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  • authored by Concerned Citizen
  • published Fri, Dec 30, 2005

Open Letter to the Financial Services Commission of Ontario

Ms. Lynda Ellis
Financial Services Commission of Ontario
Pension Plan Branch
5160 Yonge, Street, 4th Floor
P.O. Box 85
North York, ON M2N 6L9

Dear Ms. Ellis,

I read a recent feature story in the Canadian Grocer Magazine. While what I read didn't shock me, I was dismayed by the realization that you and your pals don't give a rat's ass about the people you are supposed to protect.

After reading the article, I came away with the thought that you dance better than Ginger Rogers. You and the other dancers at the FSCO seem all too eager to rhumba with pension plan administrators but y'all refuse to two-step with the common folk. Is it 'cause you're afraid of the way we dress, or do we have to buy you a friggin' lunch before you'll talk to us?

Anyway, I digress.... Ms. Ellis, to keep this letter to a manageable size I will confine the comments on my dismay to how I feel after reading the following excerpt from Canadian Grocer (CG) Nov 2005 edition:

Lynda EIlis, a manager with FSCO who was directly involved with the CCWIPP investigation, was also short on answers. When asked what level of cooperation FSCO received from the UFCW, she replies: "I'm not going to comment on that at all." When asked if it is likely criminal charges will be laid against CCWIPP representatives in the future, Ellis says: "I'm not going to speculate on this." As for the for forensic audit? "That [audit] is a very significant cost factor when dealing with a plan this size," says Ellis. "And what is it going to accomplish in the context of what we're doing!"

The FSCO even appears reluctant to give CCWIPP a public relations black eye. FSCO refused to provide Canadian Grocer with a copy of its report on CCWIPP, forcing Canadian Grocer to obtain the document from another source.

The question now begs: where does FSCO go from here? "We have to do two things," says Ellis. "One, we have to bring the plan into compliance and ensure there are processes in place so this kind of situation doesn't arise in the future. The second thing we are doing is looking at our options for purposes of what would be the next step in the process. The act permits us to lay charges if warranted."

As for a timeline in accomplishing these tasks, Ellis can only speculate. "I would say months, but it could turn into years, God only knows. What looks to be straightforward is sometimes not."

Ah, Ms. Ellis, wouldn't life be grand for criminals if they knew that their secrets were safe if they made sure that it would be expensive to uncover them? However, that would be a supremely absurd concept for any organization, regulatory body or government to run on - now wouldn't it? If that were the case everywhere, we could turn our prisons into libraries because they would all be sitting empty.

As absurd as it is, you seem to share Mr. Mockford's view (mentioned earlier in the CG article), and I'm sure that he didn't accidentally develop it after drinking a few rancid beers and eating bad pizza. I'm sure that isn't the case with you either. If both of you share that view, how many others in the FSCO are of the same mind?

I don't know the answer at the moment because Mr. Golfetto, Mr. Gordon and Dr. Christie are reportedly ignoring questions about the CCWIPP in the hope that they will "get rid" of the guy asking them. I am of this mind because a friend passed on the FSCO's stupidly - disrespectful response to a legitimate question.

One person wrote to your boss of bosses, Dr. Bob Christie, and asked the following:

...Ms. Ellis refuses to answer most of my questions, and I find that troubling. However, for the moment, what is the most troubling is her refusal to release to me a copy of the CCWIPP Report addendum. I am assuming that it has been published because Ms. Ellis told me that it would be ready by the end of October. I have since enquired about obtaining a copy and Ms. Ellis et al simply refuse to acknowledge or respond to my questions.

I hereby ask that you urge Ms. Ellis to respond to my queries and to release to me a copy of the CCWIPP Report addendum....

You can imagine the writer's shock when top pension honcho David Gordon instructed his boss, Dr. Christie, to:

I would recommend that you do not respond to [this person] because once [this person} thinks [that this person] has you, you may not get rid of [this person]. Lynda hopes to be in tomorrow at which time she can respond advising [this person] that you referred [this person's] email on to Lynda, that the Addendum has not been issued yet but will hopefully be ready at the end of this week, and that he will receive a copy in accordance with [this person's] request.

I have been informed that apparently Dr. Bob did as he was told by his underling because he did not respond the person in question.

That being said and considered, I'll take a safe guess about the motives and motivators of the fine folks at the FSCO. I'll bet that all of you share the attitude that if you ignore pension plan members long enough you will be "rid" of them. That attitude must be well know to some because it seems to have lulled sleazy pension plan operators into a warm and secure feeling that they are safe and that their crimes will never be revealed. The worst that can happen is that they will be asked to stop plundering their plans.

Ms. Ellis, you ask what a forensic audit would accomplish in the context of what the FSCO is doing - or could we say "Not Doing?" The CCWIPP's own auditors love the idea of forensic audits. Here's what they say:

Take a Bite out of Fraud

In recent years, many corporations and organizations have experienced positive changes in their financial fortunes. Unfortunately, an increase in corporate and organizational affluence creates opportunities for theft and fraud. Statistics suggest that organizations lose six per cent of annual revenue to fraud and abuse.

Some look to audits as a counter - measure to potential fraud. Three distinct types of audit are available. Each has a unique objective, and so care should be taken to choose the right audit(s) for your situation.

