Public Services Minister Joe Handley, flanked by Karen Shaner (left) and Don Cooper, defends the government payouts. - Merle Robillard/NNSL photo

'Fingers point' at Kakfwi

Auditor General says 'no justification' for severance pay to top former bureaucrats

Nathan VanderKlippe
Northern News Services

Yellowknife (Oct 25/02) - Some MLAs have Premier Stephen Kakfwi in their sights in the wake of a "damning" report by the federal auditor general.

Federal auditor general Sheila Fraser speaks with reporters on Wednesday. Fraser's report found "no justification" for the amount paid to Lynda Sorensen and John Bayly for terminating their contracts. - Merle Robillard/NNSL photo

Auditor General's observations

- Termination agreements for Sorensen and Bayly were "negotiated by cabinet secretary Elizabeth Snider and approved by Stephen Kakfwi."

- Bayly was "entitled to 12 months' salary."

- Sorensen received "additional compensation of termination pay for seven to 12 months more than she was entitled to receive under the terms of her employment agreement."

- "Given that both Bayly and Sorensen had legal counsel in this matter, it would have been prudent for the GNWT to have obtained legal advice as well."

- Both received performance pay -- Bayly, $25,000, and Sorensen, $20,000 -- even though there was "no documentation with respect to Sorensen and inadequate documentation with respect to Bayly." Both also had a letter of reprimand on their files.

Sheila Fraser said the territorial government did not stick to its own employee contract agreements when it paid $400,000 in severance pay to Lynda Sorensen, the premier's former chief of staff, and $280,000 to cabinet principal secretary John Bayly. According to Fraser, Sorensen was paid $250,000 more than was her due, and Bayly received an extra $6,000.

"This is a significant amount of money, and not to have justification for it in the files is not good," she said. "It is not reasonable nor prudent."

The standing committee on accountability and oversight questioned Fraser Thursday morning and met last night to discuss the severance packages.

Election call an option

Yellowknife South MLA Brendan Bell called Fraser's report "damning" and said he expected it would be the focus of debate in the legislature today.

"Recommendations and discussion could be anywhere from do absolutely nothing to call an election," said Bell.

Committee chair Charles Dent suggested the buck must stop at the top.

"The finger, to me, appears to be pointing to the premier."

Other MLAs called outright for Kakfwi to resign.

"If I was in his shoes, I would resign," said Tu Nedhe MLA Steven Nitah. "The credibility of government should be in question by the people of the Northwest Territories."

Sorensen and Bayly left the GNWT after a conflict of interest scandal that forced Hay River South MLA Jane Groenewegen to resign from cabinet.

The $150,000 cost of the report, which was requested by MLAs, was paid by the federal government. Fraser's office reviewed five severance packages of other senior GNWT officials to determine standard procedures.

Handley defends deal

Cabinet members quickly jumped to defend the payouts.

Public Services Minister Joe Handley stopped just short of calling Fraser's report flawed, but disputed its most significant finding.

The report finds that Sorensen's severance package should only have included 12 months of severance pay, based on her contract for the two years she worked in the premier's office.

Handley said she should be compensated for the full number of years she served the GNWT -- 17.

"Using this approach is fair and reasonable, and it's supported through the courts and through the practices not only here but in all jurisdictions," he said.

However, Sorensen received 24-months' salary, benefits and increased pension benefits.

When asked to explain why Sorensen received an additional seven months pay, even above cabinet's own calculations, Handley said: "you're not bound to pay just one month's salary for each year. ... You also pay whatever is negotiated. ... You're paying people for damages to their reputation, for the difficulty they'll have in finding a similar kind of job, there's a whole host of factors."

Handley said he only agreed with the auditor general's finding that the GNWT paid both Sorensen and Bayly an extra $6,000 for moving expenses.

Bayly never left Yellowknife and Sorensen only recently moved out of town.

Premier Kakfwi ignored reporters' requests for comment yesterday.