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December 5, 2006

The provincial government in Ontario has a burgeoning corruption scandal making headlines, costing taxpayers millions with little likelihood of recovery. Unlike Adscam, the notorious Liberal Party fraud in the Sponsorship Programme, this appears to have little to do with partisan politics and more to do with traditional bureaucratic corruption:

Millions of dollars charged to taxpayer-funded credit cards in Ontario are unaccounted for, the province's Auditor General Jim McCarter reported on Tuesday.

A number of Ontario's public sector workers, and managers overseeing expense accounts, are unable to account for the cash, he said. ...

Staff at Hydro One, the massive transmission utility, purchased $127-million worth of goods and services using corporate charge cards, but Mr. McCarter's annual report found few credit card slips or paperwork to justify those charges. ...

Staff at Ontario Power Generation failed to produce any receipts at all to support $6.5-million in expenditures. Managers at the government-owned power company also spent $300,000 for gifts, and $120,000 on gift certificates, for employees. The gifts included 40 leather jackets worth $8,000 each, given in recognition of five-year safety records. ...

The auditor general also examined four school boards across the province, and found one teacher spent $52,000 over two years on a purchasing card, including $4,000 spent during school breaks on DVDs, eyeglasses and Christmas lights.

The corruption appears to have spread throughout the government agencies in the Canadian province. Even quasicharitable agencies such as Children's Aid has come to light in the audit. Purchases of $60,000 SUVs and car allowances -- with some getting both simultaneously -- and Caribbean vacations got charged to Ontario's citizens, literally. They also spent money on personal trainers, gym memberships, and $150 car washes, an interesting use of funds for agencies dedicated to the benefit of underprivileged children.

The fraud centers on the use of credit cards issued to employees in government agencies and the lack of documentation that shows any relation to the mission of the government agencies. How extensive was the use of these credit cards? One school district, the Thames Valley District board, had over three thousand credit cards issued to district employees. They charged over $5 million, an average of over a thousand dollars each.

Nor was that the only fraud uncovered by the provincial audit. The investigation discovered that Ontario issued 300,000 more health cards than the total population in the province. Most of these wound up in Toronto and in communities close to the US border. Unlicensed doctors can still charge the government for services in the nationalized health-care system, calling into serious question the supposed benefit of guaranteed levels of expertise in a state-run system. It also found that CT and MRI machines get handled incorrectly, dosing children with levels of radiation far above that given adults and threatening their long-term health.

In terms of sheer damage, Cardscam appears much more significant than Adscam, and that isn't a minimization of the fraud perpetrated by the Liberals involved in that scandal. The provincial government in Ontario needs to answer some tough questions about their management of their bureaucracies. Taxpayers do not get freebie credit cards to charge personal items and services, and they don't expect to fund them for their public servants -- and they certainly expect competence from a health-care system that they are forced to use. Expect this to get more headlines over the next few weeks.

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Posted by Ed Morrissey at December 5, 2006 7:41 PM

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