RMWB accuses former HR director of hiding more than $1 million in 'illegitimate bonuses'

The accusations, which have not been proven in court, allege former HR director Kari Donnelly approved and hid more than $1 million in bonuses during a two-year period.

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The Regional Municipality of Wood Buffalo (RMWB) alleges a former senior director gave more than $1 million in “illegitimate bonuses” during a two-year period, including more than $100,000 to herself. A lawsuit filed last week in the Fort McMurray Court of King’s Bench claims Kari Donnelly, who was the RMWB’s human resources director from 2018 to 2023, went to great lengths to keep these bonuses secret.

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The allegations, which have not been proven in court, happened at a time when the municipality’s unionized and non-unionized staff were told by leadership there was no money for raises. Senior leaders have also spent years warning current and previous mayors and councillors that RMWB revenues have been getting smaller every year.

The lawsuit alleges the bonuses were approved by Donnelly between 2021 and 2023. Donnelly said “no comment” when Fort McMurray Today reached out for comment on Friday. She has 20 days to file a statement of defence against the accusations.

According to the lawsuit, which was filed June 7, Donnelly was fired by CAO Henry Hunter last October. Hunter claims he received complaints about Donnelly’s behaviour in the workplace from staff and councillors. Donnelly was given a severance of roughly $101,280, as per her contract.

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The municipality says they never have given her this severance if they knew about these allegations at the time. The lawsuit claims these allegations were discovered after an anonymous whistleblower complaint accused Donnelly of “misusing public funds… for her own purposes and gain, as well as certain other employees of the municipality.”

An investigation was carried out and the RMWB claims it discovered $1,081,872 in bonuses that were approved “with broad discretion.” This includes a $100,678 bonus she allegedly gave herself. Council was told about the discovery during an in-camera meeting on Feb. 24.

The lawsuit claims Donnelly mislead RMWB leadership about the validity of these payments, which were allegedly “concealed, or caused to be concealed” by her actions.

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Court documents argue recipients were told to sign non-disclosure agreements that were drafted independently for Donnelly by a law firm. Payments were coded into the RMWB’s payroll system “to not alert officers of the municipality to the fact that the bonuses had been paid.”

Any internal inquiries about payroll “were vague and evasive,” the lawsuit claims, and the RMWB’s compensation consultant was not told about the payments.

The RMWB is suing Donnelly for $201,958.30, which covers both her severance and the bonus she allegedly gave herself, as well as punitive damages and the RMWB’s legal costs.

The lawsuit does not name who was given bonuses. The Canadian Union of Public Employees (CUPE) Local 1505, which represents many RMWB staff, said none of their members received a bonus.

More to come…

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