The Public Service Integrity Commissioner's office found Charles Chrapko, then president and chief executive officer of Blue Water Bridge Canada, awarded a total of $650,000 in severance — well above what was considered appropriate compensation.
"These actions constitute a misuse of public funds, as well as a serious breach of the code of conduct applicable to members of the management group of the Blue Water Bridge Corp.," integrity commissioner Mario Dion said Thursday.
Blue Water Bridge Canada is responsible for the construction and operation of two bridges between Sarnia, Ont., and Port Huron, Mich.
The Crown corporation awarded $366,000 in severance — the equivalent of three years' salary and benefits — to a human-resources manager who was fired in 2008 over founded harassment claims.
She was terminated without cause so she could get the maximum possible severance package, the report says.
Three years later, the woman's husband, who was a project manager, received $292,000 in severance — or, two years' salary and benefits.
Chrapko first proposed that the project manager receive three years' severance, the report says, but he changed the offer to two years after a discussion with his board of directors. The project manager was also put on a one-year retainer that paid him his full salary to work at his leisure from home or the office, the report says.
The man returned to work in September 2011 in his new job. A month later, someone filed a sexual harassment complaint against him, the report says. He retired a second time in December 2011 ahead of the findings of the sexual harassment investigation.
Chrapko had a close relationship with both the human-resources manager and the project manager, Dion said.
Initially there was a suggestion Chrapko was somehow related to the two managers, Dion added, but the investigation wasn't able to establish any family ties.
"But this is a small work environment. People are closer in small work environments, it's pretty well known," the commissioner said.
"They had both worked at the Crown corporation for in excess of 25 years, and Mr. Chrapko had been there for a few years already ... but we have no evidence of anything other than a close professional relationship."
The commissioner's office says that while Chrapko — who resigned in March — committed a wrongdoing under the Public Servants Disclosure Protection Act, he did not commit the more serious infraction of a gross mismanagement.
The report puts most of the blame on a lack of guidelines around severance packages. The Crown corporation says it has since put a severance policy in place.
It's unclear whether the money will be recovered.
"I do not know whether it will be possible to recover any funds," Dion said.
"I have informed the appropriate senior officials at Transport Canada — in fact, the deputy minister — yesterday morning ... that it will be up to his department to determine if and how monies can be recovered out of this whole situation."
Transport Minister Denis Lebel's office did not return a call for comment. Instead, a spokesman for Steven Fletcher, the Conservative minister of state for transport, emailed a statement to The Canadian Press.
"These payments are clearly an unacceptable use of public funds. Our government created the Public Sector Integrity Commissioner to ensure that individuals in public office holders are following the rules," said spokesman Brayden Akers.
"As the commissioner noted in his report, these payments contravened direction provided to Bluewater Bridge Corp. Our government has taken strong action to ensure all Crown corporations have policies in place to ensure severance packages are in line with the public service and respect taxpayers' funds."
Akers wouldn't say how much — if any — of the money has been recovered.
"Any misuse of public funds is unacceptable. I cannot comment on any potential legal proceeding."