The Toronto Star

Ottawa Asks Centre To Return $425,800

It challenges expenditures by Laborers union training facility

Jack Lakey

August 8, 1996

The federal government has claimed $425,800 in "inappropriate and excessive expenditures" of taxpayers' money by a powerful Metro union's training centre.

But six months after the centre was asked to repay the money, the government hasn't collected it and won't say what, if anything, has been done to recover the funds.

The centre is run by Local 183 of the Laborers International Union.

Sources say government officials have quietly told the training centre that Ottawa does not intend to collect the money as long there is no negative publicity that would embarrass it.

The money was part of about $1.6 million in federal grants issued in 1993 to the training centre to pay for courses to retrain and improve the skills of union members and unemployed people.

Funding was cut off after The Star reported that Local 183 employees renovated the home of the federal bureaucrat who recommended that the training centre receive the grant money.

Criminal charges were laid against the bureaucrat, Eric Ferguson, and two top union officials.

Ferguson pleaded guilty to accepting a secret commission and defrauding the government.

Tony Dionisio, Local 183's former president, and John Colacci, the former training centre administrator, were acquitted in June on charges of offering a secret commission and defrauding the government.

After the acquittals, Dionisio was elected as Local 183's business manager and Colacci was elected as a member of the union's executive board.

Since his election, Dionisio has fired 15 of Local 183's business agents, who deal with union-management issues and organize bargaining units.

Five of the seven business agents who ran against his slate of candidates are among those fired.

In two letters sent Feb. 23 to Cosmo Manella, administrator of Local 183's training centre, Human Resources Development Canada says that a forensic audit done by Lindquist Avey Macdonald Baskerville Inc. found evidence of questionable spending.

Both letters, which were obtained by The Star, said the auditors found that "the costs incurred by the (training centre) were not all supportable, and certain internal charges appeared excessive."

In one example, the government wrote that the training centre "did not spend $100,509 of computer training funding for the purpose of carrying out the training."

The same letter went on to request that the training centre also repay an additional "$164,835 in inappropriate and excessive expenditures, together with interest."

The second letter says that the training centre "did not spend $93,681 of upgrading training funding for the purpose of carrying out the training," and claims a further $66,775 in "inappropriate and excessive expenditures."

Pamela Mintern, a spokesperson for the human resources department, denied the government does not intend to collect the money, saying "discussions are ongoing" with the training centre.

"We certainly were very serious about the letter we sent," Mintern said.

"We are seriously following up with discussion. We have not received an answer from Local 183, but in the meantime we are taking other action.

"We are not prepared to share with you what that action is."

Manella said that Local 183 is "in discussions" with the government over the money and he has asked its internal auditors to "look through the whole thing.