The City of Nanaimo has hit back at a lawsuit filed by its former chief financial officer Victor Mema, saying they had every right to fire him because he violated policy by making thousands of dollars of personal purchases with a corporate credit card.
Victor Mema was the City of Nanaimo’s chief financial officer until May 2018. At the time of his departure, the city did not publicly say whether Mema left on his own accord or was fired.
However, his firing in 2018, came shortly after a report by KPMG found “significant deficiencies” with whistleblower policies and the way employee expenses were approved at the City of Nanaimo and specifically noted that the city’s two top senior managers were approving each other’s expenses.
“This cross approval process provides for the opportunity of collusion,” the report states, adding. “Additionally, when discussing the review procedures performed when approving expense reports, it appears that the proper due diligence is not always followed in reviewing the items being submitted for approval.”
Last year, Mema filed a wrongful termination lawsuit in the Supreme Court of B.C., arguing that the city didn’t have cause to fire him because he didn’t violate any of the city’s policies around purchase card expenses.
But, according to the city’s response to his lawsuit, Mema was fired because he charged $14,148.97 in personal expenses on his city-issued credit card and authorized the payment of legal fees for personal legal advice provided to the chief administrative officer at the time, Tracy Samra, who is also suing the city for wrongful termination.
Filed last month, the city’s response argued that when Mema was hired in 2015 and issued a credit card, he signed a cardholder agreement which stated that “under no circumstances will I use the BMO MasterCard to make personal purchases, either for myself or for others.”
Mema had a yearly salary of nearly $175,000 while employed with the City of Nanaimo.
What Mema’s lawsuit said
Before Mema was fired, the City of Nanaimo announced on March 2, 2018, that they had placed him on paid leave but never publicly provided a reason other than that there were “allegations of concern.” The suspension came a few months after the city temporarily suspended — but later offered back to him — his purchase card, court documents show.
According to Mema’s lawsuit, he learned that he was being suspended on March 1 after a journalist contacted him. Mema also alleges that the city never provided him with “particulars” about the “allegations of concern.”
The following day the city issued a press release which stated that he had been placed on leave.
Then on May 11, 2018, according to documents, the city held a meeting with Mema and his legal counsel to discuss his future and give him an opportunity to be heard. Following that meeting, councillors unanimously voted to fire Mema with cause.
According to Mema’s lawsuit, he received a letter in April about the meeting regarding his employment and that the municipality “failed” or “refused” to provide him with information that would allow him to prepare for it.
Mema’s lawsuit claims that he was fired without “just cause” even though he “faithfully and capably” performed his duties while employed with the City of Nanaimo. It argues that the city’s own policies permitted personal expenses to be made with a purchase card and that the municipality applied its policies in a manner that was “inconsistent, arbitrary” and in bad faith.
“The conduct of the city was a material and fundamental breach of its obligation of good faith and fair dealing owed to Mr. Mema and has caused Mr. Mema to suffer damages and loss,” the lawsuit reads.
The lawsuit goes on to claim that the municipality didn’t follow the procedures set out within its misconduct policy and that there was never an investigation into any of the allegations.
“The allegations were false, and the city knew or ought to have known they were false on the basis of information” that was readily available,” the lawsuit reads.
Mema’s lawsuit also alleges that city employees and members of council “leaked personal information” about him related to the suspension to several media outlets and on social media.
The former chief financial officer is seeking undisclosed amounts in damages, legal fees, and compensation for out-of-pocket expenses among other things.
City argues it had cause to fire Mema
Mema was originally hired as a director of finance in 2015 and became the city’s chief financial officer in 2016.
According to the City of Nanaimo’s response to the lawsuit, concerns regarding Mema’s use of the city-issued credit card were raised in February and October of 2017 by Samra, who expressed concerns about his behaviour with the card and his failure to repay the personal expenses he had made, which ultimately led to Mema having his credit card temporarily suspended.
In February 2018, an employee filed a complaint under the city’s serious misconduct policy claiming that Mema authorized some of his own expenses, continued to make personal purchases on his city-issued card and failed to repay the personal expenses he made, according to the city’s response. The complaint, which also claimed that Mema approved unauthorized expenses made by Samra, led to an internal investigation conducted by KPMG that resulted in Mema being suspended with pay in March 2018 and eventually fired in May of that year.
“The investigation concluded that [Mema] had engaged in serious misconduct regarding the use of the credit card which misconduct was inconsistent with [Mema’s] fiduciary duties and his roles and responsibilities as the city’s chief financial officer,” the city’s response reads.
In its response, the city claims Mema knew all about the investigation into his credit card usage. It also stated that because both Mema and Samra were being investigated, the city could not “feasibly follow all aspects” of its serious misconduct policy and had to hire an outside party.
After receiving a letter regarding a scheduled hearing in front of council, Mema, according to the city’s response, requested and was provided “copies of all the city’s information that comprised the investigation” and would be considered by councillors at the meeting.
The city claims Mema attended the hearing with legal counsel and was given an opportunity to be heard and that council unanimously voted to fire him with cause.
After Mema was fired, the city, in its response, admitted that “certain information regarding [Mema’s] misconduct found its way into the public sphere” but that it had “no knowledge of how this information was disclosed” and denied leaking any information.
The city also denied that it ever breached the employment agreement with Mema, intentionally inflicted mental suffering on him and conducted flagrant or outrageous conduct toward him. It also rejected Mema’s claims that it caused him any loss, damages or expenses and said he has failed to take reasonable steps to mitigate any losses arising from the alleged breach.
Lastly, the city argues that even if Samra has any valid claims in her lawsuit, those claims are statute-barred and limitation periods have already expired.
In addition to his lawsuit against the city, Mema has a disciplinary hearing with CPA Alberta to deal with allegations of unprofessional conduct scheduled to begin on the week of Oct. 4.
Mema declined to comment. The City of Nanaimo told CHEK News they could not comment on the matter as it is before the courts.
None of the allegations have been proven in court.