Tom Adams
Toronto Star
April 15, 2004

Letter to the Editor

The Toronto Star

Re: "Taxpayers are so done with the sorry Hydro saga" by Jennifer Wells, April 11, 2004. Without its failing nuclear program, OPG could easily avoid the outrageously excessive executive compensation it has grown accustomed to. The world’s troubled nuclear programs are driving up prices for managers who can credibly claim that they might solve nuclear problems. In the U.S., utilities like First Energy are dealing with corrosion-related nuclear safety deficiencies. The U.K.’s major nuclear company, British Energy, is being restructured in bankruptcy. In Japan, a long series of safety gaffs at reactors and also in uranium handling has shaken the nuclear industry. Canada’s own AECL is struggling with two major safety problems in its MAPLE reactor program. All these troubled nuclear investors and more are bidding for self-described nuclear turn-around experts. If the Ontario government accepts former federal finance minister John Manley’s proposals to attempt a restart of another retired reactor and build new ones, the only financial winners will be consultants and executives. Ontario taxpayers will be stuck with the bills, including more outrageous consulting and executive fees and salaries.

Tom Adams, Executive Director, Energy Probe
This letter has not been published by the Star.

 

The original article appears below:

Taxpayers are so done with the sorry Hydro saga

by Jennifer Wells

Dwight Duncan needs a new script.

The province’s energy minister has professed himself "surprised" by the number of Hydro workers making more than $100,000 annually.

And clearly appalled by the "obscene abuse" levelled at Ontario taxpayers by the $40-million pay-and-pension haul humped back to the U.S. by four self-billed nuclear experts.

As we have been living this tale for going on eight years, it would be more fitting of the circumstance if Duncan were to offer a more jaundiced and informed view.

There are no surprises here. None. Zilch. Nada. Better for Duncan to simply say, "I’m so done with being surprised."

Surely taxpayers are so done with the Hydro story. So beyond fed up.

Five years ago. Let me start that sentence again. Five years ago, taxpayers were informed of the top-flight salaries and benefits of the aforementioned nuclear pros. $1.35 million to someone named Brian Debs. $1.23 million to Warren Peabody. $1.31 million to Carl Andognini.

These are single-year payouts I’m talking.

At the time Chris Hodgson was management board chair in the Mike Harris government.

Here’s what he said: "That seems to me like a lot of money, personally. But it depends on their skill sets, I would presume."

Yeah.

Sean Conway, then the Liberal energy critic, said he thought the vast sums were an April Fool’s joke.

The strategy of the government of the day was to lower a veil of secrecy on payouts in excessive years.

Except that later securities filings for Ontario Power Generation, one of the Hydro successor companies, forced some disclosure.

By example, we knew that in each of the years 2000, 2001 and 2002, Gene Preston’s salary exceeded $1 million. That his bonus ranged between $76,000 and $323,000 in those years.

And that in 2002 he was paid an additional $1.4 million upon retirement, plus moving costs back to the U.S., plus the repurchase of his home at its appraised value.

I’m up to about $10 mil already.

Gene Preston was one of Carl Andognini’s top picks. Initially there were seven Americans hired to fix Hydro’s nuclear woes.

Gene Preston would become chief nuclear officer at Pickering, the individual responsible more than any other for bringing the four A units back online in a timely and fiscally responsible fashion.

It has become common to refer to the group pulled together by Andognini as the Dream Team.

I prefer Magnificent Seven, a label chosen by Hydro insiders at the time of the U.S. hires in 1997.

The idea of importing gunfighters to defend a village – "They were seven — and they fought like 700!" – is so much more animated than the dreary Dream Team.

In an earlier interview, a former Hydro executive captured their arrival this way: "I got the impression from the Magnificent Seven that they had been sent to the remotest backwater."

The Magnificent Seven left a mess. Successive reports made that point, and answer the question recently posed by some in the media. That is, what did we get for our money?

The hole in the doughnut, that’s what.

What’s less well known is that the Magnificent Seven gave birth to wave after wave of American nuclear workers infatuated with Hydro’s pay scale. Our nuclear operations were seen as a candy store. A cookie jar. A honey pot.

Per diems. Travel expenses. Outsized contract salaries. Pickering delivered a payday that these workers couldn’t even dream of in the U.S. No wonder the embittered Pickering workers took to calling their top bosses the million-dollar club.

I’ve written a couple of columns about a job shop called Power Source, which appeared out of thin air, run by a Chicagoan and incorporated in Nova Scotia. Power Source was pumped full of Pickering A contracts.

Older hands at Pickering were full of questions about Power Source and about whether any current executives were connected to Power Source in any way.

I’ve also written about the sudden disappearance of at least two key Pickering executives, Bob Tynan, who was paid via Power Source, and Mike Bagale.

Getting any information out of OPG has for years been akin to pulling teeth. Confirmation of the departures of these two was no different. And that’s subsequent to the investiture of the McGuinty government. The new OPG appears to favour stealth manoeuvres, just like the old OPG.

You can bet there’s a long list of over-the-top earners at Pickering. And their true cost can’t be known until the tab includes those travel expenses, and billed-to-the-company dinners at the favoured Pickering pub, for that matter.

And pension treats. Moving expenses. The whole nine yards.

This week, Dwight Duncan promises more disclosure on those $100,000-plus salaries. Who earned what.

If the McGuinty government truly intends to deliver transparency and accountability, it will take the opportunity of that news moment to give taxpayers more than they’re expecting.

To put itself, for once, ahead of one of the most unsurprising financial disasters the country has ever seen.