I HATE ICBC

Source: Globe and Mail. July 18, 2008.

Senior managers at the government-run auto insurance corporation in B.C., some employees, and their family and friends bought vehicles that had been repaired at an ICBC facility after being written off, an independent review has found.

In a highly critical forensic audit that cost $700,000, PricewaterhouseCoopers found that 55 repaired vehicles over the past 10 years were purchased by insiders at the Insurance Corp. of B.C. The audit identified 22 employees and 18 people who were either friends or relatives of employees who purchased the vehicles.

Five of the vehicles were later resold for a profit. In one instance, an unidentified employee made a profit of $2,376 on the sale of a 2005 Mini Cooper convertible that had been purchased from ICBC for $17,124.

Another employee made $1,689 on the resale of a GMC Yukon. As well, three people connected to ICBC employees - a relative and friends of two employees - made a profit on reselling repaired vehicles.

Geri Prior, the corporation’s interim chief executive officer, admitted the situation created “an appearance of conflict of interest.” She said she accepted changes recommended by PricewaterhouseCoopers to ban employees from purchasing repaired vehicles and to tighten administrative procedures.

“I would like to acknowledge that actions taken by management within ICBC were not appropriate,” Ms. Prior said. “Those who condone this activity are no longer with ICBC.”

Despite repeated questioning, Ms. Prior refused at a news conference to say whether any managers or employees were disciplined as a result of their activities. She also refused to specify how many managers are no longer with ICBC. “Our focus is on making things right for our customers,” she said.

She told reporters yesterday the corporation’s internal polices on whether employees could purchase repaired vehicles were not clear. Also, some managers condoned the practice of employees purchasing repaired vehicles, which led to concerns raised by whistle-blowers two years ago to be ignored, she said.

The corporation’s revised code of ethics will “make it very clear no employee can purchase ICBC salvage,” Ms. Prior said, adding that whistle-blowing procedures will also be improved.

NDP public safety critic Mike Farnworth said he was “very disappointed” with the lack of transparency concerning the number of people who were disciplined and the severance that was paid. Taxpayers have a right to know, he said.

“This scandal has people asking a lot of questions. They do not have to get into details but they can certainly give an indication of the number of people who were let go or who were disciplined,” he said.

However, Public Safety Minister John van Dongen, who is responsible for ICBC, said the corporation has been as transparent as possible subject to legal constraints.

“I believe they have done everything possible within the law to make individuals accountable for their actions,” he said. He also said he did not anticipate the controversy would affect public confidence in ICBC.

The audit found that an unidentified person who was either a relative or a friend of an employee made $3,715 on the sale of a 1999 Mazda Miata that had been bought for $8,285. In another instance, a friend of an employee bought a 2003 GMC Envoy in June, 2005, for $20,982. The car was sold 17 days later for a profit of $3,703. A third unidentified person with a link to an employee made $415 by reselling a 2002 Ford two months after purchasing the repaired vehicle from ICBC.

The audit also identified ICBC employees who had work done on their personal vehicles at an ICBC facility, and 94 vehicles that had been repaired and resold without proper identification of damage they had sustained.