'It is not surprising, then, that I failed to uphold the standards necessary'

I had no experience, NBCC ex-boss says


When the Nunavut government's red-faced bosses sat inside the legislature last November to explain the Nunavut Business Credit Corp.'s abject failures, their fingers all pointed in one direction: at Mel Orecklin, the man who ran the troubled organization from August 2004 until December 2006.

But the GN's designated fall guy finally got a chance to defend himself last week, telling MLAs that GN bosses knew he had no financial experience when they hired him in August 2004.

"In my interview, I admitted to having no experience in the financial sector, so it is not surprising then that I failed to uphold the standards necessary," Orecklin told MLAs.

"I did not know what the standards were and as the previous CEO's knowledge was no better than mine, there was no history on which to lean," he went on to say.

Before coming to Nunavut, Orecklin worked as a manager on a First Nations reserve in northern Ontario. He now does a similar job in British Columbia.

Orecklin made his comments in a written statement, which he read Feb. 5 at an appearance before the legislative assembly's standing committee on government operations and accountability.

The committee continued its probe of the NBCC fiasco this week, hearing sworn testimony from former NBCC office holders.

Besides Orecklin, witnesses included ex-chair Bob Hanson, ex-comptroller Rajan Jhaveri, ex-investment manager Miles Voakes, ex-CEO Michael Sanagan, and Steve Hannah, a GN manager who acted as CEO for a time after Orecklin's departure.

Orecklin told MLAs that GN officials suspended him from his job in December 2006, then pressed him to resign Feb. 6, 2007.

He said the deputy minister that the time, Alex Campbell, "wanted to fire me," and that "I was accused of deleting computer files."

But Orecklin denied that he erased any files, adding he does not know which files he is alleged to have deleted.

"I can only presume that the GN did not have proof of any wrongful behaviour and so could not fire me," Orecklin said.

And Orecklin said GN screw-ups – including NBCC data lost on the GN's computer system and a denied request for a new laptop computer – drove the NBCC into buying their own computer system.

In her devastating report on the NBCC last fall, Sheila Fraser, the auditor general, said failures in that computer system may have erased important data required by her auditing team.

At the time of his resignation, Orecklin said he signed a settlement agreement promising not to say bad things about the GN: to observe "non-defamatory behaviour" and a promise not to reveal confidential information.

But committee rules protect Orecklin and other witnesses from GN retribution. Any evidence they give during committee hearings cannot be used against them.

In talking about the state of the NBCC's Cape Dorset office during his time there, Orecklin revealed the Crown corporation was always understaffed and got little support from the GN.

He said the NBCC's five-person office was fully staffed for only one two-week period during his entire time there, and said retention of employees must be improved at the agency.

He also said the GN hired him after a better-qualified candidate turned the job down because of the low salary.

"Banking at its senior levels is a well-paying profession and the GN must take that into account when determining salary levels for any of the NBCC's employees," Orecklin said.

He pointed out that the auditor general's team actually outnumbered the NBCC's tiny staff. The auditor general assigned seven people, including six chartered accountants, to do the NBCC auditing job.

"The committee might find it interesting to compare the cost of the OAG audit to NBCC's actual budget. I know if the corporation had the resources to add six accountants to our staff, the files would have been more complete," Orecklin said.

And Orecklin said the risk-averse behaviour of Nunavut's chartered bank branches – the Royal Bank of Canada and the CIBC – make it extremely difficult for businesses to gain access to capital.

"It is not easy to obtain a commercial loan for any business in the territory unless the firm has 20 years of successful operation and a strong asset base," Orecklin said.

That means the NBCC is "not only the lender of last resort; it is the lender of only resort," he told MLAs.

This explains why two related companies in Rankin Inlet had to borrow $2 million, in violation of NBCC rules, in 2005.

Orecklin said the two firms planned to build office space in a market where there was little risk of the space remaining vacant.

But the banks would not lend money to the companies without a signed lease. At the same time, the GN would not sign a lease without a firm commitment to start construction.

So in lending them the $2 million, the NBCC was able to resolve a "Catch-22" situation, Orecklin said.

The NBCC's new CEO, Phillip Bhagoutie, started his job Jan. 14. He was to have appeared as a witness Feb. 7, along with other GN witnesses.

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