globe to advise on best regulatory practices.

The plan was for the agency to be spun off from the regulator and go independent, but the report says the reason behind that was to provide future employment for Ellis and others.

The report also says Ellis and others worked to get the agency off the ground, even though it was not part of the regulator's mandate and potentially put it in conflict with the oil companies it was overseeing.

It says the executives used regulator funds, travelled business class and stayed in lavish hotels.

Dozens of regulator employees were redirected to work for the International Centre of Regulatory Excellence, even though the regulator faced criticism for long approval times, the report says.

It adds that the board was kept in the dark on some issues and didn't provide proper oversight on others. It estimates that taxpayers lost $2.3 million in salaries, work time, travel and other costs related to the international centre.

In a statement in response to the report, the AER said that “While ICORE was originally established to provide training to AER employees and support information sharing across jurisdictions, it is clear now that a small group of senior leaders used AER resources in a way that is unacceptable. These individuals are no longer employed at the AER.

“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 Ethics Commissioner recommended a review of three current employees which has been completed by an independent firm and no concerns were found.”

Ellis quit the energy regulator earlier this year and last month Premier Jason Kenney's government replaced its board. The province is reviewing the regulator's operations.

In a joint statement Friday, Energy Minister Sonya Savage and Environment and Parks Minister Jason Nixon said the reports “cite several troubling and unacceptable examples of conduct that demonstrate that the focus of the AER’s previous leaders clearly lay elsewhere, a clear betrayal of the organization’s obligations to Albertans.”

The recommendations contained within the reports will inform the government’s review of the AER, “and we would expect the interim board to implement these recommendations,” they said.

© 2019 The Canadian Press, with files from JWN

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