This is the full legal documentation, as given to Arthur
Anderson, the Metro Toronto Fraud Squad, the media, The Society and the Ontario Labour
Relations Board at the appropriate times. The full text is about fifty pages and ***
Mbytes long. Note that some of the fonts have changed on conversion, but the text remains
the same.
Legal Considerations : Case Strategy : Hydrogate Summary : Chronology
THE STAGES
1. Background
2. Stage 1 - Incorrect Selection
3. Stage 2 - Internal "mismanagement, fraud and corruption"
4. Stage 3 - Implications of Criminal Fraud
BACKGROUND
* John Baron converts Section to high tech matrix (called "creative anarchy", actually very highly focussed neural net)
* 1988 John leaves, and Michael Moles effectively takes over NDE Unit
* 1990 Jim Brown shuffles Section... brings in others, and promises Section Head job to Michael or Mark
* 1991 Section in totally dominant business position in PTs
* May 1992 Jim Brown gives Section Head job to outsider
* 1993 AST in dominant position in SGs as well as PTs
STAGE 1 - INCORRECT SELECTION
* MM makes case: overwhelming in Education, Experience and Track-Record
* Ont Hydro system effectively allows Manager to choose anybody (no merit considerations)
* Case taken to Director (Don Mills)
* No success with Incorrect Selection (no surprise!)
SELECTION CRITERIA AND WEIGHTING FACTORS
documents/marc1.gif, COMPARISON OF MARC LEGER AND MICHAEL MOLES
STAGE 2 - INTERNAL "MISMANAGEMENT, FRAUD AND CORRUPTION"
* Purchasing clerk shows considerable fraud in PO system.
* Problems center round TEM (Transmission Electron Microscopy) and Don Mills, Jim Brown and Sylvia Sandloehken.
* Other issues include timesheet fraud, incorrect procedures, terrible contracts.
* Case taken to VP with several options (incl. hiring a PI)
* Verbal mention to VP about Jim Brown's daily drunkenness
* VP hands case to Internal Audit. Audit spends much time with Purchasing, none with MM's other three witnesses
* Many verbal messages from VP's office on Management's right to "ignore anything, refuse to reply, say anything they chose"
* VP's memo finds no wrong-doing
* Jim Brown gets promoted (still my boss)
* Research re-organization a disaster
* Effectively, Mills re-instated
documents/dane_maccarthy1_1.gif, documents/dane_maccarthy1_2.gif, documents/dane_maccarthy1_3.gif, documents/dane_maccarthy1_4.gif
documents/dane_maccarthy2_1.gif, documents/dane_maccarthy2_2.gif, documents/dane_maccarthy2_3.gif
STAGE 3 - POSSIBLE CRIMINAL FRAUD
* MM hires top PI's
* PIs find:
(i) evidence of criminal fraud at Cariad;
(ii) Don Mills "clean";
(iii) Jim Brown has major financial and alcohol problems, and some questionable accounts;
(iv) serious doubts about validity of Internal Audit investigation;
* Fortunately, PIs find no evidence of criminal fraud within OHT
* MM takes case to Top Management
* No previous known experience in TEM
* Operate out of small semi- in poorer part of town
* One month after Feb 15/93 memo, sold house to children
* Have $250k rolling in short-term deposits
* Extensive correspondence looking for employment overseas
* Very unusual fax implying fraud and other activities
? Cariad ready to flee the country
? TEM contracts at OHT deliberately set-up for fraud
* No inherent knowledge of TEM work
* Major financial problems: credit card refusal, short term cash flow problems, phone and hydro bills delinquent
* Rumours of social problems, e.g. Sylvia
* Major alcohol problems known for several years
* Suspicious payments into Jim's accounts
documents/al_kupcis_1.gif, documents/larry_leonoff_1.gif, documents/Al Kupcis3.doc, AL KUPCIS 3, documents/, May 20, 1994, June 1, 1994, documents/maurice_strong_2.gif, November 22, 1994,
documents/pwu_1.gif , documents/larry_leonoff_3_1.gif, documents/larry_leonoff_3_2.gif, documents/maurice_strong_4.gif, MAURICE STRONG 1, MAURICE STRONG 2, MAURICE STRONG 3, MAURICE STRONG 4, MAURICE STRONG 5
documents/fraud_Squad_1.gif, 73 Superior Avenue, 73 Superior Avenue, documents/bill_farlinger_1.gif,
NOTE: Written scrawl at the bottom of Mr. Farlinger’s copy reads:
"Dear Mr. Farlinger:
Please do us all a favour, and don’t sign any new Memorandum of Understanding with AECL Chalk River (either a renewal or any of the proposed versions) until you have heard from down here in the ‘trenches’. The MoU is uncompetitive, unfair and distinctly anti-Harris."
An article on the Memorandum of Understanding to AECL – Chalk River appeared in the Financial Post, Wednesday June 24th, 1998. "AECL blamed for nuclear power woes", by Greg Crone. Guess who the unnamed scientist is?
documents/minister_of_energy_3.gif, documents/derek_cornthwaite_1.gif, documents/fraud_squad_2_1.gif, documents/fraud_squad_2_2.gif, documents/phil_wong_1_1.gif, documents/phil_wong_1_2.gif, FRAUD SQUAD 3, FRAUD SQUAD 4, THE SOCIETY 1,
