| May 13 | Agents
express outrage at real estate board
Plan to confront executives over expenses in works By Tony Wongand John Spears
May 13 Rocked by allegations of overspending by a past president and the abrupt departure of its vice-president, Toronto Real Estate Board directors spent the day yesterday fielding calls from angry member realtors. ``The calls are quite emotional and some members are quite upset and you can't blame them,'' TREB president Marilyn Baubie said yesterday. As reported in The Star, the board has launched an investigation into the expense account spending of last year's president Bill Palander. The board's directors have also passed a motion to refer the probe to Ontario Provincial Police. ``I am completely outraged
that something like this can happen. That's our
Nimmo said he will be asking
for a special meeting of members to confront
``The question is, how did
it even get this far?'' asked Gerry Wapnah, a former
``How can spending this outrageous slip through the cracks completely, and why did everyone wait till the following year to do something about it?'' Baubie said spending guidelines for directors and the president were ``tightened up'' in January of this year. The president and directors can only spend $110 per day for breakfast, lunch and dinner on out of town trips, said Baubie. Previously it was ambiguous as to whether that guideline applied to the president. ``We obviously don't want something like this happening again,'' said Baubie. According to documents obtained
by The Star, The PricewaterhouseCoopers
Palander has told The Star ``there were no financial irregularities'' during his term as president. He said he just received the report and is writing a written response. According to the report,
Palander submitted claims for more than $75,000 in
Wapnah said the finance committee would see the expenses every month and then report the figures to the rest of the directors. ``These are huge numbers. Who was asleep at the switch?'' According to the report, about $60,000 of the undocumented spending was in 1999, the year Palander was promoted to president from his position as president-elect. On a trip to Madrid for a real estate convention, for example, Palander's spending in addition to accommodation totalled $25,837.80, exceeding TREB's travel expense guidelines by more than $23,000. During the seven-day trip to Madrid - augmented by two-day stopovers in London, going and returning - Palander made 116 calls to one person in Washington, D.C., costing nearly $8,000. Cell phone expenses for the
trip, including the long distance charges, totalled
Meanwhile, executive vice-president Stephen Van Houten abruptly left Wednesday, following a board of directors meeting. Circumstances surrounding his departure remain cloudy. The board said the parting was ``by mutual agreement,'' but Palander said Van Houten was asked to leave. Real estate board in turmoil at top Vice-president gone,
By John Spears and Tony Wong
The Toronto Real Estate Board has abruptly parted company with its executive vice-president, and launched an investigation into spending by its past president. The board's directors have also passed a motion to refer the probe of spending by past president Bill Palander to Ontario Provincial Police. The OPP have not been contacted so far. Meanwhile, executive vice-president Stephen Van Houten left Wednesday, following a board of directors meeting. Board president Marilyn Baubie insisted the parting was ``by mutual agreement.'' But Palander, who attended the board meeting, said in an interview yesterday that Van Houten ``was asked to leave.'' Palander said he opposed the decision, calling Van Houten ``a professional and a gentleman.'' Palander himself is studying a report, prepared by PricewaterhouseCoopers, on his own spending as board president in 1999. The report - a draft was obtained by The Star - shows that Palander submitted claims for more than $75,000 in expenses unsupported by receipts in 1998 and 1999. About $60,000 of the undocumented spending was in 1999, the year in which he was promoted to president from his prior position as president-elect.
`TREB president Bill Palander's 1999 expenses
totalled $260,462.18 - twice as much as any
previous president and more than four times the
average of the previous 10-year period' - PricewaterhouseCoopers
draft report
Palander told The Star ``there were no financial irregularities'' during his term as president. He said he just received the report this week. He is consulting a lawyer and will draw up a written response. ``There's potential damage to my reputation. That's why I'm meeting with counsel,'' he said. Baubie said the board was concerned with Palender's spending, but noted ``he was the president (and) there were no guidelines in place.'' The Pricewaterhouse investigation has so far cost the board $85,000, according to invoices contained in the report. The report states: Palander's expenses for 1999 totalled $260,462.18 - the highest total for any TREB president in the past 10 years. He spent twice as much as any previous president, and more than four times the average of the 10-year period. On a trip to Madrid for an international real estate convention, Palander's spending in addition to accommodation totalled $25,837.80. That exceeded TREB's normal travel expense guidelines by more than $23,000. Of that amount, which the accountants call a ``potential overpayment,'' $14,698.43 was in the form of a cash advance. ``It is reasonable to assume that this advance could cover all the expenses during his trip,'' the report says. However, it notes that TREB paid $11,139.37 charged to Palander's American Express card, in addition to the cash advance. Cash advances showed up more than once during the probe. Pricewaterhouse found that in 1999 Palander received advances totalling ``approximately $21,000,'' but no receipts were available to account for the spending. During the seven-day trip to Madrid - augmented by two-day stopovers in London, going and returning - Palander made 116 calls to one person in Washington, D.C. They cost nearly $8,000. The single most expensive call cost $543.54. Cell phone expenses for the trip as a whole, including the long distance charges, totalled $17,072, which Pricewaterhouse says ``was not budgeted for and appears excessive.'' The report says Palander's stopovers in London to and from Madrid - which cost TREB $11,416 - ``would not be necessary under normal conditions.'' The London expenses included $571.20 for a ``concierge tour'' and $209.02 for theatre tickets. ``It is not clear as to whether these expenses were business related.'' The report notes the trip's expenses also include $6,457 ``for a stay at the Marriott Hotel in Washington on the return from Europe.'' It doesn't explain why Palander was in Washington, or for how long. Palander's expenses included $41,949.64 for hosting directors' dinners during 1999. The directors sometimes go out for dinner after their regular meeting. Those dinner bills were more than five times the average spending over the previous 10 years. Of the total, $12,497.45 was unsupported by receipts. Palander also incurred expenses unsupported by receipts during 1998, when he was president-elect, totalling $15,313. The board of directors has asked Palander to repay ``amounts over and above TREB's expense policy,'' minutes of the April 28 meeting show. A covering letter from Pricewaterhouse says its probe was ``limited to assessing the accuracy and nature of submitted expense reports.'' It adds: ``We express no audit opinion.'' Circumstances surrounding Van Houten's departure remain cloudy. Van Houten didn't return calls. The directors had expressed concern April 28 over invoices for telephone service that were ``not shown in the financial statements.'' The invoices, covering six months, totalled $750,000, the minutes show. A motion calling for Van Houten's ``immediate dismissal'' at that meeting failed by a voted of 5 to 7. Before coming to TREB, Van Houten was president of the Alliance of Manufacturers & Exporters Canada. As executive vice-president he was responsible for all operations at the real estate group, reporting to the board of directors and the president. But when interviewed by The Star last year on his appointment, he said: ``The thing is there are always going to be challenges in any organization . . . but that's part of the challenge.''
`The first day he arrived he told us he wasn't here
to do a hatchet job and then people started to get
fired'
Once Van Houten came on board he let go more than 20 staff members, some in such key positions as human resources and government relations. Morale at the board, according to one staffer, was ``miserable.'' ``The first day he arrived he told us he wasn't here to do a `hatchet job' and then people started to get fired,'' says Fareed Khan, manager of government relations at the time. Khan was dismissed last March and is suing the board over his dismissal. Carol Faulkner, vice-president of member services and communications for TREB, said Van Houten ``brought tremendous strength and direction to the company.'' Baubie and president-elect David Pearce will take over Van Houten's job for now. ``We don't see that as an
issue,'' Faulkner said.
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