Home Capital problem hitting close to home for Wynne Liberals
The group’s apparent connections to Premier Kathleen Wynne’s administration have raised the ire of the 130,000-member Ontario Public Service Employees Union.
Thestar.com
May 8, 2017
By Robert Benzie
The problems swirling around a troubled mortgage lender are hitting close to Home for Ontario’s Liberal government.
Home Capital Group’s apparent connections to Premier Kathleen Wynne’s administration have raised the ire of the 130,000-member Ontario Public Service Employees Union.
OPSEU president Warren (Smokey) Thomas wrote to Wynne on Monday to object to a government appointee to the union’s joint-sponsored pension fund board of trustees taking on a similar role at privately run Home Capital.
As disclosed by the Star, OPTrust board member Alan Hibben contacted Conflict of Interest Commissioner Sidney Linden after accepting an appointment to Home Capital’s board Friday.
Hibben - a former RBC Capital Markets head of strategy and a key adviser to Wynne’s government on the privatization of Hydro One - is one of five provincial members of the OPSEU pension fund board.
“OPSEU, as sponsor and on behalf of its affected members, strenuously objects to Alan Hibben being a government appointee to the OPSEU Pension Trust while he holds the position of director on the board of Home Capital Group,” wrote Thomas.
The union leader added that he is concerned about “the potential appearance of a conflict of interest and reputational risk in the context of” OPTrust.
“This is not appropriate,” he continued.
But Wynne noted Hibben is abiding by the rules and seeking advice from the conflict of interest commissioner.
“If they’re following the rules - and if there is no conflict of interest - then that’s as it should be. But if there is a conflict of interest then I would expect that person to step down,” the premier said.
“My responsibility is to make sure that if there are provincial appointees or provincial employees involved that it be done according to all of the rules and that people’s expertise be used in the best way possible.”
Wynne refused to be drawn into the controversy surrounding Home Capital, which is under investigation by Ontario Securities Commission after it was alleged three current and former company executives broke the law in a scandal involving falsified loan applications.
“I’m not going to comment on the financial status of that particular organization. They will have to work out their solvency and their business model,” she said.
Finance Minister Charles Sousa emphasized Hibben is “a man of great integrity and excellent credentials.”
“I can appreciate now why an independent private organization is seeking his input as well,” said Sousa, emphasizing Home Capital has nothing to do with the provincial government.
Hibben, who was brought in to Home Capital three weeks after the OSC probe, said Friday he wants to help the mortgage lender “with the important process of governance and leadership renewal.”
Progressive Conservative MPP Vic Fedeli pointed out Home Capital’s board chair is Kevin Smith, CEO of the St. Joseph’s Health System, and, until recently, a board member of the Healthcare of Ontario Pension Plan which loaned the firm $2 billion to curb a run on deposits after the OSC investigation.
“We’ve got a very troubling situation in Ontario with Home Capital under siege. While the government denied any connection last week, we now learn that they’ve placed their own Liberal insider into this deal,” Fedeli said in the Legislature.
“With this insider now in there, does the government plan on joining this game of ‘I’ll scratch your back if you scratch mine’? Why is the premier’s inside guy now inside Home Capital?” he thundered.
An irate Sousa shot back: “I find the line of questioning rather insulting given the fact that we have taken great pains to be transparent.”
“These are operations and activities of independent agencies of government. They are not reporting to the government in any way possible,” the finance minister said of OPTrust.
