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In an apparent violation of public sector disclosure rules, Manitoba Liquor & Lotteries failed to divulge annual compensation payments of as much as a half-million dollars to a former president and CEO.

From 2011 through 2016, Winston Hodgins served in various executive roles, first as president and CEO of Manitoba Lotteries, then as president and CEO of the merged Liquor and Lotteries and later solely as the corporation's president.

Winston Hodgins

But during that period, only a portion of his 2012 compensation was reported as required under the Manitoba Public Sector Compensation Disclosure Act.

The reason Liquor and Lotteries failed to disclose Hodgins' earnings, the corporation explained Wednesday, is that he had entered into an agreement with the previous NDP-appointed board of directors to supply his services as an "independent contractor."

When a new Progressive Conservative-appointed board, chaired by businesswoman Polly Craik, took over in May 2016, it questioned the decision not to disclose Hodgins' compensation, seeking an opinion from the Canada Revenue Agency as to his employment status.

The CRA determined that Hodgins should have been reported as an employee and not a contractor for 2016, said Deanne Carson, Liquor and Lotteries' vice-president of marketing and communications, in an email on Wednesday.

"As his (Hodgins') status in 2016 was the same as it had been in previous years, we made the decision to disclose Mr. Hodgins' remuneration for 2011-2015 as well," she said.

Earlier this week, the Free Press obtained a copy of Liquor and Lotteries 2016 disclosure report, which included a note detailing the remuneration that the corporation had failed to record for Hodgins in past years.

According to the most recent Liquor and Lotteries disclosure document, Hodgins received $309,115 for nine months work in 2016. His contract with the corporation ended on Sept. 30 of that year.

Hodgins served as president and CEO of Liquor and Lotteries until Feb. 16, 2015 and then as president after that. A cabinet order dated Dec. 17, 2014, during the Selinger administration, split his job in two, with former health bureaucrat John Stinson taking the role of CEO. Stinson would part company with the corporation in October 2016.

Hodgins couldn't be reached for comment on Wednesday.

Todd MacKay, Prairie director of the Canadian Taxpayers Federation, said it is "absolutely unacceptable" that Liquor and Lotteries failed to report Hodgins' remuneration in the past.

"We can’t be using contractual shenanigans to get around reporting requirements. This absolutely should have been reported right from the beginning," he said, adding it's incumbent on the corporation to show taxpayers that it received value for Hodgins' high pay.

MacKay said while it's good that the Tory-appointed board released the information, it should go a step further than simply airing "the dirty laundry of the past government." It needs to implement policies to ensure "this kind of thing doesn't happen again."

Craik said the new board of directors began asking questions when it learned that Hodgins' pay had not been disclosed in past years.

"It’s our obligation to make sure that the disclosure is made. And if we knew about it and didn’t do anything about it we’re just as culpable," she said in a telephone interview.

Watching her words so as not to breach privacy laws, Craik allowed that it was "strange" that the company president would have been represented as a contract employee. She said according to Hodgins' contract, he had been placed in charge of strategic projects.

A source said Hodgins had overseen the proposed new downtown headquarters project that the new board would eventually scrap. Liquor and Lotteries had purchased the downtown Medical Arts Building as part of the project. Earlier this year, Liquor and Lotteries sold the building at a profit.

Tannis Mindell, the chair of the previous NDP-appointed board from 2012 to 2016, seemed unaware that Hodgins' compensation had not been publicly divulged for years.

Asked for an explanation Wednesday, she said: "I'm not sure. I honestly don't know."

She then referred a reporter to Liquor and Lotteries management.

larry.kusch@freepress.mb.ca