02/21/2014 05:01 EST | Updated 04/23/2014 05:59 EDT

CBC President Hubert Lacroix Repays $30K In Expenses


CBC president Hubert Lacroix repaid nearly $30,000 in living and meal expenses last fall after an internal audit found he had been wrongly claiming accommodation costs since his 2008 appointment.

Lacroix had been submitting claims for living expenses since he started his job as CEO and president of CBC on Jan. 1, 2008, despite having negotiated a $1,500 per month living allowance after deciding not to move to Ottawa, where the CBC is headquartered.

The expense claims were approved despite an appendix to a CBC bylaw for director compensation that says the president is entitled to be paid reasonable travel and living expenses for CBC work "at any place other than the head office of the corporation," the auditors said in a memo about the review of Lacroix's expenses.

The rule, known as section nine of Schedule K, was approved by the board of directors in March, 2006, but auditors found that nobody seemed to be aware of the rule. Lacroix and "the executives and managers currently charged with reviewing the president's expenses" didn't know about Schedule K, the auditors found.

The CBC's internal audit team summarized the investigation and opinion of the Crown corporation's general counsel, Maryse Bertrand, in a memo dated Oct. 15, 2013.

The executives and managers also said they didn't know that Lacroix had negotiated a $1,500 per month living allowance to "stay in a regular hotel" instead of moving to Ottawa, according to the memo.

The executives and managers weren't aware of "the contents of the Order-in-Council" that appointed Lacroix and set out the terms of his employment, the memo says.

CBC presidents are appointed by the federal cabinet.

Integrity, transparency 'extremely important'

The total cost for Lacroix's meals and hotel expenses over the past six years was $29,192.41. Lacroix voluntarily repaid that amount on Sept. 30, 2013.

In an interview airing Friday on CBC News Network's Power & Politics, Lacroix said when the rule was pointed out to him, it was clear the expenses weren't allowed. 

"What's important for everybody to understand is that these expenses, I mean, nobody was hiding them. They had been posted on our website since the first day I came in. Everybody knew what they were," Lacroix told host Rosemary Barton.

"Is it embarrassing to me? Am I upset, am I angry? I mean, I've been preaching transparency since day one. And here I am, in a conversation with you on Power & Politics about my expenses in Ottawa, and that's not acceptable to CBC, not acceptable to Radio-Canada either.​"

In a memo to CBC employees Friday, Lacroix said transparency was "extremely important" to him, and warned critics may use the information to attack the CBC.

"There has been a lot in the news recently, including on our own news, about the expenses of public officials and there are some who may use my disclosure of this information to attack me or this corporation. It will not change my commitment to doing what I think is necessary to make things right," he wrote in the memo.

The news comes as the CBC faces tighter budgets and less revenue: the federally funded corporation had its $1.1 billion budget cut by $115 million in 2012.

The CBC also lost its NHL broadcast rights last fall, which means that, beginning next season, it will lose the advertising that ran during hockey games and will be forced to find additional hours of programming to replace those games. 

Reimbursements stopped

CBC stopped reimbursing the president for living expenses in Ottawa as of Sept. 1, 2013.

"The corporation also obtained a legal opinion on Aug. 13, 2013, from independent outside counsel which noted that the practice followed by the corporation (since 2006) is not in accordance with the governing instruments of the corporation," the auditors' memo said.

Lacroix's predecessor, Robert Rabinovitch, was also reimbursed for hotel, meals and incidentals while travelling to Ottawa, the memo said, although it notes that "financial records indicate that prior to October 2006, Mr. Rabinovitch was not reimbursed for hotels or meals while travelling to Ottawa." It doesn't say why that changed a few months after Schedule K was introduced.

Lacroix's Ottawa expenses were regularly posted to the CBC's website, along with his other expenses.

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