Monday, May 27, 2019

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Public Sector Piracy

In the roundup of corporate management pirates that at least seems to be underway in Canada and the U.S., Ontario has recently apprehended one of the strangest and ugliest. She is 47 year old Eleanor Clitheroe, the president and CEO of the province’s publicly-owned Hydro One, which distributes deregulated electrical power to Ontario consumers—and whenever it can, to buyers in the United States. Clitheroe was dismissed from her job on July 19th ostensibly for racking up $300,000 on limousine services (even though her job gets her a $214,000 annual car allowance), along with other spectacularly tacky abuses of privilege. Actually, she was fired for being paid $2.2 million a year to dismantle the utility, along with a $750,000 annual pension and a buyout package that could total more that $6 million.

Clitheroe, a well-connected workaholic who claims a deputy finance ministership and the University of Western Ontario Chancellorship among her CV highlights, will sue the government in defense of her smudged reputation. In the ensuing circus, the media and everyone else will likely miss the point—Clitheroe is the posterchild for the murky side of Ontario’s extremist Common Sense Revolution, which has spent the last seven years tearing apart Ontario’s social and governmental infrastructure in the name of privatization, deregulation, corporate tax cuts, cost efficiency, and other icons of monetarist capitalism’s splendour. One of the tenets of that revolution has been the imposition of corporate management culture across the public sector, and this is why Clitheroe’s short rampage of piracy is so relevant and interesting.

Under the current rules of advanced capitalist management, CEOs have been given carte blanche to enhance the profits of their corporations. For doing this—and frequently for not doing it very well—they get to bonus up themselves and other senior managers with ludicrously high salaries and still-more ludicrously excessive infusions of free company stock, which they are showing a suspicious tendency to unload just before their corporations’ profit bubbles burst. Theoretically, the road to higher profits ought to be through increased productivity along with the extention and exploitation of profitable markets for company-produced services and commodities. Right? In actuality, the road to a depressingly high percentage of recent profits has turned out to have wended its way onto the annual reports by strange accounting practices—things like accounting expenses as sales, hiding loses under desk pads until convenient and other sorts of "timely reporting", and a lot of bald-assed lying to shareholders about the corporation’s performance and fiscal health. It has precipitated a stock market meltdown and a general—and deserved—loss of confidence among investors, and it could destroy the world economy if it isn’t quickly and effectively corrected. These are all things everyone now knows, so there’s no need to belabour them.

What’s interesting—and outrageous in a peculiarly Canadian way—about the Eleanor Clitheroe mess is that Clitheroe was committing her CEO piracy within a publicly-owned institution, one that she’d been brought into to oversee its deregulation and then sell off to the private sector. So far, the only benefit her shareholders—who are the citizens of Ontario—have received from her tenure has come in the form of wildly-inflated electricity bills—a phenomenon the Ontario government has explained away with the barely-credible but impossible-to-substantiate argument that things would be much worse without deregulation. The circus, it should be noted, has only happened because Clitheroe and her gold-plated team have utterly botched the utility’s sell-off by not discovering that they didn’t even have the legal right to do it without special legislative permission—and because let-em-eat-cake Premier Mike Harris has been replaced by his former finance minister Ernie Eves, a nicer and more civilized man, but not one to tolerate screwups, particularly of the embarrassing kind.

At the beginning of the Clitheroe circus, we got some numbskulled tries at explaining Clitheroe’s salary, benefit package and severance packet as "normal", or at least normal given the going rates for executives of large companies that can’t offer executives job security. That explanation in itself is doubly ridiculous given that part of Clitheroe’s mandate from the beginning was to ensure that her own tenure was short-term. The other way to see this is that she and her cronies were making merry with the cash register because all her colleagues in the private sector were doing the same and hey! Wasn’t she the CEO of a major corporation? Doesn’t corporate culture confer certain inalienable rights?

Now, notwithstanding Clitheroe’s cultural rights, apprehended pirates are supposed to be hung from the public yard arm as an example to others, and this is what is happening to Clitheroe. The Saturday, July 20th Globe & Mail, a newspaper whose business pages have been an enthusiastic cheerleader to nearly all the measures of the Common Sense Revolution, and particularly when it came to making corporate culture the model for public sector decision-making, made a stunning about-turn, posting a self-righteous article about the firing. They also pasted a photo of Clitheroe on the front page that made her look like a kind of fiscal Karla Homolka, complete with hooded eyes and what seemed suspiciously like digitally-yellowed teeth.

Meanwhile, Hydro One’s former board members, themselves already disgraced for their combination of stupidity, cupidity and lack of attention to details by being hustled out the door by the Eves government, have tried to defend Clitheroe’s crazy contract (and cover their own still-smoking behinds) by defending her sterling character. One jettisoned board member, West Coast newspaper executive from the Conrad Black era, Dona Harvey, described Clitheroe as a 90 hour-a-week workaholic who desperately needed the limos to ferry her adopted children and nanny hither and thither to 1100 different locations over three years, and hey, a couple of times the limo company only sent a minivan. Whatcha got against maternity, anyway? Never mind the question of what a $2 million a year executive is doing adopting two kids when she’s working 90 hours a week and has signed a contract to right a troubled public asset by chopping it into small pieces and giving them away.

But flogging feminist repro rights and the sanctity of motherhood aren’t going get this pirate off, nor should they. There remains the $40 grand in cross-accounted renovations to her house, the illegal credit card usages and the seven exclusive club memberships she charged to the public. Oh, wait! She paid the money back when they caught her, didn’t she? But aren’t they about to jail former NDP Premier Glen Clark in British Columbia for taking a 10 percent discount on an $11,000 sundeck from one of his constituents?

Circuses are great fun, but Ontarians need to wake up on this one. Eleanor Clitheroe was a darling of the Common Sense Revolution, and while making an example of her for her incompetence and greed may be satisfying, it would be a hell of a lot better use of our time if we all had a closer look at those elements of Mike Harris’s still-kicking Revolution that don’t employ any fathomable forms of common sense. Offering civil servants corporate piracy privileges to the public purse doesn’t make sense—whether or not you believe it does in the private sector. We need to look beyond Clitheroe’s Karla Homolka-hooded eyes, and see whether she’s an isolated case, or a typical one. Then we need to put the brakes on the management model, and go find the other pirates. Bet money they’re out there, and not just in Ontario.

July 24, 2002 1250 w.

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Brian Fawcett

Brian Fawcett

Brian Fawcett is a Toronto-based writer.

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