Whistleblower vindicated

Hey there, time traveller!
This article was published 22/10/2016 (3351 days ago), so information in it may no longer be current.

A defamation suit against one of the original Crocus whistleblowers, whose concerns contributed to the eventual forced closure of the fund, has finally been discontinued almost 12 year after it was filed.

In early 2005, the Teachers’ Retirement Allowances Fund (TRAF) sued its former CEO, Tom Ulrich, after Ulrich wrote an 8,000-word letter to then-minister of education Peter Bjornson detailing a number of issues he thought were amiss at the teachers’ fund.

Most pointedly, Ulrich alleged then-chairman of the teachers’ fund board, Alfred Black, was in conflict of interest regarding a proposed investment the fund was to make in a Crocus-related property fund. Ulrich was opposed to the investment.

The teachers’ fund filed its suit against Ulrich in February 2005. Black resigned from the fund four months later.

Ulrich subsequently made a counterclaim against the fund. Both claims were discontinued this summer at no cost to either party.

“I’m happy to have it gone,” said Ulrich, 72. “After about three or four years I convinced myself — whether that was legitimate or not — that they were never going to pursue this… But they could revive it any time. I did not want it to be part of any issue where once I’m gone someone could make a claim against my estate.”

Ulrich wrote the letter, which became public at the time, nine months after he was let go from the teachers’ fund at the end of his contract even though, as his letter details, the board had spent the previous year negotiating terms for a contract extension.

Ulrich said although he became unemployable after the suit was filed — “I was persona non grata,” he said — he referred to the forced retirement as a gift because he was able to travel with his wife.

“I lost five years of potential income… but that is not the big issue,” he said. “The big issue to me was making sure when I wrote that letter it would create enough concern that it would stop this attempt to use a public-sector pension fund for political purposes.”

The teachers’ fund did make a $10-million investment in the Manitoba Property Fund that was partially managed by Crocus. But shortly thereafter, in December 2004, Crocus shares ceased trading and the wind-down of the fund commenced.

Deloitte took over as receivers of Crocus in June of 2005. Since then, Deloitte has liquidated the assets of 40 of the 46 holdings Crocus held at the time of the receivership. It has returned about $72.3 million to shareholders in three separate distributions.

Deloitte is still managing about $1.6 million in Crocus cash as well as three investments still to be disposed of.

“It was mutually agreed to be discontinued,” said Jeff Norton, the current chief executive officer of the teachers’ fund. “It’s pretty uneventful. Ulrich contacted us and requested this, and we were happy to comply. It was sitting there dormant for a number of years. The board felt strongly about the issue at the time. The litigation served its purpose.”

Ulrich’s lawyer, Derek Booth, said he advised his client against the discontinuance without cost to either side. He said it is unusual for such a matter to take so long to be resolved.

“I think they (the teachers’ fund) had a non-meritorious claim in the first place, and the delay was somewhat confirming of that,” he said. “If there was any merit to their claim they would have gone ahead.”

The teachers’ fund manages about $6 billion in Manitoba teachers’ pension funds. Norton said it has been business as usual since 2004, and there have been no significant changes in the way it operates.

“We think we have a fairly robust governance structure that has served the teachers well over the years and will continue to serve them well into the future,” Norton said.

martin.cash@freepress.mb.ca