The most common form and the one we typically think of is the Annual Financial Audit. An auditor in these engagements expresses an opinion on the financial statements, that they are fairly presented in accordance with GAAP. This approach and emphasis in these audits is quantitative and is based on the materiality concept, the aim being to assure that risk is at an acceptably low level.

A Value for Money Audit assesses management performance. It is more qualitative in nature, making observations and recommendations about management's performance. It reports on the appropriateness, stewardship and custodial performance of management.

The Forensic Audit is unique. It is initiated to confirm or dispel suspicions of wrong - doing. The term "forensic" refers to information or evidence that is suitable for presentation in a court of law. A typical objective of a forensic audit is to obtain evidence to support criminal charges related to white-collar crimes such as bribery, fraud, theft, breach of trust, extortion and forgery. The reports are usually very lengthy and include a detailed, fully-documented and well supported chronology of the investigation and findings.

WHEN A FORENSIC AUDIT MAY BE REQUIRED

Here is a [partial] list of indicators that may indicate a fraud or other impropriety has taken place that may warrant investigation:

  • Large unexpected losses
  • Noncompliance with corporate policy or internal controls
  • Employees apparently living beyond their means
  • Missing and/or altered documentation

These are red flags or symptoms that many times are not pursued during annual financial audits, as they are often explained away as isolated incidents by management. As a consequence, a situation that may be an ongoing fraud can remain undetected and add costs to the organization.

Management must take a more aggressive and active role in searching out and detecting fraud and other financial improprieties. As well, those charged with organizational governance must take a role in developing anti-fraud policies that will reduce risk of loss.

Forensic audit or not, anyone can see that the FSCO haven't conducted any audits whatsoever. In fact the only person who mentioned an audit and calling the cops was FSCO official Jaan Pringi and he was immediately pulled from the CCWIPP file, sidelined and then publicly slapped for using incorrect terminology.

Think about the CCWIPP. Think about the Laborers Pension Plan and the Hamilton townhouse complex that never was. Think about all the other pension plans run by known characters. We know you think a lot 'cause you're right in there trying to help the CCWIPP associates do a partial windup of the Ontario UFCW Pension Plan. While you have your thinking cap on, think about the aforementioned BDO Dunwoody statement: "Statistics suggest that organizations lose six per cent of annual revenue to fraud and abuse." That's a lot of dough whether you are looking at $90 million or $1.2 billion.

Ms. Ellis, you have to understand that some characters that do sleazy deals do them often and they don't discriminate against who they screw around. A lot of people have been screwed and they are talking.

Your claim that the FSCO is doing something to bring the CCWIPP into compliance is supremely misleading - might call it unmitigated bullshit. You know full well that that plan can never be retroactively brought into compliance. You would have to ignore the fact that documents have been destroyed. What you seem to be saying is bygones are bygones and all that you care about is the future activities.

Likewise, your claim that FSCO officials are grinding their gray matter to figure out what to do next is stupendously arrogant if you actually think anyone believes it. If you followed the Pension Benefits Act you would know exactly what to do. You have been gazing at the CCWIPP for close to a decade, and after what you've seen as early as 1999, you still don't know what action to take. The FSCO crew may be a lot of things, but don't paint yourselves as whimpering ninnies without the ability to reach the right decision. Mr. Pringi arrived at the proper one in less than a day.

The FSCO cannot avoid prosecuting the CCWIPP. Stop looking for ways to avoid it. Do not think for one second that by laying charges and then letting the case languish is an option. You have one option. You must involve law enforcement agencies, you must involve the Canada Customs and Revenue Agency and you must involve other pension jurisdictions.

Look back through your files. The original focus of people's ire was on the CCWIPP. You were advised long ago that FSCO inaction was bringing about a shift in focus. You were told long ago that the focus was beginning to shift toward the FSCO. It has. Now it is beginning to shift toward the Minister of Finance and the Premier.

Has any of the information supplied to you to date been wrong? I don't think so because I've seen the information before the FSCO Report was finally released. The FSCO report, though damning, only scratches the surface. By your own admission it was never intended to be a thorough look at the CCWIPP's operations. However, if you look at the BDO Dunwoody excerpt above, you will see that alarm bells should have been ringing from day one of your review. When you ignore even the CCWIPP's own auditors regarding danger signs, there has to be something really, really wrong with how the FSCO officials think and act.

The message that we take from your CG comments is that justice takes too long to deliver and is too expensive to administer. With that attitude it's obvious that you cannot continue to administer the legislation which you have been entrusted to uphold. Ms. Ellis, justice isn't an option - it's your fiduciary duty.

Your question about what a forensic audit would accomplish is ludicrous. You know full well that it would accomplish that which the FSCO is failing to do. It would tell you where the money went. It would give you an idea of how much of it is recoverable. It would tell you who should be held accountable. It would tell you who should be prosecuted. It would tell you how to stop the pillaging now and in the future. It would tell you how the stupid and the sleazy are bleeding money from pension plans. It would help the FSCO to understand the extent to which wrongdoing exists in the administration of pension funds under the oversight of the FSCO. It might even lessen the risk the FSCO might face in the event that a class - action suit is filed.

Dr. Bob, his handler, Dave Gordon and the rest of your crew need to wake up and start carrying out your duty in a way that benefits and protects pension plan members. It's time you started giving the CCWIPP crew orders rather than them giving FSCO officials "to do lists".

Sincerely yours,

A Concerned Citizen

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