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MP plans to call former Hockey Canada board member to testify about gifts, perks

Peter Julian Peter Julian - The Canadian Press

A member of the parliamentary committee investigating Hockey Canada says he plans to ask a former board member to testify about the organization, which the former board member has described to the MP as one where senior staff and board members receive gifts and other perks with little oversight or transparency.

NDP MP Peter Julian said the Standing Committee on Canadian Heritage will likely convene more hearings to scrutinize Hockey Canada after parliament resumes on Sept. 19. 

The former board member – in addition to potentially several of Hockey Canada's eight current board members – will probably be asked to testify at that time, Julian said in an interview with TSN. It’s unclear whether the former board member would testify in public or during a private “in camera” session.

“This is not about dragging Hockey Canada through the muck,” Julian said. “It’s about accountability and transparency. We’ve had a lot of stonewalling by Hockey Canada, and we haven’t gotten the answers Canadians are asking for. We are hearing from minor hockey associations and parents who are concerned about the use of their registration fees for purposes that have nothing to do with effective management of hockey. 

“The allegations I’ve heard about high-priced wine, gold rings, and luxury accommodation are concerning. This whistleblower is providing important information. The committee needs to hear from them, and Hockey Canada has to come clean with what it’s been doing with registration fees and why they have not invested in stopping sexual assaults.”

A Hockey Canada spokeswoman acknowledged in a statement provided to TSN that recent events have called the public’s trust of the organization into question and said that an action plan unveiled last month will include a review of Hockey Canada’s governance by former Canadian Supreme Court judge Thomas Cromwell.

“Hockey Canada recognizes that players, parents, fans, and all Canadians expect us to do better,” spokeswoman Esther Madziya wrote in an email. “Since 1914, Hockey Canada has been the organization that Canadians have trusted to lead, develop and promote positive hockey experiences. Recent events have called that trust into question. This is of very real concern to the board of directors who, as volunteers, have worked diligently to deliver on its mission in a responsible way…” 

Allegations raised by the former Hockey Canada board member may open a window into the inner workings of the country’s most powerful national sports organization and raise an important question: What responsibility do board members have for challenging how the sports federations are spending money and making decisions? And when things go wrong, to what degree should board members be held accountable alongside an organization’s executives?

“Many of the people on sport boards do not have expertise in governance and don’t understand their duty of care, yet when they walk into the boardroom, they become the boss of everything,” Leanne Nicolle, a Canada Soccer board member from 2017-2020, said in an interview.

“It’s a system that is mired in mediocrity and it’s pervasive. As a board member, I asked hard questions, and they were not answered. The people around the table didn’t have an appetite to tackle hard issues like equity and abuse. These boards need to bring in people who will provide expertise and challenge norms, on top of meeting their fiduciary responsibilities.”

The former board member who spoke with Julian independently contacted TSN and discussed their concerns about Hockey Canada.

They asked for anonymity because they said they signed a non-disclosure agreement when leaving the board position. The former board member said in a series of interviews with TSN that Hockey Canada told them it would discuss their request to drop the NDA during its annual meeting in September. 

Madziya wrote that Hockey Canada has only once asked a former board member to sign a non-disclosure agreement and that it was related to “a specific internal matter between a Director and the Chair. This instance pre-dated our current directors’ code of conduct, which includes standard confidentiality provisions reflective of the directors’ fiduciary duty.”

The former board member who contacted Julian and TSN said they and other board members have received gifts from Hockey Canada such as large-screen televisions, home theatre systems, iPads, and luggage. The board member also said they and other executives and board members have attended dinners at five-star restaurants that were paid for by Hockey Canada.

“When you are on the board of Hockey Canada, you live the high life,” the former board member told TSN. “You have a credit card and can spend thousands of dollars every month to wine and dine. You stay at the best hotels when you travel for the federation, and you’re invited to attend parties in the hotel’s presidential suite where the board chair stays.

 “I’ve been at [Hockey Canada] restaurant tables … where the table has been packed with wines that cost $150 per bottle. Spending thousands on a dinner was no big deal.”

The former Hockey Canada board member said they felt compelled to contact the media and parliamentarians after watching Hockey Canada chief executive Scott Smith testify in Ottawa on July 27.

“Scott Smith was asked whether Hockey Canada board members receive gold rings when Canadian teams win championships on home soil and Smith answered, ‘Occasionally’,” the former board member said. “It was ridiculous and untrue. It wasn’t occasionally. It was every single time.”

(Smith told parliamentarians that Hockey Canada board members and executives have received versions of championship rings “from time to time,” according to a transcription of his testimony.)

The former board member said they have received three gold rings from Hockey Canada.

Terry Ledingham, a Hockey Canada board member from 2010-2015, said in an interview that he received five gold rings from the organization, as well as a large-screen TV. Ledingham also said he would testify if asked. 

“[During my time on the board] there were a lot of questions that were not asked that we should have asked,” said Ledingham, a 75-year-old retired electrician in St. Albert, Alta. “We should have asked why we were paying out claims related to the abuse of Sheldon Kennedy and Theoren Fleury and other players connected to the Canadian Hockey League and letting the CHL sit in the back row with its arms crossed and not be held more responsible.

“I didn’t know how much we paid out in claims for abuse. I didn’t know. I didn’t ask. I only knew we were taking money from every player registration, and we were told it was going to all claims, including when players had accidents, like when they went into the boards badly and became paraplegic. I could have asked more about what our executives were paid. I had no idea until this testimony in Ottawa that Hockey Canada officials were making huge bonuses when we won tournaments.”

(Documents provided by Hockey Canada to parliament on July 27 indicate that annual bonuses tied to national team performance range from a maximum of $5,000 to $55,000 per year across five different positions in the organization.)

