Hydro paints damning picture of whistleblower

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This article was published 20/02/2010 (5789 days ago), so information in it may no longer be current.

The Manitoba Hydro whistleblower based her findings on a deeply flawed understanding of Hydro’s operations, missed many deadlines and claimed she foresaw the Sept. 11 terrorist attacks, the utility says.

She also hounded Hydro staff for data and joked in emails about wishing the company’s current risk manager would commit suicide, according to an affidavit filed this week by David Cormie, Manitoba Hydro’s manager of power sales and operations. He is one of the senior executives who supervised the whistleblower during her four years as a Hydro consultant.

The allegations have not yet been proven in court and the whistleblower has not yet filed a formal response.

The affidavit was filed as part of a civil suit launched by Hydro to force some public airing of the whistleblower’s findings. Hydro has hired another consultant, KPMG, to scrutinize the whistleblower’s findings, and Hydro wants to be allowed to release the KPMG report to outside investigators, regulators and possibly the public.

It’s the latest twist in a convoluted debacle that has dragged on for well over a year with little resolution on the horizon. Along with the affidavit, Hydro also filed 82 exhibits, including dozens of internal letters and covert emails sent by the whistleblower to Hydro insiders. Taken together, they paint a picture of the whistleblower as a rogue consultant who refused to take direction and was trying to parlay her work into full-time employment or a $1.5-million software deal. Most damning are a series of emails the whistleblower sent to a Hydro employee who appears to have secretly leaked her data. The emails careen from lighthearted joking about duck hunting to insistent demands for information.

"It’s very egotistical to expect someone to have to hound you for it — and I will not work with you like this anymore," wrote the whistleblower. "It’s been seven times you haven’t come through — if you keep stalling on me like this (without even manners or explanations for the delay), I am afraid it’s going to ruin our friendship."

After being assigned to work with Hydro’s risk manager, internal emails suggest the whistleblower planned to simply "overwrite" the risk manager, calling him a "non-person" who would soon be roadkill and joking about him hanging in the bathroom.

Hydro and the consultant were frequently embroiled in protracted debates about her contract. Early on, when it took months to finalize a contract, Cormie asked the consultant why she was willing to wait out the negotiations with no income. According to Cormie’s affidavit, the consultant said she could foresee the future and knew a deal would get done.

"To support the principal’s claim to his/her ability to foresee the future, the principal further advised me that he/she had foreseen the 9/11 bombings in New York and to have reported this to the FBI…" The affidavit makes it clear Hydro kept her on the payroll for two years after allegations surfaced she was working well beyond her mandate, coercing staff to provide her with internal data and routinely failing to explain her findings to senior Hydro staff. The whistleblower, who can’t be named due to a publication ban, has said she felt a professional obligation to thoroughly investigate Hydro’s risks and when her findings were not taken seriously, she felt bound to disclose her concerns to the Manitoba ombudsman and the Public Utilities Board in the form of a whistleblower complaint.

Critics have said Hydro is using the courts to hit back at the whistleblower, tarnish her reputation, sidestep the protection she is afforded under whistleblower legislation and tie her up in legal wrangling.

Hydro took the unusual step of posting its court filings on its website and provided the court with an almost exhaustive history of its dealings with the woman.

Hydro spokesman Glenn Schneider said the company is only trying to tell its side of the story.

The whistleblower has spoken to media outlets about her allegations Hydro lost more than $1 billion over the last fives years and could face bankruptcy and blackouts.

"She is talking, but we are constrained," Schneider said. "We need to be able to defend ourselves."

The whistleblower could not offer a comment before press time Friday.

maryagnes.welch@freepress.mb.ca

CHRONOLOGY

April 2003: Senior Manitoba Hydro executive David Cormie meets the consultant through another reputable consulting firm.

April 2004: The consultant does about a month’s work for Manitoba Hydro to help Hydro process the sale of surplus power into the new Midwest market.

Feb. 2005: The consultant begins about five months of work providing recommendations on risk measurements and monitoring.

July 2005: The consultant makes a proposal for a larger consulting contract. Months of negotiations ensue, during which time the consultant advises Hydro staff to hold back on the development of a risk-modelling system called Prism. She also offers to sell Hydro her proprietary software.

April 2006: Hydro and the consultant finally sign the master services agreement (MSA) detailing her scope of work. That scope includes creating a "risk map" of mathematical tools to model Hydro’s risk, recommending policies and procedures and specifications for a future risk-management system.

June 2006: Cormie begins to have doubts about "the appropriateness of the (consultant’s) analysis." The consultant won’t explain why her conclusions related to financial transmission rights differ from Hydro’s. Cormie says it is clear the consultant doesn’t understand basic things about Hydro’s water supply variability. Progress is slow.

Sept. 2006: Cormie concludes the relationship is not working. The consultant is attempting to act as Hydro’s risk manager and investigating two software systems Hydro uses to model the flow and usage of water through reservoirs and dams. She is told repeatedly that is outside the scope of her contract, but she repeatedly asks Hydro staff to circumvent management and provide her with data to do her own modelling.

Dec. 2006: The consultant gives Hydro a report pegging Hydro’s risk at $1.2 billion over five years and detailing operational errors and bad modelling. The report’s contents "fell entirely outside the scope of the MSA" and were based on incorrect observations of Hydro’s business practices, according to Cormie. He orders staff to stop providing the consultant with data and halts payments to her.

Feb. 2007: The consultant complains to the board of Manitoba Hydro and then to the Crown Corporations Council.

March 2007: Hydro CEO Bob Brennan writes to the consultant requesting a meeting to decipher her findings. Prolonged negotiations ensue over payment and confidentiality provisions.

Jan. 2008: The consultant provides Hydro with a 204-page report that defends the findings of the December 2006 report but does not explain them. The consultant gives a day-long presentation to Brennan and other senior staff, but Hydro is still unclear on her allegations. The consultant is asked to work with the company’s risk manager.

July 2008: The consultant gives Hydro a report on long-term export contracts that includes a list of top 20 risk management issues, which Hydro worries will spawn another round of reports it doesn’t want.

Sept. 2008: The consultant emails Brennan detailing modelling errors and possible regional blackouts. The next day she is terminated.

Dec. 2008: The consultant files a whistleblower complaint with the Manitoba ombudsman.

Total amount paid to consultant: $471,589 (2004-2008)