Robert Benzie and Paul Vieira
National Post
July 20, 2002

 Eleanor Clitheroe [left] was fired as president and chief executive of Hydro One Inc. yesterday for alleged abuse of executive perks that included spending $330,000 of company funds on limousines for her nanny and children, according to Glen Wright, the utility’s interim chairman.

"You have a governance culture here that has spun out of control," said Mr. Wright, who took over the electricity grid’s board June 11. The former board members had resigned en-masse before the Conservative government could fire them for refusing to reduce the compensation of Ms. Clitheroe and other Hydro One executives.

"When I arrived here I thought that this would be a challenge to bring into alignment people’s view of correct compensation.

I did not expect to be dealing with these types of issues," he said.

"She was fired for . . . [a] pattern of behaviour and activity in the use of Hydro One expense accounts and assets and other things. Enough is enough."

In a prepared statement at a 90-second news conference, an angry Ms. Clitheroe, who is ineligible for her $6-million severance package because she was dismissed for cause but will still receive an annual pension of $150,000, denied wrongdoing and said she is suing Hydro One.

"I conducted myself in an honest and transparent fashion, a fashion that fully respected all of the agreements I had with the company’s board of directors," she said. Ms. Clitheroe refused to answer questions at the brief press conference.

"Every single benefit I received from Hydro One was agreed to with the full knowledge of either the board’s chairman and human resources committee. To suggest otherwise is simply not true. That’s why I am so disappointed in the actions taken by the interim board," said Ms. Clitheroe, 47. "I have asked my lawyers to begin the process of clearing my name."

The former president last year earned $2.18-million ($750,000 base salary, an $806,250 bonus and $625,930 in other compensation, including $172,484 vacation pay).

Mr. Wright said he was unhappy to learn that in addition to her $174,644 annual car allowance, Ms. Clitheroe received a $40,000 "executive car allowance" as well as "a limousine service and the total bill for three years was $330,000, including 1,100 trips for her family, her nanny and her children."

As well, Hydro One spent hundreds of thousands of dollars annually for Ms. Clitheroe’s memberships at clubs, including the Royal Canadian Yacht Club, the Granite Club, the Rosedale Golf Club, the Toronto Club, the North York Hunt Club, the Caledon Ski Club and Osler Bluffs Ski Club.

Mr. Wright alleged she spent $40,000 of Hydro funds to renovate her home between 1999 and 2001 but did not repay the money until last month. In an unusual arrangement, contractors used by Hydro One for corporate work were retained for Ms. Clitheroe’s personal use. He further alleged she had used the corporate credit card for personal charges, which is contrary to company policy.

Ms. Clitheroe’s dismissal comes as the province is looking to sell a minority stake of up to 49% of the utility to a private-sector partner.

No replacement was named for Ms. Clitheroe, although Mr. Wright said he would share the duties with Tom Parkinson, former president of Hydro One Networks Inc., who was promoted yesterday to be the utility’s president and chief operating officer. The utility will not not conduct a search for a new CEO until a minority partner is found.

A spokeswoman for Chris Stockwell, the Minister of Environment and Energy, said the government endorsed Mr. Wright’s decision. "We believe the board is acting in the best interest of the shareholder," said Diana Arajs, referring to the Ontario government.

But Michael Bryant, the Liberal energy and environment critic, said the Conservatives are to blame for the debacle.

"The public has got to ask themselves a question: Who was the genius who hired her in the first place? Answer: Mike Harris, Ernie Eves and the Tory government," said Mr. Bryant.

Howard Hampton, the NDP leader, said the allegations against Ms. Clitheroe illustrate "a culture of greed" and are proof Hydro One should remain in public hands.

Tom Adams, executive director of Energy Probe, said the firing is bad news for Ontario’s electricity market: "The company was proceeding with its activities as if the purpose of it was the aggrandizement of the senior executive," he said. "It’s a disgraceful performance. It’s harmful to the overall power system and it’s a distraction for the needs that the transmission system has. We’ve got transformers blowing up and all kinds of things we have to do to strengthen our power system and clearly the former CEO was not up to it – her intentions were directed somewhere else."