Tories can’t hide after MPI CEO’s firing

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This article was published 23/05/2023 (877 days ago), so information in it may no longer be current.

The decision to fire Manitoba Public Insurance chief executive officer Eric Herbelin was not much of a shock, really. The timing — on the Sunday of the May long weekend — was more than a little curious.

For some months now, Herbelin has been on the hot seat for a series of controversies authored during his 30-month tenure: a $200-million overrun on Project Nova, MPI’s core IT system; improper use of $113 million in Autopac revenues for non-Autopac expenses; $12 million in untendered contracts.

And yet, through all these negative headlines, Herbelin seemed unfazed.

Herbelin hasn’t spoken publicly about his termination but as recently as April 5, he told the Free Press MPI was “on track doing the right things” and the board of directors was “extremely supportive.” Herbelin made those statements, however, before the most recent revelations.

The straw that apparently broke the CEO’s back came on May 8, when news broke that Herbelin had given himself nearly $30,000 in performance bonuses over the last two years while his unionized employees were suffering through a wage freeze; and that in 2022, he spent more than three months away from the office — six weeks vacation and another seven-and-a-half weeks of business travel.

That story kicked off a chain reaction of events.

First, a week after the bonus and travel time story broke, long-serving board chair Michael Sullivan resigned. Around the same time, according to MPI sources, the results of an intensive board-ordered review of Herbelin’s performance and behaviour was completed.

Combine it all — the mounting controversies, the resignation of the board chair and the performance review — and the table was set for a parting of the ways.

However, while it’s not hard to understand why the board finally parted ways with Herbelin, there remain questions about why it took so long and why it was announced on the Sunday of a long weekend.

Governments that want to hide inconvenient announcements typically release them late on Friday afternoons to discourage news coverage. However, issuing a news release under the deep cover of a long weekend suggests this was less a matter of inconvenience, and more a desperate ploy to get people to forget that Herbelin ever existed.

Why would government be so invested in disavowing the Herbelin era? The more you think about the now-former CEO’s performance, the more it becomes clear he was operating without adequate oversight.

Now, it should be fairly noted that Crown corporation oversight is a tricky business.

Crowns should legally operate at arm’s length from government proper. To ensure adequate oversight and accountability, government appoints a board of directors that — while uninvolved in day-to-day operations — is there to make sure senior management does not run a valuable public asset off the rails.

Additional oversight is provided by the minister responsible for the Crown corporation in question, who is privy to all of the internal reports and other materials that are provided to the board.

Despite all this, Justice Minister Kelvin Goertzen, the minister responsible for MPI, seems to have been caught off guard by news reports that exposed some of Herbelin’s more concerning decisions.

After Free Press reports detailed his plan to add hundreds of new employees to MPI’s workforce, and award $12 million in untendered contracts to help with Project Nova, Goertzen did introduce a series of accountability measures: he publicly rebuked Herbelin for the hiring spree; he stripped MPI of its authority to award untendered contracts; and, as mentioned earlier, he ordered a broad review of MPI operations.

The troubling fact for Goertzen and the PC government is that the details of things like the hiring spree and untendered contracts were well known to the board, and thus to government, many months before they became screaming headlines. They were also common knowledge to interveners at the Public Utilities Board, which reviews Autopac rate applications.

As for the performance bonuses and travel expenses, those details were obtained through requests for financial information from MPI. Which means, they were there for the asking.

It is also fair to note that on other controversies, the Tories did nothing even after the details became public.

The Free Press wrote many stories about Herbelin’s decision to take $113 million in Autopac revenues to cover mounting costs with Project Nova and Driver and Vehicle Licensing. Even though that money should have been used solely for Autopac rate reductions and rebates, the Tories did nothing.

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MPI, and the extent to which the now-former CEO was allowed to drive out of his lane, should be an issue in this fall’s provincial election. However, the Tory government is doing everything to stop additional embarrassing information from becoming public.

The board-ordered review will likely never see the light of day. The government-ordered review, which should be made public, will not be completed until well after the fall election.

Announcing Herbelin’s firing on a long weekend won’t spare the PC government from having to face difficult questions in the legislature this week. And keeping the lid on the results of the reviews will not discourage opposition parties from raising Herbelin’s performance during the election.

The awful truth is that the Tories are now married to Eric Herbelin’s legacy. For better or worse.

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.