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Released on March 01, 2014, 12:30 AM EDT
Tag #: 666

Matichuk’s Global Office: Spending under scrutiny



Global Office Budget: Matichuk’s Adviser Saga
Advice received from the mayor’s campaign manager cost tax payers more than $29,380.00

Matichuk: “Yours to discover”
(Part 1 of 4)

The city of Greater Sudbury Municipal election is gearing up. Mayor Matichuk already declared that she will be running for public office and seeking a second term. Now this is the time to examine how Matichuk has governed the city so far.  
Update: 
Greater Sudbury Mayor Marianne Matichuk announced she will not run for mayor again. Matichuk made the statement at her State of the City Address at the Greater Sudbury Chamber of Commerce luncheon on June 19, 2014.

City council members were divided and Matichuk was unable to draw support from the majority of council members. Many accused her as incompetent in managing sensitive issues and unable to find middle ground or find sustainable solutions that would work with councillors.  This led to a major set-back in managing city business. City’s top bureaucrats started to walk on loose leash. Matichuk was helpless and isolated.

No Fiscal Responsibility: Did Matichuk save money in her office?
 
WikiLeaks Sudbury uncovered more details of Matichuk’s “adviser” saga.  Interestingly, Matichuk`s election campaign manager Paul Demers, was employed in her office soon after the election. Demers worked from January, 2011 – April 08, 2011 in the Mayor’s office.  It seems as though Demers worked as either consultant or adviser.  All payments made to Demers came from her global office budget. According to leaked invoices, payments made for service rendered by Demers are as follows. 

Account #: 5105-01-0205

(See Leaked Invoice 1, Invoice 2, Invoice 3,  Invoice 4)

Matichuk directly approved and paid $ 29,380.00 to Demers. There is no indication that Matichuk followed the so-called “Attrition Policy” in hiring Paul Demers for her office.

Who is behind the real vendor #: 2324 and what is the real purpose? 

Matichuk`s “adviser” saga did not stop at this point. According to leaked invoices, she paid an “undisclosed amount” from tax dollars as “Retainer, Policy, and communication advice” from December, 2010 to March 2011. This time period directly overlaps with Demers’ invoices. It seems the payments made to obtain advice in French and invoices were addressed to c/o Paul Demers, Mayor`s Office. Those invoices were submitted at once, when Demers left the mayor’s office. All invoices were stamped on June 09, 2011. It seems that Matichuk was kind enough to pay severance to Demers from her global office budget.  

Update:

Matichuk was being advised by journalist Rejean Grenier, both before and after the last election.

Invoices 5,6,7,8  went to Le Voyageur newspaper owner Rejean Grenier  who also worked with Demers on Matichuk’s campaign.

Sweet deal:  Rejean Grenier get the big payoff after the election is over with the Sudbury taxpayer footing the bill.

(See  Leaked Invoice 5, Invoice 6, Invoice 7, Invoice 8)  

Furthermore, Matichuk was generous enough to purchase a XEROX 3250 Print Cartridge from Toronto for Paul Demers at a cost of $ 150.12, which was also paid from her global office budget.

(See Leaked Invoice 9)

According to reports, the mayor has been allotted a global office budget of close to $600,000. (No exact budget was released). The global office budget goes towards office expenses which include: community events, donations and sponsorships, advertising, travel and staffing costs. Other expenses include: office supplies, and stationary for the fabrication of proclamations, certificates, awards of merit, etc.

According to the news release in the year of 2011, the mayor's office budget ended with a surplus of more than $76,000, which was returned to the city’s general revenues.  In order to analyze the effectiveness of savings, we need to look at the broader aspects of the claim. Matichuk hired Christine Hogarth­­­­ former senior adviser to Progressive Conservative premier Mike Harris. According to the 2012 public salary disclosure, Christine Hogarth was paid $116,484.20 and $4,200 in benefits. Matichuk did not stop at this point. She additionally hired Sudbury Star, former City Hall reporter Mike Whitehouse as communications and policy adviser. According to Matichuk the “Attrition Policy” in the office has always been followed.

It seems the mayor’s office global budget numbers were manipulated to declare a so-called surplus. In reality however, a Mayor’s office should able to manage a far lower budget. The mayor did not look at her own office expenses in a line-by-line principal. The gravy train is running across the City hall starting from Matichuk’s office.

Furthermore, there are major issues surrounding the mayor’s global office budget. 

• On what criterion did the mayor`s office determine to have a budget close to $ 600,000.00 annually?
• What are the exact numbers and details of Matichuk global budget?
• What percentage is the mayor`s office allowed to increase global budget by annually?
• Was Demers provided service to the mayor as a City staff member?
• Was Demers a private consultant for the mayor, paid by tax dollars?
• What was the real purpose of obtaining service from vendor #: 2324?

Paul Demers’ service was allocated as vender #: 12341. Now additional questions are raised. 
     (1)  Did Matichuk follow City by-laws and procedures to obtain consultancy service  from vendor # 12341 Demers?
     (2) Who approved this consultancy service ?
     (3) Does Matichuck have the power to utilize public funds, by-passing contract by-laws and procedures to obtain services for her office?

Tax payers should know the answers to all of those questions.

