Adjuster would side with minister in very public MPI collision CEO’s ‘nothing-to-see-here’ take on outside review at Crown corporation belies evidence one is required By: Dan Lett Posted: 7:00 PM CDT Wednesday, Apr. 5, 2023

Hey there, time traveller!
This article was published 05/04/2023 (928 days ago), so information in it may no longer be current.

Someone is not telling the truth.

On the one side, we have Justice Minister Kelvin Goertzen, the minister responsible for Manitoba Public Insurance. This week, the minister, announced an independent review of management at the Crown insurer following a litany of controversies involving skyrocketing costs of a huge technology initiative, millions of dollars in untendered contracts and an unexplained hiring spree.

The review, and the minister’s comments about the need for it, left little doubt that government has deep concerns about the way in which MPI is being run.

On the other side of this story, we have MPI CEO Eric Herbelin, who told the Free Press that everything is just fine at the government-owned auto insurance monopoly and that the minister — who is briefed every two weeks — is fully aware and supportive of all the steps taken to address the various controversies.

Herbelin said he cannot fully explain the minister’s decision to launch an independent review because, as of Tuesday night, he did not know its scope and purpose.

Finally, he said the government-appointed MPI board has never expressed any concerns about his performance.

Taken at face value, Herbelin’s comments completely undermine the need for an operational review and suggest that Goertzen is perhaps attempting to throw the MPI CEO under the bus to drive attention away from other government controversies.

Could Goertzen actually be using MPI as a political diversion? A quick review of the indisputable facts already in the public realm strongly suggests that isn’t the case.

First, we know that if Herbelin and Goertzen actually talk every two weeks, then they would have undoubtedly spent good deal of time discussing a series of the CEO’s more controversial decisions.

There is little doubt the two men would have discussed Project Nova, MPI’s attempt to create a fully online portal for Autopac services. Originally estimated at $86 million, Nova is now $200 million over budget and years behind schedule.

They also would have engaged on Herbelin’s decision to take $113 million in Autopac revenues — which are to be exclusively used for rate cuts and rebates — to pay for Nova overruns and increased costs of running Driver and Vehicle Licensing. Autopac customers are, collectively, more than $100 million poorer as a result of that decision.

We can also expect that Goertzen raised concerns about Herbelin’s decision to award McKinsey, a global consulting firm, $12 million in untendered contracts to get Nova back on track. And Herbelin’s decision to add more than 400 full-time positions to its workforce in the last two years, with additional plans to add dozens more over the next two years.

Even if Goertzen did not raise those concerns in face-to-face meetings, he did already express his displeasure with both decisions and would have seen the media reports detailing those concerns. In January, Goertzen publicly rebuked the corporation for its hiring largesse, prompting MPI to suspend plans to add any additional hires. And he issued a rare ministerial directive to limit future untendered contracts at the public insurer.

The rebuke and directive are prima facie evidence of a lack of confidence in Herbelin’s leadership. As is Goertzen’s decision, after all those face-to-face meetings and discussions, to launch an independent review.

Finally, Herbelin’s claims about enjoying the full confidence of MPI’s board of directors seems to be a significant exaggeration.

According to multiple sources, the board initiated a review of Herbelin’s peformance more than a month ago. The sources confirmed the review involves detailed interviews with many current and former employees about his performance and general workplace behaviour.

The sources also confirmed the board retained investigators from one of the city’s largest law firms to conduct the interviews, which signals governors are treating this matter as a formal performance review.

So, when weighing all of the available evidence, which of these two men is more of a stranger to the truth?

On the face of it, it certainly seems that Goertzen’s argument for launching an operational review is supported by facts, while Herbelin’s claims that all is well at MPI are not. That is not to say there isn’t a measure of political strategy in the minister’s actions.

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The review won’t be complete until the end of this year, pushing the results back beyond the next provincial election, which must take place by early October at the latest. Kicking this can down the road gives the Progressive Conservative government a slim hope it can stop the flood of controversies at MPI, and the impact they have had on Autopac rates, sooner rather than later.

However, politics aside, Herbelin’s assurances are pretty hollow.

Things are not going well at MPI. If he is taking his job seriously, the minister has good reason to be concerned about Herbelin’s decision-making. And with a decision to launch its own performance review, the board appears to be losing confidence in its CEO.

All that leaves the beleaguered leader of MPI in an unviable position: standing in the middle of a raging thunderstorm, with no jacket or umbrella, claiming that he is not getting wet.

And it simply won’t take an external review to find the lie in that claim.

dan.lett@winnipegfreepress.com

Dan Lett
Columnist

Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986.  Read more about Dan.

Dan’s columns are built on facts and reactions, but offer his personal views through arguments and analysis. The Free Press’ editing team reviews Dan’s columns before they are posted online or published in print — part of the our tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.