Fowke's empire collapsed, time to step-down
Whistle blower protection to be included into the employee hand book

"No person will make a reprisal against an employee who: a) sought advice about making a disclosure of wrongdoing. b) made a disclosure of wrongdoing; c) co-operated in an investigation or other process related to a disclosure of wrongdoing."

Reprisal is defined as "any measure taken against an employee that adversely affects his or her employment" and could include the threat of termination, suspension or other form of punishment, intimidation, bullying or coercion."

Released on July 07, 2015 @ 13:00 EDT
Tag #: 680

Nadorozny:  Waking up to the price of corruption

Nadorozny's employment contract leaked
Departure cost taxpayers about $ 362,517.00. Fowke brokered the deal

Nadorozny: Incompetent and lack of accountability 

The service of the City of Greater Sudbury’s former CAO, Doug Nadorozny's, was terminated and he was escorted out from the City hall by the corporate security manager.

During the past regime, Nadorozny coordinated with Canapini, the city solicitor, Fowke, human resources director and Benkovich, director of water and wastewater division. Together they utilized the police force to remove an employee who spoke out against the defrauding of public funds from the Wahnapitate water plant.  Similarly and ironically, Nadorozny was escorted out from the city hall without any notification and thus paid this hefty price for his actions.  

This is a clear warning that defrauding public funds can no longer be tolerated. All bureaucrats involved in corruption sooner or later will be removed from the City hall. They no longer belong to the transparency and accountability of the government which promises to protect civil rights.  

Super CAO Doug Nadorozny cost taxpayers almost quarter a million dollars annually. Nadorozny made $223,374, plus $9,372 in benefits in 2014.  Nadorozny's salary had increased by about $10,000 since 2011, when it was $213,196.

According to Nadorozny's leaked contract (See contract), he is entitled to "buy back" OMERS pension plan for missing service later in his job. The City agreed to pay 50% cost of the purchase. His salary is subject to increase at 3.5% annually. He is also entitled to $700 per month for the use of a personal vehicle at work, and will be compensated for out- of-town business travel. Nodorozny is also entitled to 8 weeks of vacation per calendar year. Additionally, the City provided $ 1500 to review his contract by a lawyer of his choice.

According to Nadorozny's employment contract, he is entitled to receive a minimum of a 14 month severance package. Nodorozny started working with the City of Greater Sudbury in 1999 and he held almost 16 years of service with the City. According to Lior Samfiru, co-founder of Samfiru Tumarkin LLP (an online severance package calculator), Nodorozny is entitled to 16-20 months compensation. In addition, he earned almost a month of vacation entitlement for 2016. This has to be paid out too. Therefore it is estimated that Nodorozny is entitled to receive 19 months of pay as a severance package.

It can now be established that Nodorozny received, as compensation, 19 months of wages which is equal to $ 362, 517. Kevin Fowke, director of human resources, brokered the deal with Nodorozny. This will also assure that Nodorozny will not take any civil action against the City of Greater Sudbury.

According to the Municipal Information and Protection of Privacy act, it is not allowed to access labour relations information such as severance packages of terminated employees.

Nodorozny's departure and his administration failures caused huge damages to the city and that damage cannot be estimated. His activities came with unrecoverable cost to the taxpayers. Furthermore, The City of Greater Sudbury’s image was largely spoilt and finally the burden was passed on to the taxpayers. Corrupted bureaucrats surrounded by Nadorozny were continuing to involve themselves with other scandalous agendas. These such agendas include the water main break repair contract, the water division after-hour monitoring SCADA contract, external legal services contracts and the millions of tax dollars that were defrauded.

Out of all of this, however, it was the transit ticket scandal that immediately took the spotlight in the eyes of the public. Nodorozny took every action available to him in attempts to hide it. He was then hammered by social justice groups that demanded for answers. Even his joint attempt with Jamie Canapini, the City solicitor, along with all other desperate attempts to hide evidence of the missing transit ticket money from the public, failed. As such, during the election campaign, Bigger promised to disclose a forensic report but he later discovered that such a report does not even exist.

Paid news vs. Bureaucratic agenda


According to the WikiLeaks Sudbury, an investigative team said there is no forensic audit report. The WikiLeaks Sudbury therefore did not make any attempt to access them. Sudbury's tabloid news paper, City hall editor, Darren MacDonald (of Northern Life), however, submitted a freedom of information request to access the forensic report. This is part of a campaign to white-wash the scandal surrounding Nadorozny while providing misleading information to the public to convince them that Nadorozny efficiently handled the matter.

Adding to the plot is the fact that Northern Life's City hall reporter, MacDonald, is facing an allegation that he is being paid by City hall bureaucrats to keep everything under the radar.

Protecting Taxpayers


The costs of corruption for economic, political and social development are becoming increasingly evident. Unfortunately, many of the most convincing arguments in support of the fight against corruption are little known to the public and remain unused in political debates. This brief account of evidence provides a glimpse into the true cost and renders clear why governments and businesses must prioritise the fight against corruption.