Hockey Canada has been under extraordinary pressure since TSN reported in May that the federation had settled a $3.55-million lawsuit filed weeks earlier by a woman who alleged that eight former Canadian Hockey League players, including at least some players who were on Canada’s 2018 World Juniors team, had sexually assaulted her in June 2018 following a Hockey Canada event in London, Ont. Her allegations were not proven in court.

Smith has testified that board members approved the litigation settlement during an in-camera session in which the discussion was not memorialized.

Liberal MP Anthony Housefather criticized Hockey Canada after learning that when its board came out of the in-camera session, the organization did not document that a vote had taken place, let alone what the vote had been to settle the case.

Richard Leblanc, a professor of governance, law and ethics at York University in Toronto, said gifts provided to Hockey Canada board members call into question the board’s decisions over sensitive subjects such as settling a sexual assault lawsuit.

“Boards like Hockey Canada should have a strict no-gift policy for directors,” Leblanc said in an interview. “It compromises their independence and objectivity. I’ve actually had the chief executive of one company I’ve worked with tell me, ‘I will own any director through the gifts we give them.’ Besides that, there’s no way that Hockey Canada executives should have been in the meeting with the board members when they were discussing a possible settlement. Proper form would have been for Smith and other executives to leave the room while it was being debated by the board.”

Madziya declined to say whether the board deliberated about the abuse case settlement in private.

Michael Brind’Amour, who resigned as chair of Hockey Canada’s board on Aug. 6, did not respond to repeated requests for comment. Interim chair Andrea Skinner also did not respond to a request for comment.

Madziya wrote in her email that Hockey Canada pays for a range of expenses related to the board’s duties, including meetings, food, and travel costs. She wrote those costs are governed by the board’s travel and expense policy, which is regularly reviewed.

“To process expenses more efficiently, Board members are provided with Hockey Canada-issued credit cards, which are connected directly to our travel expense reporting system,” Madziya wrote. “These cards are to be used strictly for pre-approved travel expenses.”

Madziya wrote that Hockey Canada cannot detail the gifts that have been provided to board members.

"As volunteers, directors have received gifts, including as part of welcome packages when attending events or meetings from partners and sponsors," she wrote. "…Gifts may be provided to directors from a variety of sources. As such we do not have a detailed list.”

Madziya wrote that prior to the COVID-19 pandemic, Hockey Canada spent about $200,000 per year on airfare, accommodation, meals, and ground travel for board members. Directors must book the most economical fare available, she wrote, although some exceptions are made for international travel longer than eight hours.

Soccer Canada spends about $150,000 a year on board-related expenses, including travel, hotels and food, spokesman Paulo Senra wrote in an email to TSN. Basketball Canada spends $15,000 on board-related expenses, chief executive Michael Bartlett wrote in a text message.

 Athletics Canada, meantime, spends about $75,000 per year on its board, chief executive Mathieu Gentes said in an interview.

“I’m almost embarrassed to say how cheap we are,” Gentes said. “Board members get a hoodie. That’s it. We are extremely stingy because we want every dollar possible going into programming and our athletes.”

Board members of not-for-profit organizations such as Hockey Canada do not typically receive compensation in any form, Leblanc said.

Hockey Canada has tried to assuage recent public criticism by disclosing an action plan that promised a collection of policy improvements. The organization has reopened its probe of a 2018 alleged assault. (Smith testified in June that Hockey Canada was investigating two other active abuse complaints.) 

Besides commissioning Cromwell to investigate its governance, Hockey Canada also has agreed to become a signatory to a new government agency that will independently receive and investigate abuse complaints.

Sponsors including Canadian Tire, Tim Hortons and Scotiabank have declined to respond to requests for comment about whether they endorse Hockey Canada’s current leadership.

Despite promises of increased transparency and accountability, Hockey Canada’s finances for now remain cloaked in secrecy.

While Hockey Canada’s 2021 annual report detailed that the sport has 385,190 registered players, the organization did not specifically disclose how much revenue it generates or how it spends its money. It reported that 43 per cent of revenue is from “business development and partnerships” but did not detail how much revenue the organization actually generated – or how much money was spent on expenses.

Leblanc, the York University professor, said Hockey Canada should be transparent about revenue and expenses, gains or losses from investments, funds used to settle lawsuits, and executive compensation, as well as any gifts provided to board members.

“This is also on Canada’s sports minister [Pascale St-Onge],” Leblanc said. “This should have been a condition of funding. Organizations like Hockey Canada shouldn’t be getting free money. Any funding should be conditional on disclosure and proper reporting.”

St. Onge’s staff have said funding agreements for all national sports organizations are under review and new agreements will have stricter disclosure requirements as soon as next year.

To be sure, Hockey Canada isn’t the only sport organization that does not disclose how much money they pay their executives. Leblanc, who said he has worked for others in the not-for-profit sports sector, is unaware of any national sport organizations that offer fulsome transparency.

“Public disclosure by sports not for profits related to financial statements and executive pay is wholly inadequate in Canada,” Leblanc said. “Members, donors, sponsors and governments do not know if over-compensation is occurring relative to performance, or what executives and board members are receiving in other forms of self-enrichment like swag and gifts.”

Even if Hockey Canada introduced governance rules barring gifts for board members, it still wouldn’t be difficult for the organization to attract new candidates for the volunteer positions, said David Larcker, a professor of accounting and corporate governance at Stanford University.

“While board members for not for profits like Hockey Canada are typically not paid, you would think a lot of qualified people would want to serve an organization that governs Canada’s national sport,” Larcker said.

“You just want to make sure you have the right people. In a well-run organization, you don’t want a cozy relationship between board members and the executive office. The board is supposed to monitor what the executives are doing. There’s supposed to be a bit of tension.”