Too Little… Too Late

These episodes continue to carry on; the leader of the political office, Matichuk, continues to fail in providing leadership to resolve contentious issues within City Hall. It seems that Matichuk’s administrative skills, political knowledge and experience was inadequate. The application of policy at the grass root level is not effective. Regardless of media circuses, City hall is being run by the same “old school boy’s club.” Tax payers did not see any improvement in governance.  Matichuk has neither the strength nor strategy to topple “dominance in bureaucratic empire” in the City Hall. What we have seen instead is only an annually increasing tax bill. 

Sudbarians are fed up with politicians and bureaucrats and, wondering how deep the flagrant spending abuse runs. These allegations regarding misspending were perceived as a sign that more accountability was needed for all use of public money.

Matichuk: “Yours to discover”. 

Leaked Invoices

--------------------------------------End

Editorial
Released on March 01, 2014 at 12:30 AM EDT

Paper prepared for presentation at 2006 Annual Meeting of Midwest Political Science Association, Chicago, USA on April 20-23, 2006. Excerpts of the article as follows.

Corruption as Injustice

Although the general public sees corruption as a problem of social justice, the academic literature has explored it as a problem of development, usually in a narrow sense of economic development. This paper attempts to develop a normative theory of corruption as a form of injustice.

Authour define corruption as abuse of power that is a breach of "formal justice" and a violation of "obligations of fairness" by individuals for their private gain, which involves betrayal of public trust. Corruption can be justified only when the gain in substantive justice is large enough to clearly outweigh the loss in formal justice and other alternatives are unavailable. Unjust rules, in terms of substantive principles of justice or in terms of implementability and observability, give partial justification for corruption as self-defense. Hence, unjust rules and institutions tend to breed institutional corruption. Any gains in efficiency from corruption are accompanied by negative externalities such as losses for honest competitors and erosion of social trust. Hence, corruption is not functional for economic efficiency as well as for human development in the long run.

Authour argue that the private sector as well as the public sector is prone to corruption, that market failures as well as government failures produce incentives for corruption, and that principal-principal relations as well as principal-agent relations are prone to corruption. Formal justice such as control of corruption and substantive justice such as democracy (procedural justice) and income equality (distributive justice) tend to mutually reinforce each other.

Rawls’ theory of justice is mostly about "substantive justice" and presents "equal liberties," "fair equality of opportunity," and the "difference principle" as its basic principles.He defines "formal justice" as "impartial and consistent administration of laws and institutions," whatever their substantive principles are. An institution is a public system of rules that define offices and positions with their rights and duties, powers and immunities, and the like. Substantive justice is about the rules of an institution, while formal justice is about the actions of the individuals who are taking the offices of the institution, according to Rawls.

Formal justice, or justice as regularity, limits discretion and arbitrary decision-making to ensure equality before the law. It requires that, in their administration, laws and institutions should apply equally. Thus, the conception of formal justice becomes the rule of law when applied to the legal system. If an institution is reasonably just, then it is of great importance that the authorities should be impartial and not influenced by personal, monetary, or other irrelevant considerations in their handling of particular cases.

Rawls argues that even where laws and institutions are unjust, it is "often" better that they should be consistently applied. In this way those subject to them at least know what is demanded and then they can try to protect themselves accordingly, whereas there is even greater injustice if those already disadvantaged are also arbitrarily treated in particular cases. For example, if a law discriminating against women is not fairly and equally applied to all women and further discrimination occurs during the implementation process, many women will suffer from double discrimination.

The concept of formal justice can be applied not only to law-implementing processes but also to law-making processes. We know that the process of enacting laws and rules can be unfair and irregular, too. An unjust law can be enacted through fair process. A just law can be enacted through unfair process. If a law prohibiting discrimination against some minority group, which is presumably just, were enacted because the minority group bribed lawmakers, we would call the process corrupt while the legislative outcome is substantively just. According to Rawls, legislative process is part of the political process governed by the constitution. Thus, formal justice in legislative process means impartial and consistent application of the constitution, whose provisions guarantee equal liberties and equal participation.

While corruption always involves the violation of formal justice, violation of formal justice that is not for private gain is not corruption. The case of dirty hands was such an example. More serious problems arise when the rules and institutions are substantively unjust. If a regime, a law, a rule, or a contract is extremely unjust, adherence to formal justice will not be morally binding and violation of formal justice can bring a much greater substantive justice. As Rawls argues, obligation of fairness for an individual applies only when the institution, the benefits of which the individual voluntarily has accepted, is reasonably just. Citizens’ natural duty to comply with the constitution and laws is not binding if the constitution or laws are extremely unjust.

Thus, in the case of inefficient regulation, corruption may increase the efficiency in purely economic terms, although it is unjust because owners and employees of honest firms will incur loss. However, the prevalence of the corrupt firms and corrupt officials and the unfortunate fate of the honest firms will inflict other social costs. The spread of corrupt practices will probably be extended to avoid the socially efficient regulations and thus reducing efficiency even in economic terms. The destruction of social trust due to the spread of corrupt practices will increase the general transaction costs and make many economic activities and contracts more costly or impossible, and hence overall economic efficiency will be increasingly damaged. If existing regulations were all efficient, any corruption would harm the efficiency. If existing regulations were generally inefficient, the initial effect of corruption on efficiency might be positive but the long-run effect is likely to be negative considering the increasing transaction costs due to the erosion of social trust as well as the contaminating effect of corrupt practices.

Editor
WikiLeaks Sudbury
March 01, 2014