Corruption is defined as the abuse of public or private office for personal gain. It includes acts of bribery, embezzlement, nepotism or state capture. It is often associated with and reinforced by other illegal practices, such as bid rigging and fraud. Nadorozny's portfolio is henceforth a match for the entire criterion and removal from office is the only option available to protect taxpayers.

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

Editorial
Released on July 07, 2015 @ 13:00

This research initially published on Japanese International Economies (34), 272–290. Brief review and excerpts of the article follows.

Severance pay vs. procedural inconvenience

This paper considers the effects of employment protection (EP) on worker incentives in the labour market with search friction, where EP is categorized into severance pay (SP) and procedural inconvenience (PI). When organization cannot distinguish shirkers, EP seems to negatively affect worker incentives, because shirkers are unlikely to be fired. However, EP can have a positive effect on worker incentives because diligent workers are protected by EP. It is shown that the positive effect can dominate the negative one when EP is moderate. In particular, PI tends to improve the unemployment rate and welfare, while SP has a somewhat unclear effect.

This paper analyzed the effects of SP and PI on worker incentives in the labour market with search friction when all workers including shirkers are protected by EP. This study has shown that the effect of PI on worker incentives is likely to be positive compared with the effect of SP and that PI plays a significant role in worker incentives. Specifically, (1) both SP and PI decrease market tightness; that is, they induce vacancies to leave the market. (2) While the effects of SP on the incentive compatible wage, the threshold of dismissal, and welfare are ambiguous, SP tends to negatively affect the unemployment rate. (3) PI is likely to decrease the incentive compatible wage, the threshold of dismissal, and the unemployment rate, and it has a positive effect on social welfare. (4) A hike of SP or PI does not substantially affect the incentive compatible wage; however, this effect mainly appears through the threshold of dismissal and market tightness. (5) An increase in PI lowers the inflow to and outflow from unemployment.

Consistent with the literature, the speed of this inflow and outflow is not significantly associated with the unemployment rate. Accordingly, PI is more effective than SP when worker incentives are crucial and every worker is protected by EP; thus, it is important to provide sufficient notice and to negotiate with unions. Although EP seems to negatively influence worker incentives when shirkers are also protected, the conclusion of this study indicates that this is not always the case. However, research does not imply that we should have stringent EP. The main message is that EP, especially PI, can positively influence worker incentives when it is moderate.

Some points of this study may be controversial. First, we may need to consider search externalities. Because social welfare may be associated with search externalities, this positive effect on social welfare may be due to the elimination of negative search externalities. Social welfare is affected through various paths and by multiple factors in this model, and it is too difficult to evaluate each path explicitly. Although estimating how search externalities are associated with social welfare in this model is complex, reseachers can infer the effect of the search externalities to some extent.

In the literature review book model  wage bargaining but with no incentive problem and no firing cost, the optimal level of bargaining power is uniquely determined using the  different condition; that is, it is efficient when workers’ bargaining power is equivalent to the elasticity of matching. When the bargaining power of workers is weak compared to the elasticity of matching, as shown by the its condition, the unemployment rate is excessively low from the perspective of efficiency.

In this case, social welfare improves if a policy raises the unemployment rate. Research established baseline with weak bargaining power of a worker. As the bargaining power strengthens, social welfare initially improves until the bargaining power exceeds the elasticity of matching, at which point it declines.

Although this model with the incentive problem and firing cost differs from the textbook model, the effect of SP may be similar to that of workers’ bargaining power because high SP can increase the basic wage. Actually, the numerical illustrations show that the unemployment rate and the in the textbook model. If search externalities are crucial only to social welfare in this model, the social welfare should have an inverted U-shape with respect to SP showing that social welfare first increases then decreases with respect to SP in the case of z = 0. In contrast, as shown in another study social welfare decreases as SP increases from 0. This implies that the improvement in social welfare generated by PI is not caused only by the elimination of search externalities. The effects of search externalities, therefore, are not essential to the result of this study.

Next, this model assumes that a random shock to productivity is repeated independently from the identical distribution. Thus, we can avoid complexity of analysis. However, as a vintage model suggests, the productivity of a match may initially be high and then decrease. In this case, long term employment relations become inefficient, and the positive effects of EP shown in this study are alleviated. From the perspective of the vintage model, EP should be more stringent in the beginning of matching but more moderate for a long-term match. However, in contrast, we see that a long-term match may be more productive because of workers’ skill formation and cooperative industrial relationships, which are difficult to establish in a short period. In this situation, EP may have a more positive effect. Accordingly, the effects of EP hinge on productivity of matching which may vary over time.

Although this viewpoint is outside the scope of this paper, it is a crucial issue left for future analysis, especially through empirical perspectives. Finally, we have not considered the difference of wage-setting between wage posting and wage bargaining. Between permanent employees and fixed-term ones in developed countries, there are earnings and working condition gaps. The difference of wage setting may be associated with this gap. A recent study by another researcher shows that the proportion of matches under wage bargaining is lower than the socially optimal level if no employment policy is implemented. The study implies the need for analyzing the effects of EP under each wage-setting, and that is another issue for future work.

Editor
WikiLeaks Sudbury
July 2015

Related document

Severance pay vs. procedural inconvenience

Reference